Episode 39: Brian Gu of XPENG Motors: Why China’s EV Market Excites Me

We interviewed Brian Gu (顾宏地), the vice chairman and president of XPENG Motors, also known as Xiaopeng Motors, a Chinese electric vehicle company and a GGV portfolio company. The company designs and manufactures what it calls “Internet cars” which has AI technology integrated into the vehicles.

Prior to joining XPENG Motors in March 2018, Brian was the Chairman of Asia Pacific Investment Banking at J.P. Morgan. He holds an MBA from Yale University, a Ph.D. in Biochemistry from the University of Washington Medical School and a bachelor’s degree in Chemistry from the University of Oregon. At XPENG, Brian leads the company’s global strategy, finance, fundraising, investments and international partnerships. Brian discussed his journey from an investment banker to a tech company executive, why China’s EV market excites him, and how XPENG differentiates itself from its competitors. This episode also features a bonus interview with GGV Managing Partner, Jixun Foo, on why we invested in XPENG Motors.


HANS TUNG: Hi there. Welcome to the 996 Podcast, brought to you by GGV Capital. On this show, we interview movers and shakers of China’s tech industry, and discuss how founders from around the world can draw lessons from China’s tech ecosystem. My name’s Hans Tung. I am the managing partner at GGV Capital, and have been working at and investing in startups across the U.S., China and other emerging markets for the last 20 years.

ZARA ZHANG: My name is Zara Zhang. I’m the marketing manager at GGV Capital and a former journalist. Why is this show called 996? 9-9-6 is the work schedule that many Chinese founders have organically adopted. That is, 9 a.m. to 9 p.m., six days a week.

HANS TUNG: To us, 996 captures the intensity, drive and speed of Chinese Internet companies, who have produced many growth miracles over the last decade.

ZARA ZHANG: Also, I highly recommend joining our listeners’ WeChat groups and Slack channel, where you can connect with like-minded people interested in tech in China. We organize regular offline events across the world for our followers. You can join these by visiting 996.ggvc.com.

HANS TUNG: On the show today, we have Brian Gu or Gu Hongdi (顾宏地) in Chinese. He’s the vice chairman and president of XPENG Motors, also known as Xiaopeng Motors (小鹏汽车) in Chinese. It is a Chinese electric vehicle company and a GGV portfolio. The company designs and manufactures what it calls “Internet cars” which has AI technology integrated into the vehicles. Prior to joining XPENG Motors in March 2018, Brian was the Chairman of Asia Pacific Investment Banking at J. P. Morgan. He joined J. P. Morgan in 2004 and has held a variety of leadership roles instrumental in building J. P. Morgan’s franchise in Asia Pacific region. In his 14 years at J. P. Morgan, Gu led his team in a range of sizeable fundraising deals for Chinese tech giants, including most notably Alibaba’s $25 billion US IPO in 2014.

ZARA ZHANG: Before joining J.P. Morgan, Brian worked in the Global M&A and Global Healthcare practice of Lehman Brothers in New York from 1998 to 2004. Before working on Wall Street, he was the Senior Research Scientist at the University of Washington Medical School. He holds an MBA from Yale University, a Ph.D. in Biochemistry from the University of Washington Medical School and a bachelor’s degree in Chemistry from the University of Oregon. At XPENG Motors, Brian leads the company’s global strategy, finance, fundraising, investments and international partnerships. Welcome to the show, Brian.

BRIAN GU: Thank you. Pleasure to be here.

ZARA ZHANG: First question is, why did you join Xiaopeng Motors after 20 years in investment banking? What was the thinking behind joining a car company? 

BRIAN GU: I think after 20 years of banking, I definitely was looking for something different and more exciting to do. I think I was fortunate to witness the rise of Chinese industries. While I was at my tenure at J. P. Morgan in the last 14 years, I worked with a lot of leading companies, particularly a lot of entrepreneurs that built world-class companies. I think at the stage of my career, I would love to join a company that could also have the potential to be one of the global leaders and really experience the rapid growth inside the company and also during this entrepreneurial rise. Also, obviously joining XPENG is a decision I made looking at both the sector and also looking at the team and the company. I think the electric vehicle, combined with AI and also the autonomous driving phenomenon, is a huge game changer. I think it brings tremendous potential. I would say, from a timing perspective, we’re looking at an explosion happening at the moment. Also, obviously Xiaopeng himself is someone I’ve known for many years. I really identify with the way he thinks about the future and his capabilities as a leader.

HANS TUNG: For our audience, who may not be as familiar with XPENG Motors, we’ll give you some background on the company. It was co-founded in 2014 by Henry Xia (夏珩) and He Tao (何涛), former senior executives at Guangzhou Auto. It’s named after its chairman, He Xiaopeng (何小鹏), a former Alibaba executive and the founder of UCWeb, which was also a GGV portfolio company. My partners, Jixun and Jenny backed UCWeb. Together, we have all known him for almost 10 years. UCWeb was a mobile browser company that was acquired by Alibaba for more than $3.8 billion in 2014, as was the largest M&A deal ever in the industry at that time. After acquisition, Xiaopeng became the president of Alibaba mobile business group, and later served as the president of Tudou and Ali Games. In August 2017, Xiaopeng left Alibaba and officially joined XPENG Motors on August 29th as CEO of the startup. A lot of that was urged on by my colleague, Jixun. XPENG Motors is headquartered in Guangzhou and has raised over $1.5 billion since its establishment in 2014. Its investors include Alibaba, Foxconn, Hillhouse, Primavera, Morningside, GGV, among others.

ZARA ZHANG: Brian, how did you first meet Xiaopeng? Did you think it made sense for him to join a car company full time as a former internet executive?

BRIAN GU: Actually it was an interesting story, because I met Xiaopeng during an expedition in Iceland. It was actually a trip put together by a friend of ours, who is also a venture capitalist.


BRIAN GU: I think they organized a trip for a number of entrepreneurs to experience the wilderness in Iceland. I was the only non entrepreneur in that group. But we spent 10 days in, I would say, sort of the wild in Iceland. We drove a jeep and stayed in cabins. We cooked barbecue. I think it gave me a chance to really get to know the individuals very well. Xiaopeng was one of these entrepreneurs I started forming a bond. Since that trip, that was probably 4 years ago, we’ve actually been in touch for a long time. He actually showed me his investment in XPENG Motors. I’ve also been following the progress all the way to 2017, where Xiaopeng himself decided to leave Alibaba and to join XPENG as the chairman/CEO full time. He actually came to my house. We had a drink on our roof in Hong Kong. He asked me whether I would be interested to join. It took me a few months to think about it. But the more I considered the opportunity and the more I thought about both the sector and the company and the individual, I feel this is a must-do opportunity for myself, so I joined in March last year. 

ZARA ZHANG: We all know that China is the world’s largest EV market and actually accounted for 6 percent of global EV sales in the fourth quarter of 2018. By the end of 2018, electric vehicles made up 7 percent of all new vehicle sales in China. Thanks to a mix of government and market forces, the EV market is now extremely heated with hundreds of startups in the space in China. What do you think differentiates XPENG from the rest?

BRIAN GU: I think there are two things you mentioned that I definitely agree with. I think the first thing is that EV presents tremendous opportunity. I mean it’s one of the sectors, if not the sector with scale, with explosive growth and also with almost certainty that the change is going to happen. That’s something I agree with your assessment. The second point I can agree with your assessment is it’s also very competitive. You mentioned there are hundreds of new startups joining this movement. I think there are companies, not just from a startup perspective, there are also existing OEMs that are trying to do electric vehicle. However, I think what Xiaopeng or XPENG is doing differently is that we’re not just focused on making an electric vehicle. A lot of startups actually are people who came from the original OEMs. Their vision or their idea is just to make maybe a cheaper or better electric vehicle from a gas engine car. Because of the unique DNA that Xiaopeng himself brings to the business, as well as this very unique starting point of the venture, XPENG Motors actually is set out to design and build not just EV, but a smart, intelligent and autonomous driving vehicle. We are one of the very few, I would say, startups that actually do our hardware, software, autonomous driving all in-house. We believe in integrated capability. We believe that in order to provide the best product experience to the drivers as well as customers, you need to own all these three pieces, and not just merely to be an EV manufacturer and rely on suppliers for the software and autonomous driving pieces. Also, what we do differently from some of the other startups is that we started focusing on the largest segment of the auto market, which is middle segment. Our price point actually is hopefully targeting the largest selling price point segment in Chinese passenger vehicles. Unlike some of the premium brands, we want our technology to be used and enjoyed by the mass market. I think our technology differentiation in this segment will be actually very, very standout compared to our peers and competition. 

HANS TUNG: XPENG calls itself an internet car company, instead of an EV or electric car company. What is the difference between internet car and an electric car? How does Xiaopeng’s background as an internet executive for a long time become a differentiation here? 

BRIAN GU: This is actually a very interesting question. When we launched our G3, which is the car in December with delivery, actually I went around asking a number of opinion leaders in the industry to hear their definition of what an internet car or smart car, intelligent car looks like. Everybody gave me a different answer. That means that there is no absolute definition of what a smart car is. But what we believe that to make a core car smart, you cannot just be someone with a big screen and you can have some sort of application features. You really need to thoroughly design a vehicle that can actually learn, respond and provide you with a very intelligent experience. In my mind, there are probably three elements of a vehicle intelligence that you need to have in order to qualify as a smart car. One, I think the car itself should have a deep learning capability through the interaction exchange with the driver. For example, in our current vehicle that we are selling, we can use voice to command the car. The car can learn your preferences in terms of your routes, listening to the type of songs you like. You actually have some driving patterns inside the car. The car can actually become smarter and understand you better, and provide better services in entertainment and productivity to you. That’s the first degree inside the vehicle. The second degree I think to qualify a car to be smarter is the ability to do OTA. I think a lot of cars now claim that they have over-the-air upgrade capabilities. But if you look at them, some of those capabilities mainly just upgrade their screen applications. But I think in order to make a car truly smart, it has to be much deeper than that. Right now, I would say the majority of the ECU, electronic controlling unit, in our vehicle can be upgraded over-the-air. Our next model, which we will be unveiling in April, we actually anticipate to have 100 percent of our ECUs to be OTA. That’s the second part. I think the third part obviously is the autonomous driving capabilities. In order to make a car smart, it has to be able to learn how to drive itself. We actually are very proud to say that our current selling model, G3 is probably the only domestically manufactured, volume produced model that incorporates self-developed autonomous driving features. That’s something I think that will make a car also smart. With all those three capabilities, I think a car can be truly called a smart intelligent vehicle.

ZARA ZHANG: I want to talk about your personal background. Where did you grow up? Why did you go to the U.S. for middle school?

BRIAN GU: I grew up in Shanghai. I actually always tell my friends that I’m probably the… Because obviously you know that a lot of Shanghainese actually came from different cities. But my grandfather, my father and I were all born in the same hospital in Shanghai.


BRIAN GU: That’s pretty rare. I’m a true Shanghainese. I can make that statement. Zara, you mentioned I actually left Shanghai very early in my growing years. I went to the US when I was 12 years old. I actually spent two years in U.S. for middle school. Then I came back to China for high school, because I followed my mother who was a business scholar at the time. She returned to China after three years of experience. After the high school, I decided to go to the U.S. for college again. I went back to Oregon to get my undergrad degrees. Then I went to the University of Washington for my Ph.D. In my first phase of my career, I always wanted to be a scientist. I studied biochemistry. I was fascinated by science obviously, because my family are all scientists. My mom was actually a chemist. One funny story is that when I started in Oregon, before I walked into my first class, they already handed me a sheet saying, your major is chemistry. I said, “Who actually picked the courses for me?” Actually because of my mom’s background, she thought that was the best subject to study. I studied biochemistry. Then after I got my Ph.D., I decided that I want to do something different. I felt that the scientific training was very exciting, but I felt like I wanted to do something that is more dealing with people and commerce. But I didn’t know what I wanted to do, so I went to business school for a career switch. I went to Yale. I got my MBA from Yale School of Management. At Yale, I got to learn about the finance side of the business. It was an east coast school, so a lot of people focused on banking. Naturally, I sort of ended up joining an investment bank out of business school. The first few years, actually I was in New York. I was at Lehman’s M&A group. Again, given my background in biochemistry, they thought I would definitely make a good healthcare banker, which I spent probably 5, 6 years focusing on healthcare M&A, working with U.S. and global companies. But in 2004, I decided to return to Asia. I saw the opportunity with China booming. Also, I think the banking sector is also going through a transformation, so I decided to leave the U.S. and join J. P. Morgan Hong Kong office.

HANS TUNG: In China, we’re starting to see a tradition developing of top U.S. educated investment bankers or finance professionals joining a top internet company as an executive, such as Martin Lau (刘炽平) of Tencent, or Joe Tsai (蔡崇信) of Alibaba, or Charles Chao (曹国伟) of Sina. You joining XPENG Auto also could be another example of this. Obviously, in the case of Martin and Joe and Charles, they’ve all contributed a ton to Tencent, Alibaba, and Sina in the growth of their international credibility. What do you see as your role in contribution at XPENG to be like going forward? Now that you’ve been there for a year, what are some of the interesting surprises or adjustments that you have made so far?

BRIAN GU: Martin, Joe, and Charles actually are all very good friends of mine. I really respect what they have accomplished. I think they took different types of risks. Some went into the industry very early on at a young stage in the company’s development stage. Some I think joined after the IPO of the company. But along the way, they have made a tremendous impact as you pointed out on their respective businesses. I think this is definitely something that I would love to do at XPENG Motors. I believe that EV is a global industry. It’s also a cross section of multiple disciplines that have to make it work. For example, it’s not merely an auto company. It’s not merely a technology company. It’s not merely an operating service company. It can also have financial elements, too. It’s a very interesting and very complex business. I feel like my background being in the banking sector for that many years, seeing the development of many different successful companies, and also understanding the global nature of dealing with partners, investors and company executives, I believe I can bring a sense of global perspective to the business. At the same time, I think XPENG at this stage of growth needs to connect very closely with capital markets. That’s an area I think I have tremendous experience in given what I have done in the past. I think both in the near term and the long term, I would love to contribute to the vast growth and development of the company. Also, similar to those friends of mine who actually has done successfully in Tencent, in Alibaba, in Sina, I hope one day, my contribution can stir XPENG to be one of the global giants as well.

HANS TUNG: If I push this point a little bit further, on the operations side, what kind of things would you want to spend more time on? Is it international partnerships? If so, what kind of partnership is possible? Beyond that, what are the other areas of interest for you to spend time on?

BRIAN GU: I think the first order of business for us is to make sure we are firmly established as one of the global or China leaders at the moment in the EV space or the intelligent EV space. We want to have that in the mind of the global investors, the global thought leaders and global strategic potential partners. That’s an area I would love to spend more time to cultivate and establish. Also, I think as a young company, which I think haven’t answered your prior question on what I see in a young company is it’s very dynamic. Actually, it’s tremendously interesting in how a young company evolves. You won’t know that until you’re inside the company. I think there is a tremendous learning power of the executives around me. A lot of those probably have not gone through large companies before. But they have a lot of innovative ideas. To piece those good ideas in a structured manner I think also takes experience and organization. I think that’s also an area that I would like to make sure I contribute because of my background experience in larger companies. I think also to provide a global perspective on a lot of things we do also can influence the direction of the company’s businesses, both in terms of technology development, as well as business model selections. These areas I also hope to shape with my involvement as well.

HANS TUNG: It makes sense. I’m sure that’s why Xiaopeng decided to recruit you to join him from early on. Now that you’ve been there for a year, what has surprised you?

BRIAN GU: Like I said, I think what surprised me most is how talented and how large the potential to learn for the young executives around me. Because in a large company, you always feel okay, we have seen a lot, we know a lot and we actually can teach them how to do things. But in China, especially with the talent surrounding us, a lot of them have not gone through the large companies, but they have real good common sense and business judgement. They actually have very innovative ideas. Actually their ability to learn is also tremendously powerful. I think what surprised me most is actually I realized that a lot of times, it’s not me showing them how to do things in a proper or the global or sort of the sophisticated way in the larger companies. Actually I’m learning from them how actually we can do more innovative things and how we actually can achieve things more efficiently. I was very surprised by my own learning.

HANS TUNG: Do you have an example?

BRIAN GU: Let’s just use one. For example, in a traditional company, when you look at selling a product, I think there’s a lot of analysis we have to go through and also the standard channels you have to push and understand in the market. There’s almost a playbook. But there are a lot of innovative measures that we actually put into our business, which have not been seen before. For example, nobody in the past, other than Tesla I think, in China, people don’t click and buy automobile, right? Because it’s a larger purchase item, people want to test and feel it. But I think we actually try to break down the process into two parts. We want to efficiently leverage the online and internet traffic and appeal and the fan-based approach to generate excitement. At the same time, we actually are directing that and funneling that into our physical stores, which we built ourselves in large cities, which was never seen before nationally in China when we actually sell automobiles. A lot of times I think you have executives who come from large auto companies like BMW, or from other domestic makers. They were actually, I would say, blown away by how innovative some of the things that we’re doing here. I think we have results to show for it, because if we actually look at the foot traffic that comes into our showroom to buy our product, more than 50 percent of this foot traffic is actually converted online, which is actually a lot more efficient way than relying on just regular traffic inside a shopping mall or the physical stores. I think these are the things that we are doing that hopefully can differentiate ourselves.

HANS TUNG: It sounds like the stores that you have are your own stores, not dealers or channels?

BRIAN GU: Right. I think for a young company with a product that is very different, and also we want to have a direct connection with our customers, direct stores is probably the right format. But however, if we scale up and we actually want to penetrate into tier 3, tier 4 or other cities, I think we cannot build enough of our self-owned stores. We will also explore partnerships if we decide to scale up. I think we will always be looking for the best model. Maybe it’s a hybrid in a year or two. But right now, we are focused on building our own experience stores in the large cities.

HANS TUNG: I definitely see some similarity between your approach and how Xiaomi started selling phones online and then opened XiaoMi stores offline. It is definitely an internet-inspired model for sure.

BRIAN GU: Xiaopeng himself has been influenced a lot by Xiaomi. Lei Jun (雷军), the chairman of Xiaomi, used to be the chairman of UC. I think Xiaopeng used Lei Jun as one of the mentors. I think there’s definitely a lot of influence we receive from a successful business model like Xiaomi, which is also very innovative in the way they do business. However, I think as a car, that product is very different from smartphones. We need to tweak that model to make sure that it actually addresses some of the pain points for auto customers. That’s why we are actually constantly exploring new approaches. 

HANS TUNG: From my perspective, seeing how VANCL (凡客) trying to sell clothes online, but they weren’t able to open up good stores offline to sell it. Then a few years later, Lei Jun went with selling phones online and tried the stores offline. Then another few years later, you guys went to do that in auto. Each time the challenge being taken is hard. Before Xiaomi selling phones online, even Google failed. Then before you guys do that, not many others, maybe besides Tesla, have done it. Each time, Chinese founders are breaking new grounds, and it is super exciting to see. 

BRIAN GU: Absolutely. 

ZARA ZHANG: Xiaopeng’s G3 car which released in December 2018, could you talk about what’s special about this car? What has been the attraction so far?

BRIAN GU: First of all, it’s a SUV. It’s a compact SUV, five seater, beautifully designed. I can show some pictures actually. It’s very sporty look, particularly targeted at the young, active drivers in large cities. Also, the car is packed with technology. This car has level two plus autonomous driving features, which means that it has full ADAS plus some of the level three features in low speed scenario. For example, we actually have a full scenario auto parking that is very differentiated compared to everything that is out there on the market. Our car can park in more than 70 percent of the different types of parking scenarios in the Chinese parking lots and parking areas. Whereas compared to even Tesla, which I would say, is probably one of the smarter cars, they only can identify probably less than 20 percent of those parking scenarios. Actually we are trying to provide a very unique and targeted solution to our drivers. The car also has a range per charge of 365 kilometers, which is already, I would say, sufficient for city use. The car has a panoramic glass roof, very similar to the Model X experience. It also has one of the larger screens inside the car that has full control of the vehicle. It does not have the traditional vehicles like buttons and dials. It’s very futuristic. Also, what’s unique about the car is that I actually drive our vehicle to work every day. I don’t even touch the screen or control or window. I use my voice command. Actually the voice change is something that’s really, I would say, differentiating because you can actually select your music, lower your window, turn on your fans or adjust your own seats for you. It also has facial recognition features with an AI camera that actually can monitor whether you’re distracted, whether you’re tired. It can monitor your heartbeat. There are lots of these cool intelligent features in our vehicle. But more importantly, the price point that we actually are hitting as I mentioned earlier is very different compared to Tesla or other premium models. Our car is priced between RMB150,000 to RMB 200,000, which is less than half the price of Model 3, the most basic model in China.

ZARA ZHANG: That’s around $22,000 to $30,000.

BRIAN GU: Right. We want to provide a very differentiated unique product packed with technology to a segment that is the largest and at best growth in China.

ZARA ZHANG: What is the experience of driving that car in Guangzhou? Do you think China is equipped to have a lot of people driving EVs around, in terms of infrastructure, for example, charging points.

BRIAN GU: Driving an EV I think is very easy. It’s actually easier than other traditional gas engine vehicles. There’s no gear. You can actually just go. I think our G3 is also very easy to drive. It’s not designed to be a super car at this price point. We don’t have the super fast acceleration, but it’s nimble enough. I think in city driving, the acceleration is really strong, especially in the 0-60 kilometer, it’s very, very fast. But the reason I think people hesitate to buy EV, I think the top reason is the charging. I think the distance anxiety is something that people always cite. We provide actually a holistic charging solution to our drivers. First of all, we provide home charging to whoever that has the capability to install home chargers. If they have dedicated parking space or they have a garage, we will give them a free home charger. The second thing is that we have our own proprietary supercharging network that’s built in large cities that we’re selling our vehicles. Those supercharging network only provides supercharge, which is a fast charger that we designed with our partners. It provides 80 percent and above charging for less than 40 minutes. It’s a very fast charging time. We are likely to half that time in the next 12 months.

ZARA ZHANG: How many of those are there?

BRIAN GU: We have built close to 2,000 of these charging stations already. We aim to have close to 200 by the end of this year. Then the third solution we have is our vehicle can be charged at any of the third party charging stations, so charging companies or public charging infrastructures. China, as you know, is actually probably the most advanced in terms of building auto charging infrastructures. The government has already mandated by 2020 to have close to 5 million charging piles around China. It means that it is going to have more charging piles than the rest of the world combined.

HANS TUNG: The Chinese government has spent close to $60 billion in various subsidies, like you said, in support for building out charging stations and to build up the new energy vehicle industry in the last decade. But recently Beijing has also been rolling back on subsidies in some areas. How has the growth of spending money to help to build this industry help to support this industry? Does the cutback on the subsidies have any negative impact at all on the sector? 

BRIAN GU: I think the Chinese government has been very, very instrumental in facilitating the development of the EV industry. The subsidy you mentioned, the infrastructure investment all are a part of an effort to really push China to be one of the global leaders, if not the global leader in EV. I think the Chinese government is also thinking about what are the best ways to support the industry. I think the subsidy has been probably the main factor in the last 5 years. It obviously gave a lot of financial assistance to EV makers. But at the same time, I think it created some dynamic that encouraged lower-end producers to design and build products that’s not the best product but end up collecting subsidies, which is not the right thing I think for the industry. I think the government is actually realizing that and trying to change the way they support the industry into more efficient means. For example, there are a lot of policies that are now being implemented around Chinese large cities. EV can actually receive plates much easier than traditional gas engine cars. That’s one of the main drivers for a lot of people to buy EVs, because they can easily get the cars to drive in large cities. Secondly, I think they actually are pushing the emission standard for OEMs in the gas engine world. The emission standard will become more and more stringent. Actually I would say, by some measures, China is actually already ahead of Europe for the emission standard requirement. Some of the cities are likely to ban gas engine cars altogether. That is also some movement that is pushing the development of EV. Also, I think the continual investment into infrastructure is something I think the Chinese government will commit to do to actually foster the development of this industry. I think the overall tone as well as the overall support from the government continues to be very strong. For young EV companies like XPENG Motors, I think we clearly want to make sure we take full advantage of this support in our development. The scale back of subsidy is going to be felt by all the players in the industry. We believe that it actually favors companies like XPENG, who actually focus on product design and unique experiences and technology superiority. The more customers or consumers focus on the product technology itself, I think we actually get better advantages. In the long run, I think it’s good for the industry and we are very confident that we can actually be one of the potential leaders given the way that we define and position ourselves.

ZARA ZHANG: On the G3 SUV, how many orders have you received? How is delivery going?

BRIAN GU: We started delivering G3 in December last year. The delivery obviously is a slow ramp up process. If you look at NIO and other companies, they all went through the same phase, because it takes time to get the factories to perfect the manufacturing process, get the supply chains ready. The first three months, there was actually a low volume delivery. I think we are going to start volume delivery by later this month, which is March 2019. We actually aim to do delivery in the thousands, multiple thousands of range in the next few months. In terms of orders, we actually have been receiving very exciting momentum in our orders. We have more than 10,000 paying orders on hand. Our orders are already stretched in terms of delivery schedule well into the second half of this year.

ZARA ZHANG: As you mentioned, the XPENG car is priced very competitively at between $23,000 to $30,000. Could you talk about why you’re targeting this younger consumer group?

BRIAN GU: First of all, I think if you look at the demographics, the young. I would define young as between 25 to 35. I think it is actually the fastest growing driving crowd in China. Also, we believe at that age, these drivers are more tuned to try new technology, new features. For a lot of them, it may be their first car or their first family car. A lot of times, I think these people can truly enjoy and be involved with our technology development. I think that’s why I think targeting those core users is actually our first strategy. But again, I think once we actually can really put the precise positioning of our vehicle into the minds of these individuals or customers, then we can expand from there. One interesting data point for you is that if you look at the orders that we have on hand, given we have three trim levels of the G3. We have the basic trim level, which is without our autonomous driving features. We have the intelligent trim, which is including the autonomous driving, and then the top end. If you look at our order book, 97 percent of our orders are actually in the intelligent and the top end, which means that our positioning is quite successful. People who come to buy Xiaopeng cars are actually coming to us because of our intelligent and our technology approach.

ZARA ZHANG: Recently Tesla has also cut the price of its vehicles in China significantly. Do you think that will have an impact on you?

BRIAN GU: First of all, I think Tesla will bring Model 3 and Model Y, but I think it will take a little longer, particularly Model Y which is a similar size of our G3. It is a few years out. Also, I think at the current stage, I think the cars they are going to bring to the market are still going to be viewed as premium segment vehicles, even with local production. I think their supply chain cannot be completely localized yet. I think there will be additional cost. I think the vehicle will come down from the current price, but still way above XPENG’s price range. I think the competition itself, we will not feel directly, because we’re not going to compete in the same segment. But I think it’s actually a good thing that you have a good product coming into the Chinese market that stimulates Chinese consumer demand and interest levels, and at the same time, bringing high quality supply chains to the Chinese markets. I think those are actually in general good for the development.

ZARA ZHANG: Like Apple for the smartphone market.

BRIAN GU: We are actually seeing this as a positive development. I think also given years, let’s say in two to three or four years, we actually are confident that our technology, given the user base, the vehicle on street and the data we continually collect, we can actually come up with better features, more localized experiences in autonomous driving than Tesla. I think we are very confident that in the long run, we can compete well with Tesla products.

HANS TUNG: My last question is around a different topic, around talent. XPENG Motors currently has about 3,000 employees. This number is growing rapidly. As you know, in 2018 the company in one year alone added almost 2,000 employees, 70 percent of them in R&D. Xiaopeng has said recently and told us that he plans to add another 5,000 new employees this year. The company has been able to attract a wide range of high caliber talent, such as including yourself from early on. Can you talk about Xiaopeng’s talent strategy? What are the different profiles that you guys are looking for to add to the team? As you may know, many of our listeners of 996 podcast listened to our interview of a Chinese company before they joined them. Hopefully everything said today will be something that will help you attract more talent to join you as well.

BRIAN GU: We actually have a very diverse employee pool. We have employees coming from over 200 different companies. There is great diversity. We also have employees coming from over, I would say, a dozen different nationalities. It’s growing really fast as you mentioned earlier. Obviously, we are into adding employees at a pretty significant pace. The 5,000 number you mentioned includes part time employees. The full time number will be significantly less than that. But still I think it would be an impressive growth by any measure. We’re looking for talent in actually a lot of different areas. As the company is focused on automobile and technology, talents that bring the experiences in the relevant product areas, I think we’d love to talk to them. We would love to get experienced applicants in AI, in autonomous driving, in vehicle design, in power train, in a number of these specific product areas. At the same time, we’d also like to attract individuals coming from more non traditional and non auto backgrounds, because I think we are trying to do something quite differently. We want to bring individuals that have experiences with new retail models, new network development capabilities. We want to also attract executives in the functional areas like legal and finance and corporate strategy, etc. I think we are actually looking for talents across the board. This company has a very strong employee-focused culture. We have a very strong emphasis on human capital. One of the key area or department that Xiaopeng oversees directly is the HR function, because he feels like having the right infrastructure, right organizational structure, and right culture is important for a company to grow into a much larger scale. I think that that is something we probably are different from other fast growing Chinese companies, because of our emphasis on human capital and organizational structure. 

ZARA ZHANG: I also want to ask a career related question. I do have a lot of friends in investment banking, who are trying to pivot themselves to join a tech company, but it doesn’t come naturally to a lot of them. Do you have any advice for aspiring or current finance professionals who are trying to transition into tech?

HANS TUNG: Good question.

BRIAN GU: There are actually quite a few investment bankers in our company, myself included obviously. But in our strategy department, we have senior bankers and also junior bankers as well. We also have finance professionals, who have been successful investment professionals for over 20 years in the largest Wall Street firms. I think we have a very unique balance of companies from finance, technology and other areas. I think the transition from an investment bank to a fast growing entrepreneur company is always going to be challenging, because it’s a different pace. It’s a different culture. Also, it’s focused on different priorities. But I think if you are willing to learn, if you actually are flexible about the work schedule intensity, I think an entrepreneur technology company is actually very, very good experience for young bankers. I always feel it interesting that if I actually, in the earlier part of my career, have had experience inside a company and see the operation, I think that would make me a much better or much more well rounded banker. I think that experience is very valuable. I’ll give you another story. Actually, I had breakfast with Joe Tsai for example, when I joined XPENG. I asked him. I said, “You took lots of risks. You joined Alibaba when it was first founded. Why did you take that risk?” Joe looked at me. He said, “I don’t think there was a lot of risks.”

ZARA ZHANG: That was not so bad. 

BRIAN GU: “For me, spending two or three years in Alibaba even if it didn’t work out…”

HANS TUNG: Exactly, it didn’t matter.

BRIAN GU: “It’s a tremendous experience compared to if I stayed in Investor AB. Where’s the risk? I don’t see any.”

HANS TUNG: You can always get another job if Alibaba didn’t work out.

BRIAN GU: What I’m saying is that for young professionals who are starting their banking career, don’t be afraid. Try to be inside an entrepreneur company. The experience will be very valuable. You still have time to decide what you want to do later.

ZARA ZHANG: The only risk is not taking any risk.

BRIAN GU: That’s right.

HANS TUNG: I just want to emphasize on this point that Brian made again, which is that I don’t think I will be as good a VC if I didn’t have startup experience in the internet before. I highly encourage everyone to follow Brian’s advice. If you are in banking or in consulting, spend two or three years in a tech startup or a tech company, just gain more experience, not be afraid to try that. It would be much better, even when you go back to banking or consulting later.

ZARA ZHANG: Now I will jump to a round of quick-fire questions. You can just say the first thing that comes to your mind. The first one is who is an entrepreneur you admire the most and why?

BRIAN GU: Jeff Bezos and Jack Ma, because I think they not only built a big company, they weathered the ups and downs of a company. They always come up with new better ideas and better directions for their company. I feel like that’s true entrepreneurship. It’s consistent, not just one-hit wonders.

ZARA ZHANG: What’s a book you read recently that you would recommend?

BRIAN GU: Actually I read something I recommend to our management team is Founder’s Mentality, which is a book written by BCG I think or Bain, one of the consulting companies. They took some analysis on the companies they looked at and concluded a number of traits that  make a company better, which included a lot of the company characteristics that trace back to the founder’s way of doing business.

ZARA ZHANG: What is a habit you have that you think has changed your life? 

BRIAN GU: I think the best thing I learned is not to react too quickly. I think that that’s something I learned as a scientist, and then as a banker. I think a lot of times, the first reaction may not be the right one. Always take a pause and you will benefit from that slow response.

ZARA ZHANG: Lastly, what do you do for fun?

HANS TUNG: Go to Iceland. 

BRIAN GU: Travel is always fun, but it needs time. What I do is I usually try to find time to do hiking because Hong Kong has a lot of hiking trails. A group of friends will always like to hike together. I also enjoy wine and food. These are probably my hobbies.

ZARA ZHANG: Brian, thank you so much for your time.

HANS TUNG: Thank you, Brian.

BRIAN GU: Thank you very much.

HANS TUNG: It was great.

ZARA ZHANG: Next, you will hear a short interview with our managing partner, Jixun Foo, who co-led GGV’s investment in UCWeb with our other managing partner, Jenny Lee. UCWeb is a mobile browser company founded by He Xiaopeng that was acquired by Alibaba for over $3.8 billion in 2014 in the largest M&A deal ever in Chinese history back then. Jixun, could you talk about how you first met Xiaopeng and how you actually persuaded him to start his next venture, XPENG Motors.

JIXUN FOO: Sure. Actually my history with Xiaopeng, first of all, dates back to when I first met Lei Jun. Lei Jun was an angel investor at UCWeb. Back in ’06, he started to tell me this story about a mobile browser. I was thinking, future phone, mobile browser, what is that? He then made an introduction to one of the CEO co-founder of the company, Yu Yongfu (俞永福). Yongfu at that time was brought in and co-led the team with Xiaopeng. He became the CEO of the company. I actually first met Yongfu and then later met Xiaopeng. Xiaopeng was based in Guangzhou. He was really the guy who built the product for UCWeb. This deal is kind of interesting. Jenny and I actually got to know Lei Jun. There were a few deals at that time that Lei Jun sort of angel-ed as the most promising deal. He kind of helped out, promoted the deals to us and got us to look at it. One of them is YY, which he spent a lot of time and the other one is UC. We then subsequently did quite a bit of work. In ’08,‘09, we made an investment in UC. To be fair, we are a relatively small. We sort of co-led the round with what was called Nokia Growth Ventures at that time. It was Paul and his team. We co-led the round at about $150 million valuation at that time. It was an interesting start. The thing with UC has always been that, with a feature for market, how is that value going to evolve? Obviously, they made a huge impact in terms of growing, not just within China as a browser, but they also had scaled outside of China. Anyway, the long story short is ’06 was the time because of UC, that’s where I met Xiaopeng as the founder and key product person behind UC. Along the way, obviously we stayed in touch, but I spent a lot more time with Yongfu than I spent with him. Having said that, I think after the company got acquired by Alibaba, both Jenny and I were a little involved in trying to navigate the acquisition as well as a merger, because there were a few parties, not just Alibaba involved. There was also Baidu. Then post-acquisition, Xiaopeng stayed on at Ali. Then there was this time that he called upon Jenny and said, “Hey, I built this car, incubated this car. I want you guys to come and take a look.” I did. Jenny asked me and we went along. We went to Guangzhou and we saw this whole mockup, stripped out car, EV. He put together, incubated a team led by Henry, who today is the president of the company, Henry Xia. It was interesting, but I didn’t have a lot of drive. I said, “Hey Xiaopeng, are you doing this full time?” He said, “No, no, I’m still at Alibaba.” That didn’t really give me a lot of conviction or confidence in how he would want to build this. It was kind of like a project, a toy project for him. That was 2013, 2014. By 2016, I start to see the whole momentum behind EVs. I see there’s been a lot more talk about autonomous drive. I think that smart car is a big future. There’s a big potential because of all the potential infrastructure, investments that’s made by the Chinese government, the subsidy that’s been launched by the Chinese government, etc. I started to think and I spent a bit of time looking in the category, met up with NIO and Weima (威马) and a few other players. I felt like Xiaopeng, if he wants to do this, and he goes on full time, it would be interesting. I spent quite a bit of time talking to him. I revisited his team. In fact, this time round, I dragged Jenny along to spend a day at Guangzhou, meeting up with his team and so on. I spent probably, I would say, a few months talking to Xiaopeng and said, “Are you ready to go full time? Are you ready to go full time? Because if you are, I’m going to be backing you.” There was this day that I called him. It was just right after Chinese New Year, or just around Chinese New Year in February of 2017. I said, “You really need to do this.” That’s the point in time where somehow it struck him. I’m not sure why because he just had his newborn second kid and it was a boy. At that time, he was holding his baby. I didn’t realize that when I made that call to him. Then I was just ramping off telling him. I wasn’t congratulating him because I didn’t realize he just had a boy. I said, “You should do this.” That really turned him on. Thereafter, he made the decision to jump. He officially jumped in in August 2017 and went full time on Xiaopeng.

ZARA ZHANG: What about Xiaopeng that made you have such conviction that if he jumps in, you’re going to back him?

JIXUN FOO: I always give this analogy between a feature phone versus a smartphone. I think there is a fundamental change when you go from just a functional product to a smart product. There’s a lot more thought and ideas that have to go into the whole user environment. The car is not just a utility anymore. I thought that somebody like Xiaopeng with an internet product background could be very, very powerful. There are not many of such so-called entrepreneurs, if you will, who have done this before. To do this, you need a serial entrepreneur. If you look at NIO for example, Bin (李斌), the founder is a serial entrepreneur. Without that serial entrepreneurship, without the bit of halo behind you, it’s hard to draw the kind of capital to build a car company. Elon Musk is a serial entrepreneur. I actually think you need a bit of serial entrepreneurship to do this. There are not many players around. Number two, he has that. I mean he has an interest. That’s why he incubated this company. He has a passion for cars. He loves cars. There is an inner interest. He’s not just off the street, I pull any guy, a serial entrepreneur and say, “Hey, you go do this”. He’s somebody who’s been doing this and he understands cars. Thirdly, this is a business, given how capital intensive it is, you need to be able to put your money where your mouth is. Investors, not only will follow you, they will also follow your money. Xiaopeng, given the exit at UC and so on, he has, not just the halo, but the ability to say, I can put my money where my mouth is and draw other capital along. That’s important. I think there are a few reasons. I think there’s a market factor. There’s the fact that he has the charisma, the halo, his pot of gold, if you will, to actually do this and make it work. The market opportunity is there, right? China has 26 million new cars every year. Today, Tesla globally probably sells 200,000-300,000 cars. There’s still lots of room for a second, third, fourth player to come up.

HANS TUNG: I will add a couple of points to what Jixun said. I think he’s definitely right comparing what Xiaopeng is doing with XPENG Motors similar to going from feature phone to smartphone. Venture VC is a game of public recognition. When you see something shift from feature phone to smartphone like we all did with Xiaomi, it leaves an impression in your mind. When you go into a car, whether it’s utility or luxury, you see now you go from a dumb car to smart car. That experience just reminds you of the different shifts that you saw earlier both as an investor as well as a consumer. If everything around us is going to the cloud, why shouldn’t the car where we spend enough time on it, both going to work and leaving work, be smarter as well. Elon Musk already showed that is possible, and other countries should do that, especially a country as big as China. The second thing is that Jixun mentioned that Xiaopeng is a serial entrepreneur. A lot of times, the entrepreneur first time may be a creator of a product, but he may not be ready or she may not be ready to be the CEO of the company, because building a product and being the CEO, which requires more business background, are two different things. If someone has done it once, got an exit, but was never the CEO, and you have a new baby in your hand. You think like what is my legacy? I already have my money, but what do I want to be known as to my kids? As someone who kind of followed and did something or as someone who’s going like, I actually built something myself and took it all the way to the end and leave a legacy? A lot of times, a serial entrepreneur is driven, not by money anymore, but by a legacy. That’s an extremely powerful motivating factor for success.

JIXUN FOO: I think that’s absolutely right. I think for Xiaopeng, it’s definitely not about money, because he is well to do on his own after UC. He’s driven by a more important underlying mission and passion for something for himself. I think that drive for legacy, I think is a good way to describe it. It’s really what propelled him. I had a board meeting with him recently. Prior to the board, we had this lunch. He said, “You know what? I worked as hard as I was, if not harder than I was when I was in UCWeb.” I mean this guy has already made it, but yet he’s working so hard. He might be working more than 9-9-6, Hans.

HANS TUNG: Yes, I wouldn’t be surprised. 

ZARA ZHANG: Brian joined the company around a year ago. How did you first meet Brian? What do you think are some unique values that he has brought to the company? 

JIXUN FOO: I got to Brian while he was in investment banking. His last position was chairman at J. P. Morgan. I had touchpoints with him on and off. But Brian really brought a different set of skillsets to the organization, given his background, his knowledge, his perspective, his macro, and his ability to communicate very, very well with the outside world. I think Xiaopeng needs that. That’s one thing I would say about Xiaopeng. I said, his halo is important. This is not just about attracting investors, followers, etc. but talent. He’s able to attract talent to join him. Brian joining him is a testimony for that. It’s not just Brian. He has many other people who are ex-Tesla, or ex-Qualcomm, and Xiaomi, etc. joining the team, senior and professionals, etc. Brian is one of those. I think Brian really complements Xiaopeng in a way where he’s completely bilingual. He understands China very well. He has very strong linkage to various investors in the community. This is a capital intensive game. We need that ability to rally the support and the investors behind us to build the company. Brian plays that role really well.

HANS TUNG: It’s interesting that Brian said that now he flies economy class all the time. When he was a banker at J. P. Morgan, it’s usually all first class and making good money. Why is he doing this? We’re seeing more and more professionals in China willing to take that entrepreneurship jump and be part of a company that’s leaving a legacy, changing the world, doing something better for society that gives enough meaning and also enough payout at the end to make it worthwhile, because the market is massive, the opportunity is huge, and the upside is there. If you work hard for three to five years, you can really make a huge difference at multiple levels. 

