Tweet
Tweet

Slide 1

Slide 1 text

STARTING UP IN CHINA ELI BILDNER PRESENTATION DELIVERED AT GENERAL ASSEMBLY IN NEW YORK CITY, JANUARY 9, 2012

Slide 2

Slide 2 text

CONTENTS Why start-up in China? 1 system, 2, 3, 4 countries Why ޓ联᠓ ≠ the Internet HW: A clicking tour Starting-up in China Why start-up in China? (2) Discussion/Q&A Introductions

Slide 3

Slide 3 text

WHO AM I AND WHAT AM I DOING HERE? Fulbright research on SMEs in rural China Work for this foundation in Hong Kong Co-found Transi.st in Shanghai grow up in Montclair, NJ (go Cougars)

Slide 4

Slide 4 text

Tech meets impact WHAT WE DO Seed investments and incubation of social enterprises, with focus on intersection of technology and social innovation Growing China’s top SEs A fellowship program for seed-stage Chinese social entrepreneurs, offering training, mentorship and investment opportunities

Slide 5

Slide 5 text

Calvin Chin Bill Schoenfeld Scott Ballantyne WHO WE ARE ! David Chen Simon Huang Eli Bildner Hi.

Slide 6

Slide 6 text

FRONT MATTER The Chinese start-up scene...has a frenetic feel similar to those early dot-com boom days. “I’ve worked in Tokyo and in Silicon Valley during the dot-com bubble, and that was intense,” he said. “But it’s not even close.” -NY Times Dealbook

Slide 7

Slide 7 text

“The pressure to take a job with a large prestigious company, or even the government, remains a big hurdle for startups by young Chinese professionals born as the only child of their aging parents. Americans, in contrast, live with the epic stories of Bill Gates, Steve Jobs and Mark Zuckerberg dropping out of college to chase their dreams and become billionaires of companies that literally changed the world.” - Frank Yu

Slide 8

Slide 8 text

“China’s users are too busy enjoying the Internet they have, rather than lamenting the one they don’t.” - Andrew Lih

Slide 9

Slide 9 text

“There are three kinds of lies: lies, damned lies, and Chinese statistics.” - Unknown

Slide 10

Slide 10 text

(Source: Kaixin/Sinosplice/John Pasden) “WHAT CAN SAVE OUR COUNTRY?” Public poll posted on Kaixin (social network) after Wenzhou train crash in July 2011. Respondents could select up to five options, ranging from “equality” to “science & technology”. Just 1% of respondents select “the economy.” The response of 73% of those polled: There is no hope. I don’t want to save it anymore.

Slide 11

Slide 11 text

Why start-up in China? 1 system, 2, 3, 4 countries Why ޓ联᠓ ≠ the Internet HW: A clicking tour Starting-up in China Why start-up in China? (2) Discussion/Q&A LARGEST Internet user base in the world DO NOT APPLY The same rules IT’S COMING Like it or not PROBLEMS We’ve got

Slide 12

Slide 12 text

MEET CHINA Why start-up in China? 1 system, 2, 3, 4 countries Why ޓ联᠓ ≠ the Internet HW: A clicking tour Starting-up in China Why start-up in China? (2) Discussion/Q&A (Eli Bildner 1/9/12)

Slide 13

Slide 13 text

THREE DIVIDERS

Slide 14

Slide 14 text

URBAN RURAL Beijing & Shanghai: 15-20% of jobs; ~2.5% of population Rural China 2001: 64% of population 2011: <50% of population (Source: McKinsey)

Slide 15

Slide 15 text

PRE-R&O* POST-R&O Came of age during cultural revolution *”Reform & Openness” Prize stability; the “iron rice bowl” Parents of the 1- child policy Came of age in a new era The “Post-80s” vs. The “Post-90s” Children of the 1- child policy 4-2-1 generational structure

Slide 16

Slide 16 text

HAVE-NOTS (Source: Adrian Fisk/Chinasmack) HAVES The real divider is not where you live, but how you live. China is one of the most economically inequitable places in the world. And in a connected world, everyone is striving for the same Stuff. Guo mei mei. “After I watch TV I have a lot of thoughts, but no way to realize them.”

