Episode 42: AMA: Hans and Zara on the Origin of This Podcast and Other Questions from Listeners

GGV Fellows is accepting applicants for its 2020 cohort. The program, which is a week-long intensive learning experience in Beijing, provides a fast track for aspiring entrepreneurs who want to become part of China’s startup ecosystem. On top of hearing from some of the biggest names in China’s tech industry, fellows will be equipped with essential skill sets to survive and thrive in their entrepreneurial endeavor and get plugged into the supportive network GGV provides. The deadline for applications is Sept 30th. The program will be in Beijing from Jan.2nd to the 6th, 2020.

*Note that the program will be conducted in Mandarin, so the applicants need to be fully proficient in the language. 

Apply at http://ggvcommunity.mikecrm.com/cEkWZYw.
Read on why we organized GGV Fellows here https://hans.vc/why-we-organized-ggv-fellows/

After 20 months and 42 episodes, we are taking a moment to reflect and celebrate on this podcast. You will hear from Hans and Zara on the behind the scene story of how this podcast was started, why an English podcast about tech in China and what people can expect for the next season. You will also hear from our listeners’ community asking Hans and Zara a wide spectrum of questions. Special thanks to Kenny Chan, Jacky Shen, Jun Zhang, Huang Zexin, Jenny Niu, Jonas Wolf and Barbara dos Santos, who recorded their questions for us.


Rita Yang: Today on the show, we have two people who started this very podcast you’re listening, Hans and Zara. After 20 months and 42 episodes, we’re taking a moment to reflect and celebrate. We’re concluding this season of the 996 podcast with questions from our listeners community. Welcome to the show, Hans.

Hans Tung: Thank you.

Rita Yang: Welcome back, Zara.

Zara Zhang: Thanks.

Rita Yang: Where have you been?

Zara Zhang: So for those who have forgotten about me, my name is Zara Zhang. I was the co-host and producer of the 996 podcast. I was an investment analyst at GGV Capital from August 2017 to May this year. And in May, I joined ByteDance in Beijing, and Rita joined GGV as my replacement. And I’m very happy that Rita is now continuing this show and making it even greater.

Rita Yang: Thank you. I’m going to start with some of the most frequently asked questions for this podcast. I even asked them during the interview process. So how did you guys started this podcast in the first place?

Hans Tung: Zara, do you want to start first?

Zara Zhang: Sure. So when I joined GGV in 2017, I think it was probably in my first couple weeks I told Hans that we should start some sort of content that tells the China tech story in English. And at that point I was exploring a couple of different formats like podcasting, maybe videos, or blog posts, or newsletters. And then I settled on the podcast idea because one, I was a huge fan of podcasts myself. I started listen to Serial really early on when the medium took off. And then I’ve always been looking for a good English podcast on tech in China, which is a topic that I’m most interested in, but I couldn’t find one. And secondly, I felt like podcasting as a format really attracts the kind of audience we want to attract.

So, for example, why not make videos, short videos, it’s so popular now. But for me, I feel like videos are for people who have a lot of time to kill. People who watch videos tend to have a lot of time, whereas people who listen to podcasts are multitaskers who commute, who listen to it when they’re working out, in the car, and they want to make the best use of their time. And these are the highly efficient people that we want to attract as audience for our show. And I decided that I think the long form audio format where we interview prominent guests would be the best format. Hans, do you want to add on?

Hans Tung: Yeah, when Zara first asked me – taking a step back a little bit – we went on and recruited Zara, because we felt that there’s a lack of content in English regarding what was happening in China. And so, how to tell a story well? we thought originally, we need to start writing articles about that, and that’s easier for a lot of people to read. I wasn’t sure whether a podcast would be differentiated since there are so many podcasts about startups and venture in the U.S. already. Granted there wasn’t as much on China, I just wasn’t sure if enough people would bother to listen to two of us talk. I’m glad Zara convinced me to do it, and I think that’s part of GGV’s culture of willing to take chances, and that talent, the younger people, to try new things. In terms of asking for interviews from the guests, we know a lot of them already from our past dealings with them, or investments we made in them. So getting the guests wasn’t as hard for a more established firm like GGV. But the ingenuity of this idea definitely come from the millennial Zara, and without her efforts and the care, the thought that she put into it, this podcast and this community would never be what it is today.