JIXUN FOO: Right, and it’s really interesting. Not just flying economy class. They even have budget for hotels. He stays in budget hotels. For a guy who has made it as a chairman of J. P. Morgan, and was obviously treated first class everywhere, including flight and hotels and travel, to be willing to kind of step down and say, this is what I’ll do coming into a company and having the desire and trust to follow Xiaopeng and do this, it certainly means a lot. It certainly takes a lot, not just for himself emotionally, but also family and everything. I mean Brian lives in Hong Kong, but he works in Guangzhou. I stayed in the hotel where he stayed, which is just next to the company. It is a budget hotel. It’s a sign of commitment and conviction to the XPENG vision.

ZARA ZHANG: Do you think China’s EV or smart car market is inherently localized? Is it possible for non-Chinese players to be successful in China, or do you think the local players will in the long run beat everyone else? 

JIXUN FOO: Auto market is not a winner takes all market. I will say that you have Mercedes and you have BMW. You have Toyota and you have Honda. You have local players. It’s a big enough market, with 26 million new cars being sold every year. Granted the whole growth momentum behind new car sales has come down, 2017 to 2018, but it’s still a big market. It’s probably the single biggest market in the world in terms of number of cars sold. There’s opportunity to grow that market share. Today, the penetration of EVs is about 3 percent. There’s still room for smart cars to actually extend itself. I’m less worried about competition per se. I mean there is definitely the competitive element. But foreign or local, the chances are actually fairly equal. I think China is increasingly trying to open up. It’s not limiting foreign players per se. The market is open to all. Having said that, I think that it’s important for us to appreciate the local environment and the local market. I’ll just give you one example, and this I use quite a bit, this ability to auto park, XPENG, right? Most people when they talk about auto parking as a feature, the reality is that many of the cars only recognize 10 to 20 percent of the parking scenarios here in China. Out of 10 times that you try to auto park, only one to two times, you get the auto parking. Then that feature is quite useless. I think Tesla, for one, coming into the market and others who are trying to come into the market, if they want to support that feature, they have to localize to the scenario that is here in China. Xiaopeng, for one, is able to address 70 to 80 percent of the parking scenarios here. Out of 10 times, 7 to 8 times you could easily auto park your car. That becomes a true valuable feature, versus just a feature that you put on the brochure. That’s important, localizing to the marketplace that you see, because China is a very, very different driving environment, I’m sure Zara and Hans, you guys are aware, versus the U.S.


HANS TUNG: I will echo Jixun’s point a bit further. We get a lot of questions in the U.S. that China is different, so much regulation, government risk, blah, blah, blah. As if that’s the number one reason U.S. companies don’t do well. The reality is that, especially in this category, Tesla will be welcomed in China. That’s not the issue. That is not any more a bigger issue than any Chinese company will face. But what is different is that the Chinese companies do know the level of entrepreneurship and level of capabilities is so strong and so good that Chinese companies move extremely fast to satisfy the needs of local consumers. If you do that well, of course, consumers would use your product. If the product is not localized for China, then millions, hundreds of millions users are not going to use your product as readily even though you have an amazing brand from outside. Most American companies fail to realize why they should change and tailor a solution that’s specific for the Chinese market. Most of the time, that’s the reason why U.S. companies don’t do as well in China.

ZARA ZHANG: For Chinese players, there are a lot of companies in this space as well. What made you have such strong conviction that XPENG is the one you should bet on?

JIXUN FOO: First of all, I think that each of these companies have their merits. As peers of Xiaopeng, they have their merits. It’s hard for me to comment. But I do fundamentally believe that this is a product business. The car is a product. It is not a service business. The intensity and skills and knowledge needed to build a great product is important. I think Xiaopeng is the type of person, he’s a product guy. He’s not here to market and pitch sales. He is pretty focused on giving the right product experience to the end user. That’s what I believe in. I think underlying it is what does it take to build a great car company. I think Xiaopeng has what it takes. Therefore, I chose to back him.

ZARA ZHANG: That’s all we have for today. Thanks so much, Jixun, for your time.

JIXUN FOO: Thank you.

HANS TUNG: Thanks for listening to this episode of 996.

Episode 38: [AMA] Hans Tung on Breaking into VC and Other Questions from Listeners

On a special “AMA” (Ask Me Anything) episode, GGV Managing Partner Hans Tung answers questions posed by our listeners on a wide range of topics.

How did Hans break into the VC world? What made he move to China and then come back to Silicon Valley afterwards? How does he deal with failures as an investor? What does it take for non-Chinese entrepreneurs to succeed in China? What motivates him to wake up and work hard every day?

Join our listeners’ community via WeChat/Slack at 996.ggvc.com/community.

The 996 Podcast is brought to you by GGV Capital, a global venture capital firm that invests in local founders. As a multi-stage, sector-focused firm, GGV focuses on seed-to-growth stage investments across Consumer/New Retail, Social/Digital & Internet, Enterprise/Cloud and Frontier Tech sectors. The firm was founded in 2000 and manages $6.2 billion in capital across 13 funds. Past and present portfolio companies include Affirm, Airbnb, Alibaba, Bitsight, ByteDance, Ctrip, Didi Chuxing, Grab, Gladly, Hello Chuxing, HashiCorp, Houzz, Keep, LingoChamp, Namely, Niu, Nozomi Networks, Opendoor, Peloton, Poshmark, Slack, Square, Wish, Xauto, Xiaohongshu, Yellow, YY, Zhaoyou and more. The firm has offices in Beijing, San Francisco, Shanghai and Silicon Valley. Learn more at ggvc.com, or “GGVCapital” on WeChat.

Episode 37: Hao Wu on Making “People’s Republic of Desire”

We interviewed Hao Wu, a Chinese American film director, producer and writer to discuss his recent work “People’s Republic of Desire”, a documentary about the live streaming industry in China.

Originally trained as a molecular biologist, Hao worked in tech before becoming a full-time filmmaker. He held various management positions at technology companies including Excite@Home, Yahoo China and Alibaba. From 2008-2011, he was the China Country Manager for TripAdvisor. As his career progressed, so did his passion in more artistic and creative endeavors. In 2012 he decided to pursue documentary filmmaking full time. His latest work, which is the subject of this episode, is a documentary called “People’s Republic of Desire”, a journey into the live streaming industry in China, where Hao follows a few top streamers on YY to document their lives behind the screen. The film has won the Grand Jury Award at the 2018 South By South West, among many other awards, and has screened at over 40 film festivals worldwide. The New York Times calls the film “hypercharged,” while The Los Angeles Times says it’s “invariably surprising and never less than compelling.” If you haven’t watched the film, we highly recommend doing so. It is available on Vimeo, iTunes, Amazon and Google Play; just visit desire.film for the links. Hao has produced two other documentaries, The Road to Fame, and Nowhere to Call Home.

Hao holds a bachelor’s degree in biology from the University of Science and Technology of China, a master’s degree in molecular and cell biology from Brandeis University, and an MBA from the University of Michigan’s Ross School of Business.


HANS TUNG: On the show today we have Hao Wu, or Wu Hao in Chinese. He is a Chinese American film director, producer and writer, in our opinion superstar in the coming. Originally trained as a molecular biologist, Hao worked in tech before becoming a full time filmmaker. He held various management positions at technology companies including Excite@Home, Yahoo China and Alibaba. From 2008 to 2011 he was the China country manager for TripAdvisor. As his career progressed so has his passion in more artistic and creative pursuits. In 2012 he decided to pursue documentary filmmaking full time.

His latest work, which is the subject of our show today is a documentary called People’s Republic of Desire. It’s a journey into live streaming industry in China where Hao follows a few top streamers on YY, it’s a GGV portfolio, to document their lives behind the scenes. The film has won the Grand Jury Award at the 2018 South by Southwest among many other awards and has screened at over 40 film festivals worldwide. New York Times called the film hypercharged, while the L.A. Times says it’s, “Invariably surprising and nevertheless compelling”. If you haven’t watched the film, we highly recommend doing so. It’s available on Vimeo, iTunes, Amazon and Google Play. Just visit Desire.film for links. Hao has produced two other documentaries: The Road to Fame and Nowhere to Call Home, and both are very good.

ZARA ZHANG: Hao holds a bachelor’s degree in biology from University of Science and Technology in China, a master’s degree in molecular and cell biology from Brandeis University, and MBA from the University of Michigan’s Ross School of Business. Welcome to the show, Hao.

HAO WU: Thank you. Glad to be here.

ZARA ZHANG: I wonder how did you come to choose the topic of this film and why did you choose to focus on YY out of all the live streaming platforms in China?

HAO WU: Back in 2014 in the summertime I went back to China to start researching my new film project. Actually, I had six project ideas in mind. I did some research filming in China. And then just randomly one of my friends who is a financial analyst at that time asked me, since you worked in tech for so many years, have you heard of this company called YY? It’s listed on Nasdaq. Its market cap back then was over $3, $4 billion dollars already. Can you tell me a little bit about how to make money? I was immediately intrigued, because for many years as Hans was saying I was working in China Alibaba and TripAdvisor China, but then I asked around my friends in Beijing and Shanghai, very few of them have heard of YY. The few people who have heard about it said, okay it’s so Diaosi 屌丝, it’s very low. It’s all about these gamers addicted to gaming, they kill time online. I decided to really research, how can a company that even tech people in the big city don’t know about get listed on Nasdaq. That was my first impetus to start researching this.

Then luckily through an industry connection in China’s Internet industry I was introduced to Li Xueling, the founder of YY. Li Xueling then introduced me to YY’s marketing department, so I shadowed their marketing department as they worked with live streamer, what they call hosts, Zhubo 主播. In China they did some events. Then I was like, wow, this is so fascinating because you see all these live streamers who are not that very talented in the real world, but online because with their mic, with their mixers, they sound much better, they look prettier and then they attract all these digital gifts that cost so much money. And then as soon as I realize there are a lot of Tuhao 土豪, the rich-

HANS TUNG: Rich consumers.

HAO WU: Rich patrons, as well as the Diaosi 屌丝, the losers, all getting together in showrooms and worship them. And every night when they do their shows it’s 20,000 to 50,000 to even 100,000 people watching simultaneously. I was like, wow, this is fascinating. Because world over if you want to see, the rich and the poor, they don’t get together, they don’t mingle. But online this community they are together, and they actually talk to each other, they worship each other. That to me was so fascinating I decided to make a film about that.

ZARA ZHANG: How long did it take you to make the film and what were your biggest challenges along the way?

HAO WU: I started filming in the summer 2014 before live streaming really exploded in China. If you guys, follow the development of the Internet industry in China you know live streaming really exploded into mainstream consciousness in 2016. My plan back then was, because I knew YY every year has this kind of Niandu Shengdian 年度盛典, the annual competition coming. I was like, wow, that’s going to cool. So, I followed my live streamers as they prepare to go to this competition to win “the Idol” title. That can be fun to watch, and then next year I can come back and film a little bit about the personal stories and cut it in and build a more typical three-act structure. But then, very quickly, soon after I finished filming the first competition where one of the live streamers won, the other one lost, the girl, the female, Shen Man, she had a plastic surgery and she moved to a different apartment so I cannot film her personal life and try to cut it in before the competition to cheat to build a three-act structure anymore. That forced me to continue filming to film the next competition.

I filmed all the way into 2016 as a witness of the explosion of live streaming in China so that’s almost like two years of filming, production. And then the editing took a long time, took a year and a half. Because YY is such a complex ecosystem. Their business rules, how they replicate the social status, the luxury cars, the digital lollipops, and how the agency works trying to promote the live streamers they manage. The business rules as well as the different levels of relationship is so complex. It took me a long time trying to streamline the story enough so audience could potentially understand it, but at the same time to really retain the complexity. Because that to me was what’s fascinating about this is that we can replicate real life online in this fantasy world. That took a year and a half for me to find the balance between simplicity and complexity, between portraying this virtual community versus the character stories, how the characters are feeling as their fame goes, ups and down, as online trolls trash them or blackmail them online, how they feel about the relationship with their families, and how their real life relationships are being impacted as their online fame grows.

HANS TUNG: It feels like the mixture of Hollywood, Netflix, Snapchat kind of all combined into one and more.

HAO WU: Yeah. When I was making the film, I’m a huge fan of Black Mirror, so the overall feeling is the film is very sci-fi-ish, because I feel like China is already compared to the US in the future already in many ways. I decided consciously to make this film feel more like a sci-fi film. Also, the feel itself is very Black Mirror-ish.

HANS TUNG: Your film is Black Mirror-ish. I’m saying that YY’s system reminds me of online Hollywood, and Netflix and Snapchat all combining into one.

HAO WU: That’s absolutely correct.

HANS TUNG: I love your title, People’s Republic of Desire. I find that very thoughtful. Can you explain the logic?

HAO WU: Yeah, I mean what’s the logic? Painaodai 拍脑袋, right, a lot of time. Because as a film title, you want to convey this film is about China. Obviously, People’s Republic of something. It’s something that took us a while to arrive at. What is this YY or virtual community about? It’s about, in the end, it’s so hard because people asked me to explain. Why do these poor people spend money online? Why do these rich people spend money online? I was like, it’s so hard to explain that. For each rose in that online community, their motivations are multifaceted. It’s not simple to summarize. In the end I just decided like, okay, desire, because the desire is this longing, is this aspiration but it’s-.

HANS TUNG: It’s emotion.

HAO WU: Yeah. And it’s broad enough to cover a lot of bases, like money, fame and relationships basically.

ZARA ZHANG: The film’s characters all leave a pretty deep impression on the viewer, from the two Wanghongs 网红, internet celebrities, who devote their whole lives to live streaming on YY, to the Tuhao 土豪, the super-rich, who lavish virtual gifts on their favorite streamers, to the Diaosi 屌丝 who is a migrant worker searching for cheap entertainment. I’ve always wondered, how did you find these people and how do you get them to agree to be filmed?

HAO WU: I was lucky as I mentioned earlier, I was introduced to Li Xueling. They introduced me to their marketing department. Back in 2014, I think YY was not as conscious about its PR.

HANS TUNG: No. If it was a $10 million company, it would be different.

HAO WU: Yeah. Nowadays if you go approach them, it’s probably going to be different. So, the marketing team was really, really nice to me. They introduced me to the different live streamers. I would say, can you help introduce me to this one or that one, and they would do that. At first, the marketing team definitely tried to push certain live streamers to me. Can you profile them? Because they are-.

HANS TUNG: Up and coming maybe?

HAO WU: No up and coming, it is more, why we want their live streaming all day.

HANS TUNG: Wholesome.

HAO WU: Wholesome, that’s the word. But then I talked to these wholesome live streamers, first of all, some of them can be boring. They can talk a lot in front of a webcam, but in real life they can be a really boring person. So that’s one thing. Secondly, some of them actually tell a different story online in terms of, one of them I really wanted to follow, I really liked and YY also liked. I’m not going to name names, but she portrays herself to be a college student online, but in real life she’s a 29-year-old teacher married with kids. So, there’s no way I can portray the real story about her.

HANS TUNG: Online she’s like a Baifumei 白富美 in college?

HAO WU: No, no. They never tried to pretend to be Baifumei 白富美, because everybody has to be, every live streamer has to have some needs that they need money so their fans can support them. So, they can never be Baifumei 白富美. But most of them kind of make up a story online about who they really are. But in terms of gaining their trust, in the beginning, the live streamers were confused. They thought I was making a corporate video for YY. After I showed up a couple of times they were like, “Why are you still coming back?” I said, “No, I am making an independent documentary.” And they were like, “What is an independent documentary? What’s going on in the film?” I was like, “I don’t know the ending yet. Can we just hang out?”

With the guys it’s easier. With the migrant worker, with Lao Li, the character was really easy they open up to me. Because I’m a guy, we can just hang out, have beer, go hang out. But with Shen Man, it was very difficult because she’s a girl, she livestreams in her bedroom, she flirts and talks sometimes dirty jokes to her patrons. And with me, a guy, in her bedroom filming the whole time, she felt really uncomfortable. So, for a period of time, she actually said, “You cannot come.” So, I’ll fly back from New York to Chengdu and wait for a week or two because I’m very thick skinned and every day I just keep on knocking on her door, “Can I come in? Can I come in?” In the end she let me.

ZARA ZHANG: You filmed her in some really intimate moments including when they’re like crying or really intense moments. How do you get them to be comfortable in front of the camera?

HAO WU: I think the key is you just have to show up. Once you show up holding the camera in front of them long enough, they kind of forget that the camera exists.

HANS TUNG: That’s a very good point. And they do it online anyway, so they get used to it.

HAO WU: Yeah.

ZARA ZHANG: Many reviewers have called the film provocative and unsettling or terrifying. Was that part of your intention? Did you mean for it to be that way, or was it more like an unintended consequence?

HAO WU: I think there are different types of filmmakers, different types of documentary filmmakers. Some documentary filmmakers just want to give the impression that you’re just observing life along with the filmmakers. But I’m the kind, I want to tell a good story. I want to find the most dramatic moments to tell a good story, to give a strong impression on my audience and let my audience try to figure out what the message is. Obviously, I followed them for two years, I have like 700 hours of footage which I shot, as well as hundreds and hundreds of hours of recordings of their live streaming shows. It’s up to me to pick the right moment to convey whatever I want to use this film to convey.

So, yes, I intentionally really pushed for some dramatic or provocative footage and kept some footage in the film, because even when I explain live streaming to a Chinese audience who may have heard of it but who don’t understand it, they all find it shocking, too. Because live streaming is something very uniquely Chinese, very uniquely complex and astonishing also because the amount of money being transacted on any given night. Yes, I think it’s part of my intention. It is also part of what the reality is. It is really shocking.

HANS TUNG: I see it as an investment thesis. We think that there will be other forms of live streaming in other emerging markets. Whether it is Southeast Asia, or Latin America or other places. Because when I looked at YY, when my colleague Jenny made an investment, it feels like a bit of pro wrestling, and soap opera during the day in the US and professional sports all combined into one. There’s a very intense feeling that even the most Diaosi 屌丝 users, the more mass-market users can participate and feel like a part of a movement to change the order where your champion, the person you support could end up winning it all. And if he or she wins it you feel like you did it as well. Almost like sports. That’s why sports is so popular.

HAO WU: That’s right. That’s why YY and other major live streaming platforms they all have competition. They all have annual competition. They also have monthly competition or sometimes weekly competition because they want to encourage live streamers’ fans, the patrons and the poor fans all get together to support your idol, get him or her to win the number one for the vanity for the fame.

HANS TUNG: So, wherever soccer is popular I think there’s a chance for live streaming to have a shot.

HAO WU: But we need the whales.

HANS TUNG: We need the whales, yeah. And there are people who gamble on soccer games, so I feel that it’s there. You just need to have a great team to get that out of people.

ZARA ZHANG: I wonder if you got different reception to the film from Chinese audience versus American audience.

HAO WU: Very different. I think here, in the developed world, not just in the US like in Europe, when people watch this film they were like, “Wow, can this be real?” Their first reaction is like, this is so crazy. I think they look at it almost really like Black Mirror, because several reviewers mentioned Black Mirror in their reviews of this film. They really do think that this is a very dystopian near future kind of story. But I think for Chinese people, it’s real. Because first of all we have heard of live streaming if you’ve not have been a fan of live streaming. Secondly, in terms of the motivation, it’s a lot more understandable for Chinese people to understand why the rich want to show off by throwing money online.

HANS TUNG: They cannot do it in the real world, it’s too dangerous.

HAO WU: Yeah, it’s too dangerous. Also, in the real world the rich people hang out with rich people, they don’t stand out. Online they stand out among tens and thousands of poor people. The poor people just say, “Oh, you’re so awesome.” Weiwu Baqi Shuai 威武霸气帅. That’s what they say. Their ego gets a huge boost. Here, people don’t understand that but in China people immediately get it.

ZARA ZHANG: Recently we have actually been seeing live streaming slowing down in China whereas short video is rising fast to become the go-to medium for entertainment for the vast majority of Chinese mobile internet users, like Douyin 抖音 and Kuaishou 快手. Did you see this trend coming when you were making the film?

HAO WU: No, I was so busy editing my film. But it’s kind of obvious. You guys definitely know better. Douyin抖音 right now, or the short video Douyin 抖音短视频, Kuaishou 快手, they’re taking a lot of the buzz from live streaming. But also, live streaming, in my view, I mean I want to hear what you think, and short video are very different, the audience appear very different. Because in live streaming you really need to be spending an hour, at least an hour every night watching. So, who does it appeal to? People who are lonely, who don’t have friends, who are staying home, who don’t have income, right? The Diaosi 屌丝 population. But if you look at short video, short videos have a much wider appeal. It’s very short, it’s kind of funny. You can spend however much time you want on it. So, no wonder short video, right now the popularity I think overshadows live streaming.

HANS TUNG: We’re a shareholder in TikTok, in ByteDance 字节跳动, so we know how well they’re doing.

HAO WU: Can I make a film about that? Can you introduce me?

HANS TUNG: Yes, you can. I can introduce you to Zhang Yiming. I will guess there’s probably a lot of overlap between YY users and Kuaishou 快手 because Kuai is very grassroots, mass market as well, as you know. I think users can be on both platforms and get different entertainment value out of it.

HAO WU: Yeah. A lot of the YY live streamers I follow actually, when Kuaishou 快手 first started taking off they were all using Kuaishou 快手 as well.

ZARA ZHANG: One impression I’ve been getting, working in US-China cross-border tech is that there’s a general sense among people in China that tech is a force for good, whereas the opposite is true in the US. Do you agree with this assessment?

HAO WU: Are you talking about media impressions?

ZARA ZHANG: Just general public.

HAO WU: Honestly, I feel like in the US we tend to live in our own media bubble, right? Depends on which media we follow, which Twitter celebrities we follow. I feel like if you watch a lot of the films coming out about American internet, I would say the majority of the internet consumers are not as concerned as some of the media elites about “the dangers” of the internet, of technology. Even though, yes, all the mainstream media right now, we are talking about the Facebook, or privacy, or the alienating nature of technology in the mainstream media. But if you watch American Meme on Netflix, it’s a documentary about Instagram celebrities, or if you watch Cam Girlz- I recently talked to a reporter who is doing a story, writing a book about Twitch, America’s premiere live streaming platform. I think it’s the same thing. If you talk to the actual users, their day to day, they are not thinking as much about that, but I definitely do agree, in the mainstream traditional media in the US there’s a lot more pause and reflection about the complex roles technology can play in the society as compared to what’s happening in China today.

HANS TUNG: But when you were in China filming, do you feel there’s more a general sense of people in China think that technology or internet can make their lives or make the world better?

HAO WU: Oh yeah, absolutely. I think in China, it’s been well discussed elsewhere, we don’t have as much of a concern for privacy per se. That’s not to say everybody don’t care about privacy, just in general. And also, we are more open to embrace the latest, the newest technology. Even right now, right? Chinese people still believe in technology even like AI. Here AI has almost a bad name now in the US, but in China we still believe AI can bring a lot of good.

HANS TUNG: I think what the Chinese are going through is very similar to founders and general consumers in Southeast Asia, in Latin America and in India. In developing countries where often world is not as efficient, extremely inefficient, you feel like tech is changing and making a difference. In developed countries, the gap is not as big between online and offline.

ZARA ZHANG: I want to talk about your very interesting career path. You were trained as a biologist, then went into tech and then filmmaking. Could you talk about how you made these transitions and what guided your decision-making processes?

HAO WU: When I was growing up in China, even in middle school and college I was always interested in the humanities and arts. But as a Chinese son of very traditional Chinese parents, your parents would, and it’s not just the parents, the entire social expectation kind of nudge you, they never pushed me, they nudged you into doing STEM.

HANS TUNG: They guide you to do something better.

HAO WU: Something stable, something with a better future. That’s why I decided to do biology, do science. But then it was not satisfying. I love science, but it wasn’t emotionally satisfying. Then I didn’t know what else to do. As a good Chinese immigrant, you do either business, law or medicine. I picked business because it’s the most flexible. I actually love tech. I love tech. I started off as a product manager at Excite@Home doing web products.

HANS TUNG: What great timing.

HAO WU: No, I joined just as the bubble was bursting. Then I worked my way up from product management into general management. I helped Alibaba launch Alimama.

HANS TUNG: That’s a very important product.

HAO WU: Yeah, so the Alimama platform. But then I guess I always had this urge to express myself more. I like product management because it is creative. You work with a team of people to do it. But gradually as I become more and more into general management, I feel like I’m getting farther and farther away from the creative process of actually making it. I love to get my hands dirty. I’ve always been doing some writing or filmmaking on the side.

HANS TUNG: Which years were you at Alibaba?

HAO WU: 2007-2008. That’s right after the merge with Yahoo.

HANS TUNG: That’s right. Yeah.

HAO WU: At a certain point I just had to ask my question, do I want to be an entrepreneur, launch my company, become a multi-millionaire first before I do what I like, or do I want to do what I like right now. It took a while for me to really say, it’s okay to not be a multi-millionaire and do arts. So that’s where I am right now.

ZARA ZHANG: When you went to Alibaba was that the first time you were back in China after spending a lot of time in the US?

HANS TUNG: You were probably with Yahoo first?

HAO WU: No, I joined the Yahoo China side right after the merger. Initially I was managing the technology transfer of Yahoo’s advertising technology, the ad networks and exchange, into the Alibaba Group. I was managing the deployment of technology so the ad operations. I moved back to China 2004, took a year off doing film making and then I joined an e-commerce startup. That didn’t go anywhere so then I joined Alibaba because back then people were already talking about Alibaba as a very unique Chinese Internet company. Because the first wave of the Baidu and the Sohu 搜狐, you can always argue they were a copy, it’s a copy to China model. But Alibaba was really unique so that really intrigued me. I really wanted to understand the culture, what makes Alibaba so different from the rest of the crop.

HANS TUNG: Right. And what was your takeaway after spending there over a year?

HAO WU: Personally, I loved it. I think the Ali culture is so strong I personally don’t think it’s right for everyone. But I consider myself still very “local”. I get the culture, whether you’re talking about the close camaraderie, the 9-9-6, the voluntary 9-9-6. Ali’s all voluntary 9-9-6. I like that. In Ali, it’s like YY. Everybody was battling. Jack Ma is the general. It’s like, “We are trying to build a great China. It’s us against the world. You guys are the troops. Let’s all do the battle.” I like that kind of feeling, but then some other people find it so different.

HANS TUNG: Brainwashing.

ZARA ZHANG: And then you went to TripAdvisor to be their General Manager for China. What was that like?

HAO WU: That was very different. TripAdvisor China had the advantage and disadvantage of a typical Western Internet company trying to expand in China. Whereas you have a lot of great industry know-how, you have a very successful business model in the US, but how to adapt that in the China marketplace where it’s-

HANS TUNG: So fast moving.

HAO WU: Fast moving, super competitive. Do you want to replicate the success story in a different market, or do you want to create something new? That was always something we struggled with. It was a great learning experience but a challenging one.

HANS TUNG: Did you guys compete with Kuxun 酷讯 and Qunar 去哪儿 back then?

HAO WU: I think we acquired Kuxun 酷讯.

HANS TUNG: That’s what I thought.

HAO WU: Yeah, we acquired Kuxun 酷讯.

HANS TUNG: Because Zhang Yiming was part of Kuxun酷讯.

HAO WU: That’s right. We were competing. TripAdvisor was primarily a hotel review so there was no pure play competitors in China back then. The two biggest competitors we looked at was Ctrip 携程, because Ctrip 携程 has both hotel booking as well as tons of reviews, as well as Qunar 去哪儿. Qunar 去哪儿was a metasearch. They have a lot of hotel data and also, they aggregate a lot of hotel reviews.

HANS TUNG: Actually we did a simple analysis, look at the Chinese founders who sold their first startup to an American company, worked there for a year or two and hated it because it’s so slow and not fast-moving enough, and they come out and do their next startup, the success rate on their next startup is super high.

HAO WU: Oh, you should have told me that, because when I quit TripAdvisor, I was thinking to do a startup, but then I thought, oh, there’s a film I didn’t finish in editing. So, I gave myself six months to finish editing that film. The six months became a year, became a year and a half. By the end I was like, “Should I go back?” That’s when I decided not to go back to tech.

HANS TUNG: You could’ve done either one successfully.

HAO WU: Yeah.

ZARA ZHANG: So, are you still playing with the idea of entrepreneurship?

HAO WU: No. It’s really funny because whenever I travel back to the US, the immigration will always say, “Welcome back to the US.” Sometimes they’ll say, “Oh, what do you do.” In the past whenever I said I’m a filmmaker, I always feel like I’m a fraud, like an imposter, the imposter syndrome. But now finally I feel like I can say I’m a filmmaker.

ZARA ZHANG: What’s the next film we can expect from you? What are you working on?

HAO WU: My new film is launching on Netflix, it’s a Netflix original short. It’s a 39-minute. It’s called All in My Family. It’s about me having kids through a surrogacy in the US and take my kids and my “modern family” back to China and face my traditional Chinese parents. If you guys watched Ang Lee’s early film, Wedding Banquet, it’s kind of similar to that. It’s a comedy with a lot of tears. That’s my own story so you’ll see me, you’ll hear my voice in that film.

HANS TUNG: Do you find Ang Lee as an inspiration, a model or something?

HAO WU: Obviously. I think he’s amazing. He’s someone who can stay truly Chinese but also has universal appeal because he focuses so much on the human emotion.

HANS TUNG: Yeah. That’s part of motivation for us to do 996 as well. We’re nowhere near but it’s the same kind of thinking.

ZARA ZHANG: We’re really appreciative of people who can tell the China story in English to the greater world in a way that’s authentic and true to the actual experience of living in China. In that way I think 996 and what you’re doing are kind of in the same vein.

HAO WU: Thank you.

ZARA ZHANG: As someone who has had a lot of dramatic career shifts, I wonder how you develop the self-knowledge to know what you’re good at and what you should be doing? Because I think a lot of our audience are younger people trying to figure out what their next steps should be and whether they should move to a different field etc.

HANS TUNG: What did you do to help you find your true self and true calling?

HAO WU: That’s a tough one. A lot of times you have to be almost stupid.

HANS TUNG: Or idealistic.

HAO WU: Not idealistic, you have to be pigheaded enough-.

HANS TUNG: Stubborn enough.

HAO WU: Stubborn enough to really believe you can do it in order to do it. That’s a prerequisite. Despite what everybody else tells you you’re going to fail, you have to have the strong- If we put in a bad word, it’s ego. You have to have ego that you can do it.

HANS TUNG: That’s true, a chip on the shoulder.

HAO WU: Yeah. And also, secondly, just start doing it, rather than thinking about it. When I wanted to make films, I just started writing a screenplay, I picked up a camera, started reading some books, started making short films, watched a lot of film and try to learn it that way. I did it, like I said earlier, on a part time basis for a long time before I had my last film which is The Road to Fame, Chengming Zhilu 成名之路. When I saw the film, when I premiered the film at festivals, I knew I could do this. I knew my next film would be even better than that. You need to be able to get your hands dirty to try it out before you know you can do this full time or not.

ZARA ZHANG: Have you figured out a business model for documentary making?

HAO WU: No. It’s really hard because when I first started doing documentaries full time, every once in a while, I put my business hat on. I’d be thinking about the ROI of all the hours I’m putting in.

HANS TUNG: Your MBA degree has to be worth something.

HAO WU: Yeah. Where can I optimize this process to make it faster? But you can’t. If you think about it, documentary film by nature has limited market appeals, just like certain types of writing. There’s no business model per se. I’m not doing this right now to really try to make a lot of money. But ideally once you make enough films and have enough repetition, other people will commission you to do a film, like HBO and Netflix, and then that’s how you can make a decent living. But right now, I’m also like kind of in transition, thinking about the other ways-.

HANS TUNG: Non-documentary kind of films.

HAO WU: Like narrative films, like commercial narrative films and there are companies in China that’s talking to me right now. I’m exploring that as well.

ZARA ZHANG: Hans, I know you really enjoyed the film.

HANS TUNG: Yes, I did.

ZARA ZHANG: I wanted to just hear from your perspective what do you like about it and why do you find it so compelling?

HANS TUNG: Partially it’s personal because GGV was an early investor in YY so just seeing that story being played again and see how the characters are in it different but very familiar, is something that’s easy for me to relate to. Secondly, I think Wu Hao did an amazing job of showing the complexity of the system. I struggle to explain to the westerners how YY works, yet with a film everything becomes so alive. I think if we have more time, we’ll probably want to go into how it is very similar to how professional sports and other forms of entertainment work in the Western world were developed all around the country, around the world. How there’s a lot of similarity between the two.

I would love to see Wu Hao go through some of that later in another format to show how he sees it too. Because a lot of things I saw in the film are maybe uniquely Chinese, but the values are extremely universal. It’s the universal aspect that’s not as obvious to westerners who watch it for the first time. They were so shocked by the details that they forget that there is a universal connection as well and that’s something that I’m sure Wu Hao will do more with that kind of topic and material over time.

ZARA ZHANG: You lived in China on the ground for eight years so this reminds you of what you saw.

HANS TUNG: Totally. And even when I go back to China today, I still see a lot of that. It’s a challenge to the point where it’s a country with a rising middle class, but also a group of people kind of left behind as well, and they want to feel part of this progress and movement. By participating on YY, it gives them a chance to do that. However little money they make they’re using that in a way to give themselves, their life a lot more meaning. That part of our connection is extremely universal. It may look specifically Chinese, but the desire was a great, great word. The desire to be connected, to be meaningful, to be part of a movement is extremely universal.

HAO WU: Yeah. I think whenever people ask me whether the YY model can become popular in the US, I say you already have it; it’s called YouTube. The vlogging never took up in China for various reasons but then live streaming kind of took the role of vlogging in China. If you look at the Internet celebrities on YouTube, the type of content they produce, and also how they rely on stunts, controversy to generate popularity, it’s very similar to live streamers in China.

HANS TUNG: And YouTube, a lot people don’t see it, but YouTube almost fails at monetization the way YY has done. If you have all these interesting broadcasters on YouTube, the form of monetization should not be just advertising. There are actually users from around the world willing to pay for additional value-add services on YouTube. It’s just that YouTube did not do as good a job as they could have. One thing that we want to do when we invest in companies, hopefully they learn the best of both the US and China and build companies to provide services that we think are truly, truly world-class and multicultural.

ZARA ZHANG: The concept of 9-9-6 has been in the news a lot recently with 996 ICU and all that. Jack Ma just released an article about what he thinks about the phenomenon. I was wondering as someone who has lived in both US and China deeply, what’s your perspective on this kind of, I don’t know if we should call it hours or mentality, but this phenomenon?

HANS TUNG: Do you work 9-9-6?

HAO WU: As a filmmaker, I work longer than programmers. I’m editing around the clock. I think 9-9-6, I think the reality is that most startups are doing 9-9-6, right? Whether the startups are in the US or in China, if you want your startup to succeed, or anybody who’s doing anything they feel truly passionate about, they will do 9-9-6. I remember when I was working at Alibaba, when I was launching TripAdvisor China, we were all working 9-9-6. Nobody complained about it. Everybody felt so excited being part of something great. They want to work 9-9-6.

I think right now what maybe the discussion in China, there are two reasons why we’re having this discussion in China. One is, I don’t pretend to know the younger generation, I do feel like the younger generation think differently compared to the older generation. That’s one. Secondly, a lot of the Internet companies in China in the headlines, the Alibaba, the Tencent, they’re established companies already. For established companies to continue to have this, it’s hard to cultivate the startup culture, the cohesiveness-.

HANS TUNG: That mission, that feeling-

HAO WU: That mission to get people excited to willingly do 9-9-6. That’s why we’re observing Silicon Valley as well, right? There are some companies with the exception of Amazon, but in general, I think instead of trying to enforce or ask people to do 9-9-6, their HR should do a better job in terms encouraging people to really buy into the company’s mission, buy into the project they are working on. No, I shouldn’t be advocating volunteering, that sounds bad. Make it fun for people wanting to do that, wanting to help the company.

HANS TUNG: I’ve worked in probably six or seven different companies in my career. Even VC alone, GGV is my third partnership. I think a lot of people think that they’re just working in order to live. They talk about the work-life balance. Completely understandable. But for the things I do, I don’t just do it for my employer, I’m doing it for myself. I’m sure when you decided to do filmmaking, you’re doing it for yourself. There’s a story you want to tell, there’s a mission you want to achieve. There’s a personal growth you want to get to. There’s a personal agenda and viewpoints you want to come across. And for all of us who are multicultural, who have lived in multiple cities, how do you have something that’s uniquely you with quite a bit of Chinese elements, yet at the same time you want to make a universal so that other people don’t think you’re weird but think that, “Wow, there’s something deeper there and something I can learn from.”

So, to me it’s never about work-life balance, it’s always about work-life integration because I don’t treat work as work. I treat work as my life calling. When you treat something as a life calling why would you be balancing away from that? If you treat it as a job just to make money, you don’t find meaning in what you do, quite frankly you shouldn’t be doing it at all. You should do something that you truly, truly love so you don’t find it something that you have to fight against.

ZARA ZHANG: Yeah. With that, I want to move to the last part of the interview which is a round of quickfire questions so you can just say the first thing that comes to your mind. The first one is, who is the entrepreneur you admire the most and why?

HAO WU: Tony Ma. He built a truly, truly professionally well-managed Internet company in China.

ZARA ZHANG: As someone who worked at Alibaba.

HAO WU: No comment. I think Alibaba’s business is hard to replicate. It really requires some charismatic leaders like Jack to do that.

HANS TUNG: That’s true. We’ve seen it from 2003 onwards so we know without Jack, Alibaba wouldn’t happen.

HAO WU: That’s right.

ZARA ZHANG: The second one is, what’s something you read recently that you recommend?

HAO WU: I just finished reading the latest issue of Foreign Policy talking about nationalism. I find that fascinating. It’s emerging worldwide, everybody is talking about nationalism. It’s also happening in China. Why is that? It’s not a book but it’s a magazine.

ZARA ZHANG: What’s a habit you have that you think has changed your life?

HAO WU: Always believe that in order to get better I have to do actual work. Benniao Xianfei 笨鸟先飞. That’s what my parents kept on telling me when I was little. Even nowadays sometimes I find a lot of the political discussion in this country is baffling. It’s like, if you want to get better, just work harder.

ZARA ZHANG: What do you do for fun?

HAO WU: I don’t have. I have two kids. I have my films so it’s always about work. I watch films on Netflix.

HANS TUNG: My wife asked me the same thing and I gave her the same answer and she’s not happy with that.

ZARA ZHANG: When is your Netflix film coming out?

HAO WU: May 3rd.

ZARA ZHANG: Okay. So, everyone please go watch that on May 3rd. And with that, thank you so much for your time and we really enjoyed the conversation.

HAO WU: Thank you for having me here. Thank you.

Episode 36: Tao Peng, President of Airbnb China, on Redefining Travel

GGV Capital’s Hans Tung and Zara Zhang interview Tao Peng (彭韬), the president of Airbnb China.

Prior to joining Airbnb in Sept 2018, Tao has founded a number of companies in the travel space including Breadtrip, a social app for recording and sharing trips, and more recently, CityHome, a management platform for short-terms rentals across China. Before founding Breadtrip, Tao has worked at the network security provider IntelliGuard and has also worked for McKinsey for two years as a management consultant. Tao graduated from the University of Melbourne with Ph.D degree in computer networks and the Huazhong University of Science and Technology with a bachelor’s degree in communication engineering. He is also an avid traveler and has been to over 50 countries across seven continents.

Earlier on the 996 Podcast, we have interviewed Nathan Blecharczyk, Airbnb’s co-founder and chief strategy officer as well as the chairman of Airbnb China. If you haven’t listened to that episode, we highly recommend checking it out here; it was released around exactly a year ago on April 11th, 2018. Airbnb is a GGV portfolio company and our managing partners Hans Tung and Glenn Solomon actively works with the company especially with regards to its China strategy.


HANS TUNG: Hi. On the show today we have Tao Peng or Peng Tao 彭韬 in Chinese, who is the president of Airbnb in China. Prior to joining Airbnb in September 2018, Tao has founded a number of companies in travel space including Breadtrip 面包旅行, a social app for recording and sharing trips, as well as more recently CityHome 城宿, a management platform for short term rentals across China. Before founding Breadtrip, Tao has worked at the network security provider, IntelliGuard, and has also worked for McKinsey for two years as a management consultant. Tao graduate from the University of Melbourne with PhD in Computer Networks, and the Huazhong University of Science and Technology with a bachelor’s degree in Communication Engineering. He is also an avid traveler and has been to over 50 countries across seven continents.

ZARA ZHANG: Earlier on the 996 podcast, we have interviewed Nathan Blecharczyk who is Airbnb’s Co-Founder, Chief Strategy Officer, as well as the chairman of Airbnb China. If you haven’t listened to that episode, I highly recommend checking it out. It was released around exactly a year ago on April 11th, 2018. Airbnb is a GGV portfolio company, and our managing partners Hans Tung and Glenn Solomon actively work with the company, especially with regards to its China strategy. Welcome to the show, Tao.

TAO PENG: Thank you for having me.

HANS TUNG: So, Tao, you have been running Airbnb in China for almost eight months now. How has it been like for you and what are the top three things on your mind right now?

TAO PENG: It’s a great journey. At the moment for me I think still quality, community and a brand are the top three priority for me. For travel everybody wants to have a good travel experience, so we focus a lot for quality because quality is very important to ensure people have a great own trip experience. We launched Plus last year. For Plus we have more than 100 checklists to make sure Plus satisfied users’ travel requirements. Plus is one of the key drivers for us to offer high-quality listing. Second, actually we focus a lot on the community building. We believe human trust is a very precious part for travel, so we want the host to be very welcome to the guest and the guests feel belonging anywhere. The third part actually we focus a lot on building the brands. We believe Airbnb is a super brand, especially to the millennials. Sixty percent of Airbnb China travelers, millennials they travel around the world. They really want some guidance on how they explore the world and Airbnb has a unique position to offer that guidance.

ZARA ZHANG: So, could you talk about the first time you met with the Airbnb team. When was it and what was it like? And how did you find each other?