Slide 17

Slide 17 text

Why start-up in China? 1 system, 2, 3, 4 countries Why ޓ联᠓ ≠ the Internet HW: A clicking tour Starting-up in China Why start-up in China? (2) Discussion/Q&A ޓ联᠓ ≠ Internet

Slide 18

Slide 18 text

ޓ联᠓ is a giant intranet

Slide 19

Slide 19 text

No content

Slide 20

Slide 20 text

World average: China: 5.6 MBS 1.8 MBS (and often much slower on foreign sites) (Source: Technode)

Slide 21

Slide 21 text

ޓ联᠓ is booming 0 100 200 300 400 500 600 2007 2008 2009 2010 2011 M users (Source: China Internet Watch)

Slide 22

Slide 22 text

1/2 of the population And yet, web users comprise less than (Source: China Internet Watch) Less than 10% of urban Chinese shopped online in 2006. In two years, nearly half will Q2 web revenue = 62.2B RMB 77.5% YoY surge

Slide 23

Slide 23 text

ޓ联᠓ is young & active of Chinese internet users are between the age of 10-40 80% 80% of Chinese social network users are between the age of 20-34 18.7 average number of hours spent per day...and then there are the ᠓༑

Slide 24

Slide 24 text

ޓ联᠓ is mobile of Chinese internet users access the mobile web 66%

Slide 25

Slide 25 text

ޓ联᠓ was always 2.0 0% 25% 50% 75% 100% News Search Email Music IM Gaming Blog Ecommerce USA China (Sources: Google, CNNIC, iResearch, Calvin Chin)

Slide 26

Slide 26 text

ޓ联᠓ was always 2.0 0% 25% 50% 75% 100% News Search Email Music IM Gaming Blog Ecommerce USA China (Sources: Google, CNNIC, iResearch, Calvin Chin) Web 2.0

Slide 27

Slide 27 text

It’s just...different Activity US China Send or read email 92% 55% Use a search engine 92% 84% Get news 76% 79% Use a social networking site 65% 50% Do online banking 61% 33% Play online games 36% 68% Send instant messages 46% 84% (Sources: China internet watch, Tech Rice, Pew)

Slide 28

Slide 28 text

Why start-up in China? 1 system, 2, 3, 4 countries Why ޓ联᠓ ≠ the Internet HW: A clicking tour Starting-up in China Why start-up in China? (2) Discussion/Q&A ޓ联᠓ A Clicking Tour

Slide 29

Slide 29 text

Search is where the internet begins for many in China, where some users have trouble typing due to a bothersome input method (“pinyin”). Baidu: 78% of China’s search market

Slide 30

Slide 30 text

78% market share in Chinese search (Source: Tech Rice) BIDU 42.2B market cap

Slide 31

Slide 31 text

TAOBAO Taobao is one of China’s e- commerce kings, holding 31% of the country’s B2C market. It also provides an example of how foreign companies can screw up royally in China: In 2003, EBay held 90% of China’s online auction market. Today, almost all of that belongs to Taobao. An ugly website? To American eyes, perhaps. But most Chinese would demur. In China, the mouse click is king.

Slide 32

Slide 32 text

10% of China’s B2C market. ...And a good example of how different a market China really is. Where else would a huge e- commerce site send you a confirmation email with the cell phone number and name of the deliveryman? Or allow you to pay by cash on delivery? 360Buy.com

Slide 33

Slide 33 text

7 steps to becoming a ᠓༑ ʢ“netizen”)

Slide 34

Slide 34 text

1

Slide 35

Slide 35 text

2

Slide 36

Slide 36 text

3

Slide 37

Slide 37 text

(Eli Bildner 1/9/12) 4

Slide 38

Slide 38 text

5

Slide 39

Slide 39 text

6

Slide 40

Slide 40 text

7

Slide 41

Slide 41 text

...or you could just use the Tencent weibo English UI

Slide 42

Slide 42 text

“China only has one firm that is capable of becoming China's Facebook: Tencent. The two (Facebook and Tencent) may be dissimilar in outward appearance, but the core of each is closely related: the social graph.” - Keso

Slide 43

Slide 43 text

Shanzhai culture One of China’s highest-profile internet radio apps. Available only on “jail-broken” IPhones.

Slide 44

Slide 44 text

Space to breathe. Space to vent. Space to laugh.

Slide 45

Slide 45 text

(Click)

Slide 46

Slide 46 text

“WK” = “Wukan”. “535” = “Tiananmen”

Slide 47

Slide 47 text

(Click)

Slide 48

Slide 48 text

SOLVE Why start-up in China? 1 system, 2, 3, 4 countries Why ޓ联᠓ ≠ the Internet HW: A clicking tour Starting-up in China Why start-up in China? (2) Discussion/Q&A PROBLEMS You should startup in China if you want to

Slide 49

Slide 49 text

the environment 1)

Slide 50

Slide 50 text

food & product safety 2)

Slide 51

Slide 51 text

economic & social inclusion 3)

Slide 52

Slide 52 text

education 4)

Slide 53

Slide 53 text

FURTHER READING @ECSELfellows Tech Rice Technode China Internet Watch iChinaStocks Twitter Sinica podcast Michael Pettis/ Seeking Alpha the 5-year plan (KPMG series) Startup digests

Slide 54

Slide 54 text

Eli Bildner eli@transi.st Why start-up in China? 1 system, 2, 3, 4 countries Why ޓ联᠓ ≠ the Internet HW: A clicking tour Starting-up in China Why start-up in China? (2) Discussion/Q&A ଟ྆ʂ