Zara Zhang: Thank you, Hans. I also wanted to add on that a lot of people have asked why certain English podcasts on tech in China, why not start a Chinese podcast tech in Silicon Valley? If we want to be a cross-border farm, there are two ways you could approach this, so why do we pick the first one? I think for me, I’ve realized there is vast information asymmetry between China and the outside world. Actually, people in China already know a lot about what’s going on in the Silicon Valley, or outside of China in general, and they’re extremely hungry for knowledge of how different companies do things. And a lot of Chinese people are pretty good at English, so they can access a lot of the English materials or media sources, whereas people in the U.S. actually have very little understanding of what is going on in China.

And part of it is because there’s huge language barrier. Because most material, most stories on China are in Chinese, it’s a very impenetrable market for them. So we wanted to be the fresh voice that tells the China story in English, in a way that audiences who don’t speak Chinese and who haven’t lived in China can relate to, and appreciate and learn from. And for me, that was a missing voice on the market, because the China story was pretty much always told by people who have not lived in China – I mean, the China story in English. Because most reporters in Western media have not – many of them have not lived in China for a prolonged period of time. So it’s really hard for the English stories to be authentic. Whereas both Hans and I have lived in China for very long period of time and we know what it’s like to be on the ground, and we know the language, we can relate to the people, to the way of living, so I really wanted to kind of bring forth that voice through this podcast.

Hans Tung: I think the early seed of this project came through in 2011, when some of the smartest Indian VCs and founders came to China. And the question they asked were extremely thoughtful. They clearly studied the portfolio of leading Chinese VCs, and they understood that some of the big problems relate to urbanization that they’re seeing in India – somebody in China is or has been trying to solve it is. So they felt that there’s a lot of learning they can take. And they also ask a lot of question about China and there’s just not enough content in English, like Zara said, about China, to make it easy for them to pick up. So it became incredibly obvious that producing content in English about China, whether it’s voice, video or text could be quite useful to the $6 billion people who live outside of China. And the challenge is always when you take an idea that seems obvious, how to make that into a reality that has a lot of care and insight into it, and that’s where Zara came in.

Rita Yang: So Hans, you were pretty already established when this podcast was published. Why did you decide that you are willing to make time to host this podcast from episode to episode?

Hans Tung: I think GGV and myself were evolving, and we know that, over time, the next billion users will come outside of the U.S. and China. So at some point in the future, that will be important for other founders interested in what China is doing to learn from it. Like I said, the early idea came from watching these smart Indian VCs and founders come in China and asking amazing questions. So for us, we thought both good for sharing our knowledge and helping the community to learn, and also, selfishly, it helps us to build a brand, and to let more founders all over the world willing to pick GGV as a value-added investor. And what I didn’t expect is that the content, whether it is in PowerPoint text or podcast voice that we produced together, is just so well-consumed by people, whether it’s our episode, our write-up on Pinduoduo, on Meituan, on ByteDance, it was just amazingly well-received.

Some of you from different places have come up to me and said, “That was really insightful and really helped me to think through the issues.” At the human level, beyond just making investments in VC, when you see someone else who’s intelligent and smart, that generally felt that they benefited from the knowledge and experience that we have had, and that we were fortunate to be able to share, it is incredibly satisfying to see that knowledge is power and you’re making a difference in people’s lives. And I think that fundamentally that human connection is what keep us up to keep on doing episode after episode.

Zara Zhang: I want to give Hans a lot of credit, because I think you are a person who really likes sharing and is really generous with your ideas. And that can’t be said of every investor we’ve met. And I also think you’re a really eloquent person in general. So for our listeners’ information, all of our podcasts are unscripted. We don’t write out everything we say. But everything that comes out of Hans’s mouth is like perfect. And there are even times when I feel like, “Oh, my God, he just said that. That’s so well said.” So I just feel like the podcasting format lends really well to someone like you who is good at speaking in general, and asking good questions, and bringing people’s ideas forward and asking them about – bringing out how they really feel about things.

