In the summer of 2012, Steve Fan suspended his graduate studies at Stanford University and headed back to China, which he had left four years earlier. The motivation of this computer science major -- to launch a start-up and cash in on an idea he spotted in the world's largest Internet market -- was not uncommon. Less expected were the extra costs he incurred for doing business in China.
These had nothing to do with common costs like equipment, rent, or hiring workers. Rather, daily life involved finding workarounds past China's immense national Internet censorship apparatus, widely known as the Great Firewall.
"Google is often blocked for obscure reasons," said Fan, 25, now a software engineer at the Shanghai-based Morpheus Lab. "For example, if a word in my query is sensitive, like 'river,' and if I attempt to search the same term several times, the entire IP address will be blacked out for a minute and a half." "River" in Chinese is pronounced the same as the last name of China's former president, Jiang Zemin, and therefore is censored.
Fan then began to use a virtual private network (VPN) to circumvent censorship. Technically, a VPN provides an encrypted channel to connect to an Internet server in another country, allowing the user to browse the Internet normally. But VPNs are slow, making the loading time for every site (censored or not) longer, in effect imposing an additional cost. In Fan's case, he calculated it amounted to a 10 percent loss in efficiency. Even after adopting GoAgent, a free proxy server provided by Google, Fan still operated less efficiently than he otherwise would.