Final Thoughts On China Trip
So, as fate would have it, my flight from Shanghai back to LA was delayed by Russian volcanoes. That’s right, after my swine flu quarantine, I got delayed by freaking volcanoes in Russia. I wish I were creative enough to make this up, but I’m not. So anyway, upon reaching Shanghai Pudong Int’l airport, we were whisked away in a van and sent to a nearby hotel…AGAIN. There I sat from 1pm – 8:30pm, before we were sent back to the airport for our flight back home. After +27 hours door to door, I’m happy to be home again, and mostly recovered from jet lag.
Instead of posting anymore about my over-documented stint at Hotel Quarantine, I wanted to wrap up my posts about China with some thoughts from Startonomics Beijing (I would post about the other events, but, well, this was the only event I made it to). For some background on that day, Mark Hendrickson has an excellent recap over at Tech Crunch, and you can see all the slide presentations over on SlideShare. Here are some of the topics of discussion that I found most interesting/thought provoking:
What South Park can teach us about localization
Dr. Kai Fu Lee kicked things off that day, and I thought one of the most interesting points he brought up was that most US companies simply think they can take what is successful in the US, translate it into Chinese, and then they will rule the Chinese market. Google, in his opinion, has fared OK, but not terribly like many other competitors in the Chinese market, because it has always tried to assume a more humble approach, choosing instead to listen carefully to the market and trying to meet the market needs rather than dictate based on their success in the US.
This is such a simple and obvious observation that is so often overlooked. This made me think about the success South Park has had in Taiwan. Whereas The Simpsons has always struggled to find a following in Taiwan, South Park has taken hold and spread like wildfire. How did they do it? Instead of doing a literal translation of the episodes, the Taiwanese producers would watch each episode on mute over and over, and then come up with their own story line to match the animated action. As a result, instead of Kyle being Jewish and unable to celebrate Christmas, in the Taiwan version Kyle’s family are Buddhists. There are constant references to Taiwanese politics and extensive use of Taiwanese slang and pop culture references. What they were able to do was figure out the essence of what made South Park click – irreverent, potty mouthed kids making a mockery of pop culture and the rest of the world – and tailor that to the Taiwanese experience (read more about South Park in Taiwan here). If more US based companies could take that approach to entering the Chinese market, we would likely see more success stories.
No Legacy Business
Another thing that was interesting in Dr. Lee’s presentation was the fact that in China, Google had a music service named…shockingly…Google Music. The name wasn’t the shocking part though. Basically, Google Music is an all you can eat download service that is completely ad supported and free to the public. In other words, anybody in China can go to Google Music, flip through their catalog of hundreds to thousands of artists and just download their tracks. I spent one night furiously, and legally, downloading all sorts of Chinese and US music for free. Benjamin Joffe later pointed out that this type of service is only possible in China because there is no legacy business to protect in China. The music industry is basically not making a single penny in China, so there is little business to protect. Anything they can make through this partnership is upside. I don’t know whether this business model will work out (I did not pay attention to a single ad that was served as I downloaded the songs), but it is interesting in China that new business models are being explored, even by the much maligned dinosaurs of the music business.
One of the most interesting discussions was led by Kaiser Kuo. Kaiser seems like the kind of guy that was probably a royal pain in his teacher’s and parent’s butts growing up. He’s got a brash style, but he tells it like it is, and has thought provoking things to say. In his discussion about censorship, he pointed out that while the mainstream media likes to talk about the Great Firewall of China, and the blocking of access to sites like YouTube, Twitter (during the 20th anniversary of Tiananmen) and wordpress, the real story is in the content censorship that happens on all of the local BBS’ etc. Here in the States, we hear about the GFW, but the reality is it’s pretty trivial to bypass (as evidenced by my constant posts from China about the quarantine on a wordpress blog, which is supposedly censored), but most Chinese people don’t particularly care to access any of the sites that are actually blocked. But the story that goes untold is the monitoring of chat rooms and BBS’ on local sites. The thought police, if you will. In fact, there are even cute cartoon mascots called Jing Jing and Cha Cha (Jing Cha means police) that show up on sites to remind you The Man is watching. All sites are required to invest resources in monitoring their own content, and if they are unable to keep up, are at risk of being shut down. So while Westerners complain on Twitter about being blocked from using Twitter, a far more interesting story remains untold.
While most attention goes to Shanghai and Beijing and a small handful of the “tier 1” cities in China, the majority of the country accesses the internet through Internet Cafes (or iCafes). In some of the rural towns, there are iCafes with over 500 seats! With relatively low incomes, most families can’t afford computers, and therefore get their Internet access via these iCafes. While interesting in and of itself, the implications of this usage pattern are truly fascinating. This means that if you corner the market for iCafe management software (as Jerry Wang from Goyoo.com is seeking to do), you are the gateway to everyone’s Internet experience. Forget SEO, in China, if you want to get attention, get prime placement on the Goyoo desktop and you’ll be sitting pretty. This also has tons of implications for cloud-top applications and storage, since people shift from computer to computer rather than stay on a dedicated desktop/laptop. This also has a ton of implications for potential face to face payment systems instead of your traditional credit card system (imagine, for example, going to the cashier at the iCafe and buying credit to purchase goods). Anyway, as the discussions went on about iCafes, my mind was sent spinning about all the various implications that I haven’t really even thought through yet. Feel free to leave a comment if you have thoughts on this.
Chinese Medicine BallsFinally, one of the most interesting and entertaining discussions was courtesy of Nick Yang. Nick started a company and sold it during the dotcom days, then started a company called Kong Zhong, which builds WAP sites for mobile devices. They are one of the small handful of Chinese companies that are listed on a US stock exchange, and hold the record for shortest time from inception to IPO. So he’s now left Kong Zhong and started a mobile search company. What I found most interesting about his presentation is his ambition. While most Chinese companies aspire to be the “Chinese version of X” (insert Facebook, Twitter, Google, Microsoft in place of X) and are quite content just to own the Chinese market and beat out X, Nick showed far greater ambition. He believes he has an approach to mobile search that delivers far more relevant results to a mobile user than Google does. Not only that, his goal is not just to beat Google in China, but as soon as he has traction, to take on Google in the US market as well. As a Chinese American, I always felt a sense of disappointment whenever I walked through the knock-off markets (fake LV and Gucci bags). I was always amazed at the level of craftsmanship they were able to achieve, but always disappointed that they chose to apply their skill to copy someone else’s goods rather than design and manufacture really kick ass original stuff. As China grows, my sense is that type of entrepreneurial spirit that Nick Yang demonstrated will be more widespread.
Of course, there were tons of other interesting presentations on the gaming industry, as well as Steve Mushero’s presentation on the tech infrastructure required for sites operating in China, but these were the ones that sparked particular thought and interest in my mind. There were also the usual set of “HOLY CRAP THE CHINESE MARKET IS HUGE AND IS GONNA BE SUPER-DUPER-HUGE ASSUMING X,Y AND Z HAPPEN” type things, which are all impressive and true, but have also been covered in every imaginable way.