TAO PENG: That was a very interesting experience and I found that actually is a really kind of destiny to me. Originally it was not for an interview. Actually, while doing that I really find out how Airbnb thinks about managing platform. I just had a chat with Nate. We actually have a chat and we find actually that really, we have very good chemistry. Nate is very smart, successful and humble. It is a very unusual combination. I was really deeply impressed by that. We had a lot of chat. Then Nate went back to the US and decided to say this was the opportunity for Airbnb China. I was very impressed. He just decided flying from San Francisco to Beijing just like immediately that we want to have a chat. We have a five-hour dinner. The next day we have about another five-hour breakfast. I was feeling like, kind of like a moment for me, I said I think
this is a dream I really share. I really want to work for that.

Sometimes, to be honest, I used to be very kind of proud, thinking I can never work for anyone. The only company I worked for is McKinsey and I was a lecturer at Melbourne University. But I feel like I shared a dream with Airbnb, and also, I think the way they redefine travel is really something I feel very passionate about. And more important being an entrepreneur I realized the secret of this industry. Scale is the Holy Grail and Airbnb has the scale. The second actually travel is global. I do think, you know, to work with Airbnb is a better way to realize my dream, and so together we can help Airbnb. That’s the story.

ZARA ZHANG: When you were meeting with Nate was, he pitching you on the role?

TAO PENG: The first time actually we just had a casual chat, find out what is Airbnb. The second time it is. The second time we talked about this role.

HANS TUNG: After he spoke to you, he called me up as well to tell me how excited he was after he met you. We have been helping him for one or two years to look for the right person. It’s easy to start with senior executives in the top companies in China, but I think I give Nate the credit that by talking to a founder who’s looking for a bigger platform it actually makes a lot more sense that you are probably the best fit for them. In your mind, why do you think that the fit has worked out so well for you as well? Because a lot of people in China feel like, I don’t want to work for a foreign company. I have to deal with a lot of people back in-home office. They don’t know anything about China. There’s a lot of local decision making that need to be made. They’re going to be super slow because they don’t understand it, so I want to work for a foreign company in China, especially Internet space. That’s sort of a common complaint we hear about CEO, GM position for China for Internet companies from the US.

TAO PENG: I think there are three reasons for that. First of all, I think as I mentioned before I’m actually lecturing in travel space. I really know the exciting things and toughness about this space. We see lots of companies up and down. For me, I ran in basic change gear for a number of times just to get the right direction. I know for this one is a low frequency, it is especially challenging if you do not have the scale because you don’t have the good unit economics. While Airbnb has more than 6 million unique listings around the world, across 91 countries, that’s an actually unique asset, you can set a good foundation before you do bigger things. The second is Airbnb is very unique. Airbnb, their culture, their value actually helps the business. I think that’s the only company for me. I find the value and the mission directly help the business. I was an Airbnb guest first and then became Airbnb host. So, a number of situations, because I really believe in Airbnb value, I actually resort into a basic understanding of the host if he makes some mistakes.

If the guest requires something, some situation, I just give him a full refund. I think that this happens a lot in our platform. But if not everybody believes in this vision this will become a serious ticket. Basically, people will have to spend time to resolve that bad experience. I think that kind of seamless system makes Airbnb very unique and powerful. Third thing, I think, for me, confidence is directly linked to the founder. I believe we have lots of commonality, the dream. I really believe all the three founders have the passion; they believe in that so that’s something very special to me. Also, they gave me the assurance this can be different. So direct from the founder I see it from their eyes, I see in their eyes they really want to make the success. As I talked to Nate, I said China has 1.4 billion people. If it’s not successful in China how can you say Airbnb is for everyone. And China is so big, if you do not have listing and have homeowners in China how can we say Airbnb is anywhere. I believe that. This is why I decided. Although there are lots of problems, we need to tackle that’s fun problems.

HANS TUNG: Fast-forward to today, eight months later, are you still in the honeymoon period or have you woke up and say, “Oh my God, there’s so much to do and I don’t know if I have enough resources”?

TAO PENG: No. I really enjoy it; I still enjoy it. The key thing is I define myself as a problem solver. I really like to solve problems. I would feel very bored at something too comfortable. I could live in Melbourne. Melbourne is the most livable city in the world. I have stayed there for eight years. I could choose to just stay in Melbourne. I could be a lecturer at Melbourne University. But I really enjoy all the problems. And the most important is the problem solving. I think all this is very tough, but these things are very important to connect to a mission. We want to build a world where there are no strangers and people can travel and have the best experience.

Being a hardcore traveler myself, I think the best experience a traveler can have is this kind of mingle with the locals, to see something like a local. That’s the best thing about travel. I do believe that’s a reason why people want to travel. I think life is like a journey. The lens actually is limited, but the views are defined by yourself. If you want to broaden your views you have to travel because traveling you actually live another people’s life. I fundamentally believe this is why people want to travel. I believe the experience Airbnb is building is actually what will be attractive to people, especially people the young people, to realize this is exactly what they want. This is something I feel every day, although on a very tight schedule, I really feel very passionate.

ZARA ZHANG: Could you talk about your communication with the US headquarters so far? What has encouraged you and what have been some of the challenges?

TAO PENG: I think, how to explain the difference about China. But now actually I own one of the sentences, which is actually now widely propagated in the US corridor. I explain a difference saying that China is like another, different operating system. For example, the US is more like Android, it’s very open and China is like iOS. It is very closed, with everything. Think about if you do something port the program from Windows to Mac, then you just don’t simply redesign the interface, you actually rebuild the code. That’s exactly the effort I try to expand to the US headquarters they should do. This is why we will have a business unit in Beijing. We have engineers. We pretty have a full stack of people here. It’s like a startup. We also ask people to have this startup mentality, and we try to recruit the most aggressive people, aggressive and talented, and give them very ambitious goals. Inspire them by the big goals to go big. I think that’s the only thing you can do, the right thing you can do to be in China.

ZARA ZHANG: I think a lot of US founders have difficulty not seeing China as just another market. A lot of them still consider China as an international market. They don’t understand how you need to start everything from scratch. Do you get the impression that the Airbnb co-founders have been well receptive and open minded than perhaps other US founders you’ve met?

TAO PENG: I think they’re very open minded. I think Nate traveled to China a number of times, and actually still travels with high frequency. I think being physically in one place actually will make you instantly realize, wow, this is a different operating system. In order to make this happen, I also initiated a program called China Offsite. Basically, to bring all the senior folks from San Francisco to Beijing. If you ask all the people what is the biggest shock, the biggest shock for them apart from the big buildings is people here actually travel without their wallets. Everybody is just using mobile phones. They’re really impressed. These people without WeChat Pay they can do nothing. Basically, this instantly makes them realize, oh, WeChat is so important. Before they had us, or the payment functions to do something pretty. For them this is important. Why is that important? This is something that we with communication with people instantly realize this is, WeChat Pay, Alipay it’s just part of Chinese daily life. This is very different from the credit cards in the US. This can help them a lot to understand what’s the difference. I tend to use the operating system to describe the difference so if you want to port a program to China you have to rewrite the code, you just don’t redesign the interface.

ZARA ZHANG: Speaking of WeChat, I think Airbnb now has a WeChat mini-program. Could you talk about how that came about? Is that something you spearheaded after you joined?

TAO PENG: I think we just think about WeChat is virtually another platform for all Chinese. It’s actually a cross-operating system. We told the headquarters this is another way to broaden our top funnel traffic. We designed that. But the hard thing is just to make it work globally. Because Airbnb has lots of global listing. There are a lot of things that are actually not so dirty work at the back and need to be happening. It’s not like a local startup, just build a mini-program and you can do it in one week. We build that and we have to meet all the agreements, and we also need to make sure everybody’s committed to that. That has been a very good success. Now after WeChat program is increasing tremendously fast. We also, while having mini-program we can do lots of Chinese style campaign, like gamification of the red packet, and also connect this to the WeChat public accounts. That actually will be one of the growth drivers for us. We also believe that’s just in a nascent stage. I think there is more to come.

HANS TUNG: Airbnb has been putting a lot of resources as we all know into Airbnb experiences. Could you talk about how Airbnb experiences have developed in China? Are the Chinese consumers embracing it? What are the opportunities and challenges with this in China?

TAO PENG: Experience is our company’s strategy. I think it’s very important for us to provide, to use a magic journey. I think a few years ago we only have 10 experiences in Shanghai. Now we have more than 2,000 experiences in more than 10 cities in China. The experience has grown tremendously. When we design experiences what we do is we actually try to make sure this is something unique to offer to the guest. During the experience, we find out all the Chinese guests, especially young people they want to redefine travel. This kind of experience to them an eye-opening experience, and it’s actually easy to generate word of mouth. We have very good momentum for experience in China.

ZARA ZHANG: What are the most popular types of experiences?

TAO PENG: I think the most popular are photo walks. Basically, some people take you to walk around the metropolitan cities, to talk about history and have you take some photos. Just like I took an experience in Sydney. I’m just back from a trip from Sydney. That was amazing. Basically, it’s an Australian guy who used to study in China, so he gave us that experience, a group of Chinese guests in Chinese talking about the history about Sydney. All the guests actually feel that this is the experience they never have, and it’s a kind of upgrade of the traditional bus tour. For the young people, right away they try to share the WeChat moment. I think this kind of thing is a way for us how to redefine travel. Other things could be some things about nightlife. For example, you want to experience some kind of pubs so there is some local take you to have some drink. This is another very popular experience in Airbnb.

ZARA ZHANG: For the people joining those experiences, are they mostly foreign tourists or local Chinese people?

TAO PENG: Both. I think we can say more and more actually people use the experience for the weekends. They do not necessarily book the listing, but they actually view that as a way to experience travel. You can see in Shanghai and Beijing they have people within the city or come from the nearby city, they come to Beijing, another way to discover the city. Basically, I think we positioned ourselves, how to help people just live like a local. This is an important ingredient to our accommodation capability. People live there, in the accommodation and they want to find out what to do nearby. Sometimes they also have a dinner. Some people host like a dinner table. This kind of thing I find out that young people really like and it’s very viral, so people tend to be super fans about that. And remember, this is how Airbnb started, people really liked this experience. They were ambassadors. A person who really believes the experience will go very big. Also, we are working on a number of ways how to make booking Airbnb listing and experience very smooth.

HANS TUNG: How do you decide which experiences to select and feature on Airbnb in China?

TAO PENG: For us basically there is a category we have designed for experience. It’s the one I explained before. That is advice based on user’s feedback. They have good reviews, good conversions. The second is actually we also look at what’s the next city which needs this kind of service. People after booking want to look for something to do. All this together we will run some experiments to make sure the experience really fits the user’s needs. All the numbers can tell us which one is on the upward trend, which one is actually not exactly what people want and we need to some work on that. We have a set a very clear feedback loop to improve the product. Ultimately, I think this is something we tackle, the user journey. For user journey, it’s kind of a non-standard experience. We want to be unique. How to make it scalable? We had to break down the non-standard things to the standard components. We will identify what the key component to make up a unique experience is. I think all of this is an advantage or a barrier for us to accumulate, because we know exactly what the host wants and what the guests want, and we will find the things which make that scalable. Actually, some of the experiences now are in the pre-scaling mode, they scale in many countries. I think that’s something I think we find out is very exciting.

HANS TUNG: Wow. Sounds like experiences in China are becoming more weekend driven, which means that this will be a higher frequency of usage because it’s more local anywhere nearby.

TAO PENG: Yes. Recently we did a campaign called 48 Hours. We know travel is a low frequency, we want to create some scenarios to make sure people have a way to travel. This campaign basically gave people some unique listing, plus some experience. Design ways how to make a 48 Hours meaningful. That has been a tremendous success. We have a super strong growth lately, close to 3x growth across all China. In some VR destinations, vacation rental places, we’re nearly four times growth. We are very happy the local tactics took effect. The team is also very enthusiastic because we can move fast so we can capture the gain.

HANS TUNG: Great. We talked a lot about domestic travel Airbnb in China. What’s it like for outbound travel? As you know there are so many Chinese millennials going to different parts of Asia and also beyond Asia. What kind of a unique or Chinese tourist-oriented experiences or listings are there to maximize and make it easier for them to feel comfortable traveling abroad?

TAO PENG: For us what we’re doing now we basically try to talk to our partners all around the world, basically we host our partners. Make sure they can be Chinese guest ready. That could be like a hot water kettle, could be a sleeper. I also offer some congee, something like that. We talk to them say, hey, you get ready for the Chinese guests. In reward, we will give you a tag called Chinese-guests ready. Because we’re a separate business unit. Actually, we can own the ranking score and we can own this kind of tag. This has been very positive. Everybody really wants to embrace the largest travel outbound guest origin so they’re very super excited. This has actually been to a few countries. Or the host community, they are very keen to find out what the Chinese guests would like. In the future you will see, those guests will see some kind of listing that says, Chinese-guests ready. When they book that they won’t worry about communication. They will somehow have a Mandarin concierge and they won’t worry about the check in, check out, the luggage where it is stored. In return we’ll make sure all these houses have a good business. That’s actually what we try to play and try to have more an interaction with our supply to make sure we create a good circle to work to those benefits.

HANS TUNG: In which cities you have the most number of Chinese-ready partners?

TAO PENG: At the moment I think it is more in Japan. They have a number of Chinese-guest ready listings, but we talk more in Thailand and in Sydney.

ZARA ZHANG: In the early days of Airbnb China you guys were more focused on the Chinese outbound piece than the inbound piece. Is that still the case and how are you balancing the two right now?

TAO PENG: For us, I think we do not differentiate what is outbound or domestic. For us, travel is across the border. We are a global company so our only goal is to make sure the global network effect can play to its full potential. Everything just happened naturally. The first wave people don’t know Airbnb, they go outbound. They have a very good experience. They come back, they become maybe a host in Shanghai. Then some people from Suzhou, they come to Shanghai, they find there is a beautiful listing in Puxi 浦西 so they have a great experience. They come back to Suzhou and they have a listing as well. This is how it goes. Basically, all the network effect is very strong, especially where community driven. We always have the first visionary users, they’re co-host, they really believe in this culture, because they believe in this kind of human interaction. For us, I think it’s more to make sure this network effect won’t be blocked by some market conditions. We want to educate the market. We want to help the host to grow. So, we will offer some tours and offer our support to make sure they are not alone, that there is some people, we work together to provide this kind of guest experience. That’s our strategy.

HANS TUNG: What’s it like for you in the inbound market with foreign tourists coming to China? Do you need to do anything special to help them to get comfortable or acclimated to the Chinese environment sooner, quicker, faster?

TAO PENG: Yes. Inbound also happens naturally so for us some page, especially our host that would translate their page to English, they just make the inbound guests more welcome. China is set to overtake France as the world’s number one tourist destination by 2030, as the growing middle class in Asia is looking to spend more on travel. I remember the report, the foundation is that because Asia gets in more developers, people choose China as a destination more likely we will probably see lots of guests from the APAC region. That’s actually also good for the network effect. For example, you can see rich people from Malaysia, or rich people from Vietnam, middle class. They want to explore; they might travel to China because it’s closer.

HANS TUNG: A lot of people don’t know that more than 50% of the population lives in China, India, and Asia-Pac in the world. It’s an impressive user base for you to grow.

TAO PENG: I think a high-speed train is another game changer. Basically, you can very easily move around. Many travelers, especially inbound guests, they’re very impressed about the infrastructure in China. They really have a good time here. We will see this is the trend become more and more obvious. We will attract more and more inbound guests.

ZARA ZHANG: I wanted to talk about your earlier experiences. How did you go from consulting to working for a network security company, and to starting your own travel startup?

TAO PENG: That’s a very good question. I think for me sometimes life is random. Opportunities just come by itself. Then, I think the only thing that if you summarize all the experience, I think I have a very strong curiosity about life. I’m just very curious. This is a way that brings me to overseas studying. I’m very curious in network security so I did a PhD there. And then actually I had a chance to have funding for a startup. Then I just find that the opportunity in China is so big that I’ll go back to China and bring my network security startup back to China. Then, some kind of financial crisis happened that make me have to make a choice go back to Australia or stay in Beijing. I made a choice to stay in Beijing. Then McKinsey moved to the same building of my previous startup. That’s how I know that there’s a company called McKinsey. Then we interviewed, I get in there.

I think McKinsey broadened my education, broadened my horizon. Before them, I’m really like a hardcore tech. That’s actually helped. At the end I think I just feel like I have a passion to build a business from zero to one. To grow a business always was something I feel very passionate. Especially in the place I love, for example, travel. Basically, from my own personal travel experience, I feel like if you can have a good travel journey that will be a precious memory for you. I think that can bring people happiness. Actually, that’s why I founded Breadtrip, because we all remember the precious moments. People feel very happy in the trip journey. This is step by step. We find out. We get in the travel industry. Then we know that in the travel industry the most important problem to tackle is accommodation. That’s what people have to have, and they know this how it is in Airbnb. I feel like it was some kind of destiny, and also everything works pretty well in line with your mission and you know the industry well to solve. I think the goal is to bring happiness to people. This energized not only me or my colleagues in China.

HANS TUNG: Your left side brain has done well because you have a PhD in computer engineering. Then the right side of your brain you like to travel, and you’re passionate about travel building the community. How has this combination helped you to win, establish credibility with folks in headquarters back home and Airbnb in San Francisco?

TAO PENG: I think first one. I think Airbnb is a company that I really believe in their value, the way I think. It’s a natural fit in Airbnb culture. It’s a very interesting experience or funny experience. I joined here, the first day I just feel I belong here. I don’t feel like it’s something I’ve got to get used to. I talk to people and I just feel like we’re the same people. That’s really very unique. You don’t need to have people to jumpstart, like to educate a culture why I think like that, because I have always been thinking like that. The next part is basically I think the training I did in McKinsey is very helpful. How to do some structures, thinking, communication, be analytical.

So, everything should be backed by logic and numbers. That can gain some kind of credibility, so people think you’re not just like very passionate without thinking about the reality. And the third par,t I have close to seven years internal experience in travel. I learned a lot, good or bad. It’s a really great learning experience and I think that helped me a lot to think straight to the problem. Basically, there is no something, basically right to the problem. I like to communicate directly because I want to solve the problem. I think all these three things help me to communicate. I feel people here want to realize a mission, so they really commit to solve the problem. I have no problem communicating directly. Especially now I have this trust from the founders so I can just speak right away what’s the problem. I don’t worry about whether I should rephrase it because I know everybody believes, we all have the same vision and that we just need a quicker way to solve the problem.

HANS TUNG: A lot of people in Airbnb in San Francisco like you a lot so you’re definitely doing something right.

TAO PENG: Thank you.

ZARA ZHANG: When you were starting a startup in the travel space why did you pick content sharing as your starting point?

TAO PENG: I think when I started, I knew nothing about travel, to be honest. I had this kind of mission that the precious memories are a very important part. But with all this getting on I think I realized what’s the best way to deliver that. So, the learning, seven years of learning, lots of interaction and also being entrepreneur, you grow the business. I think all those things actually get you to know deeper the industry. Another reason of doing from content is actually that’s another wave of mobile Internet. At that time, I choose to be an entrepreneur, wanting to travel and use the mobile internet. Mobile internet is easy to get viral and you have good content. We designed an application basically distributed by Apple. That’s actually how I got started. During the learning experience from what you see, the numbers, and from what you see the user’s requirement actually make you realize what is the core ingredient of travel and the what challenging and also the secret of travel. That’s actually I think what I believe Airbnb, the most important for people to belong anywhere is accommodation. You have to offer that. That kind of belonging is what people are really looking for. That’s how we ended from there here.

ZARA ZHANG: What was the biggest challenge you encountered while building Breadtrip and what are some lessons you learned?

TAO PENG: You need to build a super team. I think the team is very important. You need to empower the team. You need to set the right culture. I think you should treat the team like a sports team. Everybody has to grow. The growth is the most important for the employee and the tough love to give. Very easy mistake to make is you think you’re very nice to people, but you don’t think about their growth. For me, I will focus a lot on how to grow the employees, make people everybody to their full potential. I encourage them just like a coach sometimes. This is something I learned.

HANS TUNG: Great analogy. That’s our experience as well. What kind of talent are you looking to add to the Airbnb China team, and how can our listeners reach out and get in touch?

TAO PENG: For the talent team we want to have in China, basically first that they believe in our vision, the ways we want to be. The second is actually they have to be really down to earth. They can solve problems. The next thing we want to grow is actually we want to build our offline capability to enable we have a good offline experience. The third thing is, the candidate that comes here should come with a growth mentality. People should have a very strong desire to grow, and also should get used to change. Any reorg, any change, for them, they should view that as a growth opportunity. That’s something like the core criteria I’m actually looking for.

HANS TUNG: How can applicants apply?

TAO PENG: At the moment we have opened, there’s a website where they can subscribe their CVs. Second, we also have a different kind of WeChat accounts so there is a link like Airbnb 爱彼迎, there are articles and also, they have the link, you click and supply. Thirdly, we also work with different kinds of recruiting websites. They also have job ads like LinkedIn. You can see these ads. I think this is all the channels. If they’re good candidates, they can reach out to us. We’re always hungry for talent.

ZARA ZHANG: In July last year Airbnb invested $5 million in CityHome, a platform for managing short rentals in China, and the company that you co-founded. Could you talk about the synergies between CityHome and Airbnb, and how have the two companies worked together since then?

TAO PENG: The synergy is that CityHome more provides good supplies. The reason investment is that Airbnb wants good supplies. They want to build a good ecosystem. For some cases, you have this professional company running, you just make some kind of low-frequency maintenance issues more scalable. The way Airbnb works with CityHome is just with the ecosystem in mind CityHome is just one of the ecosystems. We work closely with CityHome to try out some kind of techniques, how we work with our downstream suppliers. We take this learning and apply it to all ecosystems because we have this kind of like relationship. We can build a trusting relationship and we can run something quicker. That’s basically is something we do with CityHome.

ZARA ZHANG: Next we’re going to a set of quickfire questions. Just say the first thing that comes to your mind. The first one is who is an entrepreneur you admire the most and why?

TAO PENG: I like the founder of Bridgewater, Ray Dalio. I think he’s an amazing guy. I like his book. I put his book on my desk all the time. I think what he writes summarizes a lot I learned during the past seven years. I wish I could have read his book earlier but I’m not sure-

HANS TUNG: You would not have learned as much.

TAO PENG: At the time maybe I wouldn’t have believed it. I really like the book and I like the author.

ZARA ZHANG: I realize all self-help books you just draw a new level of meaning from it once you become an operator.

HANS TUNG: That’s right. You learn a lot more because you’ve experienced it. I know it helped me a lot when I was a founder.

ZARA ZHANG: What’s something you read recently that you recommend, besides that book?

TAO PENG: I’m reading a book called The Score Takes Care of Itself. It’s is a legendary coach.

HANS TUNG: Of the 49ers.

TAO PENG: I also like that book because I played basketball before and think the sports analogy reminds me a lot of some concerns with management issues, how to encourage a team, how to build the right team culture and how to actually make people proud, that it’s something they feel is worth fighting for. I think that book is great. I’m somewhere in the middle of that.

HANS TUNG: I’ve read the book. I agree. Glenn has read the book as well. He highly recommends it and I can see why.

ZARA ZHANG: What’s a habit you have that you think has changed your life?

TAO PENG: I think the habit that changed my life is reverse thinking. I used to have something like a hypothesis I want to prove is right but now I actually for a hypothesis try my best prove to prove it’s wrong. It sounds very counterintuitive, but I think I made a lot of mistakes because I tried to prove a hypothesis right. It’s not scientifical, but I realize it’s a thinking fraud. Now actually when I have something, I always think the worst scenario so what could go wrong. If you find one out you just do not do that, then you’ll be right. That habit changed me a lot.

ZARA ZHANG: And not making pre-assumptions about things.

TAO PENG: If you make assumptions, you want to prove right you can do lots of cherry-picking. It’s very easy to prove it right and then you claim success. Because the reality is the world is so complicated, you only simplify it for a reason. But if you make big decisions, if you’ve simplified, cherry-picking some stats to support your judgment, you can easily claim success for yourself but it’s not for the reality. At the end, the reality will tell what it is. It’s better to have this kind of reverse thinking mindset. You try to challenge yourself or ask your team to challenge yourself. We want to build a culture where everybody can challenge me. Maybe challenges can just make you think. Maybe the challenge might vary, but at least you see there’s a blind spot. Everything has blind spots. That habit helped me change a lot.

HANS TUNG: I’m going to ask you the toughest question in this interview. What is your favorite travel destination?

TAO PENG: Africa.


TAO PENG: People migrated from Africa. Every time I travel to Africa somehow, I just feel connected. I just feel like I belong because this is how humans started, right? They just started from East Africa. They still have a particular fashion or love East Africa. I’ve been to East Africa a number of times, see the safari, climb Kilimanjaro. I don’t know, I just feel like it’s a very unique place to me.

HANS TUNG: Great. Cool.

ZARA ZHANG: Thanks, Tao, for your time.

HANS TUNG: Thank you. Really enjoyed it.

TAO PENG: Thank you.

Episode 35: Jane Sun, CEO of Ctrip, on Running Asia’s Largest OTA

GGV Capital’s Hans Tung and Zara Zhang interview Jane Sun (孙洁), the CEO of Ctrip, the largest online travel platform in China which is listed on the NASDAQ. It’s current market cap (at time of recording) is around $23 billion.

Jane has been at Ctrip for 13 years. Prior to becoming CEO in Nov 2016, Jane served as COO of Ctrip for four years and CFO for seven years. Before joining Ctrip, Jane worked at Applied Materials in the US as the head of SEC and External Reporting Division. Prior to that, she worked with KPMG as an audit manager in Silicon Valley for five years. Jane received her bachelor’s degree from the business school of the University of Florida, and LLM degree from the Peking University Law School.

Jane discussed her journey from studying abroad in the US to one of the one of the top female leaders in Chinese tech, her daily routine as the CEO of a New York-listed Chinese tech company, and her advice for young people with cross-cultural backgrounds.

This episode also features a bonus interview with GGV managing partner Jixun Foo, who led the firm’s investment in the online travel search company Qunar, which merged with Ctrip in 2015.


HANS TUNG: Hi, there. Welcome to the 996 Podcast, brought to you by GGV Capital. On this show, we interview movers and shakers of China’s tech industry, as well as tech leaders who have a US-China cross-border perspective. My name’s Hans Tung. I am the managing partner at GGV Capital, and I have been working at startups and investing in them across the US, China, and other emerging markets for the last 20 years.

ZARA ZHANG: My name is Zara Zhang. I’m a Marketing Manager at GGV capital and a former journalist. Why is this show called 996? 9-9-6 is the work schedule that many Chinese founders have organically adopted. That is, 9 a.m. to 9 p.m., six days a week.

HANS TUNG: To us, 996 captures the intensity, drive, and speed of Chinese Internet companies, which have produced many growth miracles over the last decade.

ZARA ZHANG: Also, I highly recommend joining our listeners’ WeChat groups and Slack channel, where you can connect with like-minded people interested in tech in China. We organize regular offline events across the world for our followers. You can join these by visiting 996.GGVC.com.

HANS TUNG: On the show today, we have Jane Sun or 孙洁 in Chinese. She’s the CEO of Ctrip, the largest online travel platform in China which is listed on NASDAQ. It’s current market cap is around $23 billion dollars. Jane has been at Ctrip for 13 years. Apart from becoming CEO in November 2016, Jane served as COO of Ctrip for four years, and before that CFO for seven years. Before joining Ctrip, Jane worked at Applied Materials in the US as the Head of SEC an external reporting division. Prior to that she worked with KPMG as an Audit Manager in Silicon Valley for five years. Jane received her bachelor’s degree from the Business School of the University of Florida and LLM degree from the Peking University Law School.

ZARA ZHANG: Just yesterday Ctrip announced its financial results for the fourth quarter, and full year end of December 2018. Net revenue for 2018 was $4.5 billion, a 16% year on year increase. And total GMV for 2018 was $105 billion, which is around a 30% year on year increase. Welcome to the show, Jane.

JANE SUN: Thank you.

ZARA ZHANG: Most of our audience is already familiar with Ctrip and you have been part of the company for over a decade. Could you share with us three things you’re most proud of about Ctrip that most people may not know?

JANE SUN: Yes. First of all, it’s the growth of the company. When I joined the company, we only had about $500 million market cap and today we’re exceeding $20 billion in the past 13 years. So, I’m extremely proud of our growth. And secondly is our expansion in the global spaces. When I joined the company Ctrip was only a very small Chinese online travel company. And now in terms of GMV we’re already the largest in the global space. I’m extremely proud of the achievements our team has made. And lastly is our initiation in terms of protecting the female leadership. Because I’m one of the very few CEO’s in major Internet companies. We put a lot of emphasis in helping female leaders to nurture them and to make sure they thrive in our company.

ZARA ZHANG: I read recently in one of your interviews that you actually provide the option to pay for some of your female employees to freeze their eggs in case they want to preserve the option of working and having a child at the same time.

JANE SUN: Yes, very progressive company policy. And we are the only company who offer this benefit to our female employees. Our female employees really are very excited to have this protection for their career path.

HANS TUNG: I’m going to take the interview to an earlier point in time. When you went to the US you were already in college in China. Why did you go to the US for business school? You started with the law school first, and then you went to US for business school. Why did you decide to do that, and also decided to go to the US for it?

JANE SUN: Yeah, when I first came to the United States, I was a sophomore in Peking University Law School. In the Chinese system law school is a undergraduate system. But in the United States law school is a graduate school. My original plan was to go to the business school first, and then go to law school next, and get my PhD as the third step.

HANS TUNG: PhD, like every good Chinese graduate student wants to make their parents proud.

JANE SUN: Yes, absolutely. But in my third year of business school at the University of Florida I interviewed with a Big Four accounting firm and they gave me an offer. So, I thought, oh, let me make some money to save enough money so I can go to the master degree. That’s why I started to work with KPMG Silicon Valley office right after I graduated from University of Florida. And then opportunity comes when my husband became the first CTO of Alibaba in 2000, and our board asked me to join Ctrip as the CFO of Ctrip. So, we moved our family back to China to take on these challenges.

HANS TUNG: John went to Yahoo. Your husband went to Yahoo in Silicon Valley.


HANS TUNG: So, they brought you to Silicon Valley as well?


HANS TUNG: Was that your first exposure to internet.

JANE SUN: Yeah. We are very blessed for the opportunity because when we went to school the Cultural Revolution ended. And when we went to college Deng Xiaoping opened the door so both of us were able to go to the USA to study. When we finished the school Silicon Valley took off. John joined Yahoo when there was only 46 employees in the company. And then after four years we got a phone call with a very good friend of ours to invite him to join a very small company called Alibaba. And that friend is Jack Ma. John left Yahoo when the stock price was about $200 to $300 and joined a smaller company called Alibaba. I always feel both of us are very blessed for the opportunity. I feel a tremendous responsibility to bring up the next generation of the leadership and give them as good an opportunity as possible going forward.

HANS TUNG: Right. But when he first suggest to you that he must go from a big company Yahoo, which was the star at that time, to join this little small company in Hangzhou, in the middle of nowhere, what was your immediate reaction?

JANE SUN: We have known Jack for a couple of years. So even before John joined Alibaba, whenever we came back to China John always talked to the engineers the Alibaba and tried to help out as much as possible. And we always see Jack as a very good friend of ours and tried to be helpful. And I remember one day John got a phone call from Jack and said, oh, you already finished your fourth year with Yahoo, and I got VC money. Softbank invested $20 million in Alibaba. You have to join us. John believed in the vision Jack had. Although I only had my first baby. She was born in March 2000, and John joined Alibaba in May 2000. But I thought to be a good wife I always should be very supportive of him, so he joined Alibaba. It was during a very difficult stage of Alibaba because Softbank invested $20 million in the company. But the company was growing so fast. So, when John joined, he told me Alibaba only had $5 million left in the bank.

HANS TUNG: Spending a lot of money.

JANE SUN: Yeah. It has been a long way, and we are extremely proud of the achievements Alibaba team has achieved.

ZARA ZHANG: And how big was Ctrip when you joined, and what made you believe in the Ctrip vision?

JANE SUN: Yeah, I also asked myself. First of all, I asked three questions. First of all, should I invest my youth in the United States or in China. And at that time USA, the GDP growth rate was about 2% and China was growing anywhere between 8% to 10%. So, when the economy is growing so fast it presents a lot of opportunities for the young employees. When I joined Ctrip I became one of the youngest CFOs in the market. That’s the first question, should you remain to be in the USA, or do you want to go back to China. The second question is, if you want to invest in China which industry will give you a very good opportunity to grow. And I always tell myself, if I joined a tobacco company or alcohol company, the margin for these companies is very high, you can make a lot of money. But in a way it’s not very healthy. I try to tell myself that I need to join a company that is very healthy, very green, brings happiness to the people. I believe travel not only brings happiness to individuals, to families, let young kids learn, it also brings global peace when we travel around the world. I choose to invest my time, and energy and my youth in the travel industry. And the third question is, if you want to invest yourself in the travel industry, which company has the best opportunity to win. And when I talk to our team, I feel very strong that this company is very humble, down to earth, hardworking, and they have the best opportunity to win. So, these are the three things I considered when I decided to join Ctrip as the CFO of the company. It has been a very good track for me.

ZARA ZHANG: What was it like to transition from CFO to COO and then CEO? What kind of lessons did you learn about how these leadership functions can work together well?

JANE SUN: When I was a CFO the company was very small but growing very fast. So, whatever that is not taken care of by our executive teams, I would just jump in and fix it. After a couple of years our board feels that I already was doing the COO’s position, so they promoted me to be the COO. And then three years ago when James talked to me, and he wanted me to take on more responsibility as the CEO of the company, I told him that we just finish two major deals. One with eLong, one with Qunar. And I thought our team needs to be stabilized, to finish the mergers and acquisitions before I took on the new responsibilities. I waited for one year, and then two years ago we made a very smooth transition to the CEO position. So, for me, my growth track is that when I’m in one position I already see what else needs to be done. And without the title I was already doing a lot of these things. So, for our young leadership team, my advice to them is always go beyond your title, go beyond your scope. Invest your time and energy in the next level, and then you will spin out. My title, my scope is never a limit on what I do. Whatever is good for the company I would just jump in and get it done.

HANS TUNG: A lot of people outside of China have stereotypes of how Chinese women behave. And yet you were among the very first that runs a major Chinese Internet company, or a major Internet company worldwide, period. What kind of challenges did you have to overcome in order to become in such a position and do such a great job? What were the opportunities that you sought to prove yourself, to show that you can take on more?

JANE SUN: I think as a female leader I try to be authentic. I think females themselves has a lot of stress. You don’t have to act as a male to be successful. So, a couple of strengths we have is that, first of all, we always put the team first. Very willing to make a personal sacrifice in order for the team to be successful. And I think that’s a great strength when you become a high level executive in a company. The second thing is females are also very good with putting yourself in others’ shoes. When I’m in a negotiation I always try to see for this deal what we can bring to the other side. If I were the other side, what they would like to have. If you put yourself in other people’s shoes, it’s very good for you to make a deal that is win-win, rather than I kill you or you kill me type of one-sided deal. And the third thing I feel in female leaders that’s very strong is the communication and team building skills. So, a lot of times we’re very sensitive, we understand what the teams need instead of just focusing on one thing. We try to bring to the table a comprehensive solution so that both the teams, career paths, companies interests, shareholders interests, our customers interests are well taken care. I think female leaders have inherited strengths, and we have to use our strengths to be successful in the business world.

ZARA ZHANG: What is it like to run a public company listed in New York from China? What is your typical day like?

JANE SUN: The schedule is very demanding. Normally when I’m not travelling, I try to get to the office at around 7 to 7:30. I finish all my own work, and my direct report if I need to have one-on-one with my director for report, I normally invite them for a breakfast meeting at 8 o’clock. And from 9 my schedule is half an hour for meetings back to back, all the way until maybe 6 to 7 o’clock. And in the evening I try to pack up all the work papers I need to read and bring it home. If I’m not travelling I try to have dinner with my family. When the kids are young I try to help them with the homework. Now they are old enough so when I’m working they’re doing their homework. And from 9:00 to 12:00 am or 1 am I schedule my overseas phone calls with Europe, with the United States, with NASDAQ, etc. That’s how I try to balance my work and life.

HANS TUNG: Do you work five days a week or more than that?

JANE SUN: More than that. I think in China a normal Internet company is 996, meaning from 9 o’clock to 9 o’clock times 6 days. Entrepreneurs, a lot of us is 7-11-7, so seven o’clock to 11 p.m., seven days non-stop.

HANS TUNG: Some of our listeners like to ask the question, how can you be efficient when you work long hours? Implied in that question is that you can either be efficient or you’re inefficient and you have long hours. In your mind, how do such entrepreneurs can become both efficient and still work long hours?

JANE SUN: I think efficiency is very important, so I try to run a half marathon on the weekend, and every year my husband and I try to join two marathons a year. To be healthy is very important. The second thing is also to train your team so that they can be as efficient as you are. And the third thing is arrange your time very wisely. When I’m in a car I try to listen to a book. When I’m in the office I try to arrange the meeting so there is no moment wasted.

ZARA ZHANG: Could you tell us about the Baby Tiger program at Ctrip to encourage internal initiatives? And how do you make sure your overarching goals as a company are effectively communicated to all your employees?

JANE SUN: As the company is growing bigger and bigger, we consistently think about what is the best way to energize the company. One initiative that we took is the Baby Tiger program. Basically, our employees are encouraged to bring new ideas, new business plans to us. And we’ll give them funding, personal resources, and then let them to innovate. For example, one of the employees he is very young, right now he is only 26 years old. And he is the CEO of Zhixing 知行火车票, which is a train business unit. He wants to use this business unit as an anchor and then add your ticket to it, add hotel business to it. He is only 26 years old. So, when we ask him how much money, how long he needs, he says, I need 2 million RMB, six months, six people to prove I’m successful or not. If not, you can close out. And it only took him one month to prove that the volume exceeded 10,000 per day. And last year they delivered $1 billion to the company. So very successful young people, very driven, smart and innovative. We want to encourage our young employees to step up and take on more responsibility.

HANS TUNG: In the last 14 years since you have joined the company you have helped to increase the value of the company by more than 50X. You’re very successful and extremely articulate. What’s your drive? Why are you still working this hard and this efficiently six to seven days a week?

JANE SUN: A couple of things. I think first of all I have two young kids, and I think mothers are the best role models for their children. I cannot tell them to study hard, to be independent, and meanwhile I’m relying on my husband, not to work and watching TV. I think if you want your children to grow up and rely on themselves to be independent fathers and mothers are the best role models for them. Secondly, I think I’m so blessed for the opportunity as we discussed. My grandmother was very smart but during her age China was in the Second World War and they escaped from one city to another. And my mother is also very smart, she was a chemistry engineer. But they suffered from the Cultural Revolution. And when I went to school the Cultural Revolution ended. When I went to the college Deng Xiaoping opened the door. When I finish college in the United States Internet took off. And when the Internet bubble busted in the Silicon Valley China took off. So, every step we made we were extremely blessed. Our generation is extremely blessed. For me, every day I’m so grateful for my professors, for my parents, for Deng Xiaoping for everything we have. For me, the only way you can return these favors is working hard and create the opportunities for the new generation so they can be very successful. They can step on your shoulder and create a new enterprise that becomes 10X as big as today’s Ctrip.

HANS TUNG: Right. So, you feel that this is your calling.


HANS TUNG: A strong sense of Shiminggan 使命感.


HANS TUNG: Ctrip has made many strategic investments into various startups in China and outside, including investing in the GGV portfolio Tujia, merging GGV portfolio Qunar, and many other companies in the travel space. You also invested in companies such as MakeMyTrip in India, as well as Boom Supersonic in the US. Can you talk about examples of synergies that you hope to achieve through these investments, and how did you decide that you want to make investments beyond China? And what do you look for in these startups when you are making investment in them?

JANE SUN: We hold very high standard for our acquisition target. There are three principles we adhere to. The first one is it needs to closely relate to the travel industry. There are lots of opportunities outside of travel, but we are very much focused on the travel industry. The second thing is we only are interested in making investment in the winners, number one or number two in each vertical. So hardly we make an investment in the number three in the industry. We invest in winners. And the third thing is, no matter how good a company is the valuation needs to make sense. It’s very difficult for us to make a move because you are looking for the number one, yet the price cannot be too ridiculous. If you look at our investment to Wing On, which is the number one travel agency in Hong Kong, it took us six years to finally close the deal. It was during the financial crisis when we took the opportunity and made the investment. If you look at our investment in Home Inn, again, it was during the financial crisis in 2008 and 2009 for us to do that. So, a lot of company, if they are so good, we need to be very patient. We need to be confident that we’ll be able to achieve one plus one equals five type of synergy, then we will make a move.

ZARA ZHANG: Since Ctrip is a travel company the business is inherently global. In the Q4 of 2018 revenue generated from international business accounted for 30% to 35% of the company’s total revenue. What do you hope that number to be in five years and which region will you prioritize as you go global?

JANE SUN: In five years I hope the pie will be 50% domestic and 50% globally. We move to the global places very methodically. At the beginning we only do Chinese people travel within China. And the second step is Chinese people travel within the Greater China area. And the third step is Chinese people going to Asia, and then the rest of the world. We’re pretty much finished, the layout for Chinese people outbound. Now we’re looking at the foreign people travel to China, because our inventory in China is very strong, product offering is very comprehensive. And the last step probably will be foreign to foreign, so a foreign person travel to a foreign land. We will make our move very methodically every year to achieve the best successful rate.

HANS TUNG: We all know China’s outbound travel market has been growing rapidly. In 2018 over 140 million Chinese people traveled overseas, and these collectively spent over $120 billion total. However inbound tourism in China is much smaller, with only 30 million tourists visiting China last year, and only a fifth of those are outside of Greater China. How important do you think is inbound tourism for Ctrip, and what kind of efforts does it make sense to help China become an easier destination for other people to come?

JANE SUN: I think China offers a great product offering for the foreign friends. We work very closely with the government to try to increase and attract the inbound customers. There are a couple of things we can do with the government. First of all, we need to make the visa application very simple. Have an app mobile maybe will be much better than having the foreign friends to lining up in the embassies in San Francisco or New York. That’s the first thing. The second thing is direct flights from San Francisco to China, from London to China. That’s also very important. The third thing is having a China welcome program so when people enter into China, we need to make sure there are English signs and people feel they are very welcomed. And I think if we focus on what would interest the foreign friends, we’ll be able to make a great move on inbound customers.

