starting up in china
DESCRIPTION
Adapted from talk delivered January 9, 2012 at General Assembly (www.generalassemb.ly) in New York City.TRANSCRIPT
STARTING UP IN CHINAELI BILDNER
PRESENTATION DELIVERED AT GENERAL ASSEMBLY IN NEW YORK CITY, JANUARY 9, 2012
CONTENTS
Why start-up in China?
1 system, 2, 3, 4 countries
Why 互联网 ≠ the Internet
HW: A clicking tour
Starting-up in China
Why start-up in China? (2)
Discussion/Q&A
Introductions
WHO AM I AND WHAT AM I DOING HERE?
Fulbright research on SMEs in rural
China
Work for this foundation in Hong Kong
Co-found Transi.st in Shanghai
grow up in Montclair, NJ(go Cougars)
Tech meets impact
WHAT WE DO
Seed investments and incubation of social enterprises, with focus on intersection of technology and social innovation
Growing China’s top SEs
A fellowship program for seed-stage Chinese social entrepreneurs, offering
training, mentorship and investment opportunities
Calvin ChinBill
SchoenfeldScott
Ballantyne
WHO WE ARE
!
David ChenSimon Huang Eli Bildner
Hi.
FRONT MATTER
The Chinese start-up scene...has a frenetic feel similar to those early dot-com boom days. “I’ve worked in Tokyo and in Silicon
Valley during the dot-com bubble, and that was intense,” he said. “But it’s not even close.”
-NY Times Dealbook
“The pressure to take a job with a large prestigious company, or even the government, remains a big
hurdle for startups by young Chinese professionals born as the only child of their aging parents.
Americans, in contrast, live with the epic stories of Bill Gates, Steve Jobs and Mark Zuckerberg
dropping out of college to chase their dreams and become billionaires of companies that literally
changed the world.”- Frank Yu
“China’s users are too busy enjoying the Internet they have, rather than lamenting the one they don’t.”
- Andrew Lih
“There are three kinds of lies:lies, damned lies, and Chinese statistics.”
- Unknown
(Source: Kaixin/Sinosplice/John Pasden)
“WHAT CAN SAVE OUR COUNTRY?”
Public poll posted on Kaixin (social network) after Wenzhou train crash
in July 2011. Respondents could select up to five options, ranging from “equality” to “science & technology”.
Just 1% of respondents select “the economy.” The response of 73% of
those polled:
There is no hope. I don’t want to save it anymore.
Why start-up in China?
1 system, 2, 3, 4 countries
Why 互联网 ≠ the Internet
HW: A clicking tour
Starting-up in China
Why start-up in China? (2)
Discussion/Q&A
LARGESTInternet user base in the
world
DO NOT APPLYThe same rules
IT’S COMING
Like it or not
PROBLEMSWe’ve got
MEET CHINAWhy start-up in China?
1 system, 2, 3, 4 countries
Why 互联网 ≠ the Internet
HW: A clicking tour
Starting-up in China
Why start-up in China? (2)
Discussion/Q&A
(Eli Bildner 1/9/12)
THREE DIVIDERS
URBAN RURAL
Beijing & Shanghai: 15-20% of jobs;
~2.5% of population
Rural China2001: 64% of population2011: <50% of population
(Source: McKinsey)
PRE-R&O* POST-R&O
Came of age during cultural revolution
*”Reform & Openness”
Prize stability; the “iron rice bowl”
Parents of the 1-child policy
Came of age in a new era
The “Post-80s” vs. The “Post-90s”
Children of the 1-child policy
4-2-1 generational structure
HAVE-NOTS
(Source: Adrian Fisk/Chinasmack)
HAVES
The real divider is not where you live, but how you live.
China is one of the most economically
inequitable places in the world.
And in a connected world, everyone is
striving for the same
Stuff.
Guo mei mei. “After I watch TV I have a lot of thoughts, but no way to realize
them.”
Why start-up in China?
