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?
SIMON ZHANG: Yeah.
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.
SIMON ZHANG: Yeah.
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.
SIMON ZHANG: Totally.
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?
HANS TUNG: Yes.
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.