Hans Tung: Thank you. I can say the same thing for you as well.

Rita Yang: Share with us some moments where you felt like, “Wow, this is really making a difference in people’s lives.” I know Zara you have some stories on that.

Zara Zhang: Sure. I guess there are a lot of these moments. Every time we host an offline event, we see sometimes over 100 people show up and they’re all fans of what we do. They’ve listened to multiple podcasts. They know some of the content better than myself. I’ve met, for example, Stanford students, an American student in Palo Alto, who came to one of our events, and he said, “Because of the show, it has piqued my interest in tech in China and has changed my perception that China is just copycat and has no innovation.” So now, this summer, I ran to him in Beijing because he’s spending the summer interning in Beijing in tech, and a lot of that decision was driven by what we talked about on the show. So I think, especially for younger people, their ideas about the work, about the world, are still being shaped, and I’m really glad that we’re able to tell stories that inform their perspective and make them more open-minded.

Rita Yang: And much more informative about the world. So how did you come up with the name 996?

Hans Tung: When Zara asked me what to call it, we played with different names. I think 996 was the name I came up with because that’s how I have been working myself.

Rita Yang: No, you work 0-0-7, I think.

Hans Tung: Even to this day, when you’re in – when I visited Bangalore or New Delhi, when you go to these other cities around the world, and you see that people are just extremely driven, not just for themselves, but they want to build something that change and make their society better, that drive, and that passion is very infectious. And when GGV first invested in Alibaba in 2003 and had the fortune to see how that company evolved, sure, you get a share of negative press, especially in Western media, and sometimes even in Chinese media too, but still it is a company that made e-commerce possible in China and become a model for many companies, and inspiration for many founders all over the world.

So it’s, for us, we understand that 996 may have some negative connotations, we’re not disputing that. But at the same time, it’ll always have a special place in my heart because that’s the founders I spent time with, and you see them really trying hard to make an impact, to make a difference. That to me, more than anything else, make me feel that a lot of people from outside looking at China, it’s easy for people to assume that Chinese founders are successful because the market is big, there are a lot of users, and the government protects domestic businesses, etc. But as people who listen to this podcast over the last 20 months, you know that it is a lot more than that. And when you can take away all the outside perception and narrative, and talk to that person face to face, work with that kind of founders together and solve issues together, the camaraderie and the connection you build from one human to the other is impressive. And that’s why we use 996 as a way to describe and capture that spirit.

Zara Zhang: I also think from a naming perspective, it’s a great name, because it doesn’t explicitly mention tech, or China, or entrepreneurship, but all of that is kind of captured in the three numbers or digits. And I don’t see 996 as a set of hours, I kind of see it as a spirit. It’s kind of the feeling of hustle and just being extremely motivated to achieve something and being really committed. And I think that extends beyond Chinese tech. We see that in a lot of founders around the world. And also, I like the name because it’s almost like a inside joke. Like if you listen to the podcast, you know what it is. If you ask me what 996 is, it means you’re not a listener. A lot of people ask me, “What is 996?” I’m like, “Go listen to the show and you’ll find out.”

Rita Yang: What are some of the practical tips you would give for people who are thinking about starting their podcast as well?

Zara Zhang: Sure. When I thought about starting a podcast, I had zero experience in podcasting. I have never hosted or produced any audio form before. So I give a lot of credit to Kaiser Kuo, who is the host of the Sinica podcast. He taught me literally everything I know about podcasting. I knew Kaiser back then. I just I went to him in and asked how to actually start a podcast. So he taught me things like what kind of mic you should use, and how do you actually script it, how do you put your guest at ease, ask a question, do research, etc. I think that’s a huge part of the reason why our show sounds really good from an acoustic perspective.


You’ll notice that we actually have a very high sound quality, because we are using very good equipment. So in reality, actually all of our mics fit into a carry-on suitcase, and that’s the amount of equipment we need for each recording. I don’t think there is a lot of entry barriers to starting a podcast, because the equipment is so available on the market right now. Anyone can buy it. But I think the real barrier is really getting access to really good guests and then having a really good value proposition, like who should listen to your show and why should they do it. Because a lot of podcasts want to be everything to everyone, but I don’t think that creates enough differentiation in this world when there’s so much content out there.