1 system, 2, 3, 4 countries
Why 互联网 ≠ the Internet
HW: A clicking tour
Starting-up in China
Why start-up in China? (2)
Discussion/Q&A
互联网 ≠ Internet
互联网 is a giant intranet
World average:
China:
5.6 MBS
1.8 MBS(and often much slower on foreign sites)
(Source: Technode)
互联网 is booming
0
100
200
300
400
500
600
20072008
20092010
2011
M users
(Source: China Internet Watch)
1/2 of the populationAnd yet, web users comprise less than
(Source: China Internet Watch)
Less than 10% of urban Chinese shopped online in 2006. In two years, nearly half will
Q2 web revenue = 62.2B RMB77.5% YoY surge
互联网 is young & active
of Chinese internet users are between the age of 10-4080%
80% of Chinese social network users are between the age of 20-34
18.7 average number of hours spent per day...and then there are the 网友
互联网 is mobile
of Chinese internet users access the mobile web66%
互联网 was always 2.0
0%
25%
50%
75%
100%
NewsSearch
EmailMusic
IMGaming
BlogEcommerce
USA China(Sources: Google, CNNIC, iResearch, Calvin Chin)
互联网 was always 2.0
0%
25%
50%
75%
100%
NewsSearch
EmailMusic
IMGaming
BlogEcommerce
USA China(Sources: Google, CNNIC, iResearch, Calvin Chin)
Web 2.0
It’s just...differentActivity US China
Send or read email 92% 55%
Use a search engine 92% 84%
Get news 76% 79%
Use a social networking site 65% 50%
Do online banking 61% 33%
Play online games 36% 68%
Send instant messages 46% 84%
(Sources: China internet watch, Tech Rice, Pew)
Why start-up in China?
1 system, 2, 3, 4 countries
Why 互联网 ≠ the Internet
HW: A clicking tour
Starting-up in China
Why start-up in China? (2)
Discussion/Q&A
互联网A Clicking Tour
Search is where the internet begins for many in China, where some users have trouble typing due to a bothersome input method (“pinyin”).
Baidu: 78% of China’s search market
78% market share in Chinese search
(Source: Tech Rice)
BIDU 42.2B market cap
TAOBAOTaobao is one of China’s e-commerce kings, holding 31% of the country’s B2C market.
It also provides an example of how foreign companies can screw up royally in China: In 2003, EBay held 90% of China’s online auction market. Today, almost all of that belongs to Taobao.
An ugly website? To American eyes, perhaps. But most Chinese would demur. In China, the mouse click is king.
10% of China’s B2C market.
...And a good example of how different a market China really is.
Where else would a huge e-commerce site send you a confirmation email with the cell phone number and name of the deliveryman?
Or allow you to pay by cash on delivery?
360Buy.com
7 steps to becoming a 网友（“netizen”)
1
2
3
(Eli Bildner 1/9/12)
4
5
6
7
...or you could just use the Tencent weibo English UI
“China only has one firm that is capable of becoming China's Facebook: Tencent. The two (Facebook and Tencent) may be
dissimilar in outward appearance, but the core of each is closely related: the social graph.”
- Keso
Shanzhai culture
One of China’s highest-profile internet radio apps. Available only on “jail-broken” IPhones.
Space to breathe.Space to vent.
Space to laugh.
(Click)
“WK” = “Wukan”. “535” = “Tiananmen”
(Click)
SOLVE
Why start-up in China?
1 system, 2, 3, 4 countries
Why 互联网 ≠ the Internet
HW: A clicking tour
Starting-up in China
Why start-up in China? (2)
Discussion/Q&A PROBLEMS
You should startup in China if you want to
the environment
1)
food & product safety
2)
economic & social inclusion
3)
education
4)
FURTHER READING
@ECSELfellowsTech RiceTechnodeChina Internet WatchiChinaStocksTwitterSinica podcastMichael Pettis/Seeking Alphathe 5-year plan (KPMG series)Startup digests
Why start-up in China?
1 system, 2, 3, 4 countries
Why 互联网 ≠ the Internet
HW: A clicking tour
Starting-up in China
Why start-up in China? (2)
Discussion/Q&A
多谢！