ZARA ZHANG: What is your advice to younger people with cross-cultural backgrounds who have lived across both the US and China just like yourself?

JANE SUN: I always tell my children that in order to be successful they need to look at, first of all, what they are passionate about. You can be a lawyer, you can be a hairdresser, but whatever you do you need to feel passionate and try to be the best in your vertical. “可以是律师,也可以是理发师”. Their passion is very important. The second thing is what they are good at. If you have a bilingual bicultural background that’s very rare. I think these kids will have very good opportunities working with multinationals, doing business in English speaking countries as well as Chinese speaking countries so that’s very good. The third one is they also need to ride on the wave. For example, right now Internet is very big, mobile is very big, AI is very big. These industries obviously will offer great job opportunities for the young people. But manufacturing probably is not as fast growing as the other. Mining industry is not as fast growing as the other. To ride on the wave is also very important for them.

HANS TUNG: As you grow your international business the demand for talent that’s multicultural is also greater. What type of employees do you look for to help you do that?

JANE SUN: We try to look for, first of all, bilingual bicultural people. We have a Global Leadership Program hiring students who are from China originally, study, or live and work in Silicon Valley, New York, LA, or Europe, and are willing to come back again to work in China. I think these people will have a very good career path in Ctrip.

HANS TUNG: And many of them are listeners of our 996 podcast. That’s why we encourage everyone who is interested to apply to work at Ctrip. Lastly I’ll ask you a bit more controversial question, which is that some of our listeners from Washington DC have made the claim that it’s not easy to find a Chinese company traded in the US a New York Stock Exchange or NASDAQ, that’s completely transparent, that can share even working papers of accounting with US regulators. This is a tricky touchy subject with the Chinese government as well. What’s the best way for a Chinese company that’s listed overseas to navigate through that?

JANE SUN: I think China is growing so fast. The analogy I hear a professor used was very good. China is like Yao Ming when he was 10. When Yao Ming was 10, you look at him, he was already much taller than anybody else. So, if you expect teenager Yao Ming to behave like an adult it’s a little bit too difficult for him. But he is learning. China is learning. Chinese culture is a little bit more reserved than the American cultural. Little teeny kids in the United States learn how to do PPT, how to do presentation very well. In China when I was in law school in China, we haven’t done any presentations before. China needs to learn to be a global citizen very fast, because much is given, much is expected. As the second largest economy in the world, the government, the community, the schools, and enterprises likes Ctrip, all need to take on the responsibility to grow our young people, to grow our company to be able to manage the expectation well. But on the other hand, for the global places, they also need to learn China a little bit better. I saw millions of students from China are very interested in learning in the United States. If Trump issued a visa, I’m sure there will be more Chinese students going to study in the USA. Yet I saw very few students from the United States, Germany or UK coming to study in China. It has to be a mutual way. Chinese people need to invest more, understand the US rules and regulation, understand the culture in a western country. But the western countries also needs to invest a little bit more, try to understand the 2000 years of Confucius and the industry. Then I think a lot of misunderstanding will be eliminated. And I’m very blessed by the opportunity to have the opportunity to study in the law school in China, and also to study and work in the USA. And I’d very much like to be a good bridge for these two countries.

ZARA ZHANG: I think travel also plays a big role in enhancing that mutual understanding.

JANE SUN: Very much so. We just launched a new product today called Zhuangyou 壮游. Last summer my husband and I took our children to visit Italy. When we were in Rome we taught them about the Roman history, how two kids with the wolf started the city. And then we took them to the Santa Maria di Leuca the medieval town and we thought them about the reform in the religion. And then we went to Florence and we taught them about the Renaissance. When I come back the kids just learned so much along the way. The Confucius’ teaching is it is better to travel 10,000 miles than to read 10,000 books. When I came back I talked to our product team, and I thought there were so much education we can do along the way. So, we launched a product and we will have professors, experts in each destination. And before we send these children, we will let them read these books, and then let them touch it. When they come back, they can share their stories, what they see, the pictures, and I think they will never forget about it. And these kids will be such good global citizens rather than having only the view from China to the world. Now and they will know, wow, outside of China there are so many people similar to Chinese people yet so different. I’m very positive that travel will enhance the international exchange and promote global peace.

HANS TUNG: Yes, we absolutely agree.

ZARA ZHANG: And now we’re down to the final round of quickfire questions. Who is the entrepreneur you admire the most and why?

JANE SUN: There are many people I admire. I think Bill Gates foremost. I think he built such a successful company, yet during his peak time he contributed so much to Africa, to the rest of the world. And I have very high admiration for him.

ZARA ZHANG: What’s something you read recently that you recommend?

JANE SUN: I enjoy reading a lot. There are many books I’d like to recommend. The classic book is From Good to Great and Built to Last, Jim Collins. And then leading enterprises, From Zero to One, exponential enterprises. And then a very good book I enjoy to read is The Better Angel of Our Nature, talking about the confidence that violence is decreasing and human race progresses.

ZARA ZHANG: What is your favorite travel destination?

JANE SUN: Oh, I have so many. For natural scene I love Africa. It’s just so beautiful. I think humans migrated from Africa. Africa’s wonderful. We climbed up the mountain Kilimanjaro in 2014. And in terms of history I love Egypt, and we just went to Israel, Jordan, and I think the history over there is so amazing. I highly recommend these places to our peer travelers.

ZARA ZHANG: What do you do for fun?

JANE SUN: I have many hobbies. Athletics. We ski in the winter, or we dive in the summer. On the weekends we run marathons. Anything that is fun and adventurous I’m very interested in.

ZARA ZHANG: Cool. Jane, that’s all we have for today and thank you so much for your time.

HANS TUNG: We appreciate your time. Thank you.

JANE SUN: Thank you so much for having me.

ZARA ZHANG: Next you’re going to hear a short interview with our managing partner at Jixun Foo who led GGV’s investment in Qunar, an online travel company that merged with Ctrip in 2015, in a deal that was valued at close to $10 billion. Jixun Foo could you please tell us about how you first met Qunar and how you came to invest in them?

JIXUN FOO: It’s kind of a long story. I first met Fritz back in 2005, 2006 at a China Wall hotel. A lot of us have our meetings in China Wall back then.

HANS TUNG: That’s right.

JIXUN FOO: So, I met Fritz Demopoulos back in 2005-2006. He was carrying his briefcase and telling me about this metasearch play and travel search. I thought it was an interesting story, but I wasn’t paying a lot of attention because at that time Baidu just went public. I thought that, hey, search is search. There’s a big search company already just gone out, a couple billion dollars at that time. Why would there be a marketplace for a vertical search? So, I wasn’t paying a lot of attention to it until they did their series A, they did their series B. I still have questions on the value of a vertical or metasearch. But during the process I got to know CC, Zhuang, the co-founder. I also got to know Fritz and the two of them really well. It was over a three to four-year period. And by 2007 and 2008 I saw that they were doing something quite right actually. Because how flight information got democratized because it’s digitized, and tickets became e-tickets versus physical tickets. That was an opportunity at that time for them to actually help consumers acquire the cheaper possible tickets. That was back in 2007-2008. My first meeting with Fritz was in 2005-2006, and when I saw that their search for flight actually started to take off. And the whole momentum, because of the change in the market as well back in 2007-2008 if you recall it was the whole financial crisis, actually consumer becomes more price sensitive. Qunar got quite a bit of a boost in terms of their growth. One, because of the market. Two, because of the digitization of the tickets.

HANS TUNG: I can offer another perspective where Qunar is in my entire portfolio a deal that I missed. And I can tell you why I missed it. Like Jixun I also met the company in 2005, I met the team, but back then there were only two websites in China to travel. One is eLong and the other one is Ctrip. So why do you need a price comparison website? It didn’t even work most of the time when you had two sites to look for everything. And, for instance, even though he’s a old China hen he’s still not local back then. And you worry that if a CEO is from outside of China can it really localize and really embed into all the SMBs that companies that sell tickets in China as travel agents. And then thirdly, the Chinese government and Chinese SOEs in travel sector move very slowly. When would the airline have e-ticket. It seemed like it would take a long time and they don’t move that fast. Those were three things that most people saw and passed. I think what Jixun did well was that, as the sector was changing, China’s government and the major airlines in China were issuing e-tickets much faster than anybody thought was possible. And then more travel agents were getting online and want to be online. And that depends on the travel sites with all the price information. During the financial crisis a competitor to Qunar was acquired by a foreign company so Qunar was left alone to be able to focus on dominating the China market and not be distracted. So, I think Jixun made a right call to make an investment but at that time the VC passed a deal, not seeing how the conditions to say no have actually changed, and therefore you need to go back because this actually could be a big opportunity.

JIXUN FOO: Right. Despite the investment that I made there was an overhang on the question on Fritz and CC together, can they truly grow a company from 60 people, to a few hundred, to a few thousand. So as the organizational complexity grows can they, as a combination of a foreigner versus a local, can they really run the organization. I think that question continues to be there. And I think the other underlying thing for me which later brought to the involvement on Baidu, was that the metasearch service in itself is actually a fairly thin layer in terms of the value, because you are providing a verticalized comparison engine for a very specific sector. On the front end you still have Baidu which is the global search engine. And now you have the OTAs that are laying below.

So, you are really playing the arbitrage between the robust search and the OTAs. And that value is always a little bit of that overhang for me. As the company evolved into 2011, I realized by that time that something has to happen. Because if you look at what happened very close to that, Kayak and SideStep post-merger was also sold to Priceline. We knew at some point that the value of this company can be capped. And so, the one thing I have to do is to figure out how to make the company great. We actually started a conversation with Baidu, and Ctrip, and so on. The involvement of Baidu into the company was strategically important because it effectively made Qunar starting in 2011 the de facto gateway for all travel search. That positioning helps us to transform itself beyond just a metasearch play to an OTA play. And therefore in 2011 through 2013, prior to its IPO, Qunar went on this crusade to go from flight, to hotel, to other multiple travel services, transforming itself to become more of an OTA platform rather than just a media platform.

That’s a very important transformational change that allow it to grow from a $500-$600 million valuation company when Baidu first got involved or invested, to post IPO $3-$4 billion company. That was the second milestone. Obviously as a company further evolved and went to this huge battle with Ctrip, the eventual merger with Ctrip was inevitable given how intensive the competition was. And that is facilitated by both Baidu and ourselves, the investors, in association with the management teams.

ZARA ZHANG: So, before they became a real OTA it was more differentiated from Ctrip in terms of product?

JIXUN FOO: Right. But you can think of the relationship kind of like Baidu versus Alibaba or Taobao. Because if you are the metasearch and one is the OTA, at some point the conflict will be there if you become the dominant player and the other is the dominant OTA player. While they are playing a different role in the value chain they are competing for value. That competition got intense, so we have to take certain sides. We took side with Baidu earlier, and then we did the merger later with Ctrip.

HANS TUNG: Just to put that into perspective. Like Jixun said, when he got Baidu to invest in Qunar, Qunar valuate was between $500 million and $600 million. Kayak in the US didn’t have any investment from Google or any search engine. It was sold to Priceline, the number one OTA in the US, actually in the world outside of China, for $2 billion. Kayak was a global company sold for $2 billion, and Qunar was only $500 million to $600 million in China, as a China only player, doing exactly the same thing but with Baidu’s involvement, it ends up increasing the valuation of the company by teaming up with a number one search engine in China to become $3 billion to $4 billion. So huge important deal to change the valuation and complexion of the landscape in China, in this area.

JIXUN FOO: That’s right. To Hans’ point as an investor and partner to entrepreneurs, the entrepreneurs drive their business on a day to day operationally. They understand the landscape quite well, they develop the strategy and execute on it, but for the most part I think what investors have is that we have this global landscape, particularly our team here at GGV. So, we understand a lot of the dynamics that’s going on the ground, looking into that future, where do we create value. The creation of value is not just for ourselves. The creation of value is also for the entrepreneurs. And oftentimes we hope that we could offer a value-added advice and hopefully positioning the company for greater success.

ZARA ZHANG: Could you talk about the role that you played in the Ctrip-Qunar merger, and how long did it take and what were the biggest challenges?

JIXUN FOO: Well, it took a long time. I had long conversations with all sides including Ctrip, Baidu, Qunar. for lack of a better way to describe it it was pretty intense. We have to realize one thing right. The complexity comes from the fact that you have two companies, two managements that have fought over a few years, and many years. There is a missing element which is trust. And so, it’s tough. How do you establish understanding and trust of what the eventual, not so much just in the value of the acquisition, relative value for both or one, it’s also the fact what’s the eventual management going to look like? That transitional management, that’s the big part of the conversation. In fact, I spent so much more time talking through that and going through every single options and that takes a lot of time, because there’s emotions involved, and entrepreneurs and managers need time to digest a lot of these options and conversation. But having said that, I think it took time to come to terms, and typically if I reflect on some of the positives I’ve done including Tudou 土豆, Youku 优酷, etc., most of these deal easily take six months to one year. That’s the kind of timeframe you have to be prepared for.

HANS TUNG: How are you so patient through this process? Because it’s easy to have objections, easy to have people say, no, or not right now. How do you get people to eventually say, yes? And how do you come up with a method to slice the pie so that everybody feel they’ve got something that’s either tolerable, or acceptable, or something that’s worth moving forward?

JIXUN FOO: Perhaps the patience is inevitable because you have to live with it. And it’s not something that you need that patients for that matter. You have to be appreciative of all the energy, emotion, the sweat, the tears that entrepreneurs put into building these companies. It is not easy. And so, we naturally have to appreciate and empathize with those emotions. That’s very important. Number one. Number two, I think having said that entrepreneurs are also rational. There’s a rational part of them, understanding the value of those outcomes. Numbers do make a difference, rationalizing through those numbers. And also, typically there is a premium for the exit party. And so how do you rationalize through those premium for both the buy and sell side to come to terms with and have some sort of a settlement on it. I think that process, the number process is also important, because it’s a full realization of value to the team. Obviously if I acquire the buy side, the buy side typically get the upside on the future value, whereas the sell side gets the value that is premium today, a premium to the current value. There’s a bit of a working model if you will and rationalization to the economics of it. And typically for entrepreneurs, they’re quite rational. At the end of the day they work hard, and they have sweat and tears behind it, and that earn can be a meaningful reward for them.

ZARA ZHANG: I’m curious because you said that because that conversation between Ctrip and Qunar became so intense it became inevitable for them to merge. Is this a China specific phenomenon, because in the US there are also a lot of intense competitions but there doesn’t seem to be as much mergers of rivals?

JIXUN FOO: Yeah. I think maybe the competition in the US is not as intense as in China. Zara, you’ve been here in China over a few years and you’ve seen how intense competition is and how ruthless. The more ruthless they are they fight more intensely. If you look at Uber versus Lyft, and you compare that versus DiDi versus Kuaidi, it’s a different level of intensity.

ZARA ZHANG: Sometimes in China there are literal fights like between delivery man of takeout companies.

JIXUN FOO: It’s fairly intense. And given that, it further drives the necessity to actually come to terms on a steady state. What is that steady state? The steady state in some cases, if you look at some markets, in some cases as they come to terms, whether it is the online video landscape, there’s still compared to competition. Or if you look at the food takeout landscape like Ele.me versus Meituan, it comes to a steady state where they stop the intensity and they start raising take rate. So, there are certain times when it does come to a steady state and certain mergers cannot happen for various reasons. But otherwise whether investors continue to fund it, and they need capital, the need for capital actually drives a big part of the merger conversation.

HANS TUNG: You also see the founders getting diluted every time they raise more money. If their board doesn’t top up with more refresher, because the battle is so intense and it’s hard to figure out who’s going to win, then it makes it harder for the founder to keep on raising money. And because the type of competition is so intense that you know the other guy is not going away so you do you really want to do this for another two-three years or do you want to figure out a way to resolve this. After you go 9-9-6, 9 a.m. to 9 p.m. 6 days a week, or sometimes double 7, you work all the time seven days a week, and you do that for three or four years you’re like, I don’t want to do this anymore. Because the other guy’s not going away, I have to raise a lot more money, and I’ll get diluted more, and life is not going to get any better for the next three or four years versus what just happened the last three or four years. So, you’re much more willing to figure out a way to get out of this stalemate.

JIXUN FOO: I think you’re absolutely right. That’s the kind of conversation oftentimes we have to have with the entrepreneurs, kind of rationalizing to the options ahead of them. The risk versus the reward, the downside versus the upside. Like I said, I think entrepreneurs there’s an emotional part of them where there’s a conviction and drive that make them who they are, but at the same time there’s a very rational part of them that understands some of this risk-reward equation.

ZARA ZHANG: So, with that that’s all we have for this episode. And thanks, Jixun, for your time.

JIXUN FOO: Thank you.

HANS TUNG: Thank you. Thanks for listening to this episode of 996.

ZARA ZHANG: GGV Capital is a multi-stage venture capital firm based in Silicon Valley, Shanghai and Beijing. We have been partnering with leading technology entrepreneurs for the past 18 years, from seed to pre-IPO. With $6.2 billion in capital under management across thirteen funds, GGV invests in consumer, new retail, social, Internet, enterprise cloud and frontier tech. GGV has invested in over 290 companies with more than 45 companies valued at over a billion dollars. Portfolio companies include Airbnb, Alibaba, Ctrip, Didi Chuxing, Domo, Hashicorp, Hellobike, Houzz, Keep, Slack, Square, Toutiao, Wish, Xiaohongshu, YY and others. Find out more at ggvc.com. We also highly recommend joining our listeners’ WeChat group and Slack channel, where we regularly share insights, events and job opportunities related to tech in China. Join these groups at 996.ggvc.com/community

HANS TUNG: If you have any feedback on this podcast or would like to recommend a guest, please email us at 996@ggvc.com.

Episode 34: GGV Fellows

GGV Capital’s Hans Tung and Zara Zhang interview two “GGV Fellows,” David Sun (a data scientist on Apple’s Siri team) and Bo Ning Han (a recent Harvard grad working on a startup in Beijing), on their life stories and their takeaways from the GGV Fellows program. What is the GGV Fellows program? Read this blog post to find out more.

If you are interested in applying to future batches of GGV Fellows or our other events, please join our listeners’ community via WeChat/Slack at 996.ggvc.com/community, where all related announcements will be posted.


HANS TUNG: Hi there. Welcome to the 996 podcast brought to you by GGV Capital. On this show we interview movers and shakers of China’s tech industry and discuss how founders from around the world can draw lessons from China’s tech ecosystem. My name’s Hans Tung. I’m a managing partner at GGV Capital and I’ve been working at and investing in startups across the US, China, and other emerging markets for the last 20 years.

ZARA ZHANG: My name is Zara Zhang. I’m a marketing manager at GGV Capital and a former journalist. Why is this show called 996? 996 is the work schedule that many Chinese founders have organically adopted. That is, 9 am to 9 pm, 6 days a week.

HANS TUNG: To us, 996 captures the intensity, drive and speed of the Chinese internet companies which have produced many growth miracles over the last decade.

ZARA ZHANG: Also, I highly recommend joining our listeners’ WeChat groups and Slack channel where you can connect with like-minded people interested in tech in China. We organize regular offline events across the world for our followers. You can join these by visiting 996.ggvc.com.

Hi everyone. Before we jump into today’s show, I highly recommend checking out the last episode of the 996 podcast if you haven’t already. During the last episode, Hans and I discussed the challenges and opportunities that Hai Guis, or Chinese overseas returnees, face as they come back to China. That episode has very useful background information that will help you make sense of this episode.

On today’s show you will hear from a few of our GGV Fellows. What is GGV Fellows? It is a program that we launched this year which was designed for sea turtles or Chinese overseas returnees to get re-acclimated to the Chinese startup ecosystem and business environment. During the program, 34 global-minded young leaders came to Beijing and completed a one-week, intensive training on tech and entrepreneurship in China.

Our 34 Fellows were carefully selected from over 400 qualified applicants. They come from top institutions around the world. The most well-represented schools are Stanford, Harvard, MIT, and Berkeley, and many are currently working at Silicon Valley tech companies such as Google, Facebook, Uber, Apple etc. All of them are native speakers of Chinese or equivalent and are fascinated by the meteoric rise of China’s internet sector over the past decade. Among the first class of the Fellows, two-thirds were professionals and a third were in school. Their ages range from early-20s to late-30s. They represent a diverse range of talent and skill sets including engineering, product, business, and marketing.

During the program, the Fellows visited the headquarters of eight Chinese unicorn internet companies and heard from a total of 21 founders or executives who shared lessons on what it’s like to start and run companies in China’s business environment. Our speakers came from some of the most valuable tech companies in China including ByteDance, DiDi, Xiaomi, Xiaohongshu, Kuaishou, Face++, Zuoyebang, Liulishuo, Keep, Hello Chuxing and others. During these closed-door sessions, the speakers shared not just tips for success, but also candid stories of failures and pitfalls that they ran into along their startup journey. The program is designed to resemble a lightweight MBA on all things related to China’s startup ecosystem. And by the way, if you’re interested in learning why we organized the program, we actually have a blog post in which we discuss the rationale for starting GGV Fellows. You can read the blog post by following the link in the show notes.

Now you will hear a few interviews with our GGV Fellows on their life stories, what brought them to the program, and what they took away from it.

HANS TUNG: Hi everyone. Today I will interview one of our GGV Fellows, David Sun, or Sun Qiwei in Chinese. David’s currently a Data Scientist at Apple in Cupertino. He’s originally from Suzhou, China, and attended college in Germany at Jacobs University in Bremen before heading to the University of Pennsylvania to obtain a PhD degree in double-E, electrical and system engineering. Welcome to the show, David.

DAVID SUN: Thank you Hans. My pleasure.

HANS TUNG: So how was GGV Fellows for you?

DAVID SUN: Well, I guess you’re asking about program, but first of all I think the Fellows were absolutely amazing in my inaugural class. The program itself, I think, it’s frankly amazing if not surreal. Personally, for me, I didn’t quite know what to expect. But when I was in Beijing, it was a week of packed schedule, of closed-door conversations with senior executives and founders of the hottest startups in China, and office visits. So, it was eye-opening for me to be there.

HANS TUNG: How many meetings per day roughly?

DAVID SUN: Well, jokingly towards the end of the program, everybody was almost near the burning out period and it’s almost like a 996 schedule we’re having.

HANS TUNG: Like this show.

DAVID SUN: I think it’s roughly 10, 9 meetings at least, a day. And we’re doing lunch meetings and we’re eating in the bus and we’re told to hurry up, to use the bathroom at the next company when you arrive there.

HANS TUNG: So, Zara and Erica, Fischer, Caiyao, they did a great job of scheduling and organizing this and ushering you guys along?

DAVID SUN: Yeah. I think not only carefully curated this program and all of the conversations and visits, it was also very thought as an- we jokingly say it’s an immersive boot camp for anyone who wants to do a Chinese startup.

HANS TUNG: And how many of you went on this trip together?

DAVID SUN: Roughly 36 of us, I believe.

HANS TUNG: Out of an applicant pool of over 400. So, you guys are all very lucky and well-deserved.

DAVID SUN: Definitely it’s what I felt as well.

HANS TUNG: When we thought about this program, we didn’t expect to be seeing this many applicants. On top of that, most of the 400-plus applicants had very strong resumes, so it was very hard for us to choose. We were flattered and very impressed. And we’re glad that this community is forming and want to foster that.

DAVID SUN: Yeah. I think the team did a really good job in terms of marketing and soliciting applications. There was this joke thing we say, it’s Liebian 裂变, chain reactions,  because they ask every single Chinese to refer at least three or four of their best friends. I personally actually referred a number of friends and I personally feel guilty about them not being selected.

HANS TUNG: Well, thank you for your support. My next questions is just share a bit more about yourself and your life experiences. I notice that you have lived in eight different cities, so I would love to hear more about it. I personally have been in nine, so I know what that has done to me. So, I’d love to hear what that’s done for you as well.

DAVID SUN: Sure. I left for Germany when I was 16 for college. When I was in Germany, I did a number of internships and also just backpacking on random trips and locations. And after that I moved to the States for my PhD studies.

HANS TUNG: So, you did college in Germany?

DAVID SUN: In Germany, yes.

HANS TUNG: And you left for there when you were 16 or 18?


HANS TUNG: 16. So you started school early?

DAVID SUN: I used to be in a program called Special Class for Gifted Young. It’s a collaborative program which is between my high school and the University of Science and Technology in China. We had a lot of renowned grads like Zhuang Xiaowei, the first and youngest tenured professor at Harvard. But at the time when I was 15, I looked around and felt something was wrong. I always felt I was rushing myself in this accelerated pace of study. And I personally felt there’s something more to life than academic excellence.

HANS TUNG: And this program was in Suzhou?

DAVID SUN: This program was in Suzhou High School. It was one of the only in the nation at the time because there just weren’t that many people to participate, I guess. So, I made a decision to actually go and see the world instead of going to college. I took a year, basically to prepare for the tests. And in retrospective- I think you’d definitely echo- being open and traveling across different countries at a young age, in particular during my teenage years, really helps to shape a global mindset and building up this open-mindedness which is, I believe, critical in navigating through an ever more increasingly globalized world. And internationally, I feel that really helps me to understand and appreciate and respect diversity and differences in cultures, beliefs, and societies.

HANS TUNG: Why did you pick Germany?

DAVID SUN: Frankly, I applied to a number of places. I felt most of my friends would end up in the States for grad school or for work. If I couldn’t be the best, I’d like to be a little bit different. And I was a petrol head and really into cars and football, so Germany’s kind of a reasonable place to choose.

HANS TUNG: What were the most surprising things about Germany that you didn’t know before and you discovered when you were there? And what were the things that impressed you the most?

DAVID SUN: I think one thing that impressed me most about Germany is time management and dedication. They’re almost the same thing. I think there are a lot of urban legends on Chinese social media about how Germans are carefully curating, managing, and documenting everything. Just two examples for this. First of all, when I was first in Germany, I had a host family. And Germans really don’t like mobile phones. They’re not really communicative in general. They actually have the lowest penetration and also phone usage in all OECD countries if you look it up. I read on The Economist a while back. They would phone up their friend and say- I believe it was in September- they would say, “The winter’s coming. Should we grab tea together on the second Sunday of November?” And then the other person would say, “Let me check my calendar.” They’d take out their little book, they’d find that date, and then they’d be like, “I’m available and let’s meet for tea at 2 pm at your house.” And they would never phone each other again. They would just show up on time. It was incredible. When I come to the States, it was Quaker time when I was at Penn. Everybody’s half an hour late. And then Berkeley time, 15 minutes late. And then Germany time is time. And then the second thing about their managing of documentation, I went skiing my first year in the States and I broke my glasses. It was holiday season, and nobody would actually give me a prescription in time. Out of despair, I phoned the optical shop back in Germany where I had my glasses about three years ago. I gave them just my first and last name.

HANS TUNG: And of course, they had your record.

DAVID SUN: And they had my record. They emailed me over in 10 minutes. And I think this kind of dedication to documentation and time management is what made the country so efficient and so good at craftsmanship. When you think in terms of building an actual physical object, cars in particular, there’s so many pieces and movements in there. You just have to be so meticulous.

HANS TUNG: And precise.

DAVID SUN: And precise. So that’s the takeaway. I wasn’t very organized before going to Germany.

HANS TUNG: So that changed for you?

DAVID SUN: It was a big change for me and really helped shape me for better, I believe.

HANS TUNG: Okay, good. Now onto the US. It was for a PhD at UPenn? What was your impression of Philadelphia?

DAVID SUN: I was leaving my consulting job at KPMG when I was moving for grad school. Connor actually came to my farewell party and he emailed me the first week I was in the States. And the email title said, “Hello David. How is United States?” And then the body of the email said, “Is it really fun just like in the movies?” And really, frankly, when I first got into the States, we actually had somebody renting a house for us and it was in West Philly. I’m not sure everybody knows how West Philly’s like. It’s basically Chicago inner cities, slightly better, where if you call 911, people come after an hour because policemen don’t want to be in danger. So, it was a huge shock for me because it’s quite different from Europe in general and also quite different from the movies I have seen about the States. I’m talking about American Pie and Friends and other things. But it’s an interesting experience to see how the landscape in an urban environment is in a different continent and also in a different political system. But Penn overall is great. And I want to say here for the record, Penn is one of the safest schools. We have a lot of security personnel.

HANS TUNG: I’m glad you said that. I was going to ask just to make sure.

DAVID SUN: Yeah. We take care of everybody.

HANS TUNG: That’s right. You’ve got to pay respect to UPenn which is great. I’ve been to UPenn a couple of times. I enjoyed both experiences when I was there. So, what prompted you to join Apple? And how long have you been at Apple and do you ever get the entrepreneurship bug to do something on your own?

DAVID SUN: That’s a lot of questions. I’ll answer first why did I join in the first place. My first job after grad school was at a political consulting firm, the legacy branch of Monitor, which took care of all the US agency clients, public opinion monitoring consulting. I did for about a year and then I realized it’s not quite the thing for me. I think I enjoy problem-solving and critical thinking and quantitative things more than what might make me most successful as a consultant, especially in the public opinion consulting environment. Towards the end of 2017 I got a call from a recruiter at Apple and he said if you’re interested in doing something cool with artificial intelligence and I basically jumped at the opportunity. I said, yeah, it’s probably time for me to move to tech.

HANS TUNG: How did you go from a PhD degree in electrical and systems engineering to public opinion consultancy?

DAVID SUN: My PhD’s actually in systems engineering and my concentration is on human behavior modeling. What we do is apply quantitative modeling and computer simulations to understand and predict human behavior. My lab back in the ‘80s and ‘90s did this profiling of all the world leaders and tried to predict, basically, military conflicts around the world.

HANS TUNG: Based on what was on the public speeches?

DAVID SUN: Based on public speeches extracted and formulated personality models of those leaders. And I personally, with my PhD work, we actually published how to predict and model coalition dynamics in regions of conflict like Syria with different military factions and ideology claims, how they form different coalitions. We also used a model to do US election back-testing in 2008 and we were able to achieve a very highly accurate model that predicts down to the zip code how, collectively, people would vote for a particular candidate based on ideology. And that was very interesting.

HANS TUNG: Where do you get the data on people’s ideology.

DAVID SUN: Basically, if you look at US elections, there are published positions of those candidates. And there are also the Annenberg National US Election Survey, one of the largest panels composed of- it was hosted by Penn as well at the time. What they do is they ask about what are your positions on the top six or eight issues that are controversial and divisible including taxation, welfare, immigration, and then there’s the pro-life and pro-choice kind of topics. And then based on those questionnaire responses, you can basically place an individual and then groups of individuals in a high-dimensional ideology space. And then there are also the interests and alignment with the published statements of the political candidates. And then you can see which candidate will give them a higher perceived utility. Individually, there are noises and people who are irrational or just misinformed. But collectively, noises cancel out and they form a near-perfect behavior in terms of making the better choice for themselves.

HANS TUNG: Fascinating. So, from there, where did you go next?

DAVID SUN: From there, I was one day given this report on Syria about different ideological groups in Syria. And it said State Department: For Official Use Only and I traced back to the author of that document. Turns out that the former partner of that practice was a Penn alumni and so was the Vice President. So, I reached out naturally, and I said, “Look. It’s pretty cool and I’ve been doing PhD work on this. Do you think you can have me as an intern?” And that’s how I started with them. It was really nice.

HANS TUNG: What did that internship lead you to?

DAVID SUN: The internship led to a full-time offer naturally. And I joined the firm being one of the first data scientists, leveraging technology to help them to extract people’s what they call narratives of things and then tracing public opinion on core social issues for a number of clients from US Government to financial services agencies and just general consumer friends.

HANS TUNG: And how did you go from there to Apple?

DAVID SUN: I think that really helped me to build a lot of more solid engineering technical skills. I felt there was this insufficiency for me personally in terms of a particular technical area. I actually had a couple of offers at the same time. One of them I still remember was to be a Content Strategy Manager for Coursera, deciding what curriculum they’ll be adding. So, like a mini-provost for branching out their studies. But my argument to myself is that I think it’s easier to go with the technical track, an engineering track, when you’re younger because you think faster and you’re more energetic versus if I go for managerial consulting track and then do an MBA. I think it’s much more difficult to come back to the technical field because the pace of innovation and the pace of change in the tech world is just so fast. And I want to stay tuned until I’m ready to make the jump.

HANS TUNG: So, you were in school at UPenn and you reach out after reading about this research and start working for Monitor. You start as an intern and then become full-time. And then how did you go from Monitor to- what city were you in for Monitor? New York?

DAVID SUN: Monitor’s actually in San Francisco. It’s Monitor 360, the former government practice.

HANS TUNG: Okay. That takes you to the Bay Area. And then how did you go from Monitor to Apple?

DAVID SUN: I think after the first year I realized that I was not sufficiently trained in technical and engineering backgrounds. I basically made a judgment call that it would be better for me at a young age to concentrate more on the technical track until I’m ready to make the jump entirely to strategy or management side. And it became interesting for me to actually look for tech firms in the area. I wasn’t seriously looking at that time until the end of ‘17. And I got a call from a recruiter at Apple and he said, “Look, we have this really cool thing going on here. We’re expanding a secret AI project that I can only tell you after our first phone conversation. Would you like to do the interview with us?” And I did and naturally, everything just followed afterwards.

HANS TUNG: And what are you doing at Apple now that you can share?

DAVID SUN: I think for the official tagline, I am developing and enhancing the natural language understanding capability of Siri, the voice assistant. And that’s all I’m allowed to say.

HANS TUNG: And do you feel that by doing that, it improves your technical background and experience?

DAVID SUN: I think definitely it does. I think one of the things I did not realize until I joined is that there is an inherent advantage to large tech firms. It’s the scale of their problem. When I was at Monitor, our clients are really looking at probably thousands or quarter of a million, half a million sizes of data and asking us why and those kinds of probing questions. But at Apple, whenever we develop networks and roll out a specific feature, we’re serving in hundreds of millions a day. I think that’s really valuable experience. And also, it really helps you, and almost forces you, to think big and think at a different scale.

HANS TUNG: And then when you’re at Apple, did you ever see anyone around you do a startup? How did you come to know about innovation in an entrepreneurial setting?

DAVID SUN: I think at Apple, the first month and second month I joined, I actually saw two colleagues departing, one for a self-driving startup and the other one went on to do ICOs, cryptocurrencies. I guess it was a bit late for him to do that. But anyway, in terms of entrepreneurship, I have always been a firm believer in startup life. I think in order to do great things, I would say for anyone with a mission to realize their dreams, they should try to work for themselves and commit their life, or at least a period of their life, to at least one attempt to build something they believe in. That’s my personal credo so to speak and I’ve always been seeking opportunities to do so. I have done one startup back when I was in grad school, an iOS social app that got FbStart funding. But in the same time, I realized it’s not quite truly my passion. And we had a very competitive competitor at the time when we launched, and it didn’t go quite well. But then I think that dream still just persisted in me. And personally, for me at this stage, I’m trying to build as much of technical background as I can and also just building important connections that will become useful when I do decide and find out what my passion is.

HANS TUNG: Let’s say you can raise $5 million today. What would be your startup idea that you would want to spend a lot of time in?

DAVID SUN: I think there are two considerations I always have when I want to do a startup. One is how confident I am to realize it. And secondly, how much of a positive impact it will have on society. I have actually long been thinking about doing a startup in the area of strong and general artificial intelligence in language understanding. I think this will be a critical trend in the next decade for reasons that are almost obvious. Number one, there will be a new form, a much more efficient and natural form, of human-computer interfacing methods.

We’ve been using clicking and typing as the major form of communicating with computer systems ever since the invention of it, for nearly almost a half a century now. But we humans aren’t quite programmed to just use our fingers to communicate. The most natural form of communication for anyone, as we’re doing right now, is through talking. And this really requires this computer system to have this capability to fully understand and take in what our intents are. And language systems would help bridge the gap. I think that has two very important applications. For one, if you think in terms of the human-computer interface, this would help to bring technology so much more personal and incredibly easy to use for even people who have no computer skills at all. And that, I believe, there are plenty. And secondly, there are massive troves of data existing in the internet space and in the broader public domain that are in text and not in any other form. We currently are still doing string word-matching to find information. And we have humans reading, analysts reading through pages of documents from prospectus to due diligence documents to files and industry reports to get maybe one or two useful pieces of information. But what if the computer had the capability to read, to understand, to summarize, and also to do the QA in a near or super-human level? I think there have been some startups in the area, in some vertical industries, doing this already. But I think it’s still a relatively under-developed field that is inherently challenging. And I personally just like challenging things.

HANS TUNG: And it’s natural language processing in a very specific vertical use where people will pay a premium for the benefits it generates?

DAVID SUN: Correct.

HANS TUNG: Okay. That seems like a solid idea. So now you’re at Apple, Cupertino, and the new campus is amazing. It’s very easy to just work there for the rest of your life and never leave because it’s so beautiful and so self-sufficient. What prompted you to decide to apply for GGV Fellows?

DAVID SUN: First of all, about Apple, the campus is indeed amazing. But in terms of why I wanted to apply for GGV Fellows, obviously I do have the dream in the long term to do something on my own and to be good at it and making an impact that’s very tangible and personal. I don’t believe you can quite do that in an enormous organization, in any enormous organization. Secondly, I think with the current economic and political trend, China is taking an ever-increasingly important role on the world stage, economically and politically. It’ll be a natural thing to do to be in those environments. Just like in the old times you would want to go to Venice, Florence, Milano to be a merchant. I think if you want to do a startup and you want to do a venture, you want to go to an environment where it’s business-friendly and also the overall society is providing this good foundation for your business.

I recall vividly one thing I read on Wired about reports of Steve Jobs in his final days going to see the construction site of Apple Campus. He appeared very upset and his fellow men asked why aren’t you happy about the new campus. He said he just realized everything has an end. Not to bring this into any depressing tone, but I think overall for every single business entity, it’s fundamentally cyclic and there will always be the next big thing. It is important for those individuals who can to take the leap of faith and commit to what they believe in will be the next big thing and eventually build it. And I hope I can be one of them.

HANS TUNG: Along the way, it seems like you were also impressed by Peter Thiel.

DAVID SUN: Yes. I think he is a marvelously brave, intelligent person. He’s almost contrarian in a way in the tech world. I read his book and almost every single executive and founder we’ve met in China on this GGV tour was talking about Zero to One and talking about the process of building something out of nothing. I think that’s a very helpful and informative writing that he has had.

HANS TUNG: So, amongst your one-week trip in China with GGV Fellows, who was an actual live speaker that you heard that impressed you besides people quoting Peter Thiel?

DAVID SUN: I think it’s Lin Lin, Stanford grad, Chief of Staff of Kuaishou. Kuaishou is the social network side for video clip sharing. It’s a very controversial service and widely criticized for public domain by some people who think they’re sharing distasteful and boring or just-

HANS TUNG: Low-brow content from Tier 3, 4, 5 cities.

DAVID SUN: Yeah. I think that’s the perception almost everybody in the class had before him coming in. I talked to a lot of people and they were like, “Why would a Stanford grad go and do this kind of things.” And people gossiping and people wanting to ask him so many questions. But then he came in just being very candid and very relaxed, and he’s like, “Look, I know you all have this perception of this infamous company I work for, but here’s our mission.” So, he shared the value of Kuaishou which I really echoed with and a lot of people in the room did as well. It’s about recording everyone faithfully. He said there are three things good in life: the truthful, the kind, and the beautiful. If you think about Instagram and then there’s the Douyin and Xiaohongshu, it’s the beautiful. And then NGOs or World Food Organizations are the kind. And Kuaishou is the truthful. That’s a very interesting perspective. And he compared his business to the artists composing a Qingmingshanghetu 清明上河图, a famous painting of all the daily lives of working class people in Song Dynasty. For those who don’t know, it’s like realism paintings in 19th Century French art circles depicting the life of working class people.

HANS TUNG: That’s right. This happened almost 800 years ago.

DAVID SUN: Yeah. So basically, he’s arguing that it is the modern version of an art piece that is faithfully recording the daily lives of people who, in the pre-Kuaishou era, were simply omitted in history and the media archives. And I had this kind of aha moment and eureka moment of, “Wow. This is what they’re doing.” This is kind of eye-opening and really just astonishing for everybody in the room and they were like, “We didn’t know you were doing charity work.” And I think to a certain extent, it is. They were talking about universal values. They were talking about how we should give everybody the opportunity to share, equitable access, and went into a very meaningful and deep conversation. That was the most unexpected part of all the workshops we’re attending. I personally was very touched by his candidness and also their vision, at least their advertised vision, as well as just how openly he was willing to share business and regulatory hurdles Kuaishou was facing when growing so fast and moving so fast. So that was, I would say, the most memorable piece.

HANS TUNG: Any big takeaway after one week, things you learned or things that you feel you can take away and help you to do something else new later?

DAVID SUN: I think without a doubt it would be realism. Not Kuaishou’s style, but realism in the sense that I think a lot of us who have been studying overseas and going to elite institutions and working at big tech companies are living in bubbles. We didn’t quite have an actual grounding in markets outside Silicon Valley, outside school. Getting a reality check felt slightly painful, a little bit discomforting, but fundamentally reassuring. And for me personally, I think a lot of my friends and me personally had over-romanticized the idea of doing a startup. Not romanticized, but almost to the extent of fantasizing getting exorbitant valuations after six months, after six months, after six months of doing this marvelous unicorn. And the reality when we visited all the companies and talked and really learned from all those founders and senior executives is that I think the idealism is there. The passion and the urban legends, some of them are truly real. But the amount of effort, dedication, and the firmness of your faith and belief in actually executing it and being the persistent leader of the organization takes a lot of courage, a lot of perseverance. I think I went there with a lot of curiosity and I came back with a lot of respect.

HANS TUNG: I was a founder twice. Both companies didn’t do that well. But it is the hardest job on earth to be a founder/CEO and lead your troops from zero to one. As a VC, I think no matter how hard I work, it’s an easier job. And like you said, we all have a lot of respect for the founders we back.

