Driscoll's Should Have Watched HBO's Silicon Valley Before Going to China

Blueberries, coffee, and running shoes offer three lessons about creating a market for your future competitors.

I liked HBO's Silicon Valley because its most ridiculous moments often contained something true. In one episode, Richard Hendricks walks into what he believes is a legitimate meeting with potential investors. Encouraged by their interest, he begins explaining Pied Piper's revolutionary compression technology on a whiteboard. His colleague Erlich Bachman eventually realizes what is happening. The people at the table aren't seriously considering an investment. They are gathering enough information to help a competing company reconstruct Pied Piper's technology. Erlich pulls Richard away from the whiteboard, but not soon enough. The rival company, EndFrame, later emerges with its own version of the algorithm.

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I thought about that scene while reading Jon Emont's recent Wall Street Journal (WSJ) article, "Driscoll's Gave China Its Blueberries - Then China Swiped the Secret to Growing Them." Executives at Driscoll's, Inc. and Mountain Blue might find Richard's predicament familiar.

About 15 years ago, Driscoll's entered China hoping to introduce blueberries to a country where relatively few people ate them. The California company brought agricultural expertise to Yunnan province and helped develop a sophisticated growing system. Because the local soil was poor and neighboring farms sometimes contaminated the surrounding water, its growers cultivated blueberry plants in coconut fiber under greenhouses, using filtered water and drip irrigation.

Driscoll's also licensed premium blueberry varieties from Mountain Blue, an Australian breeder whose owner, Ridley Bell, had spent decades developing berries for flavor, size, texture, and local growing conditions. One of those varieties was Eureka Sunrise. The strategy worked. Chinese consumers embraced blueberries, and Driscoll's demonstrated that they could be grown successfully and sold profitably in China.

Then the competitors arrived. Some adopted similar greenhouse and irrigation techniques. Others followed a successful example. Others allegedly copied greenhouse designs. Still others crossed a clearer legal boundary by obtaining protected plant cuttings, reproducing them, and selling the resulting plants to growers. A plant cutting is unusually vulnerable intellectual property. It is the product, the result of years of research and the means of making more of itself. In Silicon Valley, Richard Hendricks revealed his technology on a whiteboard. Driscoll's and Mountain Blue brought theirs into China in a flowerpot.

According to court records described by the WSJ, an employee of one nursery acknowledged that his company had "pulled some strings" to obtain Eureka Sunrise cuttings from a Driscoll's farm. Investigators posing as farmers purchased plants and sent samples for DNA analysis. In December 2024, a Chinese court ruled that an unlicensed nursery had illegally reproduced, propagated and sold the protected variety.

Meanwhile, China's blueberry industry exploded. State-backed financing helped new growers enter the market. Production increased twenty-fivefold from 2010, and China surpassed the United States as the world's largest blueberry producer. Prices fell dramatically, giving consumers what Chinese media called "blueberry freedom" while squeezing profits throughout the industry.

At first, this looks like a straightforward story about intellectual-property theft. Two other American companies, however, show why the larger lesson is more complicated.

Starbucks entered China in 1999 and helped popularize coffee in a country traditionally associated with tea. Nearly two decades later, Chinese entrepreneurs Jenny Qian and Charles Lu founded Luckin Coffee around a very different idea. Instead of selling an expensive place to linger, Luckin emphasized mobile ordering, small pickup stores, aggressive coupons, and drinks developed for Chinese tastes. Starbucks had already provided one valuable service to its future competitor: it had shown that a large Chinese market for coffee existed.

Luckin then pursued growth at extraordinary speed. It opened thousands of stores, spent heavily on discounts to attract customers, and completed a Nasdaq public offering less than two years after its founding. The strategy made Luckin appear to be a formidable challenger to Starbucks, but the reported growth concealed a serious problem.

In 2020, an internal investigation found that Luckin had fabricated more than $300 million in sales. The company was delisted from Nasdaq, paid a $180 million settlement to the Securities and Exchange Commission, removed its founders, and sought Chapter 15 bankruptcy protection in the United States. It appeared that Luckin's challenge to Starbucks might be over. It was not. Under new leadership and with backing from Centurium Capital, Luckin restructured and rebuilt the business around the operating model that had initially attracted customers. By 2023, it had surpassed Starbucks in Chinese sales.

The scale of that recovery is remarkable. By the second quarter of 2026, Luckin reported more than 36,000 stores and an average of 112.7 million customers making purchases each month. Its coconut latte alone had recorded more than 2.1 billion cumulative sales. Luckin has also opened stores in New York, including one less than 200 feet from a Starbucks. The company born in the market Starbucks helped create has now arrived on Starbucks' home turf.

Nike faces a similar challenge. For years, its global brand, product technology, and association with American basketball gave it a formidable position in China. Now Chinese companies such as Anta and Li-Ning offer sophisticated running and basketball shoes at competitive prices. They move products to market quickly and increasingly command cultural prestige of their own. Anta has worked with Chinese scientists on nitrogen-infused cushioning. Reviewers have compared leading Li-Ning running shoes favorably with Nike products. Chinese consumers no longer necessarily regard an American logo as proof of superior performance or style.

This is where we need to be careful.

The three cases do not belong in the same moral category:

• The blueberry case includes a court finding that protected plant-breeder rights were infringed.
• Luckin's rise primarily reflects a different business model and adaptation to local consumers.
• Anta and Li-Ning have become stronger competitors through their own product development, pricing, and cultural relevance.

Copying a protected plant, learning from an existing business, and independently creating a better product are legally and economically different activities.

Yet all three cases raise the same strategic question:

What happens when a company enters a large and rapidly changing market and, in the process, helps create its future competitors?

It may educate consumers, train suppliers, establish infrastructure, and prove that an opportunity exists. The company creates a market, but creating a market does not mean owning it.

Mountain Blue understood that China presented an unusually high risk. Its leaders nevertheless concluded that entering such a large market mattered more than staying out. That decision may still prove correct. Mountain Blue has now established DNA records and evidence-gathering procedures to identify illegally propagated plants. Chinese courts and industry groups have also begun taking plant-breeder protections more seriously. Legal protection can address only part of the problem. It can punish someone who reproduces a protected blueberry variety. It cannot prevent a competitor from studying a successful irrigation system, designing a better ordering app, or developing an excellent running shoe.

That is the boundary Silicon Valley's Richard Hendricks never quite learned to see. Some knowledge is proprietary and must be protected. Other knowledge inevitably spreads once an innovation enters the world. Sometimes the apparent imitator becomes the better competitor.

The lesson of Silicon Valley is not that innovators should keep every idea off the whiteboard. It is that creating something valuable and retaining its value are two different problems. Driscoll's helped create China's blueberry market. Starbucks helped create its coffee culture. Nike helped establish the appeal of premium Western sportswear. None of them thereby acquired permanent ownership of what came next.