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Kai-Fu Lee on the Internet in China, Stanford note

October 29th, 2009 View Comments

Had the chance to listen to Kai-Fu Lee’s talk at Stanford today on the Internet in China and his new VC/incubator, Innovation Works.  Lee was previously the founding president of Google China.  Lee provided some great anecdotes about some of the differences in internet culture between the US and China.  I’ve posted some raw notes below.

Greater reliance on the Internet. Internet in China is not all about censorship.  Print is controlled tightly, but not Internet.  Healthy ecosphere of news and blogs.

Blogs. More than 50% of Chinese users have blogs.  Random article by Chinese celebrity blogger got 980K visits and 7k replies.  Blogs increase expressiveness.  Chinese sites have blended blogs and news.

News + Blogs. Reporters are mining blogs for news.  Blogs are commenting on news.  Almost circular.

Users are more curious. In America, a user typically looks for the upper left side.  “Top 3″ is the golden triangle in America on Google as people only look there.  In China, users are more curious – want to be a sponge and absorb more content.  Chinese users spend 30-60 sec on results page.  US users spend 10 secs.

Internet Cafes. 30% of Chinese users are on Internet cafes.  25 cents per hour.  How to cafes make money. Internet cafes barely break even – they make money from Coke and instant noodles.

Why are Internet Cafes important? In small villages, this is the users first experience with the Internet.  Cafes in the villages charge only pennies per hour.  Twin terminals for dates.

Obstacles to Ecommerce. Lack of trust.  Very few credit cards (1/100th of the US credit card.  US 2 cards per person.  China 2 cards per hundred people).  Bicycle cash on delivery. Order a book, will call a telephone.  Someone on a bike will deliver the goods and receive cash.  Laborer is very inexpensive.  Alipay.  Mechanism for escrow payments.

Tencent & “Innovative” Commerce. Avatar for free in Tshirt.  Free trial of NBA uniform for a month, 10 cents thereafter.  If you don’t renew, then you become naked.

Future of Ecommece. 360buy.com. ctrip.com joyo.  danddang.com redbaby.com.cnnewegg.com.cn.  vancl.

A good percentage of Chinese people are willing to send $ before merchandise, especially from trusted brands.

When China matche US potential, 50x potential. E-commerce will accelerate advertising.  Enables advertising to be monetizable.

Entertainment centric pages are very busy and long. In China, the CINA homepage is 2mb.  Mobile users are incredibly frustrated.  About 150mb mobile quota.  Youseeweb – only leaves text.  2mb becomes 50k.

Top 10 Chinese Companies. Baidu.  Sina.com.cn.  Sohu.com.  Netease.  Perfect World. Alibaba.  The 9.  SNDA.  QQ.com.  Gaming is currently the most valuable internet business in China today.

Chinese internet companies are very innovative. To advance to the next level, you must bring on disciples.  10% of the users generate 90% of the revenue.  Some users spent $5-10k a month.  Some people pay for weapons for their own users.

Top 10% of users pay couple hundred to a thousand dollars. Typically, middle-aged businessman.  Want to be even more successful in the game, than in real life.  Like to meet girls.  “Real beauty certification”.

6 companies are worth over $20 billion. Ten years ago, gaming software was only $10 million.  Cloud computing came along.  On a per license basis, piracy was rampant.  Now on the cloud, subscription and item fees are possible.

Piracy has meant that there is practically no software industry in China. To get around this, build software run on the cloud.  Google App Engine, Amazon Compute Cloud, Calendar, ERP & CRM, Online Gaming, Personal & SMB Finance, Collaboration, Email.

Music is largely all unlicensed. Google China launched a free legal music search.  Content providers are very frustrated as they are not making money on digital music.

Video is heavily (but not richly) monetized. Foreign companies cannot stream video or news.  Yoku and Tudou are the leading Youtube copycats.  Youtube is on the path to profitability.  However, in China, advertising is only worth a fraction.  Bandwith costs much more.

In China, bandwith is not that great. The pause button isn’t that great.  Pause ad is a great idea.

P2P is very popuar.  Chinese technology substantially leads the American technology.  Average user in China reinstalls Windows every 4 months.

Social networking is now taking off. Xiaonei was the first social network.  First UI copied Facebook.  Created a more Chinese-friendly UI.

Kaixin.  Kaixin got Kaixin001.com  Kaixin.com sold for $1 million to Xiaonei.  Xiaonei created Kaixin.com.  Xiaonei cloned Kaixin001 on Kaixin.com.