DAVID SUN: Yeah. And that was kind of the key takeaway.

HANS TUNG: Do you have any plans to return to China to work in the future? And how would what you learned from this program impact you to make your decision going forward?

DAVID SUN: I think first of all in the long run, as I said earlier, the economic trends are really going in favor of China and Asia and a lot of emerging economies. I foresee for the next few decades. And it is a natural thing to be there and to be on the ground and, using a war metaphor, fighting the battle or to build a business venture in those economies. The program itself really helped me in two ways. One, as I said, getting a reality check to fully understand and have that kind of breadth and depth in such a short period of time is simply incredible and unparalleled. And secondly, it also helped me with a lot of social programming with our Fellows in the class, building important connections of people who might become partners in the future. So overall, I feel this is a great program that really helped me to find directions and to make more informed choices in the future.

HANS TUNG: If you have any suggestions for next year, how can we do it better?

DAVID SUN: Make the next class work harder. Do 007.

HANS TUNG: In terms of size of the class, do you think 36 was good? Or do you think it should be more or less?

DAVID SUN: I think it’s about right. If any larger, it would be difficult to build a cohort and a sense of camaraderie in such a short period of time. I would say 30-40 people is about the right size.

HANS TUNG: Interesting. Do you feel you got to know almost everyone in the group?

DAVID SUN: I tried to be as social as I could and I only, I would say, had relatively deep conversations with about three-quarters to half of the class.

HANS TUNG: So, you’re right. It’s about the right size. Any bigger would not be as effective. Then the last question, a fun question. If you have 10 days for vacation this year, where would you want to go and why?

DAVID SUN: I would go to Israel. I think Israel is the other Silicon Valley other than Zhongguancun, Shangdi, and actual Silicon Valley. I was almost going to go on a client trip at the beginning of ‘17, but then there was a terrorist attack in Jerusalem, and I had to cancel last minute by the firm. I’ve heard a lot of great things. One thing I really like to do is whenever I go to places, I read on their history and culture. My Promised Land about the whole Zionism and the movement, the returning back to Israel, was very touching for me. And I really want to be there and witness this myself.

HANS TUNG: Thank you very much. It will be on our podcast.

DAVID SUN: Pleasure. Thank you, Hans and thanks, everyone for organizing the GGV Fellows program.

HANS TUNG: Thank you.

ZARA ZHANG: Now you will hear an interview with another of our GGV Fellows, Bo Han or Han Bo Ning in Chinese. Bo went to Harvard for his undergraduate studies and graduated in 2014 and has worked as an engineer at Google as well as at a startup in LA before returning to China last year. So, Bo, could you tell us more about your background, where you’re from and why you’re here?

BO HAN: Sure. I was born in Beijing in 1992 and then when I was three, we moved to Hawaii. I lived in Hawaii for about seven years and then I moved to Connecticut, my first stop in the mainland. Lived there for a year. Then I went to middle school and high school in Indiana. I went to college at Harvard and then lived in San Francisco and Los Angeles. And then last year in July, I came back to Beijing.


BO HAN: I’m co-founder and CTO at a tech startup with my cousin and we’re focusing on English education for the zero to six age range. Currently, most of our development happens on WeChat, specifically WeChat Mini Programs or Xiaochengxu 小程序.

ZARA ZHANG: And why did you apply to GGV Fellows?

BO HAN: Before, most of my life and work experience has been in the US, so I thought it was a really good opportunity to learn more about Chinese tech. I’ve also previously listened to the GGV podcast a lot. I got a lot out of that.

ZARA ZHANG: I think you’re quite special because I have a lot of friends who spend the vast majority of their lives in the US even though they were born in China. And they identify with the term ABC or American-born Chinese even though they were born in China. And they may not even speak Chinese whereas even though you left China at age three, you’re still extremely connected with Chinese language and culture and you still identify as a Chinese person. Could you talk about why that’s the case?

BO HAN: I think most of us are very influenced by our parents. And my parents, I think, are pretty different from most ABCs’ parents. They studied the humanities. My dad is a history professor and my mom studied Chinese in college. So, from a very young age they really cared about me learning about Chinese history and Chinese language. I remember as a kid my mom, pretty much every day, would read the Yuwen textbooks with me, even though it was at a slower pace than a normal Chinese kid. But I think even with all of that, after coming to China, I’ve had to downgrade my sense of my own Chinese ability. Before, in the US, I would consider myself like a supposed native speaker. But after coming to China I feel like I’m more of, at most like a middle school level of Chinese.

ZARA ZHANG: I think you’re extremely fluent, but I think a lot of it is not language but the nuances of the culture and society that you can’t get in textbooks.

BO HAN: Also, the Chengyu 成语. They’re very difficult.

ZARA ZHANG: So how has the adjustment been? How long have you been here now?

BO HAN: I’ve been here for about half a year. I think the adjustment has been pretty easy. I think mostly it comes down to the attitude where I’m very interested in Chinese culture and Chinese tech, the changes that have been happening in society. I think living in the US for so long I am just so familiar with US society and US culture that it’s just really interesting to learn more about a different culture. But also, I feel like it’s my own culture, so connecting with my own roots.

ZARA ZHANG: Could you talk about your experience with GGV Fellows? After you came in, what were your expectations and how did the program turn out for you?

BO HAN: Even before GGV Fellows, I felt slightly overwhelmed because in the group chat you sent five or six different books in Chinese about tech.

ZARA ZHANG: Yes. I made everyone read this book list, all Chinese books on Chinese tech.

BO HAN: I started reading one of them. It’s an overview of 2008 to 2018.

ZARA ZHANG: Jidang Shinian 《激荡十年》.

BO HAN: Yeah. And then I started timing myself. So, I’ve read one chapter. How long would it take for me to actually finish this book. Then I realized that I couldn’t actually finish the five or six books. And then I didn’t actually finish that book by the time the event started. But I think after going into the event, I realized that I could follow along. And then every day was really action-packed, but it was like a fire hose style of learning. Really just got an overview of a lot of different industries and then also companies at various stages. Even though I think the earliest stage company was still pretty large, like Series A possibly.

ZARA ZHANG: I would say most of the companies we interacted with were unicorns, but there were a few that were more early stage. So, what was something that left the most impression on you?

BO HAN: I think there’s two aspects. One is the actual companies that we learned about. I think one of the really interesting companies for me was Moka. The co-founder, he left China I think as a-

ZARA ZHANG: Orion Zhao.

BO HAN: Yeah. He went to Berkeley for college and then most of his work experience was also in the US. But he came back to China, I think, when he was 23 or 24 or something like that. And he decided to go into the 2B industry which I thought was really interesting given that he didn’t have prior experience. But it seems like he has a really good attitude toward learning and just talking to a lot of different people. I think that’s a really good skill set to have.

ZARA ZHANG: Why did you identify with him?

BO HAN: I think his outlook is very Silicon-Valley-inspired. I think it’s just inspiring how he managed to build a company even though he didn’t have prior experience in that area or in China really.

ZARA ZHANG: You have worked in Google in Mountain View and also a startup in LA. How would you compare what you saw in the US, the tech space there, versus what we’re seeing here? What are the major differences in both just people’s attitude and work environment?

BO HAN: Well, there’s two aspects to it. One aspect was listening to the GGV podcast, I got the impression that every company was very 996 all the time, all the employees were 996, a little bit like sweatshop conditions. But I think after visiting the companies, I’ve gotten a little more nuanced understanding where 996 is more of a mindset where people are thinking about work more often than people in the valley. And I think that’s definitely true, especially within co-founders or higher-level employees within companies. They’re constantly thinking about how to run their company. And I think part of that possibly stems from the amount of competition that exists in China. Once you have a somewhat successful or seemingly successful business model, you’ll have a lot of competition that comes in. It seems less the case in Silicon Valley.

ZARA ZHANG: So, what would be your biggest three or a couple of takeaways from GGV Fellows?

BO HAN: One of the interesting takeaways was the other Fellows who would have very good job opportunities in the US, they’re very seriously considering coming back to China. And I think that really contrasts with a lot of the people who emigrated to the US in the early-90s and late-90s, basically my parents’ generation. I think the mindset back then was if you could stay in the US, that was your best option.

ZARA ZHANG: Oh yeah. Leave China.

BO HAN: Yeah. I think that’s a really good sign for China that it’s able to attract these people back. Even better sign is if you’re able to attract completely different immigrants. I think that’s a sign of the health of a country.

ZARA ZHANG: For you, do you feel you’re welcome in China? Do you feel like you belong when you’re here?

BO HAN: Yeah, I think so. Although the funny thing is in Beijing, a lot of people ask me, “Are you Japanese? Are you Korean?” Because they listen to my Chinese and they think it’s a little bit off. But I haven’t actually experienced that in Southern China. Maybe it’s because in Southern China it’s like, “Oh, you just have a different accent.” And I think the more someone has spent time in the US interacting with ABCs, the more they’re impressed with my level of Chinese. And then the more someone is actually completely native Chinese, the less they’re impressed with my Chinese.

ZARA ZHANG: You’re a special case for our Fellows. Almost everyone is what we call a Hai Gui or overseas returnee who probably left China from 16 to 20-something to attend college or high school or grad school in the US or other countries. They may have worked in the US for a couple of years and now considering coming back. But you left at a really young age. So, when you were speaking with the other Fellows, did you feel like you had a different perspective on certain things than the rest of them?

BO HAN: I think so. I think for me, even though I don’t purposefully try to do it, I think subconsciously a lot of my thinking is still impacted by American or Western ways of thinking. But I think having grown up in a Chinese household as well, I can understand and sympathize with a lot of Chinese ways of thinking as well. I think things that came up that was interesting to me was when we visited Face++. There were two other Americans in the group, Fischer and Benj, and I think they brought up some privacy issues. And listening to them talk about privacy issues, I could really sympathize with that as an American. But at the same time as a Chinese, I could predict the Chinese response because I lived through that growing up.

ZARA ZHANG: You can identify with both sides. I really think that’s a gift. Most people can only live their life and be one, not the other. But we’re living in an age where you can actually be both and sympathize or empathize with both sides of the story and identify with a larger set of people.

BO HAN: That was really one of the biggest takeaways from living in Indiana. Previously, when I was living in the US in Hawaii, Hawaii’s a very Asian state so if you’re Chinese, you’re just part of the majority culture. Then after moving to Indiana, even though I grew up as an American, people saw me as a Chinese. So, then I ended up having to explain a lot of Chinese culture and people would have preconceived notions of what Chinese people are. And then also when the 2008 Olympics happened, they would ask me, “Did you know the Chinese gymnasts are faking their ages and stuff? What do you think about that?” So, I think living in the Midwest actually really shaped my identity as a Chinese person. It really reinforced my sense of, “Okay, maybe I’m not completely American.” Maybe if someone grew up in San Jose or the Bay Area where everyone else is an immigrant, maybe their understanding of what an American is would be very immigrant-American.

ZARA ZHANG: So, was it a difficult decision for you to move to Beijing because you have not lived here for over a decade?

BO HAN: No. It wasn’t difficult at all. I think what really helped was the fact that my parents had moved back to- or they moved to Hong Kong in 2012, so I no longer had any family in the US. And then also, coming to Beijing, I’m working on my startup with my cousin. So, I think just having that family support also really helped. And then also when I was working in the Bay Area and LA, I was pretty frugal, so I saved up some money. I think that helped with the risk part.

ZARA ZHANG: And you see yourself here for at least a few more years?

BO HAN: Yeah. As long as funding doesn’t dry up. Yeah, I’ll try.

ZARA ZHANG: Could you talk a little bit about the startup you’re running?

BO HAN: Yeah. We’re targeting a zero to six age range.

ZARA ZHANG: What’s the name?

BO HAN: It’s called Qianqian Mama 千千妈妈. We’re focused on the zero to six age range and mostly developing Mini Programs that focus on content and then also games that center around that content, so trying to expose Chinese kids to English content and then trying to reinforce the concepts that they’re learning.

ZARA ZHANG: And you say you’re mostly building a product around WeChat Mini Programs. That’s quite different from what you used to work on in the States. Did you have to learn everything again?

BO HAN: I think the fundamental programming aspects are pretty much the same no matter what new framework comes up. But definitely the details of implementation are different. I had to go through a lot of documentation in Chinese which involved looking up a lot of words, and then also going through different tutorials, and then also learning how developers in China work. Where do they go when they have questions about bugs or how to implement something?

ZARA ZHANG: So as long as you’re a good, smart engineer and you can read Chinese, it’s not that difficult adjustment to move here?

BO HAN: No. Because I think fundamentally most programmers are lazy which is a good thing. So, whenever you hear this completely new framework, it’s usually built around something that exists already because it doesn’t make sense to reinvent the wheel. So, WeChat Mini Program sounds completely new, but it’s actually built on JavaScript and WXML which is similar to HTML and then also WXSS which is like CSS. So, if you’re familiar with web programming, it actually is pretty familiar.

ZARA ZHANG: Is there any last word you want to say maybe to either our audience or prospective GGV Fellows applicants?

BO HAN: Yeah. I think given my background, I really want to encourage other Chinese-Americans or members of the Chinese diaspora to really keep in touch with China, understand history, especially recent history, maybe why your ancestors decided to go abroad. I think that’s really interesting. I also think from a practical perspective, it’s really important to learn Chinese. There’s a lot of unexpected opportunities that you can get just from that language ability. When I was in high school, I never would have expected the Chinese tech industry to have grown to this level. And back then, I would never have been able to predict that right now I would be in China, working in China.

ZARA ZHANG: Yeah. But it’s possible because you speak Chinese.

BO HAN: Yeah.

ZARA ZHANG: Okay, cool. Thank you.

BO HAN: Thanks Zara.

ZARA ZHANG: That’s all we have for today’s episode. If you’re interested in applying to attend the next batch of GGV Fellows program in January 2020, please join the 996 WeChat group and Slack channel where all related announcements will be posted. You can join these groups by visiting 996.ggvc.com/community.

HANS TUNG: Thanks for listening to this episode of 996.

ZARA ZHANG: GGV Capital is a multi-stage venture capital firm based in Silicon Valley, Shanghai and Beijing. We have been partnering with leading technology entrepreneurs for the past 18 years from Seed to pre-IPO. With $6.2 billion in capital under management across 13 funds, GGV invests in consumer new retail, social, digital internet, enterprise cloud and frontier tech.

GGV has invested in over 290 companies with more than 45 companies valued at over $1 billion. Portfolio companies include Airbnb, Alibaba, Ctrip, Didi Chuxing, DOMO, HashiCorp, Hellobike, Houzz, Keep, Slack, Square, Toutiao, Wish, Xiaohongshu, YY and others. Find out more at ggvc.com.

We also highly recommend joining our listeners’ WeChat group and Slack channel where we regularly share insights, events and job opportunities related to tech in China. Join these groups at 996.ggvc.com/community.

HANS TUNG: If you have any feedback on this podcast or would like to recommend a guest, please email us at 996@ggvc.com.

Episode 33: Chinese Overseas Returnees (Hai Guis): Opportunities and Challenges

GGV Capital’s Hans Tung and Zara Zhang discuss the opportunities and challenges faced by Chinese overseas returnees (“sea turtles”, or 海归) who are interested in working in China’s tech industry. These are people who were born and raised in China, completed their high education outside of China or have worked overseas, and then have returned to China for opportunities. There has been a growing number of sea turtles in recent year as China’s tech economy boomed and the US immigration policies became less friendly to foreign talent.

We addressed questions including: What are the common pitfalls that sea turtle entrepreneurs run into? In an age where the premium of an overseas education is arguably declining in China, how can sea turtles make the most of their global experience? For aspiring sea turtle entrepreneurs, which verticals should they spend time on?

If you’re an aspiring or current Chinese overseas returnee, we have a special resource for you: we recently compiled a list of 10 Chinese books on tech & entrepreneurship in China that we recommend all sea turtles read before going back to China. These include books on China’s tech giants Tencent, Alibaba, JD, and Meituan, books on practical aspects of running a startup in China such as growth and marketing, as well as books on general Chinese business history. To read the book list, please follow GGV’s WeChat official account by searching “GGVCapital” in WeChat (or scan the QR code below) and then message the word “sea turtle” to that account. We also have a lucky draw for you: If you comment on that article with your story of coming back to China as a sea turtle before April 10th, you can enter a lottery to win a bundle of these 10 books, which will be mailed to you. We look forward to hearing your story.

GGV Capital’s official WeChat account

And, here’s a list of news outlets and resources that can help you stay in touch with what’s going on in tech in China.


ZARA ZHANG: Hi, everyone. On today’s show we wanted to talk about the topic of sea turtles, or Haigui 海归 which means overseas Chinese returnees. These are people who were born and raised in China, completed their higher education outside of China or have worked overseas, and then have returned to China for opportunities. There has been an increasing number of sea turtles in recent years as China’s tech economy boomed and the U.S. immigration policies became less friendly to foreign talent.

HANS TUNG: Actually, some of the most valuable Chinese tech companies were founded by Haigui 海归, and virtually every Chinese tech company has Haigui 海归 in their leadership. Examples include Robin Li 李彦宏of Baidu, Jean Liu 柳青 of Didi, Colin Huang 黄峥 of Pinduoduo, James Liang 梁建章of Ctrip, Lin Bin 林斌 of Xiaomi, Wang Xing 王兴 of Meituan, Zhang Tao 张涛of Dianping, Liu Zhen 柳甄at ByteDance 字节跳动, Charlwin Mao 毛文超 of Xiaohongshu 小红书, Wang Yi 王翌of Liulishuo 流利说, and the list goes on. And we’ve actually interviewed many of these people on our previous episodes, and I recommend everyone check this out if you haven’t.

ZARA ZHANG: So sea turtles face both opportunities and challenges when they come back to China. And indeed they’re more internationally minded than Chinese people who have never lived abroad. They speak better English and they can bring back practices from other parts of the world such as Silicon Valley. But they also face many challenges. Chief among those is a problem called Bu Jiediqi 不接地气 or not connected to the energy of the land. So Hans, what is your definition of Jiediqi 接地气?

HANS TUNG: Practically speaking China operates quite differently from the rest of world. So if you have been away from China for five to ten years, to go back and understand how grassroots people are, how things get done, that’s beyond what’s in the official guidebook. It requires someone who understands what’s going on in the land and what’s the energy of land. So Jiediqi 接地气 is a very common complaint that we hear levied against Haigui 海归 folks.

ZARA ZHANG: I actually encounter this question a lot from my other Haigui 海归 friends like how do I become more Jiediqi 接地气. Because once you have spent so many years abroad, when you come back you naturally just have English words pop up when you’re speaking Chinese, and that might create the impression that you’re just trying to act like you’re more Yangqi 洋气, or more westernized than the rest, when it’s just naturally the way you’re thinking or speaking. So how do you think practically Haigui 海归s can become more integrated into the local Chinese culture and crowd?

HANS TUNG: I think you and I both went through that period. I moved back to China in 2005, 2006. First of all I was born in Taiwan. I grew up in LA, went to school at Stanford, was an American citizen when I moved to China. China is not a place I’m most familiar with. And it’s very easy to use English words in my Chinese lingo every other sentence. It’s very easy to see that in order to become more Chinese I need to do more, which means including take trains to tier 3, 4 cities. You eat all kinds of funny food and be able to remember idioms and old Chinese sayings, read Chinese history books, to be able to recall lessons from the past, to show that you understand how this land works, and you know that China is a vast country with many differences across regions. The more you appreciate China as a collection of many different cities and regions, and know the differences, the more people respect you for understanding how to operate in this environment.

ZARA ZHANG: Yeah, I think that’s a really good piece of advice, because a lot of Haigui 海归s don’t realize how much they have missed out on by not being in China for a number of years. Because China develops so fast and has such a vast amount of history, so the people who stay here actually absorb a lot just by being here that you’re missing out on by virtue of not being here.

HANS TUNG: And it’s very easy to go to China with the attitude that you’re superior, you’ve seen how the West works, you know what’s the best practices from Silicon Valley or New York and you think that you’re better. But in China, since the growth is growing so fast, so much has changed, that your ability to adjust to that and then understand all the lingo is very difficult for someone who has been away, even as a mainlander, to be able to keep up. And the differences are so obvious to people who’ve been around in China, that it’s very hard to win the respect of people when you’re not fitting, or you’re not understanding or don’t appreciate how amazing this growth has been.

ZARA ZHANG: So what are some common pitfalls that you have seen Haigui 海归 entrepreneurs run into besides this hubris?

HANS TUNG: I think if I look at our portfolio companies, either as founders or as managers, people usually think that the shortest distance between two points is a straight line. But in order to get buy in on different departments or different business partners to get something done, you’ve got to figure out what everyone’s own agenda is and find a common ground to make that work. Sometimes that could be conflicting goals and you have to figure out a way to figure out how to move everyone along. The ability to treat people nice, build that relationship, build that trust before you talk about business. It is not just a transaction, but people need to do you a favor so you do them a favor so they could do a favor back later. All that takes work and it doesn’t happen in the business center or in the office.

So in that respect China is no different than any other place you’re trying to make that work. At the same time, China is moving much faster than Silicon Valley and New York. Most people outside don’t realize that. Chinese companies 10 years ago were small and maybe one-twentieth of the size of U.S. companies. These days Chinese companies are similar in size to their U.S. counterparts, and China is the largest internet economy in the world with more consumers than anywhere else. So the speed of change, how these companies grow, look at ByteDance 字节跳动 , for example, the work schedule is five days a week plus one day a week and two weekends a month. And it’s normal. And the work schedule is 9 to 9, sometimes 9 to 12. So the pace of change, the pace of growth, how fast people iterate is much quicker.

In Silicon Valley and in New York we talk about processes. People agree before something gets done and that’s called planning. In China, just getting it done, just do it first, and then if you have a problem you fix it, you iterate, and move on. So you get more stuff done in a shorter period of time, even though the path is rougher, not as smooth, not as organized. But as a result you actually get more stuff, you’re actually more efficient in terms of productivity because you’re willing to spend more time and not talk about as much and iterate fast. The difference in style becomes very evident within a first week of anybody who comes back to take on a job.

ZARA ZHANG: In terms of the decision making process a lot of my friends in the Valley or in the U.S. ask me, should I stay at Google, or Facebook, or Uber, or should I go back to China?  And if I go back, when is the right time? In terms of this decision making what do you think should be the top considerations when these potential sea turtles are considering coming back?

HANS TUNG: I think it gets harder and harder to come back before you are ready. A lot of mainland Chinese students want to go to the U.S., work for a few years and gain some experience. But it is not that easy in the U.S. to gain a lot of experience in a short period of time. Because now Chinese companies like Alibaba and Tencent, each is worth somewhere around $300 to $400 billion market cap comparable to their counterparts in the U.S., it is going to be harder and harder to have a superior position in a Chinese company if you haven’t learned the chops in the U.S. And you’re actually going to rise faster in a Chinese company before. So I would actually argue that it’s important for Chinese students to come back to China as quickly as possible after just working in the U.S. for two, three years, and not worry about what they’re missing out. Just come back and acclimate themselves into the scene, and work hard and climb.

Trying to become someone who was more senior in the U.S. and then come back later is not that easy. You can make it work, but the odds of success actually get smaller the more time you spend in the U.S. in my opinion. Because with so much data available, Chinese innovations, Chinese capability has caught up. Now in the most cutting edge, the most interesting aspects of semiconductor technology, or AI, or machine learning, there are going to be exceptions. If you are really smart in the U.S., you have achieved a level of success in a short period of time in some very cutting edge stuff, you’re an exception to the rule. You can go back to China, accomplish something and expect a higher pay and bigger positions. But if you don’t stay on top within two, three years your utility will go down. What do you think, Zara?

ZARA ZHANG: I think there’s also the danger of just settling in. A lot of people in the Valley or in the U.S., after they stay there for three to four years, they start to think about things like green cards, buying a house, having a family in the U.S. It just becomes harder and harder to move around and consider moving to China. I guess in the 20s people are the most mobile in general. Beijing and China is just such a dynamic place that requires a lot of energy so I often recommend friends around me to go to China when they’re young.

HANS TUNG: You recently move back to China having spent four years at Harvard, prior to that three years in Singapore, and then with GGV the first year in Silicon Valley. What’s it like for you comparing the difference between Silicon Valley and Beijing?

ZARA ZHANG: The biggest difference is just everything multiplies. The amount of people you need to meet, the information you need to absorb, the deals you’re processing, just the sheer amount of stuff that you need to deal with just increases by a lot when you’re in Beijing. Because China is the world’s largest consumer internet market and Beijing is one of the most populous cities ever. So it is very energetic and dynamic and exciting. And I also really like this get things done attitude in China, and this focus on execution above everything else. Because if you don’t execute faster your competitors will. And for every new vertical that pops up it’s like several hundred companies competing for market share. The competition is just so brutal. And I feel one underappreciated aspect is that there are a lot of opportunities for Haigui 海归s interested in emerging markets outside of U.S. and China. So in the past it was more bridging U.S. and China, but more and more it will be bridging China and emerging markets. Because all of these markets are looking to China for business models and lessons.

HANS TUNG: I see the difference between Silicon Valley and the U.S. Typically it is a difference of one to two. For every meeting you have in Menlo Park, in China you can easily have double the number of meetings, which is more people to meet and more people want to meet. Then you touched on the point that more and more founders are coming to China to learn. We actually noticed that as early as 2011, 2012 there were a lot of founders from India that came. These are amongst the very best VCs in India. Since then, in 2013 and 2014, we see a lot of founders, and to a lesser degree some VCs from Southeast Asia that came. And then fast forward to 2016, 2017, we start seeing founders and VCs from Latin America, specifically Brazil, Colombia and Mexico, come to China.

And it’s very interesting to see other emerging markets, sizable domestic markets with rising middle class, lots of urbanization, growing economy, or an economy in transition with volatility, come to China to learn more how Chinese companies have dealt with those issues, and took advantage of those issues and solved some societal problems over the last decade. And increasingly China is a place, especially Beijing, Shanghai and Shenzhen, and to some Hangzhou, these are the four cities you have to go and visit in order to see how Baidu, Ali, Tencent, WeChat, Pinduoduo, Xiaomi, JD, Meituan, Didi, all these companies operate. And it’s just fascinating.

We start seeing more and more Chinese companies, many of them I mentioned earlier, to expand their business beyond China, whether through strategic investments, JVs, or direct operations. We are seeing more and more startups from China having their first market outside of China now, leveraging their experience in China to build a lot of apps, for example, for the Indian market. There is increasingly more need for a Haigui 海归 to play a role. So I think the sooner Haigui 海归 come back to China when they’re younger, when they don’t have the burden of family, the more they can do and make an impact.

ZARA ZHANG: I have also felt that the premium of being a Haigui 海归 in China has somewhat decreased over the past few years. One, because there are so many of us. The number of Chinese students who study abroad increases, and the number of Haigui 海归s also naturally increases. And because the immigration policies in the U.S. have become less friendly to foreign talent a lot more are coming back today. It used to be that, oh, at least you graduated from one of the top U.S. schools or you have worked at Google, Facebook, Airbnb, you’re considered automatically superior to your Chinese equivalent, but that’s no longer the case. Because you’re actually missing out on a lot of the local Dafa 打法, like how things get done in China. You don’t actually understand the Chinese consumer market. Do you agree that the premium of being a Haigui 海归 has decreased and how we can best leverage our international experience in that context?

HANS TUNG: Yeah, that’s a great question. If I look at the numbers, back in 2006, the number of Chinese undergrads in the U.S. was only 10,000. That’s not including the graduate students, just the undergrads. So it’s a lot smaller. Ten years later in 2016, that number went up by 14x to 142,000. If you factor in the size of the graduate students to the group, back in 2016 there were roughly 250,000 Chinese students in the U.S., roughly one-third of all foreign students. So you have that kind of pool of students to go into the workforce in the U.S., and eventually come back to China. That’s a big talent pool of Haigui 海归. But to your point, has the premium being Haigui 海归 gone down? Yes. Because like I mentioned earlier, the Chinese way of doing things is do it first, then you adjust later.

Planning is important, but not as important as getting stuff done, because you’re in a growing economy and you’re in market that’s expanding. It doesn’t matter how you plan, you will know more about the result of your action if you do it first and then adjust very quickly. You become more productive that way. In the U.S. because the market is more saturated and everything you do could be quite destructive to established vested interests, you have to plan and think harder about what you’re doing in order to get some things done, because the market is not growing as a whole.

But China is different. There’s so many things that’s broken, so many things offline that’s not working. You are better off trying things, trying hypothesis, throw it out and get feedback in order to move forward and adjust. And that way of doing is what people in China are used to, from schools, from working in the workforce for the first few years after college. If you don’t have that kind of pace, clock speed, and approach ingrained in you, you’re going to stick out as a sore thumb very quickly as a Haigui 海归. And so how do you navigate and get stuff done so you can leverage your friends, your contacts, your professional network, your alumni base to quickly get these things done? You can’t hide that. It becomes very obvious in the first week, two weeks of the job that the Haigui 海归 will operate at much slower speed, much less efficiently than their counterparts who have been in China the whole time and didn’t leave.

If you go out for a professional degree, whether it’s at Stanford, Berkeley or the East Coast, the sooner you come back the better. And when you come back, how can you leverage what you’ve seen outside to make a difference? Well, helping Chinese companies to expand overseas, dealing with foreign business partners. These are easily areas that when you can speak better English and understand the culture outside of China better, you can add value. For most of the schools the Chinese mainland students go to the U.S. or elsewhere outside of China, there are many students from other countries, other emerging markets who will want to learn more about China. So while you’re outside as a Haigui 海归 you should build more relationships beyond people who are just Americans or other Chinese. Get to know people from Southeast Asia, from Latin America, from India, from Africa, from Middle East.

The more you’re willing to engage people of other races the more it helps you to work with them once you go back to China. So that’s the first thing that people should do. The second thing is, and I will probably be more frank on this. It is not easy, it is not as natural to figure it out for people to work in teams in general. So how do you, in a new work environment, figure out a way to build a team and work well with a team, so that as a team you actually can get more stuff done than in the collection of individuals. It is something that you get to learn when you are a student at Stanford, or Berkeley, or Harvard or other elite institutions. Many of the projects these days are done in teams. And there’s many extracurricular activities in sports and other things that you can do that work in teams. The more you learn how to work in teams, the more you learn how to become a leader in teams, the more you can effective you can be when you come back to China as a Haigui 海归. Those are the two things that are more general.

And specifically, before you go out, figure out what China needs help on, whether it is machine learning, or AI, or semiconductor, or whatever the specific areas. If you happen to have an interest in that when you’re outside of China, learn more about the best practices so that when you come back you can apply some professional knowledge that people in China just haven’t had exposure to. Those are the three ways I can think of for Haigui 海归 to add value while they’re out and be able to do more when they come back.

ZARA ZHANG: Yes, definitely. So when it comes to younger Haigui 海归 founders that have become successful such as Charlwin Mao of Xiaohongshu, and Wang Yi of Liulishuo and others, what do you think they did right?

HANS TUNG: I think first of all, all these are just very smart individuals and they learn extremely quickly. So if they learn from multiple disciplinary fields, education, technology, product, sociology, just more they see it, helps them to come up with ideas and approaches that other people don’t have. If I take Charlwin as an example, when he first went to Jiaoda 交大in Shanghai for college, that’s the first time he ever took an airplane, got on an airplane ride. And that’s when he was 18. Fast forward 10 years later, he has been to 100 different countries already. His transformation as someone who is a Tubie 土鳖 , who came from the ground when he was 18, to someone who becomes a Haigui 海归 10 years later, that transformation is remarkable. His own personal transformation epitomizes the kind of transformation and globalization many Chinese consumers in the tier 1 and selected tier 2 markets. So he acutely is aware what his consumers are going through, and be able to relate, and give them things that inspire them to want more.

With Liulishuo, with Wang Yi, his Google training helped him to figure out how to, using algorithm and technology, solve a traditional education problem. And that’s multidisciplinary in nature. And when he started Liulishuo it wasn’t obvious that leveraging algorithm alone can solve the common problem of developing better English accent, and know what to say in interviews and in a lot of life settings. ByteDance 字节跳动wasn’t as successful as today so it wasn’t obvious that based on algorithm alone you can make a lot of improvements and changes in consumers. But as early as Zhang Yiming 张一鸣 at ByteDance 字节跳动 to take that approach and apply that to a real problem. How to take tens and hundreds of millions of Chinese consumers and turn them to better English speakers. So it is just very interesting how both of them coming from different backgrounds leveraged their life experiences in a way that fits the next wave of where China’s going.

ZARA ZHANG: So in terms of founding startups, what are some areas where you think Haigui 海归s have an advantage over non-Haigui when it comes to either starting companies or working at companies? Which tracks or verticals should they consider?

HANS TUNG: I think the most obvious one these days is Chuhai 出海, or Chinese companies go global. As the population dividend or the mobile internet user dividend from China has decreased, there’s already 800 million smartphone users in China on a population of 1.4 billion. Sure, another 120 million more people could go online but the bulk of the growth has slowed down. And a lot more apps are competing for user time as well. So you can still build interesting consumer companies or apps in China, but a chance of that has gone down. Yet China has gone through over the last 18 years, and throughout the history of GGV, it has gone through a four or five different generation of startups already.

That knowledge accumulated over four or five generations are incredibly useful in other places such as India, that are only starting to experience 4G in the last two years. This is why when you look at the leaderboard of top apps in India, more than 50% come from China, at least as of now. That may not be sustainable. That percentage will definitely go down as the Indian founders get better, and smarter, and more experienced, and they’re extremely quickly which they all do. So for the time being Haigui 海归 can definitely add more value in companies from China that’s expanding overseas. Many Chinese founders have not lived in India, have not lived in Southeast Asia before. So if you have a Haigui 海归 who’s more familiar with these regions, already made friends where there were studying, friends from these two regions, he can definitely help out immediately.

ZARA ZHANG: And I would actually encourage all Chinese students or professionals in the U.S. to actively stay in touch with what’s going on in China. There are a lot of resources these days, and we actually have the benefit of being able to access not just the English resources, but also the Chinese resources. I spend a lot of time just reading tech news in Chinese, reading Chinese business books, history books, understanding contemporary China and also the past. Because I think being from China is really an advantage today. It’s quite lucky to be able to speak one of the world’s hardest languages and have the cultural affinity to the world’s most populous nation, and also the largest internet economy. I think there are a lot of opportunities that come with having this background and we should really make the most out of it by doing something that’s at least related to China. You don’t have to be in China. But I think even if we stay in the U.S. there are just a lot of opportunities to work on China related things.

HANS TUNG: I can see Haigui 海归 in their 20s move to Singapore or Jakarta, spend time in Southeast Asia, or move to Bangalore, Mumbai, or even go to Latin America like Sao Paulo, Mexico City and work. Because the knowledge that one gets from all those different WeChat official accounts, from all the different Chinese apps out there about what’s happening in China are incredibly useful to founders in these emerging markets. So the more Haigui 海归 can play the role of bridge between China and the rest of world, the more value they can generate as they get more experienced.

ZARA ZHANG: So make friends from Southeast Asia, or make friends from Brazil, or India. I think one of the best assets of going to a U.S. college with a lot of diversity is you got to make friends with people that you wouldn’t have met otherwise. And that’s really a huge asset 10 years down the road. Maybe not immediately, but in the far future maybe you’ll do business with someone you met in school. Who knows?

HANS TUNG: I was young once. I’m much older today, but I was young once. And it’s very easy to have this desire to compare with your college buddies to see how successful, or who got what promotion, who got a salary increase, and so forth. It’s very easy to keep a scorecard, because that’s what people are used to doing. And everybody who is a high achieving student did well in entrance exams, did well in school applications. But one has to think of playing a long game. If I look at my own career, the first 10 years was a lot of different things that had lateral movements, but not a lot of vertical jumps. But the next 10 years I did so much more because I had a preparation for the first 10 years. And it’s very difficult for anybody to take a 10 or 20 year view of their career.

I know that China’s growth was one of amongst the most biggest stories in the last 20 years. When you have farming people that went from countryside into cities, there’s not that kind of growth trend that happened anywhere else. Yet, we all think, at GGV we definitely know that China’s model is very exportable to other places. It will be localized, it will be changed, it’ll be innovated upon, but the base, the foundation of what happened in the last 20 years, are incredibly valuable to founders who want to make a difference in their own emerging market over the next 10 to 20 years. If the Haigui 海归s are patient and willing to engage, reach out, learn, share, and get everyone to play better as a winning team, there’s just so much that can be done between China and the emerging markets around the world. So I highly encourage everyone to take a more long term view to their career and their life.

ZARA ZHANG: So in terms of where Haigui 海归s can add value I generally see two paths. One is to help Chinese companies go global, and the other is to help global companies enter China. I think recently, I increasingly get the sense that helping Chinese companies go global is a lot more practical path or has a higher chance of being successful. What do you think?

HANS TUNG: I think it’s difficult for someone in Silicon Valley, in San Francisco, or London, Berlin, New York to understand what’s happening in China. So helping international companies expand in China is not an easy thing. It’s very hard to understand China when you’re not here in China. So if I look at our experience working with Airbnb we have been impressed with how much support the leadership of Airbnb in San Francisco were willing to provide, and what a great job the Airbnb China team led by Tao has done over the last just under one year, with some foundation laid by the earlier team. But it has not been an easy path. Yet in the last three years you see that a material portion of top apps in India come from China. So the ability of Chinese companies and apps to make a difference in oversea markets in the short term is much greater. So if I were a young Haigui 海归 in their 20s, I would spend time helping Chinese companies go abroad first.

ZARA ZHANG: And we at GGV actually have a lot of resources and programming for Haigui 海归s or Chinese students and professionals who are living overseas. So recently we organized a program called GGV fellows which is designed for sea turtles to get reacclimated to Chinese startup ecosystem and business environment. So during a program we had 34 global minded young leaders who came to Beijing and completed a one-week intensive training on tech and entrepreneurship in China. So our 34 fellows were carefully selected from over 400 qualified applicants, and they come from top institutions from around the world. The most well represented schools were Harvard, Stanford, MIT, and Berkeley. And many of them are working at Silicon Valley tech companies such as Google, Facebook, Uber and Apple. And all of them are native speakers of Chinese or equivalent, and are fascinated by the rise of Chinese internet sector over the past decade. So during the program we brought the fellows to visit the headquarters of eight Chinese unicorn Internet companies, and also heard from 21 founders or executives who shared lessons on what it’s like to start and run companies in China. Our speakers came from some of the most valuable internet companies in China, including ByteDance 字节跳动 , Didi, Xiaomi, Xiaohongshu 小红书, Kuaishou 快手 , Face++, Zuoyebang 作业帮 , Liulishuo 流利说, Keep. Hello Chuxing 哈罗出行, and others.

HANS TUNG: Many of them are GGV portfolios.

ZARA ZHANG: During these closed door sessions the speakers shared not just tips for success but also candid stories of failures and pitfalls that they ran into on their startup journey. So the program is like a lightweight MBA on all things related to China’s tech ecosystem. So Hans, you have interacted with some of the fellows. What was your impression of both the fellows and what they took away from the program?

HANS TUNG: I think when you and I first talked about this idea we have seen fellowship work. At Stanford the oldest VC fellowship to get qualified at Stanford for students to work in startups was the Mayfield Fellowship that happened in the 90s. And since then many of the U.S. VC have started fellowship of their kinds. And in China I think ZhenFund was the pioneer for China in this area as well. When you and I talked about this we increasingly realized that there are just so many Haigui 海归s who could do more in the China setting if they have a better way to bridge them back. And since we have the portfolio companies that are doing well, and many of them employ Haigui 海归, we thought it would be a good way to connect the two resources.

And I gave you and Erica Cai a lot of credit for making this work and putting this together. So kudos to all of you. For GGV, I think having a chance to give a talk to those fellows and meet them in person and have a couple of them at our podcast just confirmed that there’s a lot of talent out there who are multicultural, multidisciplinary. If we can help them to do more, connect with more people who are similar minded, we think that magic will happen, and it will be good for society when more productivity and creativity could happen as a result. So love it.

ZARA ZHANG: And we are going to continue this program in the future. It will likely be an annual program. So in January each year during the winter break of major universities. And if you’re interested in our future events you can join our 996 community by visiting 996.GGVC.com and all of our events and initiatives will be announced there.

HANS TUNG: For the first year it has more of a U.S.-China bent. I think over time we highly encourage qualified applicants apply from Southeast Asia, from India, from different parts of Europe, or even Africa or Middle East, because we want this to be more global and help to connect qualified Haigui 海归s to connect with others from different regions. And over time we probably will expand it. We encourage other ethnic groups to take the time to learn Chinese so that they can participate in a program like this and get an accelerated path to connect with this community. We think that the world should be more about connection, connecting in order to foster more creativity and productivity.

ZARA ZHANG: And in terms of resources we recently compiled a list of 10 Chinese business books on tech and entrepreneurship in China that we recommend all sea turtles read before going back to China. These include books on China’s tech giants, Tencent, Alibaba, JD, and Meituan. Books on practical aspects of running a startup in China such as growth in marketing, as well as books on general Chinese business history. To read the book list please follow GGV’s WeChat official account by searching GGV Capital on WeChat, and the message the word sea turtle to that account. We also have a lucky draw for you. If you comment on that article with your story of coming back to China as a Haigui 海归 before April 10th, you can enter a lottery to win a bundle of these 10 books which will be mailed to you. We look forward to hearing your story. And I also have an article on a list of news outlets and resources that can help you stay in touch with what’s going on in tech in China, which I’ll include in the show notes.

HANS TUNG: Excellent, thank you.

ZARA ZHANG: On the next episode you’re going to hear from two of our fellows themselves, on why they came to the program and what they took away from it. Stay tuned, and thanks for listening.HANS TUNG: Thank you all. Thanks for listening to this episode of 996.

Episode 32: Wang Yu of Tantan on Scaling China’s Top Dating App

We interviewed Wang Yu (王宇), the co-founder and CEO of Tantan (探探), China’s leading dating app. Tantan is social app that help young people in China connect with one another. It has a slide-left slide-right interface. Only when two users both slide right on each other can they start a conversation. The company was founded in 2014 and has helped users make over 10 billion matches to date. In 2018, Tantan was acquired by Momo (陌陌) for $735 million. Momo is a top location-based social networking platform in China that help people meet strangers around them. It is also one of the leading live streaming platforms in China. It is a public company on the NASDAQ and its current market cap is around $6.8 billion.