For us, it was very clear that we just wanted to be the best English podcast on tech in China, and that was a very clear value proposition to people who were interested in tech in China. And I think we put a lot of thought into the kind of questions we asked our guests and who can appear on this show. So we kind of got out of our way to invite guests who we think meet our standard. And then we think a lot about how to best tell their stories. And we listen to what they’ve said before so that they don’t repeat themselves, things like that – to make them say things that are really original. So that’s a lot of the mechanics. And then a lot of people have asked me, do you and Hans, and the guests need to be all in the same room physically to do this, and how can you make that happen when Hans is traveling like crazy all the time?

So my answer is you don’t need to do that. Right now, we’re actually recording this remotely. Hans is in the U.S. and we’re in Beijing, and it still sounds like we’re together. Because in the post-production we lay the tracks over each other, because we record each person separately with a separate track. So it is actually better for acoustics if we’re all in different places. If the three of us are in three different cities. So actually most podcasts do that. The hosts are not in one place. So that’s kind of a misunderstanding that a lot of people have is you have to be physically in the same place to be on the podcast together.

Hans Tung: I definitely want to add a special thanks to Kaiser. Kaiser has been an amazing friend to both Zara and myself, and a mentor to us on podcast making. He also connected us to other people in his world, some of them are in D.C. and New York, that let us see what we’re doing in China tech from a different perspective. So all that is in a spirit of sharing and building a community of people willing to make the world better. So for that, we highly appreciate what Kaiser has done for us.

Zara Zhang: And another question that we get frequently is, since the podcast gets released on a biweekly basis, do you record an episode every two weeks? The answer is also no, because there is no way we can get Hans to record something every two weeks. The way we do it is by batching. So we might record, I don’t know, five episodes in one week, and then we release them gradually, over the next couple of months. And that’s how most podcasts do it as well. So when you’re hearing an interview it might actually have been recorded a few weeks ago. So that’s just how podcasting works.

Rita Yang: So what should people expect for the new season of the podcast, Hans?

Hans Tung: I think that with you on board, and also, we are seeing that there’s a lot of interest in our content beyond just U.S. and China, I think next season will be much more about the next billion users and how that’s evolving, and what we can evolve – lessons we learn from U.S. and China for that market, those users and those founders. I saw a question earlier, what are our top cities or listeners. And right now it’s Beijing, San Francisco, Shanghai and New York. But we do see that there is growing interest in what we’re doing from LatAm, Southeast Asia and India. So it is has been very rewarding to see how this podcast evolves, and then we are getting more and more interest in sharing lessons beyond what we originally set out to do. And for that, I am grateful for the feedback and the interest from the community that Zara and I have started to build.

Rita Yang: So now we’re going to hear questions from our listeners’ community. It is an incredible community of people who submitted incredible questions. The first question is from Kenny Chan. He works at Grab in Singapore. This question is for Hans.

Kenny Chan: Hi, this is Kenny from Grab in Singapore. Thanks for taking the question. As the global economy faces a potential recession and fundraising may become more challenging over the next few years, how do you think this will affect companies that are currently venture funded? And what sort of new market opportunities are there for new startups that might not necessarily have come up if the economy continued to be strong?

Hans Tung: I think for GGV, we’ve been through four crises, ups and downs in our career. Whether it’s the currency crisis of 1997, ’98, ’99, or in the first bubble bursting in 2000, 2001, then the financial crisis in the U.S. in 2007, 2008, 2009, and then some of the slowdown that we saw in China in 2015-2016 timeframe. So every time we see correction like this, we end up investing in the better companies who have what it takes to get through this period. Usually there’s less funding. It also means that there’s less bubble, there’s less companies that shouldn’t be able to raise money. They won’t be able to raise money, and therefore the cost of talent, the cost of user acquisition, the cost of everything goes down, because there’s less bubble and there’s froth.