Mobile Internet. Chinese government makig a huge bet on 3G, will make it happen.  Before, China mobile had all the market.  Now there are three players – China unicom and China telecom.

iPhone.  # Google searches 50x that of other mobile browsers.  Great UI + full features browser + flat rate internet = boom.

Evolution of the internet. News-based portals.  Entertainment and social network.  Utility and e-commerce.

Foxconn and Mediatek build most of the phones in China.  Shenzai phone.  Hiphone.  Google Android is free, high quality, and will be used.  Some phones have 16 speakers, used as a boom box.  Projector phones.

Human search.  Wife committed suicide and left a note on her blog.  Secretary exposed boss on the internet.

Returnee entrepreneurs. Robin Le.  Grassroots.  Scrappy and learned as they went along.  From this point forward, next generation of Chinese internet entrepreneurs will be locally grown.  Competitive advantage for foreign trained entrepreneurs will be erased by home-town advantage.

In 20 years, there will be great Chinese internet companies.

Great angels. Mike Markkula invested $92k, secured a bank loan to $250k.  Andy Bectolsheim, wrote $100k check to Google.  Need someone with 20 years experience.

US Angel Fund $19.2 billion.  VC $28 billion.  China.  No angels.  VC $8.3 billion.

Innovation Works. Angel investing/coaching + “Google 20%” model + “Idealab” model + super recruiting firm + software company.  Angel fund with investors willing to be coaches.

Unlike Silicon Valley – Entrepreneur + Engineer + Idea.  In China, very little angel funding, can’t get team.  Innovation Works has three parallel funnels.  Select best ideas, select the best entrepreneur, seelct the best team.

Innovation Works. Trial phase.  Angel fund gets $30k to try an idea.  Get $500k to run a small company.  6-9 months will be ready for series A.  Different from Idea Labs.  They found it tough because Silicon Valley exists.  In China, there isn’t an openness and networks.

Advantage of Innovation Works. Full and raid operational bootstrapping.  Recruit and grow best entrepreneurs.  Build reusable modules and infrastructure.  Build strong complementary teams.  All resulting in a higher success of ideas.

Innovation Works.  Spin off 5 companies in a year.  Deliver great return to investors.

Thanks to Euwyn Poon, here is the original post http://euwyn.com/2009/10/03/kai-fu-lee-on-the-internet-in-china/

要中文的,多用下李博士的旧东家吧,谷歌翻译 http://translate.google.com/translate_t#

Freelance:next high-growth opportunity

October 28th, 2009 View Comments

You may not know the website crunch.co.uk, but you must know SKYPE. Its chairman, Michael van Swaaij invest his own money into this website and “so impressed with the UK contractros”.  This brilliant guy believes he is digging gold in these startup website, such as PeoplePerHour.com, as some of his next high growth projects.

He is a magic man. “The unique package of skills and flexibility that contractors and freelancers can offer can result in the productivity gains required to make Europe a global competitor,” explains van Swaaij. “Plus, individuals are now demanding the work-life balance that the freelance lifestyle can support.”

“In many European countries, such as Germany and Italy, being employed is still the ‘gold standard’, so all the financial and societal infrastructure revolves around employees,” continues van Swaaij. “These entrenched attitudes impact negatively on contractors, often restricting access to basic financial products, such as loans and mortgages, and creating problems of status.”

“It’s only through productivity gains that we will be able to compete, and significant gains can be realised by tapping into an ever growing workforce of professional contractors and freelancers,” concludes Swaaij. “This presents many challenges, but also many exciting opportunities!”

The story often remind me of similar business in China.  Magic business man — Shi Yuzhu, who is trying to build a system of small groups in GA, a famous online game company.

It will not surprise me if there is another genius boy suddenly sell his small company or products at a great price as “freelance” in the future.  Will that be you?  then just take the first step: kick off your boss, right now.

TED2010:”What the World needs now…”

October 26th, 2009 View Comments

So, what does the world need? Stimulus? Recovery? Sure, but TED is looking for the core values for human future, I believe I will see more sparkles from those brilliant speakers.   Now the same question to Chinese, I am not annoyed  about how to answer these simple and difficult questions, what I am worrying is : are there anyone or any group of people who would like to think in the TED’s way, a mankind way.

Let’s look at the following sessions and think about if we can find the proper person according to the list

Session 1: Insight

Looking beyond the crisis (Nobel Laureate Economist. Global Hedge Fund Manager. Historian. Futurist.)