Wang Yu was born in Beijing and grew up in Sweden. He holds two master’s degrees, one on computer science and one in industrial economics. In 2007, he moved back to China and started his first business P1, a fashion community, before founding Tantan in 2014.

During this episode, Yu discussed how the failure of his first startup P1 proved crucial to the success of Tantan, why flawless execution is more important than flawless product in China, whether any social apps in China will be able to challenge WeChat, and the advantages and disadvantages of being an overseas Chinese returnee entrepreneur.

Join our listeners’ community via WeChat/Slack at 996.ggvc.com/community.


ZARA ZHANG: On the show today we have Wang Yu, the co-founder and CEO of Tantan, China’s leading dating app. Tantan is a social app that helps young people in China connect with one another. It has a slide left/slide right interface. Only when two users both slide right on each other can they start a conversation. The company was founded in 2014 and has helped users make over 10 billion matches to date. In 2018, Tantan was acquired by Momo for around $735 million. For those who are unfamiliar, Momo is the top location-based social networking platform in China that helps people meet strangers around them. It’s also one of the leading live streaming platforms in China. It’s a public company on the NASDAQ and its current market cap is around $6.8 billion.

HANS TUNG: Wang Yu was born in Beijing and actually grew up in Sweden. He holds two master’s degrees, one on computer science and the second one in industrial economics. In 2007, he moved back to China and started his first business, P1, a fashion community which actually I remember, before founding Tantan in 2014. Welcome to the show, Yu.

WANG YU: Thank you. Hi everyone, this is Yu. It’s great to be here.

ZARA ZHANG: You were born in China but moved to Sweden at age seven. Could you tell us about the move, like why you moved there and what was it like for you?

WANG YU: We moved because my father was doing research and he was invited to Sweden to be a guest researcher. He moved there in 1986. After two years there, we decided to move there with the whole family. We moved in ‘88. And it was a very big difference. Back in those days, the world that I knew, it was still in the early days of open up and development of China. So all our furniture didn’t belong to us; it belonged to the people. That’s the kind of surroundings I was used to. When we moved to Sweden, the first 10 years or so we lived in two different immigrant areas which is probably quite different than the Sweden people could imagine. We had one Swede in the whole class. It was kind of like United Nations. I got to get in touch with all sorts of different cultures, so that was very interesting. And in secondary school, because I was interested in math and so on, I went into the city to go to a school with a special math and science class. And that was more like the elite part of Sweden. The difference between the immigrant area called Rinkeby and Östermalm, which is the most central part of Stockholm, I would say that’s almost as different as between China and Sweden. So I got very big clashes of how to look at the world which I think has served me a lot in life.

HANS TUNG: Good. How so?

WANG YU: You’re forced basically to look at the world with different views. And it’s often drastically different. Each one has their own reasonings which make sense from their own perspectives and narratives. And you get to, early on, get acquainted with the whole notion of narrative because there is a whole history behind why you think a certain way. So you stop looking at things in terms of black and white. You kind of have to.

ZARA ZHANG: I remember Liu Zhen said the same thing on our show when she talked about her experience of going to high school in the US.

HANS TUNG: Right. In 2007 you decided to move back to China. I lived in China, worked in China between 2006 and 2013. What prompted you to move back to China back then?

WANG YU: Right between college and starting to work, I worked for a while at Sony Ericsson. I started to have a lot of business ideas. Because I was doing some VoIP work in Sony Ericsson and my manager there wanted me to join his own company to do VoIP for solving roaming between countries. And I came up with this idea of how to reduce the costs significantly through VoIP. Basically, it’s a solution where before you go on the airplane, you redirect your number to our server locally. Say you travel from Stockholm to Beijing, then you transfer it to our Stockholm number. And when you arrive in Beijing, you buy a new SIM card and then you send us an SMS telling us what your new number is. And all calls to your Swedish number will get routed to your Chinese number. So you pay two local fees. And when you want to call out, if you call a Swedish number, you just call from your normal Swedish phone. If you call a Chinese number or any foreign number, you call our local server in Stockholm and then you pay two local fees again. So instead of paying somewhere between RMB 6 and RMB 12 per minute, it becomes less than 1. And no one to this date I think has a solution like this, although roaming is much less of a problem because cost has been reduced significantly. But back in those days, this would be very new and would solve quite a big problem. So we filed for a patent and we wanted to do this in a company. The manager went as far as to offer me a CTO position with a 20% stake in the company. And for me it was like, okay, so it wasn’t harder than this. The whole solution took me a week or so to invent.

Something snapped and I understood that for any business, what you need to do, especially if you’re more or less savvy in terms of tech, you find the pain points. People complain about stuff all the time, so if you find anything people complain about, that’s a pain point. And you solve it with technology and you find a way to charge money. There’s a business. Business ideas were coming up every day in every conversation, so it felt like I was bound to start a company. And I wanted to go back to China because, even though I was quite comfortable with the Swedish culture – I have a lot of friends who are Swedes – I still felt more Chinese in terms of values and so on. And I like China more. So I wanted to go back to China, wanted to start a company. And I think of the Chinese people in Stockholm – there’s not that many Chinese people in Stockholm – I think me and Sophia were the only ones I knew of that both wanted to start a company and wanted to go back to China. So we naturally started to look for business ideas together and that’s why we did it.

HANS TUNG: Right. I remember P1 back then. It was a very cool fashion website. It was the first website in China that had a black background color. And it was cool, but I never reached out to contact you because I thought, well, maybe it’s too early for its time. There are too many diaosi users in China, very grassroots or mass market. The people who can appreciate P1 will be very niche and only in Beijing and Shanghai. What were your lessons from doing P1? Why did you do this particular concept and this user interface? And what did you learn after doing it?

WANG YU: The reason we did P1 as we did it, the major reason was that Sophia had been away from China for four years at the time and I had hardly ever lived in China. We thought that if we would just flat out compete with the grassroots entrepreneurs in China, we would just lose. We would have to come up with something different. And back in those days, and to a high extent, still, a lot of the business ideas were borrowed from the US. Our stuff, we were coming from Sweden, and we were pretty sure no one had seen anything like this in China. So even if they saw our product they wouldn’t understand it.

ZARA ZHANG: Could you describe the product a little bit?

WANG YU: It was like a high-end fashion community. And it was invitation-only. That’s why it was kept very high-end. We had a lot of street style photographers who would scout for people who were really stylish in and outside of high-end shopping malls – they were just exploding all over China at the time – and then they would ask if the person wanted to get a street style picture taken. And we were so picky that people really wanted to. A lot of people dressed up just to get snapped by us. Once we took the picture, we took their contact info and invited them, and only if they sign up to P1 would they be able to get their picture. So conversion rates were super high. It was like 80%. And the photographers were paid for each qualified user they actually generated. It was not based on the working time or the photos. It was based on the amount of users we got. So user acquisition cost was around RMB 15. But RMB 15 for that quality of user was actually pretty cheap.

HANS TUNG: It’s very good.

WANG YU: So we got millions of users. To give an example of the quality of the users, at one point Lamborghini did an event, an offline event, and they wanted some fashion people, so they asked us to invite 30 users. And we didn’t think too much of it so we sent out emails to random users and we got 30 users to come. At the event, one of them bought a car. That’s the quality. Because think about this, people who went to Guomao and Xinguang Tiandi in their 20s were really stylish at that time. They have a lot of purchase power. So even though we didn’t have so much traffic, all the luxury brands were clients with us. We did generate significant CPM numbers. It was over RMB 1,000 CPM. But at max I think we had like 20,000 DAU, so it wasn’t a big business.

We took three main lessons from the whole endeavor. We really tried. We tried for seven, eight years with all sorts of different pivots in P1 to try to get it to work, but we just couldn’t. The three main lessons were, one, it was too niche like you said. We thought that even though this is a niche market, but China has so many people so that is still a big market. But if you do China internet, you want to get the mass. That’s the value of Chinese internet. So we neglected that. That’s one. The second part is probably more important and that’s the pain point. Not very strong pain point. Fashion socializing is something you can live without. If they don’t have a problem, it doesn’t matter how good the solution is. And the third part is the product was too heavy. Since we didn’t have a killer feature, we tried to compensate that by adding more features. And that’s not a good way to try to succeed with an internet startup.

When we did Tantan, we wanted to not repeat these mistakes. We wanted to go for a super strong pain point. We spent quite a lot of time trying to define that. Our positioning is solving singles have a lack of channels to meet people. That’s our positioning. It’s neither for hook-ups or for getting married because those are actually sub-portions of the market, quite small portions to be frank. Even though for guys there is a quite higher level of acceptance for hook-ups, for girls still in China and Asia, it’s not as pronounced. We’re talking about 5-10% of the female market which heavily limits how big you can be. If you define it as meeting people if you are single, that’s something everyone has a need for. By doing that, you open up the whole marketspace a lot, the whole TAM. So that’s how we defined the pain point. And it’s obviously a big mass market. The third part is that the product is very simple. But the product, even though being simple, it fits the Asian and especially the Chinese culture very well, I think much better than it does for the Western culture. That’s because Chinese people don’t have a flirting culture, so they can’t really solve the problem offline, for most of the people in China.

ZARA ZHANG: They feel awkward.

WANG YU: Yeah. It’s indecent to approach someone you don’t know. It’s still like that in the culture even though dating is very accepted. Having a lot of girlfriends, boyfriends before you get married, that’s totally fine. But getting in touch, that first step, is very awkward. That’s why there are hardly any parties in college, for example, and most people don’t go to clubs and bars. And if you meet someone on the subway or in the mall or so on, you don’t talk to them. You do that in the West, but you don’t do that in China. So how do you actually meet someone? That’s one issue. The second issue is that most Chinese young people are not in their hometown. They’re in a different city. That’s quite unique. They’re either in a different city to study or to work. They’re much more lonely because they don’t have their family and friends there and no one to introduce them to people. It’s usually just go to work, go home, sleep alone, every day. It’s super lonely. So the need is much stronger as well.

The Tantan product, even though being very simple, it fits this problem quite well because you never need to flirt. You never need to take the first step because when you slide someone left or right, that person doesn’t know. They only know if you like each other, and then both take the first step at the same time. For a guy, you never expose yourself. You never get rejected. There’s no face issue. And if you do get matched, talking to the girl is not indecent. You’re very confident. You know that she’s interested. For the girl, she doesn’t get harassed. She doesn’t get bothered, spammed by a lot of guys. And the girl also has a super high success rate. According to our numbers, guys like 60% of the girls they see. Girls like 6% of the guys. There is a ten times difference. So for the girls, it’s almost like an assured match if they like someone. They feel like the emperor flipping the hearts. And the third thing for girls is that they can be proactive. Socially, the females, even in the West, they’re waiting for the guys to approach them. They can be proactive. It’s a completely even playing field. They can choose who they like. And that’s something they usually can’t do. The people approaching them in real life are often not the ones they like. In Tantan, the ones they like has still a 60% chance of matching with them, so the user experience is very good. So even though our product is very simple – it’s basically just flip some cards and chat – it solves this major barrier of initiating the first contact which I think is a much bigger problem in China than in the West.

HANS TUNG: There have been many dating websites and then apps in China as well as outside of China. When you were doing Tantan, what were the features that you were thinking of that’s different from everything that’s out there? And what are the features that are distinctively Chinese that a Western app wouldn’t be able to satisfy?

WANG YU: I don’t think it’s so much about what features you have as opposed to how you operate the whole service and what kind of values you have while doing that. When we did Tantan, there were 100 products doing more or less the same product. And they all failed. And they failed not because we were doing a good job and out-competing them. They failed because they were doing a bad job. And even though I don’t think to this day that it’s really that difficult, it becomes very difficult if you don’t have the proper experience. And we only gained the experience by basically failing with P1 for seven, eight years. We basically made all the mistakes we could make and we succeeded by not repeating them. For a new startup, for new entrepreneurs who haven’t made those mistakes, I think you would need to have a lot of luck to avoid them.

For us specifically in this kind of service, first off you need to decide is everyone going to see each other only once or are you going to repeat the people you see. Since you don’t have too many users in the beginning, most startups choose to repeat. That’s a bad idea because if you like someone, you don’t need to like them again. You’re just waiting for them to like you back. If you see them again, it’s just a waste of your time. If you don’t like someone, you really don’t want to see them. What you want to optimize for is time efficiency, the amount of time you spend versus getting someone you can meet offline that likes you that’s a proper person. That’s what you want. So you only see each person once. The second is that you want to see fresh people. You don’t want to see people who were active three months ago. That’s also a big issue for a new service since you don’t have too many users. In many of the other services, you see people who were active three months ago and then you feel like it’s a ghost town. We decided early on you can only see people who are active maximum within 48 hours. They have to be active within 48 hours. With those two restrictions, then you can understand what you’re doing. I don’t think hardly any of the competitors we have realize this. In Tantan, each person slides 200 cards on average per day.

HANS TUNG: 200? That’s a lot.

WANG YU: 200. Since day one it hasn’t really changed. And if each person slides 200 cards and you only see each person once and you want to see fresh users, what does it mean for a new service? It means that locally, within the city, you have to grow by 200 guys and 200 girls a day for this to be sustainable. But at the same time, if you do grow by 200 guys, 200 girls a day, no one will hit the bottom of the stack. Because most users aren’t active every day. They are active, on average, maybe every second day. So 200 in terms of new growth is enough per city. And if they don’t hit the bottom of the stack, they don’t care if there’s one card left or a million cards left. You’re essentially operating as if you were dominating the market already in terms of user experience. So you can very early on give users that user experience. And since we had this offline street style acquisition experience, we could get good-looking guys and girls offline. We just skipped the whole street style part. We just used male and female models, male models to attract good-looking girls and female models to attract good-looking guys.

HANS TUNG: That’s the concept of yunying or operations.

WANG YU: Yes. If you get that part right, you get the city to live. I don’t think any of the competitors, of the 100 competitors, managed to do that. We first did that in Beijing and then in Chengdu. It didn’t work in Shanghai. That’s very interesting. Shanghai people, they’re too snobby for this offline thing to work. So we got Beijing, and Chengdu was awesome. That was the early experience. In Beijing, for example, you get 10 matches as a guy. You talk to all those 10 girls, maybe 5 will answer you. In Chengdu if you get 10 matches, if you don’t say anything, 5 of the girls will talk to you. That’s how big of a difference there is between cities. Once you get Beijing and Chengdu to work, we had this problem, how do we handle the rest of the cities? If we had to, offline, get each city to work, that’s a massive investment. It doesn’t feel like it’s going to scale that well. So something we tried that was very interesting was that we changed the maximum distance from 100 km to 100-plus km. 100-plus means infinite.

HANS TUNG: That’s a pretty long distance.

WANG YU: That’s the single biggest optimization we have done in the history of Tantan. Just that single change made everyone active. In a small city, before, you could maybe flip five cards and then you’re out. Now you can flip those five cards and people in the other surrounding cities. And if those were not enough, you could see people in Beijing and Chengdu who were super happy users. Even if you were not so happy, as long as you interacted with happy users, people tended to not care so much about location, much less than we thought. So immediately, we got the whole China to be as active more or less, in terms of retention and so on, as Beijing and Chengdu. We then went to just do online promotions from that point on.

ZARA ZHANG: The atmosphere of the whole company was uplifted.


HANS TUNG: So what was the maximum distance? You said 100-plus km.

WANG YU: 100-plus is like infinite. It’s actually, I think, 2,000 km. Half China.

HANS TUNG: 2,000? Wow. That’s like 1,200 miles. That’s big.

WANG YU: Yeah. You still see the people closest to you first, so if there is a lot of people close by, you don’t notice that limit. It’s only when there’s not people around that you notice the limit.

HANS TUNG: But how do you date when you’re dealing with someone who lives far away from you?

WANG YU: Early on, there were plenty of users who took a plane to meet their dates. It’s insane. The first day, since you can only see each person once, we had one of our own female employees who ran downstairs. We were like, “What’s up?” She bought a new SIM card to register a new account because she mis-swiped a guy. She wanted to swipe that guy yes. And within the first month, we had the first married couple who wrote us a thank-you email. That’s how efficient it is. It’s quite amazing. That’s one. And the other part with China is that, for example, if you look at Western dating apps, they usually connect to Facebook. By doing that, they get a lot for free because Facebook profiles are very good. First of all, at least in the West, it’s almost always of the real person. And it’s of the real person in a live situation. It’s not trying to look good. It’s quite authentic. It actually works better than the profile pictures you upload for a dating app. That’s one. The second is they get their contacts for free. They get their Facebook friends for free, so they know who their friends are. They also get their profile information for free. The only thing you need to do, basically, is write a description of yourself. Everything else you get for free. Also, you get a much higher conversion rate from downloading the app to signing up because it’s a one button press.

In China, obviously you can’t do that. And since the Western apps, half their success is because of this connection to Facebook, if you want to get this to work in China, you have to find a way to emulate that success. That’s also something that I don’t think any competitor really got that right. From the first day, we manually moderated all user profiles. We removed all profiles who did not have a proper profile picture, which is like 40% because that’s how China is. And you obviously can’t use WeChat because WeChat is even worse than 40%. Every user when you sign up, you’re actually invisible. No one can see you. You can swipe the other users, but no one can see you. But our moderation is quite efficient, so within a few seconds someone will have looked at your profile. If you pass then people will start seeing you. It’s seamless. You don’t need to know. If you didn’t pass moderation, you’ll get the prompt saying you can’t use this, and you have to change your profile picture. We did that from day one.

HANS TUNG: So your system automatically pings users. As they become more active, they need to contribute more to their own profile.

WANG YU: Yes. On Tantan, no one has ever been seen that has not manually passed moderation. That’s a very big sacrifice. So far I think we have probably killed off like 80 million accounts.

HANS TUNG: Because it’s not compliant. It doesn’t show enough.

WANG YU: Yeah.

ZARA ZHANG: And how do you have enough manpower to do that manual moderation?

WANG YU: We have hundreds of people doing that by now.

HANS TUNG: And this makes sense for you because, like you said, most users end up looking at 200 photos a day, so you want to make sure that these are high-quality 200 photos.

WANG YU: Yes. You don’t want to see a water bottle. If you do that, your excitement goes down a lot. So we had to do that. Then we had to develop a profile information system for users to fill in their profiles, otherwise they’re just a profile picture. They need to feel more alive. So we have profile tags. And I think it’s like 85% of the users fill in those tags, over 10 tags each. It’s also quite a big success in terms of that product. And then, since they sign up with their phone numbers, we use their phone address book instead of the Facebook contacts. What we do there is that we block all your phone contacts. And that’s why people give us their contacts. Almost everyone gives their address book because they don’t want to see their coworkers or their boss, or them to see them. But we push people who are secondary degree contacts to them. Friends of friends are actually okay. That’s how we use the address book.

ZARA ZHANG: It’s opposite to a lot of social apps where you sign up and they automatically ping your whole contact list.

WANG YU: Yes. That’s horrible for a dating app. That’s what I mean. You can call it features but I think it’s more like operational rationale.

HANS TUNG: Yes. It’s definitely how you operate, how you yunying and you carefully think through the usage cases and make sure the user experience is optimized.

ZARA ZHANG: For your moderation, do you use automation like machine learning?

WANG YU: We’re looking at that now but so far it’s all been manual. That’s the thing with China. It’s quite cheap. The funny thing is that we looked at some external AI solutions for doing this which everyone else uses, and it’s actually more expensive than using moderators.

HANS TUNG: Well, like you said, in the West, Facebook is so popular so you can automate this. You don’t need to yunying (operate) it. In China you can’t, so you have to be able to do that.

ZARA ZHANG: How do you prevent people from just moving the conversation to WeChat once they meet on Tantan?

WANG YU: Our rationale there has been we want to maximize user experience, so we don’t want to prevent them. That’s a natural need. Would we prevent them from exchanging phone numbers? That’s silly. And WeChat is probably more convenient than phone numbers at this point. We’re a dating app. The problem we solve, like I said, is for singles to meet people. We’re not solving the whole keep in touch with your friends part because that would be just directly competing with WeChat which is stupid.

ZARA ZHANG: Yeah. And WeChat is not good for meeting new people.

WANG YU: No. That’s intentional. Their biggest issue is that it’s getting diluted, and dating is a heavy diluter of friends management. So they don’t want that.

HANS TUNG: Right. It’s very weak ties.

WANG YU: Yeah. So we’re not competing. They don’t want to compete with us. We don’t want to compete with them. Another thing is that even if they exchange WeChat, the conversations tend to be quite short-lived. Because it’s not a friend you met. This is a potential girlfriend or boyfriend, so either it works out or it doesn’t. If it works out then that’s one person that you got. If it doesn’t work out, you never talk to them again. So it doesn’t really matter if that thing happens on Tantan or WeChat because it’s not a long-term relationship.

ZARA ZHANG: Could you discuss the monetization strategy for Tantan? And would you monetize the same way if it was a Western product?

WANG YU: In the short term, I think our revenue strategy is very similar to how we would do it in the West. Right now, it’s subscription-based. It’s value-added services. You pay a monthly fee for different sorts of premium features. But it’s a freemium product. You can use it very well as a free user, but if you buy a subscription it’s much better. So that’s what we’re doing and it’s looking quite good actually. I can’t go into numbers but it’s looking quite good. But one of the things with China versus the West, I think, is that the median ARPUs tend to be lower, but you can definitely get the average ARPU to be higher.

ZARA ZHANG: Yeah. It’s a lot of outliers.

WANG YU: It’s mostly about the top 1%.

HANS TUNG: Yeah. The whales.

WANG YU: If you find revenue models where there is no limit on how much you can spend– because the subscription, obviously, if you want to spend more, there’s a ceiling. But if you find revenue models such as in games or live streaming where you can spend as much as you want then there is people spending tens of millions a month. Basically, those are 1% generating 90% of the revenues. You significantly increase the average ARPU. Those are things we are going to look at going forward, but there is no need for us to be too aggressive about it yet because we’re still mostly growth-oriented. It’s mostly about growth still.

HANS TUNG: If you look at the profiles of the most active users on Tantan, are they all just young users or are they different profiles, different kinds of users?

WANG YU: We used to be very much about very young people, but it’s been expanding. It’s more expanding towards all sorts of people, but it’s more of a focus around young people.

HANS TUNG: How young are we talking about?

WANG YU: I think the average age used to be 22. Now it’s 25.

HANS TUNG: Interesting. It used to be people in college. Now it’s people who have been out of college and working for a couple of years.

WANG YU: Yeah. We’re seeing a lot of surge of users who are 35-plus and so on as well.

HANS TUNG: Good. And for those who are 35 or even older, what has attracted them to come?

WANG YU: The thing is, like I said, there are really no alternatives, neither online or offline. So if you want to meet someone, if you’re a single or a divorced person or something, that’s a gangxu. That’s a super pain point. You have to solve it. So as long as they know about us, they’re going to try us out.

ZARA ZHANG: How do you think dating culture has changed and do you think Tantan contributed to that change?

WANG YU: I definitely hope we have contributed to the change, but I think the revolutionary service was really QQ. They opened up this whole web friend notion. It’s like QQ, Facebook, WeChat in the early days were all about dating. And they were smart about it, so they quickly switched over to friends management which is much larger. For us, since WeChat already owns that market, it doesn’t really make sense. That’s how they did it. But early on for QQ, it was all about strangers. No one had any friends. People my age that I know of who grew up in China, half of them met their partners through QQ. That’s how big I think it is.

So I think the whole online romance thing was really revolutionized by QQ. It has been widely accepted among the population for years. That’s nothing we really made any difference to. I think what we hopefully contributed to was that we made it easier in recent years. Because in the recent years, there has not been too many good solutions. I wouldn’t say we are that awesome either, but we’re definitely better than most of the competitors. Even though I think we have big room for improvement, we’re still better. That’s why we have been able to generate this significant amount of matches, over 10 billion matches to date. And each match is for two people, so it’s like 20 billion match experiences. We don’t know how many people got together because of this, but even a very conservative estimate is tens of millions. And there is like 300 million singles or people who could be counted in that category, so tens of millions is quite significant.

HANS TUNG: Sure. As with any dating app, you need to have effective measures that prevent frauds and harassment and so forth, especially for the protection of the women users. What are the things that you have done that you’re proud of that have worked well? And what are the other new measures you may want to add over time to make the user experience even better and safer?

WANG YU: I can talk in broad strokes about what we have done. I can’t go into details because it’s secret. It’s like a hacker/anti-hacker game, ever-continuous. The spammers and so on, they have a huge supply chain. There are people who are specialized in terms of creating accounts. There are people who are specialized in terms of getting matches. There are people who are specialized in terms of getting those matches to add their other accounts on WeChat. And then there’s another group of people who chats on WeChat to get their business done.

ZARA ZHANG: It’s like an assembly line.

WANG YU: Yeah, it’s like an assembly line, and all four parts are operated by different people. It’s quite professionally operated. I think we even know the offices of where they work. By now I think there’s only one or two players left that still are able to do anything because the tech barrier of being able to do anything is so big now. I think most people just can’t do it. So it’s all about this hacker/anti-hacker game where you prevent them from being able to do each of these four steps. And you have to do it in a way where, even if they know what you do, they can’t do anything about it. It cannot be based on strategies where if they don’t know what we’re doing then it works. If they know then they can just circumvent it. For example, if they build a certain type of profiles and we find a certain keyword and we ban them based on that keyword, then it’s very easy for them to A/B test, and they just remove that keyword. By doing this, what we did is that we educated them. We made them better. We made them create profiles in the future that look more like a real person, which is really bad. You don’t want to iterate this. If you iterate this, in the end you can’t catch them at all. It’s kind of like Enigma. You can never use the information you get from Enigma. You have to kill them with other means because the whole thing is that you can’t let them know that you know.

It’s quite complicated, but in the end you have to use methods where even if they know what you do, there’s just no way around it. It’s a hard block. For example, they buy bunches of phone numbers, like 10,000 sequential phone numbers. So if you see certain patterns in the phone numbers, you ban all 10,000 and it becomes much more expensive to buy those numbers. Stuff like that. And we have probably implemented thousands of different rules and different AI formulas for how to catch them. It’s actually quite difficult to operate a spam account in Tantan. I think we have probably done this better than any other player in the social sphere and I include all the friends management services out there. We talked to the people managing anti-spam on WeChat and they were scared of how high we set the bar. 80% of the people we kill off are not even defined as spammers on WeChat. The result is that you don’t actually see that many spammers on Tantan, at least compared to most other services.

ZARA ZHANG: In 2018, we all witnessed this so-called fengkou or peak for social apps in China with a lot of companies launching new chat apps or social networks and investors pouring a lot of money into these products. But it’s commonly agreed that it’s still very difficult to challenge the dominant position that WeChat has in all Chinese people’s social lives. Do you think startups in the field should seek to challenge at all or should they just work with WeChat?

WANG YU: I think social is a pretty broad concept. This fengkou we’re referring to, I think part of it, where we’re talking about socializing with strangers, that erupted because of our acquisition I think. People suddenly saw, okay, you can actually succeed with a social app and there are actually quite good exit opportunities. That’s, I think, more than half to the fengkou. And then the other part, which is people doing the friends management part trying to challenge WeChat, that I think is much more difficult. I wouldn’t say it’s impossible. I think there’s definitely opportunities out there because to date there has not been a proper implementation of something like Instagram or Snapchat in China. People failed for years with doing Facebook in China until WeChat got it right. You had Kaixin. You had Weibo. People were debating whether Facebook with the whole friends feed is something that works at all in China. And obviously it works. It’s not about if the concept works or not. It’s just about if you are able to operate it correctly, like I said with Tantan’s case as well. Social is quite difficult. You have to really get into the minds of users and then you have to implement a simple solution. So I think you need a lot of experience. Zhang Xiaolong had a lot of experience before he did WeChat.

HANS TUNG: A lot of experience. WeChat didn’t come out of nowhere. He did Foxmail for a long time.

WANG YU: Yeah. I think you need entrepreneurs like that who know what they’re doing. For example, I think if Wang Xing would try something like that, he would have a pretty good chance. He knows his stuff with social. But there’s not that many entrepreneurs who really have that insight. For us, we failed for seven, eight years to learn what we learned. There’s not that many people with that experience. If you do e-commerce, you really don’t become much better at social. That’s, I think, the biggest block. You need the right kind of entrepreneurs and you need a lot of luck. That combination just hasn’t really happened yet.

HANS TUNG: Only very few can do it. Maybe you can do it again or someone like Alex Zhu or Louis from Musical.ly if they come out and do it again maybe. It’s just not many people who can do it.

WANG YU: Yeah, exactly. There’s not a lot of people. And you need a lot of luck. And WeChat, I think, is much more dominant than Facebook is as well because they have the whole IM part. And IM I think is even more important than friends feed.

HANS TUNG: Earlier you mentioned that when it comes to ARPU for Chinese users, the median ARPU is low but the mean could be high because of the whales on the high end. In terms of monetization, you also mentioned that maybe gaming or live streaming are better ways to capture the whales and get them to spend without much upper limit. So when it comes to monetization for you, why did you choose not to build that out yourself and instead decide to sell to Momo who was pretty good at those two areas? And when you were thinking about selling, besides Momo did you think of anyone else like Tencent who also has capabilities in these two areas as well?

WANG YU: The thing with Momo, we were not looking for an acquisition. We were raising our E round. And it was going exceptionally well. I think two weeks after we opened up the round, we already had term sheets and even finished the DD. So we would have been able to close the E round. But at that point, Momo approached us through our financial advisor, China Renaissance. We had never met with Tang Yan before, so we didn’t really know what to expect. It was quite an interesting idea to meet up. And we did it and we hit if off quite well.

HANS TUNG: Both of you are product guys.

WANG YU: Yeah. And, like I said, it’s quite difficult to succeed in the social sphere. You notice that a lot of the philosophies are actually quite similar. Momo has gotten a lot of traction from media and all sorts of people.

HANS TUNG: Tang Yan’s very good. I met him before. I know how smart he is. And he understands social.

WANG YU: Yeah. That was a really good feeling. And the other part is that at that point, we hadn’t really gotten started with monetization, and we didn’t really know what to expect with it. Nowadays, since we have succeeded quite well with it already, we are quite confident. But in those early days, just a year ago, we had less than 10 times what we have now. So we didn’t really know what would happen. And for us to keep growing, we would need to spend much more in terms of marketing. We would need to significantly increase our marketing budget. So the risks were definitely there. And I thought that on the stock exchanges, the market caps of companies were a little bit too high. Very big chance of a big drop. Now it happened just because of this Trump thing, but anything else could also have made it happen and it could have been even worse. If that happened and we would stand there having spent our money on marketing and not really have gotten revenues to grow, we would be in a pretty bad spot. So we definitely had that risk to assess.

The second part is that working along with Momo and Tang Yan, if you look at us today, we are running the company quite independently in terms of the product and operationally. For us, the difference of getting acquired versus raising a round is actually not that different. The feeling is quite similar. And we’re getting a lot of help from Momo. They have a much stronger, much more experienced tech staff than we have. We have a lot of different strengths in terms of how we operate our products, so by exchanging these strengths it’s quite helpful for both sides. Together, we more or less own the whole market. And the value of that versus just competing I think is much better. So that’s how we thought about it and I don’t regret it, even though we have managed to get revenues and so on to succeed nowadays. I think it was a good decision.

HANS TUNG: Alibaba invested in Momo at IPO I think. Did Ali or Tencent approach you as well?

WANG YU: Alibaba was an investor in Tantan too actually. And Tencent is someone we have spoken with for a long time. The issue there, it’s like I said, their main challenge is the dilution. It’s hard to see how we can significantly contribute strategically to Tencent somehow. We can’t really do that much. Regardless of how well we do, it’s more like a financial investment for them. They want to focus more on strategical investments. If we would cooperate with Tencent in the way we do with Momo, we would not get as much help and priority as we’re getting. The synergy would be quite different.

HANS TUNG: Yeah. The synergy with WeChat is not there. The synergy with QQ could, but that will be a very different conversation.

WANG YU: Yes. And QQ is a monster in terms of both the product and the organization.

HANS TUNG: Yeah. There’s not one single person that you can talk to like you do with Tang Yan at Momo.

WANG YU: Yeah. It’s really been a pleasure working with Tuong Nguyen and the whole management team at Momo.

ZARA ZHANG: Has your day-to-day changed after?

WANG YU: Not too much. We do try to extract as much synergies as possible, but we both think it’s better to operate Momo and Tantan as separate products.

HANS TUNG: And when it comes to live streaming and gaming operations, do you plan to leverage their know-how and do more on your own platform?

WANG YU: We’re definitely going to leverage their know-how, but we’re trying to find ways to get inspired by gaming and live streaming to create revenue models that are similar but not necessarily exactly the same. If we do something like live streaming, I want it to be a little bit more hidden, kind of like how Kuaishou does it. Because Kuaishou is probably the biggest live streaming player out there and you could also say they are like a live streaming company, but you definitely don’t feel that they’re a live streaming product.

HANS TUNG: No. It’s a lot more social.

WANG YU: Yeah. If we do something like that, that’s how I want it to feel like. And that’s a challenge but there’s no urgency either. It’s more about growth.

ZARA ZHANG: I think a lot of founders in China, especially the younger founders, tend to have this attachment to what they’ve built and they’re less open to M&A ideas. What is your advice to founders? At what point should you say, I built this but it’s probably better off as part of another company?

WANG YU: I don’t know how blunt I can be. To be just completely blunt, if you do an IPO as a founder, you’re quite far from seeing the money. That’s the major difference. You get a lot of face, but not so much cash. I don’t know if you’re doing a startup for face or for money in the long run. I think most people are for the money.

HANS TUNG: Right. This way you get the best of both worlds. But the trick is finding someone like Tuong Nguyen who can be a partner. Without that, you have to deal with bureaucracy. Then you’re pretty much giving up your baby and taking the cash out and you won’t have much control of the product afterwards anymore.

WANG YU: Yes, exactly.

ZARA ZHANG: For this episode, we experimented with crowdsourcing questions from our listeners community. I’ll ask a couple of questions from our listeners. By the way, here’s a message for our listeners. If you want to contribute questions that Hans and I ask on the show, please join our listeners’ WeChat group or Slack channel at 996.ggvc.com.

Here’s a question from Jenny who is a co-founder of WalktheChat, a WeChat marketing agency. What is the crazy story of managing data in China? What kind of regulatory difficulties have you encountered with regard to data on your platform? For example, users might post revealing photos of themselves. And how do you make full use of data other than for optimizing the product?

WANG YU: Tantan, we try to be a very data-driven company. We ran P1 for many years and we did it in all sorts of wrong ways. But I think in the long run, we felt everything we saw from Facebook made so much sense. So we wanted to operate the product being data-driven. So, run A/B tests. Don’t try to be too top-down-driven. Don’t rely on genius leaders. Get anyone with bright ideas to try out their stuff. And if data-wise it’s good, you launch it. If it’s not, you drop it. And fail fast, fail early. Release early and iterate, that sort of thinking. And aside from that in terms of data, obviously, AI is a big part, so algorithms. And for us, the people you see is based on an algorithm. That’s the key part of our product. That’s obviously a big part of how we use data to try to optimize the user experience for users. But I don’t think of that as having any privacy implications because no one is looking at it. It’s just machine learning.

In terms of other parts, like I said, we manually moderate all user content. So all explicit contents are filtered out. I don’t think you would ever see anything bad on Tantan. But the thing is that since that’s been the culture for so long now, people don’t upload explicit content. I think it’s less than 0.1% of our content that actually is bad in that way. Most of the content we remove, it’s not a person. It’s just a shoe or something. That’s the biggest issue. Explicit content and stuff like that is actually not a big issue. And like I said, spammers, even if they do something, they don’t dare to do anything on Tantan because we have automatic monitoring of user activity. They tend to try to do it on WeChat. Even people saying bad words in chat and so on, it’s a super small percentage of the actual chat. I don’t know if that answers the question.

HANS TUNG: Here’s the next question from Jason Liu, a software engineer at Google. How did you validate your product market fit and get the first round of active users? And what kind of metrics did you use to help you to do product iterations initially?

WANG YU: I think I went through most of that. One part was this offline acquisition of users. One part was that we invited all users on P1 to join Tantan. That’s a unique asset no one else has because that’s basically the best-looking guys and girls you can find in China. We didn’t get too many people to sign up. It was like 20,000. In terms of scale it didn’t make a big difference, but in terms of seed users, you just can’t get anything better. That’s one part. And the rest I described in terms of the philosophy and the operational rationale.

HANS TUNG: I think a lot of people who want to do their own startup underestimate how much learning one has to have the patience to pay for. Without doing P1, you would never have made Tantan work. The idea could be exactly the same.

WANG YU: Oh, yes. We were so far out wrong in so many fields of our philosophies with P1 at different time points that it would just be laughable.

HANS TUNG: And a lot of times, experience from a big company, whether it’s even a Tencent or Ali or Google, may help somewhat, but unless you make your fair share of mistakes and learn from them, it’s not enough.

WANG YU: Exactly. One example: the first two, three years of P1, we were not product-driven nor tech-driven. We were brand-driven. All was about building this high-end brand people would believe in. And we did that quite well, but that’s not how you succeed with scaling an internet company.

HANS TUNG: But without that experience, you wouldn’t have the initial users to do Tantan.

WANG YU: Exactly. There’s no way you can succeed with Tantan with trying to do it brand-driven. There’s just no way.

HANS TUNG: It also feels like no matter what you want to do, you have to do something you personally, passionately believe in so that even if the road you took is different from other people’s route, over time you learn and adjust and everything you did before becomes useful for the next venture.

WANG YU: Yes. Definitely.

ZARA ZHANG: Finally, a question from Ini Wong, a business development professional in Hong Kong who is also Swedish-Chinese. What are the skill sets and values from Sweden that has helped you in building your startup in China? What are the advantages and disadvantages of being Swedish-Chinese?

WANG YU: In terms of first disadvantages, I knew very little about China. And the problem was that I was so bad, I didn’t understand how bad I was.

ZARA ZHANG: You didn’t know what you didn’t know.

WANG YU: That’s a common issue, I think, with most things. I’ve seen many employees or competitors, you’re not good enough to understand how bad you are. It took me seven years to realize that, okay, I don’t understand this market.

HANS TUNG: That’s very honest and fair.

WANG YU: After I realized that, I tried to compensate for that. And it only took a year to start to understand the market much better. But unless you see the problem, it’s hard to solve it. That’s one of the disadvantages. Advantages, I think, like I said, having seen many perspectives of different things, I think you have a much open mind about everything. And Sweden is a very communistic society.

HANS TUNG: Socialist. Socialist society.

WANG YU: Yeah. I think it’s even on communist level.

HANS TUNG: Okay. We’ll see. Maybe that’s a controversial statement.

WANG YU: It’s a culture issue. Everyone is very equal. And that, I think, keeps employees happy. It’s easier to interact with people when you don’t have this bossy attitude. I think that’s one of the things that we have had going for us. We have pretty happy employees generally.

HANS TUNG: You mentioned that you don’t believe in having a genius boss. Everybody can have an idea and use data to test it. If it tested as good, you implement it.

WANG YU: Yeah. If you look at Facebook, most of the stuff that actually made it work were not from Zuckerberg. It’s from just random employees trying out something. The genius of Zuckerberg is trying to build a platform that encourages this and makes it very easy. Back in the days where they were doing just PHP and websites, they could A/B test single lines of code. I don’t think anyone has ever been able to do that except for them.

ZARA ZHANG: And I also think because of your experience living in Western society, you know how dating could be different and how the ways people meet each other could be different. If you only grow up in China, all you see is the Chinese way of interacting.

WANG YU: Oh yes. And also we have gotten a lot of inspiration from Western companies, and I think it’s quite hard to understand them without having my experience from Sweden.

HANS TUNG: I want to ask one more question before Zara goes into the quick-fire session which is, like you said, not many founders have experience living and working overseas in addition to making something work in China. Yet a lot of Chinese models can be exported to other emerging markets around the world. The next new 1 billion users will come from outside of the US and China. What do you think of companies like ByteDance trying to expand in foreign markets? And for you personally, do you feel that either inside Tantan or Momo or something new on your own later, do you want to do something that’s more global in the next 10, 20 years?

WANG YU: The answer to that is just a simple yes, definitely. Once in a time in P1, we tried to define our core values. They didn’t help at all but for what it’s worth, one of them was a global perspective. I think that’s one of the things that makes us different from other companies. We definitely have a global outlook of everything we do, but we have been focused on China so far. We definitely think we have a good shot, both expanding into different areas in social in China and also within dating and social abroad. That’s something we have already started doing some work in, but it’s not the highest priority yet.

In terms of ByteDance, I think that’s a super impressive company. They’re probably the one in China who has implemented this whole Facebook type of operation the best, this whole data-driven, A/B testing, opened up, everyone can try different sorts of things culture and processes the best. They are very aggressive, maybe too aggressive. If there’s anything that would be to their disadvantage, it might be their aggressiveness. But that’s also their strength. We will see how it goes, but it’s definitely a very exciting company and one of a kind I think in the world. There is no one that I’ve seen in the West who are close to their level of aggressiveness.

HANS TUNG: That’s fair. We do see a lot of founders from Latin America, from Southeast Asia, from India beginning not just wanting to learn from US, but increasingly learn from what founders in China have done as well. It’s just super exciting for us to be in the middle of everything and help founders learn from each other. We think that building a global community, global product is a much more interesting way to live.

WANG YU: Yeah, definitely.

ZARA ZHANG: So next we’ll jump into a round of quick-fire questions so you can just say the first thing that comes to your mind. Who is the entrepreneur you admire the most and why?

WANG YU: I would say Steve Jobs. It’s just because he has been able to have so clear visions of what he’s doing and have been nailing them so well and have been able to get his whole team to raise the whole standard to his level and get them to actually ship the stuff on time. I think that also came from his misfortunes that he learned from. He would never have been able to do it if everything just went well.

ZARA ZHANG: What’s a book you’ve read recently that you would recommend?