And the good founders who are focused on building the business for the long-haul, focused on biz fundamentals, end up being able to do more with less cost, and end up building the stronger companies. For example, I invested in Xiaomi in 2010. It was right after the financial crisis in the U.S., when the world was less positive on mobile internet on Web 2.0. And Xiaomi ends up building a company from scratch with social networking, and mobile services and hardware all combined into one. So we consistently feel that whenever there is a downturn, the best companies will end up doing better in the process.

Rita Yang: Second question is from Jackie Shen from Hong Kong.

Jacky Shen : My question is, what is the level of skepticism should you maintain when you make investments into startups? The reason why I am asking this is that early stage startups tend to have very limited information, and some might not even have answers to all questions.

Hans Tung: That’s a very fair question. I think the best investors I’ve observed tend to have an inkling, or some kind of thesis, or when they meet an amazing founder, they’re able to pick up what a founder is saying what’s the underlying societal trend that is causing that disruption very clearly. Whether it’s investing in Uber, in Airbnb, in DiDi, in Xiaomi in any of these companies that have become a disruptor. The investor need to have some kind of ability to see what the future would be like, to see what’s around the corner, and be able to get that, “This is something that’s going to be massive.” I’ve been in situations where I have more conviction than even the founder of what is going on, because you see that the world will just be different, and what is being done makes a lot of sense. So when you have that kind of conviction on certain thesis, then you can rank them as which one will make the most impact.

And if you have the discipline to follow that kind of thesis and ideas, then it becomes easier to judge which deal to do, and which deal to pass. Having said that it’s still not easy, because it is tempting. Either you’re a more pessimistic person to be very careful on your bets, or you’re an extremely aggressive person who just can’t say no. So how to manage your own desire, and fear, and want, and so you can try to be as objective as possible, I think requires 10,000 hours of training and iteration.

Rita Yang: Third question is from Sumit Jasoria. What is your plan for investing in startups in Southeast Asia and how do you plan to create a platform to mentor your invested startups over the region?

Hans Tung: Right. I think led by investments from my partners, Jixun and Jenny. Jixun led our investment in Grab in series B, back in 2013-2014 in Southeast Asia. Obviously has done extremely well. Jenny has made a few fintech bets in Southeast Asia, too. I’m spending time looking at it along with my partner Eric Xu as well. It is a region that some of us grew up in. Jenny and Jixun were born in Singapore. I lived there and got a PR for a period for about four years. And so traveling around the region, we know that Southeast Asia is not one country. There’s eight, ten different markets. And so we see what’s happening in Indonesia, what’s happening in Vietnam, or Singapore, Thailand, Malaysia, Philippines it’s all sometimes different. So being able to decide which markets to focus on, which trends, which thesis to bet on becomes important in order to focus, and prioritize, and use the time wisely. At the same time, we have built up talent programs in both the U.S. and China, what we call Founders + Leaders. They helped our founders to learn from those who have scale businesses.

So we feel that by sharing what has been built in U.S. and China in selected areas, it is a great way for founders from those regions and other new regions to learn from it. And we will over time probably have events that will invite founders from LatAm, from Southeast Asia and India to join us, either in the U.S. or China, or take our program to them and be able to build a community that can allow founders to share lessons and be able to learn from each other, and learn from experts who have built it and done that before. I think that what’s interesting about the VC job, is the ability to help to form communities, foster communities that allow people to share their life experiences and lessons. And it is incredibly satisfying to see other people benefiting from that and build that connection between people, that kind of human kindred spirit is what makes this job extremely satisfying and rewarding.

Rita Yang: The fourth question is from Jun Zhang.

Jun Zhang: Hello, this is Jun Zhang. My first question is what kind of personal attributes do you identify from a successful CEO and that will make you seem invested to them? And my second question is for GGV capital —what is the investment strategy you’re looking to invest in India and Southeast Asia in terms of sectors? You focus on stages, check size you would like to write?

Hans Tung: Sure. I think the CEOs, the ones we back, tend to be the ones that are incredibly thoughtful about what is the problem that needs to be solved and what are the exact pain points. The better ones — the best ones even have experience solving it or know or tried it with different methods before but learned that some innovation into structure needs to happen to make it work.