Session 2: Courage

When the going got tough, who had what it took? (Entrepreneur. Contrarian Investor. Mountaineer. Humanitarian.)

Session 3: Discovery

Are there answers in nature? Who’s finding them? (Astronomer. Paleontologist. Geneticist. Nanotech Researcher. Explorer.)

Session 4: Provocation

This is a great team to be challenged on some fundamentals. (Corporate Critic. Libertarian. Hacker. Rap Artist.)

Session 5: Invention

Who is dreaming up the new ideas we need? (Smart-Grid Designer. Collaboration Catalyst. Concept Animator.)

Session 6: Imagination

Who can nourish our sense of wonder? (Theoretical mathematician. Sculptor. Landscape Artist. Musician.)

Session 7: Inspiration

Can a wish truly inspire change? (The TED Prize winners.)

Session 8: Reason

How do we think smarter — about the world, and about ourselves? (Media reformer. Statistician. Neuro-scientist. Philosopher.)

Session 9: Energy

Both metaphorically and literally. (Nuclear reactor designer. Radical Biofuels. Motivational Coach. Dance Troupe.)

Session 10: Laughter

There really is a funny side… And humor can catalyze understanding. (Comic author. TV host. Filmmaker. Stand-up. Singer-songwriter.)

Session 11: Simplicity

Is too much complexity a threat to our world? To our happiness? (Former Derivatives Trader. Legal System Reformer. User Interface Designer. Monk.)

Session 12: Wisdom

Step back, and the view looks different. (Anthropologist. Story Teller. Slum Dweller. Sage.)

We often (only) use these words in our composition in high schools, but not in our real life except your major is “classical philosophy” or you are a teacher.  All we need is about “money” “authority” … material things…

Free BBQ and Brazil Buffet in Jinshajiang Rd

October 21st, 2009 View Comments

This new company is trying to improve business networking.

Have to delete this AD because too many friends ask where is it.

Better and Better life in China

October 8th, 2009 View Comments

Our family is like a little chicken.
When it grows up it becomes a goose.
And it’ll turn into a sheep.
The sheep will turn into an ox.
And after the ox is Communism.
And there’ll be dumplings and meat every day.……”
Communism, or at least China’s bastardised version of it – what would Marx have made of fourth-class railway compartments in a supposedly classless society? – has duly performed its miracle. The path has been far from straight, the journey anything but painless, certainly not bloodless. But the Communist party, by its own criteria at least, has delivered. As the hero of To Live, a 1994 film by the director Zhang Yimou, promises his son and later his grandson, life has indeed got better for most Chinese.
The story of To Live, and indeed the life of Mr Zhang, a once-banned film director recast as the Communist party’s propagandist-

in-chief, tells us a lot about China 60 years after the founding of the People’s Republic and 30 years since Deng Xiaoping’s economic reforms. An epic drama, soaked in the misery of collectivism and the madness of Maoist dogma, its portrayal of Communist rule was enough to get it struck down by censors. Yet, in the end, the film somehow manages to be optimistic, a celebration of the nation’s unity and capacity for progress after 150 years of colonial humiliation and internal strife.

That optimism is almost palpable in China’s frenetic cities, where nearly one in two people now live compared with one in 10 in 1949. Born of the belief that today is better than yesterday and tomorrow will be an improvement on today, optimism is a powerful antidote to the resentment of autocracy that many westerners too readily assume to be the norm.

Meat and dumplings are not enough to buy off everybody. But they help. After 30 years of breakneck growth averaging 10 per cent a year, per capita income on a purchasing power parity basis has hit $6,000 (€4,100, £3,750). That still makes China a lower-middle-income country, more Angola than America. The average also hides a yawning income gap that keeps the party leadership awake at night. Yet it has been enough to release hundreds of millions of people from poverty. More importantly, it promises to release hundreds of millions more.

Aspiration is everywhere. Each year, China produces 700,000 engineering graduates and 30,000 MBAs, says Beijing Axis, a consultancy. There are 650m mobile phones in circulation, roughly the number of pigs slaughtered every year. In the late 1990s, the consultancy reckons, only 500 Chinese residents knew how to ski. Last year, 5m visited ski resorts.

Nor is it merely a question of personal opportunities. China will shortly overtake Japan as the world’s second-biggest economy. This year, its people will buy more cars and trucks than Americans. Beijing has sent a man into space. China, in short, is well on the way to erasing the memories of colonial subjugation that have haunted a nation once accustomed to thinking of itself as the centre of civilisation.