WANG YU: I have not read too many books recently.

HANS TUNG: Do not have time.

WANG YU: No. San Ti, The Three-Body Problem. I was not too impressed by the first book. And then I was even less impressed by the beginning of the second book. But from the second part of the second book until the whole of the third book, amazing in terms of just the sci-fi part. Wow. I think the people interactions could be better, but in terms of just the sci-fi part, awesome.

ZARA ZHANG: Lastly, what do you do for fun?

WANG YU: I just came from boxing training. I’ve been doing a lot of boxing. Not hitting other people. Mostly trainers with pads. I need to lose weight, so this is super good for that. Aside from that, I don’t know. Watch some movies. Play some games. I’ve basically bought every game you can buy, but I have not played anything really since college days. I used to be an elite Quake player. I played Quake for like 12 hours a day for four years. I was top 10 in the world at a point in Quake 1. But then that took too much time so I quit and haven’t really picked up games too much.

ZARA ZHANG: What do you see yourself doing in 10 years?

WANG YU: 10 years? I have a pretty strong entrepreneurial spirit so I’m probably going to be in some kind of entrepreneurial project.

HANS TUNG: I’m sure you will. But this time will be more global.

WANG YU: Yeah, probably.

ZARA ZHANG: Thank you for your time and we really enjoyed this conversation.

WANG YU: Thank you. It was really fun.

HANS TUNG: Thanks for listening to this episode of 996.

ZARA ZHANG: GGV Capital is a multi-stage venture capital firm based in Silicon Valley, Shanghai and Beijing. We have been partnering with leading technology entrepreneurs for the past 18 years from Seed to pre-IPO. With $6.2 billion in capital under management across 13 funds, GGV invests in consumer new retail, social, digital internet, enterprise cloud and frontier tech.

GGV has invested in over 290 companies with more than 45 companies valued at over $1 billion. Portfolio companies include Airbnb, Alibaba, Ctrip, Didi Chuxing, DOMO, HashiCorp, Hellobike, Houzz, Keep, Slack, Square, Toutiao, Wish, Xiaohongshu, YY and others. Find out more at ggvc.com.

We also highly recommend joining our listeners’ WeChat group and Slack channel where we regularly share insights, events and job opportunities related to tech in China. Join these groups at 996.ggvc.com/community.

HANS TUNG: If you have any feedback on this podcast or would like to recommend a guest, please email us at 996@ggvc.com.

Episode 31: Simon Zhang of GrowingIO: Learning to Grow, Chinese Style

GGV Capital’s Hans Tung and Zara Zhang interview Simon Zhang, (张溪梦), the founder and CEO of GrowingIO, a data analytics startup in China that helps product managers and marketers analyze mobile apps and websites without adding manual tracking codes. GrowingIO now counts over 6000 companies as its customers, including the likes of Didi, Momo, Tujia, and others.

Previously, Simon was senior director of business analytics at LinkedIn in its Silicon Valley headquarters, and before that, worked as a senior manager of site analytics at eBay. In 2015, he left a decade-long career in Silicon Valley to return to China and started his current startup, GrowingIO. But prior to all of this, Simon worked as a brain surgeon in China, and attended medical school in Tianjin. He also obtained an MBA from Baldwin-Wallace College in Ohio. Simon is also the author of the Chinese book 《首席增长官》 (“Chief Growth Officer”) and is a thought leader in the field of data-driven growth in China.

Simon discussed how Chinese engineers in Silicon Valley can crack the “bamboo ceiling”, how Chinese-style growth differs from Silicon Valley-style growth, and why “raising too much money” could create challenges for a startup.


ZARA ZHANG: Hi everyone. For those in the Bay Area, Hans and I will be hosting a 996 anniversary party on Saturday, March 9, in San Francisco. The event will take the form of a China tech trivia night. You will get to test your knowledge of China’s tech industry by answering trivia questions in teams. The winners will be awarded attractive prizes, such as a bundle of the books that out past speakers have recommended on the 996 Podcast. At the event, you also get to meet and hear from some of our GGV fellows on what they learned during their intensive one-week program in Beijing.

This anniversary party is open to all followers of the 996 Podcast and friends in the Bay Area who follow tech in China. The event will be at 7:30 p.m. on Saturday, March 9, in SoMa, San Francisco. The exact location will be included in the confirmation email. You can sign up for the event by following the link in the show notes or by visiting 996.ggvc.com/sf. It will be a fun night and I hope to see you there.

We’d also like to thank our sponsor and partner, OnePiece, for their support for this event. Also, here’s a tip: If you want to win at this trivia night, I highly recommend re-listening to previous episodes of the 996 Podcast, since many of the answers to the questions can actually be found in our show.

HANS TUNG: Hi there. Welcome to the 996 Podcast brought to you by GGV Capital. On this show, we interview movers and shakers of China’s tech industry and discuss how founders from around the world can draw lessons from China’s tech ecosystem. My name is Hans Tung. I’m a Managing Partner at GGV Capital and I’ve been working at and investing in startups across the US, China and other emerging markets for the past 20 years.

ZARA ZHANG: My name is Zara Zhang. I’m a marketing manager at GGV Capital and a former journalist. Why is this show called 996? 996 is the work schedule that many Chinese founders have organically adopted. That is 09:00 a.m. to 09:00 p.m., six days a week.

HANS TUNG: To us, 996 captures the intensity, drive and speed of Chinese internet companies, which have produced many growth miracles over the last decade.

ZARA ZHANG: Also, I highly recommend joining our listeners’ WeChat groups and Slack channel where you can connect with likeminded people interested in tech in China. We organize regular offline events across the world for our followers. You can join these by visiting 996.ggvc.com.

On the show today, we have Simon Zhang or Zhang Ximeng 张溪梦 in Chinese, the founder and CEO of GrowingIO, a data analytics startup in China that helps product managers and marketers analyze mobile apps and websites without adding manual tracking codes. GrowingIO now counts over 6,000 companies as its customers, including the likes of DiDi, Momo, Tujia and others.

HANS TUNG: Previously, Simon was a Senior Director of Business Analytics at LinkedIn at their Silicon Valley headquarters, and before that he worked as a Senior Manager of Site Analytics at eBay. In 2015, he left a decade-long career in Silicon Valley and returned to China, and started his current startup, GrowingIO. But prior to all of this, Simon worked as a brain surgeon in China and attended medical school in Tianjin. He also obtained an MBA from the Baldwin-Wallace College in Ohio. Simon is also the author of a Chinese book, Shouxi Zengzhangguan 首席增长官 Chief Growth Officer, and he’s a thought leader in the field of data-driven growth in China. Welcome to the show, Simon.

SIMON ZHANG: Thank you for having me here, and thanks, Zara.

ZARA ZHANG: So, Simon, you’ve known Hans for a long time. Do you remember how you first met?

HANS TUNG: Yes, I think I met Simon when he was still at LinkedIn or about to leave LinkedIn to explore the possibility of building software in China, even though he has been away for so long. He was figuring out whether he should do a consumer startup or something that’s more enterprise-oriented, and the trade up was that in China back then, consumer startup was the only thing that mattered in the internet space. There are not a lot of proven enterprise examples that worked out. Yeah, that’s his area of expertise, so he’s figuring out, should he work with someone in a consumer startup or start up one with low odds of success, or bet the farm that that enterprise will be a big trend in China?

SIMON ZHANG: That’s exactly right. I remember very clearly when I talk about Hans, he shared a little bit about the China market and the US market. He said, “If you do a B2B in China now, I’m not your investor,” and I remember that quote.

HANS TUNG: It’s not easy. It is so not easy.

SIMON ZHANG: It is not. That’s right, yeah.

ZARA ZHANG: When you started your career as a brain surgeon, at what point did you realize this may not be what you want to do for the rest of your life, and when did you find our passion in data?

SIMON ZHANG: I think this is almost two questions. The first one, I started my career in medical university and then joined a cancer hospital. I think after six or nine months, I figured out that wasn’t exactly what I wanted in my life. And then I told the chief of the department, “I need to leave,” because being a doctor actually is very, I would say, serious a career. I needed to leave that space for someone who really loved the job, but not me just being okay with the job.

And, also, personally, I strongly believe anyone, everyone needs to enjoy what he or she is doing, so that will motivate this person to become the best in the field. So, at that moment, I truly think I didn’t have the passion for being the best doctor in the world, so that’s the reason I left after I think, roughly speaking, a year without anyone’s notice. My family figured it out after seeing me staying in the apartment for two weeks, one week actually. My mom asked me, “Hey, what are you doing here?”

HANS TUNG: Do you have no work? What kind of work did you do down at the hospital?

SIMON ZHANG: Yeah. Is there no patient? Why are you here?

ZARA ZHANG: Why data?

SIMON ZHANG: Why data? Actually, it’s a link to a computer. It was not about the data. It was about the computer. When I was very, very young, that was my toy. I really enjoyed it and starting from a playing video games, I then shifted to computer games and then shifted to internet, very early stage.

HANS TUNG: This was in the ’80s?

SIMON ZHANG: Nineties, and that used this modem to connect to the internet.

HANS TUNG: The early-90s.

SIMON ZHANG: Yeah, almost at $2 per hour. That was the cost. Very early.

HANS TUNG: Yeah, that’s how it was in ’95, ’96.

SIMON ZHANG: Yeah, ’96. I felt this was the most powerful thing that ever happened in my life and I liked it. I enjoyed it and then I wanted to do things in this field. That was in 1998, 1999.

HANS TUNG: Yeah, it was right at the beginning, very early tipping point for Chinese internet to start happening. I remember in ’97 China had less than 10 million internet users. That’s when Jerry Yang visited China and had a picture taken with Jack Ma on the on the Great Wall. That was in ’97.

SIMON ZHANG: That’s the very earliest stage.

HANS TUNG: It was like seven million internet users in China back then.

SIMON ZHANG: Yeah, I remember that part, because before it was 386 or 486 computer models, and that was the first computer I had in my life, and then I decided I needed to do something in this field.

ZARA ZHANG: And you came to the US in 2002, right?


ZARA ZHANG: What prompted the move?

SIMON ZHANG: Because I was very young, I liked American movies and video games, novels, books, but a lot of thing I think finally convert into why America is such a creative country, have so many amazing people, creating so many amazing stories, movies, products and technologies. I just felt this country must have some significant difference from what I knew at that moment. I wanted to learn from them and that motivated me to come to the US at that moment. Yeah, so I think that was the main reason.

ZARA ZHANG: And how did you find your way into the field of data analytics?

SIMON ZHANG: I think the whole world is a hyper-connected behind the scenes, so because those personal hobbies, movies, American whatever, and then at that moment I read a lot of articles about internet, even ecommerce. I felt, this ecommerce is so fascinating, and it has connected the whole world by using internet, and then it also can sell things. Actually, I opened my personal video game store when I was a student. I found this was the best way I could sell things online and I wanted to learn ecommerce. I wanted to do ecommerce. And that’s a reason I started doing some research on how to do ecommerce, how to build a website, because if you want to build an ecommerce, you have to have a database and connect everything together, and I figured it out. I learned and then I wanted to do ecommerce. Then, you see, I shifted my focus from just a computer, internet to e commerce, but for ecommerce I needed to understand data and the database or everything. So, I learned, yeah, and then I started working on this field.

HANS TUNG: And that’s how you got involved in eBay.

SIMON ZHANG: Yes, because I wanted to do ecommerce. Ecommerce at that moment was eBay.

HANS TUNG: eBay and Amazon. Amazon is in Seattle and eBay is in Silicon Valley.

SIMON ZHANG: eBay was the largest at that moment.

HANS TUNG: Yes, at that moment it was.

SIMON ZHANG: Yeah, it was, and I joined them. It was just a personal interest.

ZARA ZHANG: Why did you join LinkedIn after that?

SIMON ZHANG: So, that’s another connection, right? Because I think after three years of working at eBay, I really learned a lot, a lot of amazing people in the department. They were using data to fully operate the site or the business. And the manager who recruited me for that eBay position, he told me, “Simon, this is Silicon Valley. I feel you should go somewhere smaller like a startup.”

HANS TUNG: Right, eBay was already very corporate by then.

SIMON ZHANG: Right, eBay had I think 10,000 employees or something.

HANS TUNG: Which was a lot back then.

SIMON ZHANG: It was a lot, a lot of people. And his name is Heston. He’s a great guy and he told me, “Simon, you should go somewhere smaller.” I didn’t understand what he was talking about. I told him, “Are you kidding me?” I was just getting my promotions in a month. “I feel I could do a lot of things here.” Anyway, he said, “No, no, no, no. You didn’t understand what I meant. You should really go somewhere growing, smaller.” He strongly believed I could do better in a smaller place.

HANS TUNG: Know more, do more and get promoted faster.

SIMON ZHANG: Yeah, and then recommended me to a couple places his friends ran and then I got a couple of offers, and then finally decided to join LinkedIn.

HANS TUNG: Which was very small back then.

SIMON ZHANG: Very smaller, yeah.

HANS TUNG: How many people were there at LinkedIn?

SIMON ZHANG: It was more than 500, definitely less than 1,000, something like that.

ZARA ZHANG: So, you were there for almost five years.


ZARA ZHANG: And you let them build the analytics team to support the company’s monetization. Could you talk about why analytics was important to LinkedIn? And what kind of impact did your team have on the company?

SIMON ZHANG: This is I think the greatest question. Firstly, LinkedIn really respected data. It is it is part of the company strategy or it is part of the company culture. When I was just joining LinkedIn, I remember very clearly, they said, “Growth drives data. Data drives money. Money drives growth.” It’s very simple. I still remember that mode very clearly.

And the second piece is I think LinkedIn really empowered employees in how to use the data. It’s not telling, Hey, Simon, you should do this, this and that, right? You just say, Hey, we want to drive in this type of result and what can you guys can do? And we did a lot of very creative projects and brought significant growth to LinkedIn. About, I think, six months ago Reid Hoffman just published a book called —

HANS TUNG: Blitzscaling.

SIMON ZHANG: Yeah, Blitzscaling. In that, the LinkedIn case he used was the project we delivered at LinkedIn that’s the fundamental internal growth engine to boost the LinkedIn revenue growth, and it’s called product Merlin. It’s like a magician and we built that product internally. I think it has increase efficiency by 3–10 times internally.

ZARA ZHANG: Of monetization.

SIMON ZHANG: Yeah, of monetization, because salespeople wrote me emails saying, “Hey, I don’t know who you are. I really don’t know who you are, but I’m very thankful to you –”

HANS TUNG: Sweet, yeah, not difficult money.

SIMON ZHANG: “– because of what you did, making me upgrade my vacation to Hawaii. Because as a result of your work, I just stay home. Because of your work, my family now goes to Hawaii. Thank you very much.” And I asked him, “What exactly have I done for you?” He said, “I used to close one deal per month. Because of the work that you guys did, I can close three deals in a week. People are chasing me to sign the contract.” Yeah, it was the moment that made me really super, super happy, and the whole team happy. I think that’s the ultimate power tool.

ZARA ZHANG: So, what was the exact reason that the conversion rate increased? Was it because of better targeting?

SIMON ZHANG: Better targeting. Better product and channel fit. Better messaging. Better positioning. The most significant part is the automation. A salesperson, first of all, he wants to talk to Hans, so seriously speaking, he just needs to click three buttons to generate PowerPoint slides. The slides would talk about Hans, GGV, why GGV needs LinkedIn, why the LinkedIn product fits the GGV needs, and who can recommend or liaison between me and Hans, all of that in that PowerPoint.

ZARA ZHANG: A personalized pitch deck.

SIMON ZHANG: A personalized pitch deck which really, really boosts the productivity during the early stage. It used to be two weeks to prepare one, for data analytics to prepare one, but right now it has become three minutes to prepare one.

HANS TUNG: So, data can be just sucked out of the database and be put into that very quickly.

SIMON ZHANG: Yeah. I remember we did some internal data tracking. We found that there were 500,000 PowerPoint stacks that have been done with it, something like that, a year, which translates into almost 2,000 data analysts’ work if we do this manually, and everything is customized for when we’re speaking to our customers. That’s just the beginning, but also, we have seriously worked, connected and then fundamentally changed the way LinkedIn scaled and grew, and it has really made me personally feel proud and happy, because I changed their lives, made them live better.

HANS TUNG: So, you were making a great difference inside LinkedIn. Yeah, many people—and I can relate to this because I’ve worked both in Silicon Valley and China now—have said that there is a ceiling for Chinese and most Asian employees. India may be an exception, but most Chinese employees in Silicon Valley tech feel that there’s a ceiling and it’s hard to move up to leadership roles at VP or higher levels. So, what kind of examples or lessons both positive and negative did you learn while working at LinkedIn as one of the top performers?

SIMON ZHANG: I will start with the positives. I think I will end with a positive as well, because everything has two sides to a story. Number one is, I think the company culture is very important rather than embracing results and performance, and the leadership team can recognize there are so many great people. You need to grow them. I think LinkedIn, at least when I was there, was the place to empower me and give me the opportunity to grow. I think that’s very important for any employee now living in Silicon Valley to find a growing space. However, a growing space is not a free ride or a free vehicle to bring you to the next level. I think, personally speaking, we need to really work hard and deliver better performance than average.

On the other side, I feel the ceiling, the ceiling problem. So, after I came back to China, I understood this a little bit more than when I was there. When I was there, I’d talked about this being just a communication issue; this is just our Chinese being kind of very siloed, not united much. Actually, right now I don’t feel that way anymore or I don’t feel much about that anymore. I feel our Chinese, let’s say, engineers or folks in Silicon Valley, number one, we need to become a T-shaped leader. I think most of time you spend too much time on becoming the expert in this field, but we forget we need to grow our leadership skills.

HANS TUNG: Horizontally.

SIMON ZHANG: We need to grow our management skills. We need to grow our business skills. We need to understand the product, marketing, sales and everything on the customer and the market. If we don’t have those skills, it’s very hard for a person to become the leader for the company, but because he or she will not have the general point of view of how to manage the whole business. I think that’s a very important learning I have.

The second part is, I feel, if we want to grow leadership skills, you’re going to grow management skills. Those kinds of skills are—how do I say it? Maybe that’s not right English term—learnable. We need to learn that. However, if we only learn from our own experience, we will become very fixed mindset people. We have to intentionally expand to our unknown area. That area needs someone really good in this field who coach us, but sometimes when I think of myself, say, seven or eight years ago, I didn’t have the awareness that someone could coach me to become better in that field. Then, when I reached a certain stage, when someone tried to guide me or tell me something I really did not know, I started refusing the lesson, to listen, because those signals were not matching with what I understood. So, I think in this area could be expanded by a much more open-minded mindset. Plus, someone could guide and mentor this person.

I feel right now in Silicon Valley in our Chinese community, there are a lot of more experienced executives or experienced people. If we couldn’t jointly work together, we will end up with much better results, but not just “Simon explored by himself randomly”. Just keep learning from practice. Learning from practice without anyone to coach and guide is kind of —

HANS TUNG: A lot less efficient.

SIMON ZHANG: Yeah, exactly, less efficient. I think the last is our education. I’m not blaming our education system. We weren’t taught much about the methodology of how to learn but taught too much about how to be right on the final results. So, my feeling right now, I think there’s some change that has happened significantly in the past several years. Our Chinese engineers or people who are staying in Silicon Valley, we need to learn the fundamental methodology, but not just how to get the results right. So, I think our education system taught too much about the results, but not teaching us enough how to learn learning.

And, finally, I would say, in the US, we have to get a green card; we have to get an H1B; we have to get meal tickets and paychecks. Those kind of limit people’s ambitions and this desire for being more creative and being more. Actually, right now if I look back, I just had too many fears.

HANS TUNG: Even in LinkedIn?

SIMON ZHANG: Even in LinkedIn, every day, Oh, I’ll lose my job; I’ll lose this, and I’ll lose that.

HANS TUNG: Losing your job.

SIMON ZHANG: Exactly. However, I strongly believe that the US culture really encourages you to have your independent thinking, being creative, being customer-centric, for example, business-oriented. So, it’s okay to speak up. It’s okay to express yourself clearly and then with guts, and that’s what I learned at LinkedIn after nine months. It was the largest lesson I learned in my life. We have to be extremely honest and brutally honest by telling the truth. This, however, I didn’t want because I was sacred or because of the fear or whatever I had in my mind that blocked me off being better. That’s just in my personal life. I’m not saying this should apply to everyone, but I recommend it to others. For example, I would tell them, Hey, these are the lessons I learned. I don’t hope you have the same problem, but that’s what I would recommend.

HANS TUNG: So, when you look at your colleagues of Indian descent over the last two decades, they have done an amazing job, very admirable.

SIMON ZHANG: Absolutely.

HANS TUNG: What are the lessons that we can learn from them? Now you see a lot of them who are senior executives in technology companies and even the academia at Harvard and other places. It just truly remarkable.

SIMON ZHANG: If you look at the top five Fortune 500, especially for tech companies, how many Indian executives are managing the whole business? I would say, communication is just a part of it, very shallow and surface. However, I think deeply culture-wise, they teach business almost across all the levels, and the second is they teach how people collaborate with others. That very important.

I almost forgot—collaboration is one of the most important characteristics of a leader. I think Indian employees know how to collaborate, how to be collaborative with others, how to keep your independence in thinking but also being able to compromise in the final solution. Also, they know how to build a network. That’s very important in the skills, because if you won’t agree on something, you have to a little bit lobby everywhere underneath and then, finally, now reach an agreement. So, I think I had a lot of things to learn.

And, also, my feeling is they understand the ladder a lot better than Chinese employees. Chinese employees sometimes feel if they work hard enough, people will recognize their —

HANS TUNG: Recognize their hard work.

SIMON ZHANG:  — yeah, their hard work. Actually, no, that’s wrong. That’s completely wrong and you do your work. It’s almost like a product/market fit. You only build a great product with other people. No, that’s a failure. You have to promote this product in the right channel and then you need to have this product with the right customer acquisition cost and their lifetime value. You need to figure out all of this. Then, promoting this product is part of the job. It’s not just self-promoting.

HANS TUNG: It’s not self-promoting, right.

SIMON ZHANG: It’s not just playing politics. No, this is how we make a great idea become very impactful.

HANS TUNG: And adopted by other people.

SIMON ZHANG: Yeah, exactly. So, I would recommend that our Chinese learn that. That’s a very important and basic skill for anyone who wants to be successful in a company.

HANS TUNG: Yeah, that’s actually a great lesson not just for our Chinese and folks in Silicon Valley, but it’s a great lesson for anyone young trying to move up the corporate ladder and do more, make more impact on life. Part of the reason that I moved back to the Bay Area in 2014 was because I felt that, like you, I learned a lot from being on kind of a battlefield in China for eight years, and you see so much and see that this is actually and I still think that this is the toughest market in the world to do VC or even build a startup. There are just so many challenges you have to overcome, which we will get to in a second later on in the podcast, that if I learn all these lessons, these lessons are actually not China-specific. They’re great lessons globally and that’s part of the motivation of doing the 996 Podcast. It was to share these kind of lessons. They may start in a China context, but the implication, the application is actually quite global beyond China.


ZARA ZHANG: I think another reason for that phenomena is the self-selection bias. A lot of enterprising Chinese people at Silicon Valley tech companies actually moved back to China to either join or start companies like you did.

HANS TUNG: If Simon ends up being a C-level officer at LinkedIn, would he still have come back to China? Hard to say. Then, this is a part of the challenge that India has. It’s that you have so many great successful Indian executives in the US. Would they be able to give that up just to move back to India? If I were already in the Forbes Midas List five years in a row in the US, would I give it up to go to China? Not so easy. But the interesting thing is that by doing it in both places, the things you will learn become quite powerful in a way that you wouldn’t have if you just stayed in one place.

SIMON ZHANG: That’s exactly right. That’s almost like the story you shared with me, Hans. Remember you shared with me that you did a lot of research on Japanese history?


SIMON ZHANG: You learned a lot. My feeling is that—when you told me that story, at that moment, I connected—if I stay in Silicon Valley for the rest of my career, I will never learn this new language, even this, what we call Chinese. I am Chinese. I came back to the China market. I just learned so much. It’s almost like a new world to me personally. I learned and then, when Hans told me that story, I reflected, The China market for me is almost like the Japanese market for Hans. I was learning in China; he really enjoyed learning Japanese history. I think that taught me how to understand better about our customers, how to deliver something.

HANS TUNG: You decided to come back to China four years ago and you decided to take part in enterprise when it was not clear that if someone who has been away for 10 years could actually build something, an enterprise which is so local, even more local than the consumer market. Against all odds, yes, you’ve built a viable business today. What are the some of the challenges that you had to face and how did you end up solving them one by one? I know you have many lessons, but you can pick two or three.

SIMON ZHANG: We have too many lessons to derive for ourselves.

HANS TUNG: Two or three of the most memorable, most impactful ones.

SIMON ZHANG: I would say, coming back to China, building a startup, building an enterprise startup where being a startup person all of this for me was completely new. I think that the reason we could do this was only because we could hold the personal view. However, if I look back, I would’ve said I should have a better understanding of a product/market fit. I should understand during a different stage what an entrepreneur should do, because this is the first time, I’d built a startup. So, we made a lot of mistakes.

I think the most important one is focus on the customers and the market, but not just focus on the technology we had or the technology dream that we had. Focus on customer and market is the first lesson I would like to share with any who wants to build a startup in any market.

The second lesson I learned is I received too early too much money. Seriously, I raised too much money during the Series A, early stage. That actually clouded a lot of things because we could do marketing, we can do a lot of things—

HANS TUNG:  You could do many things.

SIMON ZHANG:  Yes, many things to boost early growth, however, if I had had less money I would do slightly different. 

HANS TUNG:  How would you do it differently?

SIMON ZHANG:  We’d focus on no marketing in the early stage. Completely focus on customers, and make sure our product filled our customer need in the early stage. Don’t expand too fast.  Control it and make sure everything becomes smooth, product, deployment, service, customer feedback. All the loop had been checked, and then expand.  However, when we had more money, it kind of diluted our focus. At that moment I didn’t even know what was supposed to be the focus.

Even if someone told me, Simon, the product is the only thing you should care about, because it wasn’t resonating with me at that moment, I made a lot of mistakes. So, I would like to share this lesson with other entrepreneurs. They should really focus on customers, or less say the product, then later expand. Actually, this is a lesson a lot of us in the Valley share, and a lot of books and articles are being written.

HANS TUNG:  But unless you do it once, you don’t know what is important and what is not, and what’s the weighting of each.

ZARA ZHANG:  I think a lot of founders, especially in China, see fund raising as a signal for success. Like, as long as we close a round and the valuation is high, we’re a successful company. But that actually creates a lot of pressure and like you said, can dilute your focus. So, there could be a downside to that as well.

SIMON ZHANG:  Actually, that’s a very different type of culture between American startups and here in China.  I think it’s started changing, slowly.

HANS TUNG:  In the U.S. every press, media expert will want their founders not to talk about valuation and money raising too much, because reporters are so jaded, they don’t want to just report on you based on a lot of money. They really want to know what kind of value are you generating? Or that it’s not just a me-too company. It’s a lesson that needs to be there not just in China but also in Latin America, Southeast Asia and India. In emerging markets it’s very easy for people just to pound on their chests when they’ve just raised a large round. It takes more maturity or experienced firms like you to share the lessons.

SIMON ZHANG:  I’m just a little bit bold to share that lesson.

ZARA ZHANG:  So what recommendations do you have for Chinese employees at Silicon Valley tech companies who are interested in coming back to China to maybe found startups?

SIMON ZHANG:  It’s two different types of world. It depends on what they really want. I would say here in China this is a historically important point. People can come back to become someone memorable in human history. This is the place to nurture the next generation’s greatest enterprises, globally. So, I would say someone in Silicon Valley, they’re young, they’re ambitious, they really want to build something creative, this is the market that can nurture the greatest entrepreneur in the next five or ten years. This opportunity, really, they should come back to grab it. I think some of them might have regret. This is a lifetime opportunity for young, smart, well-educated engineers or Silicon Valley Chinese folks who are thinking of coming back.

If, say, after they become a VP or some senior director, or whatever, it’s a golden chance. And also, kids, family, houses, cars, it’s harder and harder for them to come back. Right now, I think is the opportunity for them to play in this field. They have nothing to lose. I’m almost 43 or 45 years old. They are much younger than me. They have nothing to lose, but a lot to gain. Even the process would be very painful. I would recommend for them to come back.

That’s the story I told some of the employees at GrowingIO. I told them this is a lifetime event.  From my heart. I’m not cheating them, I’m not making up some story. This is the place for people to become better. And also, analyze the environment. Think about the question Hans just asked me. Do other companies exactly manage—think about it. Do you want to grow in America, or you want to find somewhere there’s a little less competition? You want to become the first mover? There are a lot of advantage for Chinese people who stay in Silicon Valley. They still can come back, I mean here, to China market. I would recommend that.

ZARA ZHANG:  I think a lot of people are trying to figure out the timing issue. How long should I stay in the U.S. before I come back, because if you stay too short, the premium of what you can bring back is limited. But if you stay too long, you get settled. And people are also worried about economic uncertainties facing China right now.

SIMON ZHANG:  Well, it’s a great question. Think about if Jack Ma never stayed in Silicon Valley and learned anything about capital. He’s one of the most successful entrepreneurs—

HANS TUNG:  In the world.  In history.

SIMON ZHANG:  Yes, globally. I would say that’s kind of a thought, from my personal point of view. I would say timing isn’t the most important. Every excuse will become clear. If one thing we can prove, then we can learn anything. Of course, not in harming people kind of things. We can learn everything. Having an environment, having the requirement to learn is much more efficient than to think about doing something. I would say this is a battlefield. Learning in the battlefield, can gain much faster experience. Better skills.

ZARA ZHANG:  Just being in that environment.

SIMON ZHANG:  Yes. I would say.

HANS TUNG:  I think the questions Zara raised are very legitimate, and we hear them from a lot of folks who listen to 996 or come to our—

SIMON ZHANG:  Nine-nine-six. That’s a great name. 

HANS TUNG:  I think that we also hear from a lot of people who made that concession back. First thing you do is not worry about that you are superior. You cannot think that you know more. You have to be more humble and learn to fit in here in China more.

So, if that’s the case, it is much harder for someone to acquire that domain expertise in the U.S. and thinking that’s worth something when you come back, because most of the time it doesn’t. Even though there you were an AI or machine learning specialist, if you want to come back and stay an AI or machine learning specialist, that’s fine. You can acquire expertise in the U.S. and come back when you have achieved it. But the chance of you becoming a business leader and doing your startup in China? It’s not going to be high, because your mentality is already going to be like I’m an expert, so pay me a premium for being an expert. You choose to come back here to learn to be a founder and business leader.

So sure, you were an expert in data analytics, but that alone was not going to be enough to keep you. You had to become a different person in the last four years in order to build the business you want today. What made you decide to do that, and what specific lessons did you have to learn in order to become a T-shaped leader instead of an expert in data analytics, one of the best in the world?

SIMON ZHANG:  I learned from peoples’ criticism. Because when I just came back exactly like Hans just described, I thought if I was one of the best in that field, then, the parts that I built would be one of the best in this field. Then the company that I would build would be the best, right?

HANS TUNG:  And the customers would be so lucky to be able to use your product.

SIMON ZHANG:  Exactly. And then lucky to work with me. Oh man, what a horrible person I was. So, I would say, you know, I learned from crisis, tough times. I think the whole team learned from that. For example, the T-shape, the number one problem is how to build a team. We used to be result-oriented. Hey, you need to deliver this, deliver that. Fundamentally we found this wasn’t working any more, because we needed to be a team who did things in a consistent way for our customers. Then we needed to be able to have the collaboration and organization aligned.

I think the hardest lesson I learned was we really needed to build a great team, a great organization. The CEO is not just telling people how to build a part, but also understanding the customer, understanding the people and then build an organization. I began to notice that it used to be just a lot of terms in my mind, interlinking part of me. However, like the stuff they build feeds off my knowledge, at the moment I just live within it. However, right now we need to build that. We made a lot of mistakes.

We found a lot of lessons. Actually, employees told me hey, Simon, you’re wrong in this, that and that. I thought I was not wrong, and she was wrong, or he was wrong. But I started trying to analyze when she told me I was wrong, and I couldn’t understand what she meant at the moment. Then I asked a little different type of people, and they told me hmm, I didn’t have that type of problem with her. Only you have that problem with her. I said okay, let me think about that. The problem was I wasn’t aware of the problem I had, and that created more problems. Then I had to turn to myself.

So, I think that after coming back to China I became a little more open. I wish I could be more open for people to give me feedback, more open-minded, change myself.  Upgrade. I think that’s the largest lesson I learned. I still have a lot to learn. Really, a lot. The more I understand what I should do, the more I need to look for feedback and criticism. I think the second part is in business, there is so much great knowledge generated in history because we have not recognized the deficiencies of ourselves. We made a lot of calls based on personal judgement. These aren’t facts.

We have to learn from the facts. We have to learn from doing. We have to learn from making mistakes. I need to be quick, and not just keep making the same mistakes for five years. I think that company would die for sure. We need to learn to fail fast and keep moving.

HANS TUNG:  One of my theories is assume that everybody is similarly smart. To get to the right answer you have to go through a similar number of mistakes and failures and trials in order to get there. It could be Chinese versus Indians, Chinese versus Americans. It doesn’t matter, the race. Everybody is similarly smart, and it takes some number of mistakes to get there.

It used to be that somebody goes through that process and a second team could copy and clone and take a shortcut and still get things right. So, you’d focus on the result, get there very quickly, didn’t have to go through the same number of mistakes. But as more and more these countries and teams are at the cutting edge of what they do, you still have to go back and figure out what mistakes you have to make in order to get the right answers.

Having said that, do you feel that, having worked in China and the U.S., both places, which market is faster at iterating and making those mistakes to get to the final answer sooner, quicker?

SIMON ZHANG: I think you know my answer. Because I’m in this market. I think Chinese really learn so fast.

HANS TUNG:  A lot of Americans seem to feel like the Chinese don’t plan, they just shoot first, aim later. The techniques don’t have the right process. They just break everything and roll the product out before it’s ready. So, you’re fast, it’s a lot of action, but you’re not very efficient.

SIMON ZHANG:  Think about it this way. I would have called this creativities. This is innovation, because I think right now the speed of innovation becomes faster and faster. We cannot just set up the process before we understand what the customer really needs. So then, we try fast. I would say that’s part of the innovation. Chinese way, right now, and of course it’s been boosted a little bit by the funding.

HANS TUNG:  And the size of the market, and so forth.

SIMON ZHANG:  And size of the market, yes. However, I think the competition is faster than we are creating the theories, creating the process, or engineering the whole industrialized structure. That’s not a fit for this in a fast-changing market. We have to try and go fast. Of course, there are some fundamental things, for example, your business model. Your CAC versus LTV. At least the fundamental that the founders should think about that stuff, otherwise they will step into the pitfalls, the world’s pitfalls.

HANS TUNG: Another criticism of Chinese teams from Silicon Valley is there’s no work/life balance. In Silicon Valley they say you want to be innovating for a long time, therefore you want to stay creative, stay fresh. Take time off, step back, think about things, smell the coffee and so forth. And a lot of those are very legitimate practices. In China, what do you see, and what do you practice? Do you worry about work/life balance here? When you see teams work 996, 9 a.m. to 9 p.m. six days a week, sometimes even seven days a week, how sustainable is that? Can you be both efficient and hard-driven at the same time, or do you have to choose in order to stay creative and innovative for a long period of time?

SIMON ZHANG:  This is a great question. When I was working in Silicon Valley, I was working very hard, compared with my colleagues or my peers. I think that was one reason I could get promoted a little bit faster than normal. After I moved back, I found every single company in China, almost, from Baidu, Alibaba and Tencent, everyone’s working so hard. For example, recently we heard of some company in Nianhui 年会 , or annual parties, some founders said hey, let’s change to 986 tomorrow, or something like that. Puts some newsfeed in there recently. My feeling is having a clear goal, keep delivering, is very important in any market.

If your competitors are doing much more work than your 955 company, I’d say this company would have lost. Nine to five, for five days—regular. In the China market you have to work harder than U.S. company to survive in this market.  Even Alibaba, the building is just a couple of blocks from my office. You can see at 11 or 10 p.m., at night, the whole building lights are still on. That’s peer pressure, I would say.

However, on the other side, I definitely think keep a certain level of space where people can have time for deep thinking, truly focus on work, but not just build on by hours. Because it’s not by how many hours we work, it’s still how many great parts and results we deliver. But there should be some balance. Hans, you asked me the question. The first time I moved back to China, we worked almost 007.

HANS TUNG: All the time, seven days a week.

SIMON ZHANG:  We went home around 3 a.m., came back around 9 to 10 in the morning. So, we said hey, we just have office and home, a dorm. The office is a home. So about for almost nine months, we felt we couldn’t even think. We were too tired. And we had to return to 997, but the seventh day is a half-day. Still you feel exhausted, and you have to balance. I wish every company would select that balancing point, but to a certain level.

HANS TUNG: So, what is your schedule now?

SIMON ZHANG:  I recommend some of the founders, they need to have time off. Because when they go somewhere else, company is shut down, their thoughts become clearer than before. And also, when occupied by day to day, it’s very hard to make the right decision. That’s the recommendation I’ve been given by my friends and my peers, sometimes my advisor and coach. So, I learned better than before. So, I would say there is a balance.

HANS TUNG: So, when you’re not on a break, what is the schedule?

SIMON ZHANG:  Still 996 is very normal. I think most of the times I go to the office a little bit on Sunday, when it’s quieter.

HANS TUNG:  Right. So, you can think.

SIMON ZHANG:  I can think a little bit. And I can learn a little bit. That’s not the right habit, maybe, but recently I started managing that a little better because of the story you shared with me. You know, the Japanese story? I think I need to learn a little bit harder from what other people speak. Because I’m always occupied by myself, by my old habit, which means I don’t change.

HANS TUNG:  I’m always fascinated by Japanese history how some of them could achieve Zen and be able to think, reflect, and still be able to act aggressively and quickly as needed. So, how can you do both well? To me, there was never a question you have to choose to be efficient and work 955, or you work 996, 997 and you’re not efficient. I don’t see that you have to choose. I think there’s a way to do both, and that’s a higher form of working, and whoever can do that will be the most effective.

ZARA ZHANG:  I wanted to shift the topic to growth. You wrote a book called 《首席增长官》Chief Growth Officer.  For many Chinese people, it was their first exposure to the concept of data driven growth. At that time, growth as a term was already frequently heard in the Valley, but still relatively novel in China. So, what do you think are the differences between Chinese style growth and Silicon Valley style growth?

SIMON ZHANG:  I think Chinese version of growth is more like the numbers, you know numbers of users, number of GMV or number of… I think Silicon Valley growth means you use science, you use data to grow efficiently, and then you manage your product life cycle smartly. First you focus on maybe your MVP or prototype, and then you become a part of market, at fifth stage you fund retention, at that stage you should not pour a lot of money to boost the number of growth. And after that you figure out a channel fit and then you accelerate your growth. Those are almost exactly what LinkedIn did in the past 15 years, right?  Stage by stage. However, in China, like the question Hans asked me, the market changes so drastically and so quickly, people do not have time to do this in so classic way. I would say Chinese market focuses on dominating the market by using whatever it takes, then become a monopoly, and then you set up the price, and then you set up the business model, you set up the CAC and whatever. Actually, it’s built a lot of great companies. At least some. But recently, I think it’s started changing.

HANS TUNG:  Because the market as a whole is not expanding that much anymore. So, you have to be a lot more efficient in order to survive.

SIMON ZHANG:  Be efficient to survive. And have the right business model, and then to grow naturally or normally. I would say there’s a changing underneath with the economy, everything, the market dynamic is changing. I would not say which one is right, which one is wrong. But I’m just saying right now, it’s time for many, many companies to learn how to run business efficiently. This is a fundamental and can build the long-lasting enterprises in the future. The future is not just two years old, your IPO, done.  No, actually, to build a great company, should have a lot of patience and dedication, it’s a long-term journey. Then I would say the relative theory, part of the tooling we brought to the market, I hope could help a lot of companies and entrepreneurs become long-lasting success.

ZARA ZHANG:  It sounds like that bodes well for enterprise SaaS as a sector in China.

SIMON ZHANG:  Yes. And both the 2C and the 2B companies. But still in the market, there are some companies that are boosted by funding, right? As the business model. I would say being creative is always right. Being fast. It doesn’t matter if in the mature market or in a fast-growing market, being fast is the key. It doesn’t matter where we are, either U.S. or here. Our being fast doesn’t mean being short, short life cycle or short lifetime. Being fast means everything we need to be doing is fast, dominant.

HANS TUNG:  And this is not a popular thinking in Silicon Valley. You don’t hear groups saying we’ve got to move fast, we’ve got to move fast. Everybody favors being more methodical, think it through, plan. But if somehow you could do both, and you learn how to think on your feet, it actually becomes a great advantage, because you know other people are going to be slow. So, if you can move fast and think at the same time, you see everyone else stop moving. It’s actually good.

SIMON ZHANG:  I learn, I learn from Hans now.

ZARA ZHANG:  I think Chinese founders often have a warlike mentality. Like no matter just grab the land share first, and then figure out what to do later.

HANS TUNG:  I think over time, you have to be able to do both. So, you learn how to plan, but you learn how to plan while you’re on the go. That’s how you can be staying one step ahead of your peers or competition. So, it’s fascinating. And you nailed it. How you learn is very important. I think one of the things that I picked up as a trait of a lot of great founders, they figure out how to learn faster, quicker than their competitor, and that’s how they stay ahead.

SIMON ZHANG:  We’re still on the journey of learning how to learn. But it’s fascinating, it’s great. You changed a lot your mindsets

ZARA ZHANG:  Moving on to the quick five questions. Who is the entrepreneur you admire the most, and why?

