Archive for January, 2008

My Top 8 List

After receiving quite a number of lectures on why US  Internet companies have failed in China, here are my thoughts currently.  I’m sure it will change as I gain more perspective and experience… 

1. Use success in the US as proof-of-concept.  This leads to over-confidence.  The fact that Google/eBay dominates in the US means little to Chinese consumers.   

2. Failing to adapt website to local users.  Partly a legacy problem, and partly the inability/relunctance to adapt to needs of users. 

3. Heightened competition.  When a large US player enters, it attracts attention.  Everyone knows what you’re going to do given your existing buisiness – competition is tougher than for a player laying low.

4. Corporate governance/control.  Being public companies, there are rules to abide by which cost both time and money (sarbanes, for once).  A US company has more to lose in regards to negative press or any form of legitation. 

5. Nature of a startup.  Entering a new country is similar to starting up from scratch, in the consumer Internet space.  There’s really little to leverage other than technology (which gets cheaper every day).  Reality is that most startups fail.

6. Retention/Hiring issues.  For emerging market like China, talents are hard to come by.  Entreprenuers prefer to work at pure startups where their upside is much larger. 

7. Difference in business culture.  Leads to misunderstanding and frustrations from both sides.  Also, leads to distrust and miscommunications.

8. Taking things for granted.  This applies to a lot of things, including the rule of law.  Lack of “survival instinct”. 


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Yeeyan is a website with an interesting proposition: it started off translating select English blog posts into Chinese, and have recently started to do the reverse, translating popular Chinese blog posts into English.  The execution is not perfect, but nonetheless quite a noble idea. 

One of the translated blogs is entitled: Internet companies’ top 10 mistakes in China (Parts 1, 2 & 3).  The original Chinese post is here

To summarize, here’s the Top Ten “Mistake” List (with my own translation since Yeeyan’s version is not 100% accurate):

1. Ignoring the needs of the masses.  US companies tend to focus on elite white-collar workers – they ignore the needs of Internet cafe users and users in smaller cities (which is now >50% of population).  In other words, they target a small segment of elite users as opposed to targeting the masses.

2. Rather to be forgotten than to be hated – US sites aim to prevent negative press.  Chinese sites yearn for negative press (and the publicity that comes with it).  Also, there’s a motivational issue.  Managers of US sites lack a fighting spirit – they are paid 10 times that of local sites and thus are risk adverse. 

3. Using long-term strategies rather than querilla war tactics.  Spending/wasting too much money and time on the “perfect” planning.  Unable to adapt quickly.

4. Emphasis on process and protocols rather than just the end result.  In other words, not willing to sacrifice professionalism or moral/ethical standards to achieve results.

5. Telling users what to do rather than having them tell us what they want.  Relates to #1 – not understanding the needs of the masses and tend to over-design for the elite group.

6. Focus on building quality product vs. focus purely on traffic.  Tendency to throw money on packaging and other marketing campaigns that does not matter. 

7. Brand marketing vs. pull marketing.  Marketing effectiveness is low.  Focus on building beautiful ads – Chinese companies will produce ads that drive traffic. 

8. Rely on email and MSN communications, and English.  Not adapting to Chinese business culture whereby phone calls and face to face meetings are preferred.  Led to inefficiencies.  Also, meetings are held in English as long as one foreigner is present.  Inefficiency.

9. Simple and elegant designs.  Again, this relates to targeting the small elite groups (who prefer these simple elegant designs) and not the masses (who prefers the vibrant crowded sites).

10. Hiring “polished” managers with simlar backgrounds.  Tend to prefer MBA’s or returnees. 

These comments are representative of those I’ve heard from smart entreprenuers in China.  I agree with some, but disagree with others.  Will provide my counter Top 10 (or less) in a follow-up post. 

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Flight Talk II

Some of you might recall one of my earliest posts: Flight Talk.  In the post, I excluded a couple of topics which I thought are somewhat offensive and nothing to do with China.  Well, today I read an article in the WSJ which makes me think that I should give my flight neighbor more credit that I have. 

Here’s the article: A Decline in Testosterone May Give Rise to Many Ills.  And a quote:

A 20-year study of testosterone levels in men found that testosterone concentrations dropped about 1.2% per year, or about 17% overall, from 1987 to 2004. The downward trend was seen in both the population and in individuals over time.

To add to the Flight Talk post, this was point #7:
The US is the only country where testosterone level has declined over the past couple of decades.  Go figure. 

I have no idea how to interpret this comment, nor did I drill further.  Preceding to this was yet another comment:
There are a lot of depressed women in the states.  Most of these are single professional women living in New York City.  This is what happens when one “defies nature”. 


Yes, I know, this post has nothing to do with China.  Taking some time off from China talk here.

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China Fatique

I am feeling a bit of China Fatique recently – In brand management, there’s the concept of over-exposure of a brand.  I’d call this over-exploitation.  Every day, every publication have something to say about China.  After Jim Rogers’ book, Bull In China (see book review page), I am swearing off China business books for a long while.  There’s just nothing new to say anymore.

The next 9 months will be quite a torture – expect more China exploitation and Election campaigns.  On top of that, you have the writers’ strike.  Well, at least the Olympics itself should be interesting.

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The NYTimes has a running series on China entitled “Choking on Growth”.  Among many important environment problems highlighted, this week’s focus is on Beijing.  The picture on the left was Tiananmen Square last Thursday (12/27).  When I was in Beijing last winter, this was the image I remembered.  I could hardly breathe whenever I stepped outdoors, probably as a reflex against breathing in dirt.   This got to have a toll on the health of Beijing residents – I worry about my friends in Beijing, and am dreading my trip out in February. 

As I was just about to post this article, I read a post on Danwei called Blue Sky 2008, with the following picture, taken 1/1/ 2008.


Beijing is supposedly just over the wall.  Well, I guess you can paint whatever story you want about Beijing’s pollution problem depending on which picture you pick. 

It’s never black and white in China, is it?

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