SIMON ZHANG: I learned a lot from different type of entrepreneurs. I would say that Ed Catmull, who built Pixar, he has so much insight as how to build a creative culture, how to learn fast, how to become eco-right within the company. I admire him a lot. I read a book, actually the book was recommended by the CEO from Pablo.  I asked him, “Hey, what can I learn? Any books you can recommend to me?” He said, “Simon, you can read that Creativity, Inc.  A couple of years ago, I read the book. I learned a lot. It’s fascinating. I met him about two weeks ago here in China. He presented at Jike Gongyuan 极客公园 or Geek Park. He shared a little bit and I admire him quite a lot. Had a dream of building something really unbelievable and then delivered it. Figured out that building a dream is not the key. Deliver the key of building dreams, and it’s just fascinating the mindsight, the methodology, also another culture. Everything. I like him quite a lot.

ZARA ZHANG:  What’s something you read recently that you recommend?

SIMON ZHANG:  I would recommend a lot of very old books. I have one book I like to recommend to anyone to read. I think it’s called The Discipline of Market Leaders. It was a funny story. Let me share a little bit. I bought the book last year in summer from Amazon, and it shipped to my friend who lives in Silicon Valley. I bought some books and he always brought them back. And then he brought it back to me at the end of the year, almost November. I read it, think oh, this is great. A lot of models, talking about product, service, and efficiency. All different type of business models.  The funny part is that in the book, I saw a note from the seller. The seller said “Hey, the books I’m selling are always five to 20 years old. Congratulations. You bought the oldest book ever on my shelf. This book was 24 years old.” It was new, not read. The book talked about how to become a market leader. The focus, you know. You either want to focus on product, focus on service, or focus on efficiency. Those business models have been analyzed and become a theory 25 or almost 30 years ago. To me it was brand new information. I learned a lot. A lot of questions I had three years ago when I was building the company, those answers were available.

HANS TUNG:  That is a very good book.

SIMON ZHANG:  It was a new old book, right?

HANS TUNG:  But it talks about you cannot optimize every single factor. You had to choose one, and you had to figure out the one that you choose, whether it fits your industry and your personality or not.

SIMON ZHANG:  Narrow the market, whatever.  However, that’s resonant with the growth theories, quite well, you know, focus. Typically, entrepreneurs or founders that try to grab a large market, do everything simultaneously for whatever reason—but I just feel the book was very good.  I really recommend it.

ZARA ZHANG:  What do you do for fun?

HANS TUNG:  Do you have time for fun?

SIMON ZHANG:  Go to work. That’s the fun for me. Seriously. I think that’s the fun part. It motivates me to go to work every day. Even if it was tougher yesterday than today. Anyway, besides work, I like to play video games. I used to be a very good video game player. Recently, I’ll play video games with my son. He’s better than me. Sometimes I learn from him. He learns more quickly than me.

ZARA ZHANG:  That’s all we have for today.

HANS TUNG: Thank you very much.

SIMON ZHANG:  Thank you for the invitation. It’s been a pleasure.

If you have any feedback on this podcast or would like to recommend a guest, please email us at 996@GGVC.com.

Episode 30: Doris Ke on Marketing Across the US and China

GGV Capital’s Hans Tung and Zara Zhang interview Doris Ke, a marketer and writer who has had an interesting career across the US and China. Doris grew up in China and went to the US for college, where she attended Bard College in New York. She started her career at Unilever where she worked on brand development, and then joined Michael Kors in New York where she was the social communications manager for APAC. In 2015, she left Michael Kors to become the head of marketing operations at Alipay US, based in Silicon Valley. In 2017, she returned to China to become the CMO of the Chinese startup YCloset (衣二三), which is often referred to as “the Chinese version of Rent the Runway”. She recently left YCloset to start her own marketing startup.

Throughout all of this, she has also been running a WeChat official account with around 100K followers called “doriskeke”, where she blogs about the cultural differences between US and China.

During this lively episode, Doris discussed the cultural differences between working at Chinese vs. American companies, lessons from her viral yet controversial marketing campaign at YCloset, what it is like to live in Beijing as a Shanghainese, and how she used the “growth mindset” to find her boyfriend (now husband).


HANS TUNG: Hi there. Welcome to the 996 Podcast brought to you by GGV Capital. On this show we interview movers and shakers of China’s tech industry as well as tech leaders who have a US-China cross-border perspective. My name is Hans Tung. I’m a Managing Partner at GGV Capital and I’ve been working at startups and investing in them in both the US and China for the past 20 years.

ZARA ZHANG: My name is Zara Zhang. I’m an investment analyst at GGV Capital and a former journalist. Why is this show called 996? 996 is the work schedule that many Chinese founders have organically adopted. That is, 9 am to 9 pm, 6 days a week.

HANS TUNG: To us, 996 captures the intensity, drive and speed of Chinese internet companies, many of which are moving faster than even their American counterparts.

ZARA ZHANG: On the show today we have Doris Ke, a marketer and writer who has had an extremely interesting career across the US and China. Doris grew up in China and went to the US for college where she attended Bard College in New York. She started her career at Unilever where she worked on brand development and then joined Michael Kors in New York where she was the Social Communications Manager for APAC. In 2015 she left Michael Kors to become the Head of Marketing Operations for Alipay US based in Silicon Valley. In 2017 she returned to China to become the CMO of the Chinese startup YCloset or Yiersan 衣二三 which is often referred to as the Chinese version of Rent the Runway. She recently left YCloset to start her own marketing startup.

HANS TUNG: Throughout all of this, she has also been running a WeChat official account with around 100,000 followers called Doriskeke where she blogs about the cultural differences between the US and China. She’s also known as Dao Jie 刀姐 in China because Chinese people pronounce her name as Doris and by the way Dao Jie 刀姐literally means knife sister. I always found this name appropriate because both her personality and her writing are extremely sharp, on point and insightful. Welcome to the show Doris.

DORIS KE: Hi everyone.

ZARA ZHANG: So, you chose a very different career path from the vast majority of Liuxuesheng 留学生 or Chinese students who study abroad. Most of my friends who went to college in the US found jobs in finance, consulting or engineering after graduation, but you went into FMCG and marketing; why?
DORIS KE: Yeah, I think to be honest, one of the reasons why is actually I couldn’t get one. I went to a liberal arts college. It’s Bard College, it’s not like a big university like Harvard or Yale, so I wasn’t really –

HANS TUNG: But it’s still a good school.

DORIS KE: Yeah, it’s a good school but it’s famous for art and all of my friends, they’re like really into philosophy and art. They want to be artist when they graduate so we are not like one of those target schools, so that’s the actual real reason. Then the second reason is really when I was doing an internship when I was in college, I didn’t even bother to go to one of those banking jobs because I just felt like that was really boring to me. I actually went to one of the consulting firms, Roland Berger, during my junior year and all I was doing was doing cold call, paperwork and research on the glass industry. The next year I was doing a Coca-Cola internship and I compared the difference and it was really big.

One is you’re just doing numbers. Crunching numbers and trying to analyze the industry while on the other hand, while I was at Coca-Cola, I did consumer research and I changed the products, and the marketing campaigns. I really see the impact I’m making on people. So, I felt like I really wanted to do some job that’s making a real impact versus just crunching numbers. That’s just my personal opinion. That’s why I chose to do marketing and I went to Unilever in the end.

ZARA ZHANG: When you went to Unilever you actually turned down an offer from P&G?

DORIS KE: Right.

ZARA ZHANG: How did you approach that decision-making process?

DORIS KE: When I decided to go into the marketing industry, I did research on what are the best companies to go to. Procter & Gamble and Unilever were definitely the two best companies. They’re like the marketing schools and so I applied for Procter & Gamble China and then Unilever US because Procter & Gamble US couldn’t sponsor a H-1B for me but Unilever at that time, had this innovative program called Shanghai Management Trainee Program in which they put Chinese people, graduates, two years in the US and then the third year they sent you to China to become a manager. Versus Procter & Gamble, they just sent you back directly back to Guangzhou. I was like, “Guangzhou, I have never been. I’ve heard Dim Sum is good, but probably not offend me. I’m Chinese to be honest.” I’m kind of like, “Guangzhou, really?” So, I debated really hard because Procter & Gamble is my dream company. Unilever in the US, that’s really attractive.

Then I talked to one of the Unilever directors and he gave me this point of view which was really helpful to me even to now. He told me that Procter & Gamble hires 30 marketers every year and so to now the already have 500 and Unilever only hired 10 Chinese in the US to be marketers in the US. Do you want to be one out of 500 or one out of 10? Your uniqueness is going to define how valuable you are in the future. That’s why I was like, “Oh yeah, that sounds right.” I turned down Procter & Gamble, although I was literally heartbroken to turn it down, but I went to Unilever in the end.

HANS TUNG: One of the reasons we have you on the show is that you had experience doing marketing which is very localized. It’s very localized domain knowledge in both the US and China.


HANS TUNG: That’s still rare enough. The second reason is that you made adjustment of coming back to China and localizing the Chinese community after spending quite a bit of time outside of China. On those two fronts, how easy is it? How much leverage do you get from knowing how to do marketing in the US to China? Then as you learn how to do marketing in China, how do you localize and reintegrate yourself back into the Chinese community?

DORIS KE: That’s a great question. Lots of people actually ask me that. Actually, you don’t get a lot of leverage from working in the US. Lots of people, after working in the US for a while, they return to China and they’re like, “Oh my God, it’s completely differently. I should have come back to China earlier.

HANS TUNG: Are you saying you should have taken the P&G job?

DORIS KE: I should have taken that, to be honest. I regret it so much. Sorry, Unilever. But to be honest, I went to Unilever then I went to Michael Kors and then I went to Alibaba. That’s when I got to adjust to the Chinese culture. That’s when I came back to Beijing two years ago to join YCloset, I wasn’t really that culture shocked because in Alibaba I already had the culture shock.

HANS TUNG: So, Ali is better than Unilever.

DORIS KE: Right. So, Unilever taught me a lot of systematics, structured thinking.

HANS TUNG: Multinational way of doing business.

DORIS KE: Right, business sense. How you calculate the ROI, cost of goods sold, margin and profit and all of that but in China the media is different, consumers are different and then the budget is different. In the US, I mean, when I was at Michael Kors, I had millions of dollars in the budget to make videos. When it comes to YCloset they’re like, “Sorry, we don’t have that.”

HANS TUNG: You’ve got to be innovative.

DORIS KE: What is budget? There is no budget, sorry, just use your mind, be creative. So, I think that’s the huge difference. I really appreciate my experience in the US because I got to be really structural and plan ahead, be strategic versus in China you just need to be flexible and you need to navigate around resources to get things done and that’s very different.


ZARA ZHANG: In 2015, you made the move from New York to the Bay Area to become the Head of Marketing Operations for Alipay US. I recently read the book Ali Tiejun 阿里铁军 which means “Ali Iron Army.” It’s a book about the B2B sales team at Alibaba which is very famous for its training and methods and just army like culture. A big takeaway from the book is that this culture will probably be very difficult for internationally minded Millennials to adjust to.

DORIS KE: It is.

ZARA ZHANG: Because, the company puts a lot of emphasis on culture and has a lot of practices that are almost military in nature and doesn’t really promote self-expression. So, what was your impression on the Ali culture after you joined? What were the most unexpected things as someone who had just moved from the glitzy world of New York marketing?

DORIS KE: Yeah, I think that was really memorable. I will never forget about that experience. I think Alibaba is great. It’s great because the execution of Alibaba is all doing it so fast and smooth. It’s all because of that culture that’s cultivated but it’s really hard for me who has had the US education, who has been trying really hard to try to express myself when I went to the US and then to Alibaba it’s this other –

HANS TUNG: There’s no need to, just follow and execute.

DORIS KE: It’s reverting back to myself again. I have a couple of really, I would say shocking memories, like really interesting memories when I went to Alibaba. The first thing is when I was in New York, you know the lifestyle of New York you are in high heels, you’re head-to-toe dressed up and then you’re meeting celebrities. That was my New York life. Then went I went to Alibaba the first thing is I went to Silicon Valley. Silicon Valley and New York, that’s already a big difference.

HANS TUNG: Yes, even for Americans in America, yes.

DORIS KE: Right. So, I was like, “Oh my God countryside.”

HANS TUNG: Countryside.

DORIS KE: Bubble tea was like my night life in California.

HANS TUNG: Nothing happens after 10:00.

DORIS KE: Right. Then half of my time was in Hangzhou. That was another culture shock. Basically, you have mountains and tea.


DORIS KE: Last second, I was in high heels in New York and next second I was doing “Double 12” campaign for Alipay. I told Zara before, we were putting ribbons on my forehead and then drinking alcohol and then smashing the cups on the ground and then lots of drugs. I literally remember, we need to write down the KPIs on a wall, on a global map because we were doing global Alipay. Then I need to sign my blood on it. I was like that was really interesting.

HANS TUNG: It seems that way.

DORIS KE: Yes. Then we were wearing the slogan t-shirt that says, “Gan 干.” Then I was trying to explain to my US colleagues –

HANS TUNG: Just like Nike’s “Just Do It”, that’s all.

DORIS KE: I was like, right, just do it. That also means “fuck”. Why are we wearing that? So, that was a really fun experience, yeah. Some other experiences that –

HANS TUNG: What prompted you to leave the good marketing in New York to join Ali in the countryside of Silicon Valley?

DORIS KE: Because I think Alibaba is the future and then Silicon Valley is also the future. When I was at Michael Kors, I think most of the time we were doing traditional marketing whereas you get a contract with a celebrity, you make a fancy video, we put lots of budget behind it and then you have lots of stores opening. Whereas I was reading Zero to One, Growth Hacker and things like that and I was seeing California there are so many companies they just grow from zero to a million without any budget all because of growth hacking. I was like, “Wow, that’s so different.” I was also seeing Alibaba, in China there are lots of crazy things happening like Taobao or Alipay and so I feel like I shouldn’t just surround myself into this fashion world where everything looks fancy, but I don’t really see the business point behind it, and I don’t see it being sustainable and so I want to learn new things. That’s why I went to Alibaba in California. Half the time I can learn growth hacking from the US side and half time I can learn the military style from Chinese style.

HANS TUNG: [crosstalk] discoveries?

DORIS KE: That’s a perfect fit.

ZARA ZHANG: What was your biggest takeaway from your time at Ali?

DORIS KE: There are so many takeaways. First of all, I think the culture which you just mentioned in Alibaba is really interesting. Everyone in Alibaba is always super pumped. They never slack off. That’s something I’ve never seen before. I was always trying to figure out how they did that, like what’s the HR system that you can motivate people like this? I literally remember one of my co-workers she just gave birth a second ago and the next second she’s on DingTalk. I was like, what? Wow, what kind of HR system supports that? I think that’s really amazing.

The second part is really the ops. There’s a saying in China. I don’t know if it still works right now, it’s by Baidu tech.

ZARA ZHANG: Tencent’s product.

HANS TUNG: Tencent’s product and Ali’s operations.

DORIS KE: Tencent’s product and Ali’s operations. So, I was on the operation side and really when I was on marketing it is more about spending money and how to create the brand awareness and then impressions. But in ops, it’s really about ROI, how you make the most impact out of this budget.


DORIS KE: So, that’s what I learned most from Alibaba.

HANS TUNG: Very good. Yeah, someone who has figured out a way to combine east and west in Silicon Valley, what prompted you to come back to China and join a startup.

DORIS KE: Yeah. I always wanted to go back since day one, right. What made me stay in the US is because I felt like US in terms of brand management and marketing is way ahead of China back then, so I wanted to learn the logistic style of marketing. Then after a couple of years I felt like I already absorbed most parts of the US marketing culture and lessons. I really want to do something that’s, you know, what I built. In that sense, it’s like Michael Kors the brand is already there. In Alibaba it’s already there. What I did was that I basically took that brand and make it a little bit better maybe. But YCloset, it’s a fresh new idea and brand, nobody knows about it and I kind of want to prove whether I really know marketing or not by maybe I should do something from zero to one. I kind of want to show my muscle and try to challenge myself again, but this time not in a big platform like Unilever and Michael Kors or Alibaba but in a platform, nobody knows about without any budget and see what I can achieve.

HANS TUNG: Before you joined YCloset you hadn’t been doing marketing in China before? You had been working at Ali but doing US and some China, but mostly US and so do you think that because of your experience with Michael Kors and YCloset is in the fashion business and because of your training at Alibaba it helped you get a job that you know for sure that you can do marketing in China?

DORIS KE: That’s actually because my WeChat account. I’m very real. I was like, “I’m not even sure I can do China marketing, but she trusts I can do it.” Actually, I really admire the founder of YCloset, Stella. She read my blog. I mean, my WeChat account. I was writing a lot about marketing and cultural differences between China and the US, how I did marketing at Alibaba and Michael Kors and all of that and she really has this trust in me that she sees my potential. She’s like, “Why don’t you be my CMO and I trust you.” She didn’t even interview me that much, she just said, “Come join me.” I felt like she gave me the trust, maybe I can do something big together and so that’s why I joined.

HANS TUNG: If you look back, what made your WeChat unique? What were the things that you wrote that your followers mostly responded to the most?

DORIS KE: I think two things. One is a real experience how a Chinese working in the US looks like. The first post that made me popular is when I wrote about my job at Michael Kors and being a Social Communications Manager in New York City fashion world and being Chinese. That was like, how I experienced all the culture shock and how I struggled and got past that. That was really popular. The second thing is really comparing difference between China and the US. I wrote about the difference between bloggers between China and the US and how they’re different and how fitness differs from China and the US and all that. Right now, I’m writing how beauty bloggers differ from China and the US.

I think when I was writing my articles all I was thinking was what is my niche point? Lots of people know beauty bloggers in the US, lots of people know beauty bloggers in China but they don’t know the difference between them and how they impact different businesses in different worlds. I think being someone who is the bridge of US and China, what I should bring to the table is really see the difference and then inspire different worlds how other people are doing the same business. That’s really popular on my platform and we attract the Chinese world.

ZARA ZHANG: I think writing is all about finding what’s the unique perspective that you have. You’re not the only Chinese person doing marketing in New York but you’re the only one who bothered to write about it so that makes a difference. A lot of people writing, it gets great response just because other people resonate with what you write. Most people just don’t bother to write so if you make the effort and be disciplined and just keep writing that is actually really rewarding.

DORIS KE: Yes, yes.


DORIS KE: Then when I was doing Michael Kors that was actually the rise of the year of WeChat official platform in 2014.


DORIS KE: I really saw the benefit of writing on WeChat and how it got to Michael Kors. I was thinking if I write a blog under my name and about my content, I could also benefit from that. That’s why it really got me motivated to write.

HANS TUNG: I want to point out that when Zara encouraged us to do 996 Podcast, I wasn’t sure how popular it would be. I think like you said, if you’re willing to write something or produce something and it resonates with other people a lot of people didn’t bother to do it at all. You also took advantage of the fact that a new platform just emerged and you’re among the first that did it on the platform that suddenly became very popular. Also, you are where you are because of the different jobs that you make a decision to take that gave you exposure both to US and China. A lot of people don’t do that. They tend to want to advance in their career and get better doing something that they started and do not want to change from that track because that’s how you get promoted very fast. But in the long run, by having different jobs in different locations it may require restarting and readjustment and in the long run that gives you more perspective to be a much better bridge.

DORIS KE: Right.

HANS TUNG: A lot of people think it’s easy to be a chronical bridge. I don’t think so at all. You have to have enough knowledge of how each system works in order to create value. Being a bridge if you’re just up charging information is less interesting. Creating value is much harder.

DORIS KE: Right, I totally agree.

HANS TUNG: At YCloset what were the things that surprised you the most and what were the things that were most satisfying about the impact you were able to make because of your cross-border experience?

DORIS KE: What I was really surprised by was I really didn’t know – that was my first job in China doing marketing and also the first time in a startup. All before that it was really big companies. There were many shocks, and so I’m not sure if it’s because YCloset, or because it was China, or because it was a startup.

HANS TUNG: Too many variables.

DORIS KE: There were too many variables at the same time. I should have done one variable at a time. It was too many variables. I was shocked that lots of systems are not built, so we don’t even have a solid data tracking system, so we see growth, but we don’t know where it comes from. Then there’s not a planning system. There are lots of things like that. But really what I found is it’s really common in China among startups and so what I really wanted to build was bringing the mature systems from the US but at the same time being flexible in China so not to be too America style. You still need to be China style. That was my shock.

Then, I was really proud because as someone who just came from America, I was really localized. I managed to build my own team and then also I grew the user base 10 times from a paid user standpoint. Then I actually built lots of successful campaigns that drove the growth and also brought in the idea of growth hacking from the US but combined with the Chinese style which is also called Liebian 裂变 which is cost efficient. I don’t know if Americans understand that.

ZARA ZHANG: Like, viral growth?

DORIS KE: It’s like viral growth and referral program and all of that with the WeChat system. I was really being able to combine the western and the eastern style. That was really something that I was proud of doing.

HANS TUNG: Got it.

ZARA ZHANG: I think growth in China is usually heavier than the US. In the US people kind of build a great product and wait for people to come. Whereas in China, you actually have some really heavy Yunying 运营 or operations behind it.

DORIS KE: You usually pay people to use your product, right.

HANS TUNG: In the US there’s a lot of growth hacking but there’s not a lot of operation.

DORIS KE: Right.

ZARA ZHANG: It’s more data driven in the US.

HANS TUNG: More data driven, that’s right.

ZARA ZHANG: Data, and tech, and product driven whereas in China it’s like human driven and money, I guess. So, did you do a lot of that and what do you think were the takeaways on the best practices?

DORIS KE: From an operations standpoint?


DORIS KE: From an operations standpoint I was doing lots of WeChat group management ops. That’s like community based and that’s something really Chinese style that you basically need to make a poster and then put it in the groups so that people can make it viral and then inviting more people to join the groups. Something like that. That doesn’t exist in the US. But we also did like lots of red packets in YCloset where you refer a friend and both of them can get RMB 50 or something like that. Or, we just invented lots of incentive tools like that to motivate people to share, or to use more. I don’t think that’s really common in the US. In the US you just have the Rent the Runway, you have lots of dress on the platform and then people are just going to rent. But in China we have something called Jiayiquan 加衣券it’s basically like a dress coupon where if you have it you can rent one more dress in your bag. That’s something we created for Chinese users.

ZARA ZHANG: You had no budget, so how do you deal with that challenge? How do you be scrappy and creative and do things without spending a lot of money?

DORIS KE: That’s a good question. When I say I don’t have a budget, I actually mean I have a limited budget, but it is not like I don’t have any. It’s basically how do you get the best ROI out of it. The first thing is really how you get free traffic and then also make the most out of your traffic. So, for example I would talk to lots of platforms like, for example, Alipay. Then I know they have lots of traffic and what they need. Then I just talk to them about a collaboration between YCloset and Alipay. That’s how we got lots of traffic to be honest.

The second thing is when you get the traffic you need to increase the conversion rates. We did a lot of A/B testing. That’s also common in the US to see how you really increase conversion rate not to waste the traffic. Then the third thing is that when people become a user, we try hard to make them sure to refer so you get the viral growth out of it. Basically, the idea is the same but just in the Chinese system you need to use different tools, incentives and platforms to make that happen. Also, we made a very controversial video.

HANS TUNG: That’s our next question. If you have a limited budget you have to do something out of the ordinary and so what was it, how did it work out and what was your lesson takeaway?

DORIS KE: The reason why I did that is I did all the growth hacking stuff like I told you, but the conversion rate was still very limited because of a couple of reasons. First of all, people don’t want to wear the clothes that other people have already worn. They don’t want to share. The second thing is nobody knows about YCloset, like what is it? Even though I can see I can wear so many cloths in a month, but I don’t trust this platform and so low brand awareness and trust. The third thing is that they just couldn’t figure out how to rent clothes on YCloset and so lots of education cost there and that leads to high customer acquisition cost.

Basically, I figured out the root of the problem is a marketing issue. You need to make people trust you, be aware of you and then know what the hell you are. That’s why I really insisted on making a video or a marketing campaign to make people be aware of what YCloset is and what benefits it can actually bring to you. That’s going to lower the CAC later on.

HANS TUNG: Right. That seems innocent enough.

DORIS KE: Then I went off to convince the CEO that we need to make a video. But usually, when you say that, “I need money to make videos,” CEOs are going to be very insecure. Like, “How much do you need? What impact am I going to get out of this video?” I couldn’t ask for a lot, but I need to make this video viral and also at the same time have it really clearly communicate what the value prop of YCloset is. So, I thought about doing something that’s really controversial to trigger the buzz and talk online. No matter online or offline I just want to make people talk about this concept, so it needs to be some insight that’s really sharp.

I did lots of surveys on YCloset and users and what occasions they were using. I see the result is that they all use YCloset for work and the cause is that at work they feel really needed to dress properly.

ZARA ZHANG: Differently every day?

DORIS KE: Right. Differently every day, otherwise especially in cities like Shanghai people are going to laugh at you like, “Oh my God, you didn’t change clothes again?” That’s why they need lots of dress. I took lots of observations at work and I see that this is the deep motivation and that’s why I made a video about women at work and how they dress properly can dramatically lead to career advancement.

ZARA ZHANG: Lead to career advancement.

DORIS KE: Even eventually at force. I made it really dramatic and also that’s really similar to one of the TV shows that’s popular in China which is called Huanlesong 欢乐颂.

ZARA ZHANG: Ode to Joy.

DORIS KE: Ode to Joy, right. So, that video eventually became so popular and viral in China. There are two sides of people talking about it. One side is, “Oh my God, this video is so funny. It’s really interesting I never knew such a product existed.” The other side is like, “Oh my God, you’re talking about appearance leads to career advancement? Did you even go to the US?” I was like, “Okay, that’s not what I meant.”


DORIS KE: I actually meant in China there’s lots of occasions people don’t dress popularly. Like when you meet clients, you’re in gym clothes but someone else who is properly dressed can actually get lots of notice from clients. I made it really dramatic and it led to lots of controversy. But no matter which side they’re on, they all download the YCloset and become a user and so that’s a good number. But yeah, I got lots of attacks doing that controversial video.

HANS TUNG: How does it feel when you yourself become popular and controversial in a topic of things that you know that’s not who you are, but people are talking about you in that context? How do you deal with that?

DORIS KE: I had a huge struggle inside. I was like, “Growth and your belief, that’s like oh my God which side do I try? The KPI and my value side?” I’m like, “One side I want to make my job successful without a budget I can make success happen.” Then the other side is like, “That’s a little bit controversial, that’s not what I believe in.” When I wanted to do marketing, I wanted to build a brand that’s positive and make people feel better and now I’m making a video that is making people feel worse. That is the first thing that was like a super shock to myself.


DORIS KE: Yeah. Even to now I’m still thinking about it.

HANS TUNG: Did you ever write a blog post on your account? On your WeChat account?

DORIS KE: Yeah, I wrote one back then to defend or to really tell why I’m making this video and what message I wanted to deliver. But I didn’t write about the struggle or the dilemma after that.

ZARA ZHANG: Would you have done the same thing if you had the chance to do it again?

DORIS KE: I would do that video but then I’m going to create a second video after that.


DORIS KE: That video is going to create all the controversy and buzzy and mystery. Then the second one is like revealing why she actually got the career advancement. It’s like in addition to all the appearances, all the properly dressed thing, she also worked very hard. That’s going to become a series of video and then we can actually continue the IP.


DORIS KE: That’s something I really regret I didn’t do.

HANS TUNG: Right, but that’s a very good lesson?

DORIS KE: Right.

HANS TUNG: A very, very good tip for what could have been done.

ZARA ZHANG: So, for the company itself it’s referred to as the Chinese version of Rent the Runway, why did you think that this model could work in China? The shared closet concept was very new and Taobao is so powerful and works so well and stuff and is so cheap. What was your opinion on this model?

DORIS KE: That’s actually from my personal experience on Taobao I could buy lots of stuff but not really so many dresses that are fit for me. In the US have you have lots of good choices, you can go to Zara, or you could go to Michael Kors or there’s lots of other boutique stores that are okay. But in China there are low cost level there are luxury level but in between there are not many options. If you go to Beijing, where are you going to go to shop? I don’t even know where to go. I think there are still a lot of opportunities in terms of fashion and apparel out there.

Then I told you that at work lots of people have troubles wearing different clothes every day. Your closet is limited. Your space is limited. How are you going to buy so many clothes? I think the problem, the pain point is there it’s just how are you going to solve it.

ZARA ZHANG: Alibaba also made a strategic investment into that company?

DORIS KE: Right.

HANS TUNG: Switching gears a little bit, I’ve lived and worked in nine different cities and I want to say New York, Silicon Valley and Beijing are amongst my favorites. There are more but those three are definitely standouts. For you, what are your observations on these three cities and how are they different when it comes to people, their working styles and values? Especially within the tech industry do you see any similarity or are there mostly differences?

DORIS KE: New York is definitely my favorite city. I think New York is fun because people there they have this energy around them. They can go to work and be very hardworking, but they still have a nightlife. They go to clubs or to bars, and they go to a show or galleries during the weekends. But from a romantic relationship standpoint, I don’t think New York is the best place.

HANS TUNG: Why not?

DORIS KE: I think lots of women would admit to that.

HANS TUNG: Too much competition?

DORIS KE: No, there are too many douchebags in New York. Too many bankers.

HANS TUNG: But here it’s hedge fund guys, traders.

DORIS KE: Right. Not doing solid things just doing – I don’t like that. Whereas, Silicon Valley there are lots of tech guys who are smart.

HANS TUNG: They are boring.

DORIS KE: They’re boring? That’s true.

ZARA ZHANG: They’re trustworthy.

HANS TUNG: They’re very reliable.

DORIS KE: Very, very reliable. That’s why I found a husband in Silicon Valley. He was trustworthy.

HANS TUNG: I hope he’s not hearing this.

DORIS KE: They don’t even know how to spend money. They just work their hearts out and be smart. That’s good. I like Silicon Valley. But it’s actually different from my imagination. I thought everyone there is like startup style, Elon Musk.

HANS TUNG: Like Elon Musk or Jeff Bezos or Mark Zuckerberg.

DORIS KE: Yeah. But I don’t know if I came out in the wrong groups or what. They just talk about buying apartments, investing in stock.

ZARA ZHANG: Green cards.

DORIS KE: Right. Having two kids at home and which apartment they’re going to buy in Palo Alto, what’s the house rise. I just don’t think it’s really cool. So, I was disappointed. I was disappointed, I learned a lot and then I came back to Beijing. Beijing is really fund. Beijing is like a combination of New York and Silicon Valley.

HANS TUNG: You’re from Shanghai, so. And you live around in Beijing.

DORIS KE: You know, all my friends are not hanging out with me anymore because they’re like, “a Shanghainese in Beijing? What’s wrong with you?” It’s like someone grew up in Paris and ends up in Silicon Valley, it’s just very weird. Because I moved from Silicon Valley to Beijing, I feel like Beijing is okay.

HANS TUNG: Beijing is an improvement.

HANS TUNG: It’s very relative.

DORIS KE: Every time my parents visit me, they’re like, “Oh my God, my poor baby.”

HANS TUNG: You’re not eating well. You’re not living well.

DORIS KE: “It’s all dirty. Oh my God. Oh my God, you can’t stay here anymore.” So, yeah, that’s really weird. Shanghai is like all the restaurants are like celebrity style and blogger style. Beijing is just Luchuan 撸串, you know. How do you say it?

ZARA ZHANG: Skewers.

HANS TUNG: Skewers from the streets?

DORIS KE: Luckily, I’m a workaholic so I don’t really – I’m not into those lifestyle things so I like Beijing more.

HANS TUNG: Now that you are not at YCloset anymore, you’re doing your own startup, did you ever think about doing your own startup in Shanghai instead of Beijing?

DORIS KE: My own shop?

HANS TUNG: Your own startup?

DORIS KE: My own startup? I still chose to stay in Beijing because I think the startup, the dynamics and environment is so much better here. People are motivated. We talk a lot about growth and then how to make growth happen. But in Shanghai they just ask me, “How many houses did you buy?” “Oh, two, that’s not enough.” “Did you find a husband?” “Where is he from?” “He’s from Wuhan not Shanghai? Oh my God, what’s wrong with you.” I’m not going to go back to Shanghai.

HANS TUNG: A lot of people in the western world thing that Shanghai is more the international city and is more likely to have startup, is more free but a lot of people out there don’t know that Beijing has the most number of startups and most number of tech IPOs in China. From your perspective is you would choose to have your own startup in Beijing is actually quite interesting.

DORIS KE: Yeah. I just feel like if I go back to Shanghai, I will probably get off my work ethic too early.

HANS TUNG: And go home afterwards or go out for dinner and party.

DORIS KE: Right.

ZARA ZHANG: In terms of marketing, you’ve gone through a whole gamut. First you marketed an American product to Chinese audience at Michael Kors. Then you marketed a Chinese product to an American audience at Alipay. Then you market a Chinese product to a Chinese audience at YCloset. Out of these which one did you find the most challenging and why?

DORIS KE: I think it’s definitely YCloset. I think the easiest one is Michael Kors because it is such a big brand and it is fashion. Then marketing an American brand to Chinese is a bit easier because in the past they’re not many fashion brands available in China. Then Ali US is such a big platform so although lots of US companies don’t know about it, I can just show them videos, and press releases and they’re going to be like, “Wow.”

HANS TUNG: They’ll get it afterwards.

DORIS KE: Like, the Amazon of the east side. But YCloset, nobody knows about it and then people don’t get the idea. It’s like a new brand, a new product, a new concept and a new platform and so I think that’s the most challenging part. Also, being the first job I got in China definitely is the most challenging one.

ZARA ZHANG: Maybe you could talk about your current startup, what does it do and what is your vision?

DORIS KE: Yeah. When I look at my past, I felt like all my interests or the products I was interested in are all for females. Consumer products, fashion products, or YCloset, that’s still apparel but in a tech company environment. So, I always see this rise of women in China, being more independent and being just different. Then their needs are going to change vastly these years, especially after the viral or controversial campaign at YCloset which I made, is that I realized women are different. They’re thinking about different things. That’s why I really want to focus on her economy and do research on it and how in the western world how they’re approaching her economy and how in China people are doing that and what are the new products or what are the new business that we can get from this change from how women think differently.

So, I’m doing a combination of marketing and media company. On the media side I still write blogs about different companies. For example, Marie Dalgar which is a top Chinese cosmetic company, how they did growth and marketing and I compared beauty bloggers between China and the US and see what are the potential business ideas that you could have. Then when lots of startups start doing that, probably most of the entrepreneurs are female, they’re not sure how to build a startup, how to grow and they’ve asked me to help them. Then I can use my growth hacking skills and all my experience to help them. I think it’s going to be the future of Chinese style of consulting or media firm is you have a content media platform to gain traffic, to gain all the trust.

HANS TUNG: Build credibility.

DORIS KE: Right, build credibility and then people are going to come to you for help and for services and even for FA or consulting of ideas, community groups, study groups and I’m going to build all that to support the her economy.

HANS TUNG: As you spend increasingly more time in China, do you find women executives or women founders have a chance to be themselves more or make bigger impact here or less than their counterparts back in the US whether it’s New York or Silicon Valley?

DORIS KE: I think definitely in China.

ZARA ZHANG: More in China?

DORIS KE: Yeah, more in China.

HANS TUNG: How so?

DORIS KE: I definitely think the female leadership is going to bloom in China because of several reasons. The first thing is because of the single child policy, lots of girls are raised like guys, like boys. For myself, my parents never thought of me as a girl, they always treated me like a boy. I used to play basketball, or sports, all of that. So, I don’t think I am any weaker than guys. I find lots of peers like them. The second thing is that the Chinese education system doesn’t support so much masculinity. So, girls tend to be better. I mean, they can actually perform better than guys. In the western world they guys need to do sports and all that.

HANS TUNG: Football, and soccer.

DORIS KE: In China you just need to have a good score. Then actually girls are better –

HANS TUNG: At academics.

DORIS KE: At academics, right. So, that’s why there are so many excellent women out there right now rising in China. The third thing is back in the history of China, because it’s cultural revolution I think lots of people, it’s called Tongzhi 同志, right back in the day.

HANS TUNG: Comrades.

DORIS KE: Right, and you don’t say it’s a female comrade or a male comrade, it’s just comrade everyone is equal. So, I think women get to have more equality actually in China in the future. I definitely see that happening. I saw lots of female entrepreneurs already rising up, YCloset for example. Also, The Look, Abox, there are lots of cosmetic companies already rising.

HANS TUNG: Right. Interesting.

ZARA ZHANG: You’re very connected Jiediqi 接地气, to the land, as we say out of all the Haiguis 海归 I know. Do you have any tips for how to adapt to China quickly as someone who returns from the US?

DORIS KE: I would say cut down the number of times you use English, especially when you mix it. It will just make people hate you. So, I almost forgot how to speak English until you guys invited me on to this. I use lots of buzz words also.

ZARA ZHANG: Like Bihuan 闭环 (close the loop), Jiangwei Daji 降维打击, Liebian 裂变 (viral growth), Hongli 红利 (dividend).

DORIS KE: Jiangwei Daji 降维打击, and Hongli 红利. I’m so familiar with these words. That’s actually the words that make investors trust you more.

HANS TUNG: A lot more.

DORIS KE: They’re like, “Oh, you’re not that American. You actually know Chinese style.” So, that’s what I usually teach people, “Learn this vocabulary before you come back to China.”


DORIS KE: Then second is really be openminded. Don’t feel superior. I actually think people who never went abroad, there are so many of them that are so much smarter than people who went to the US and start there elite, but you’re actually not. I just think you always need to learn more and be openminded.

HANS TUNG: Those are two very good advices. So, you’re a very prolific writer in Chinese and you have published many articles on WeChat as we mentioned earlier and some of them have become very viral. You also have written a lot on topics of US and China cultural differences like we discussed so far on the show. One of these as Zara told me, is that you also used growth mindset to find your boyfriend, now husband. What does that mean and how have you applied what you have learned to your private personal life as well?

DORIS KE: I always like to think about lots of things and see whether there are some theories in common behind that. So, when I was thinking about growth hacking in a product, you basically find an MVP and then you do A/B test, and then you find the first scenarios to test it and you improve it until you find the PMF. Then in terms of your romantic relationships, that’s similar. I almost got married after I graduated when I was with a boyfriend from Fudan University. I should have mentioned all this. I have like a big mouth.

HANS TUNG: It’s insightful.

DORIS KE: But I felt like, “Oh my God, what if I regret it later? Is he going to be the best one? Is it PMF?”

HANS TUNG: Probably not a good fit, right?

DORIS KE: You don’t even know. Like, I just felt like I need to do some A/B test.

HANS TUNG: So, did you date multiple people and find out?

DORIS KE: I was like, “How about we take a break?” He was like, “No, let’s break up.” I broke up with him and that’s when I went to New York and I had some dates with different styles. I actually made notes like, “This is western style. This is Chinese style. This is banker style. This is tech style.”

HANS TUNG: You tagged them.

DORIS KE: Then I went out with them and see how I felt, and I definitely know which are the type of guys I definitely don’t like, like bankers are douchebags, never. They are so proud of themselves. Then later I found out – I carved out what my target audience looked like.

HANS TUNG: What’s that tag?

DORIS KE: The persona is like he needs to be not bad looking. He needs to be smart and then he needs to like startups so we can talk a lot about that. I like good looking guys to be honest, that’s very bad. Then he needs to be honest, not like lying, so trustworthy.


DORIS KE: So, all of these characteristics I found out that’s probably a guy in Silicon Valley doing tech job. Then, I’m like what kind of companies? That’s actually a coincidence, I went to Uber to do a collaboration between Alipay and Uber and Uber has all the tech actually called China real team.



HANS TUNG: In San Francisco, that’s right.

DORIS KE: In China because all their data system is in US, it couldn’t have engineers in China. Then all this group is Chinese, smart, tech guys, interviewed, filtered already by Uber.

HANS TUNG: Thank you TK.

DORIS KE: Thank you TK. It’s very targeted. I didn’t even think about that, but when I went to Uber and I was doing this recap with them in a meeting then my husband walked in. Back then he was not my husband and he’s like really honest and pointing out all the mistakes he made, what information he should have and he’s good looking. I was like, “Oh my God, that’s the guy.” That’s how I knew my boyfriend. Then later I setup a celebration dinner with Uber.


DORIS KE: I arranged it. All my wing women were over there and they’re like setting us up and he didn’t actually know that I set all this up. Then we got to know each other and then later we got married. That’s my story. Looking back, I just made fun of it, “That’s just like growth hacker, growth mindset.” You shouldn’t just marry someone because your age is there and then regret afterwards. You should just do as many tests as possible and then know what are the guys you’re really into, what are the guys you should really not date. Then just be happy with the guy in the end. I think that’s a very good story.

ZARA ZHANG: Great tip.

HANS TUNG: Very good tip.

ZARA ZHANG: A quick-fire question: what’s a habit that you think has changed your life?

DORIS KE: I think writing actually. I write things in my high school, I write blogs. But back then it’s not a public blog, I just write to myself because very time I’m angry, I’m frustrated, I’m confused I always write down to talk to myself. That’s a habit that really changed my life.

ZARA ZHANG: What did you do for fun?

DORIS KE: I’m not a fun person.

HANS TUNG: Very purposeful.

DORIS KE: What do I do for fun? I used to write for fun.

ZARA ZHANG: But now writing is your job.

DORIS KE: Now writing is my job.

HANS TUNG: Writing is your purpose.


ZARA ZHANG: What’s something you read recently that you recommend?

DORIS KE: Poor Richard’s Almanac.

HANS TUNG: Wow, you find that interesting?

DORIS KE: I just think it’s very helpful. To me, I’m a marketer, I don’t know investment that much and then how people make decisions to invest.


DORIS KE: Lots of people talk to me about this book and says, “It’s a really deep book but you should read it.” I read it, it’s really interesting because he talked about you should always do things that’s within your capability not beyond your capability. Also, instead of just studying marketing, to do marketing you should study all other subjects such as math, physics, finance, investment and all of that so that you can have a very robust knowledge system. I definitely agree with him. That’s why I actually jumped around from brand management to communications to ops, to right now it’s media. I think everything is related. They have a similar system behind it, and you should always learn more stuff and so that’s really helpful.



ZARA ZHANG: That’s all the time we have for today. Thank you so much for making the time. This was really fun.

HANS TUNG: Yeah, thank you. It was indeed very fun.

DORIS KE: Thank you guys.