Secondly, the second characteristic we see in strong founders are the ones who learn and adjust extremely quickly. They’re incredibly inquisitive, keep on asking questions. If something is not well-working, they keep on asking why. So they don’t take just what they see for granted. So they always tend to understand what’s the underlying thesis, underlying dynamics, what’s happened to society that makes this possible, and what are the other technology innovations happening around the peripheral that they can take advantage to solve this problem better than the last time.

And thirdly is that CEOs who has incredible leadership can gather a team of people to be willing to work on their mission together to solve a problem and feel that they’re making a huge difference. Therefore this mission is worth doing if we’re going to stick together and solve these problems. A startup is not easy; it’s extremely hard and sometimes a very lonely job. The CEOs or the C-level officers sometimes stay up late at night and they have problems and there are not many people they can talk to. So having that ability to build a support network for yourself so you can get advice from others, bounce ideas off of each other to help you to make best decisions is incredibly, incredibly important.

So founders who are impressively very knowledgeable what they are trying to do and are very inquisitive at figuring out how to do things better and take advantage of what’s happening around them. Then thirdly, have that amazing leadership charisma, that quality, to get people to want to work with them and work together. Those are three things that jump out as a common successful cases of criteria or factors for successful CEOs.

Now what are some common problems that we saw? It’s very easy to get confident when you raise a lot of money. Sometimes disasters happen right after a company or team brings a lot of money because to them, seemed like an immediate success, overwhelmed them. It’d end up being they’d be more wasteful or not use the money as efficiently as possible — ends up throwing money at a problem and not try to look for the root cause of the problem.

Sometimes not having enough money forces you to be a lot more disciplined and try to solve the problem much more elegantly, and therefore much more effectively.

The second problem we see is sometimes a big things happen and it happened too fast too soon and you simply were not ready for it. Ends up that a bigger player was someone else and are taking advantage of that. So you miss out at taking advantage yourself.

Thirdly is some of the problems are internally inflicted. Founders who initially when there’s not much going on can stick together, get stuff done. But when there is success, there is credit to go around, there’s fame, people start becoming harder to put up with each other and not be able to figure out — each one have their own sense of what the future, the direction should be and not be able to just pick one and stick to it. So a lot of the problems we see are self-inflicted. At the same time, the ones who are not as ready, ends up missing on the turn they’ve been waiting for.

All those I think are unfortunate and actually solvable. So the better founders learn over time from the previous iteration and mistakes, and become much better the second or the third time around.

Rita Yang: This question, from Huang Zexin.

Huang Zexin: This is Huang Zexin from Nanyang Technological University. First of all, I would like to thank you guys for creating the 996 Podcast. I’ve learned so much from it. I heard you guys giving tips to listeners in the U.S. and China, and I would like to ask — is there any tips for a Chinese undergrad based in Singapore that wants to break into the VC field after graduation? And in particular, what kind of exposure and experience would be the most beneficial? Thank you so much.

Hans Tung: I would say most people shouldn’t try to be a VC or you should not be a founder straight out of school. I think that it is important to pick up the right experiences, life lessons along the way. That will prepare you to be a much more effective founder or VC. So I would encourage people that have come out of college, you want to be a VC, get a job initially that will allow you to think critically.

Whether it’s a consulting job, or investment banking job, or even a product manager job at one of the leading Internet companies that teach you how to identify problem and try to solve problem and make recommendations to get things done. So those are all — those kinds of business analysis, critical thinking skills are very good when you have key studies and you have deals you are working on to get a chance to sharpen them.

And learn how to present that to your teammates, your colleagues, present to the clients or internally try to come up with the idea, product you are building to solve a specific problem that your older colleagues at a company will think that is worth solving. So having these kind of critical thinking issues skill sets and be able to prioritize and work within groups to solve a problem, make a recommendation are all incredibly useful toolsets to have.

And then once you do that, if we can also pick up some kind of startup experience to understand how a founder — what kind of issues he or she needs to try to solve, how to put a team together, and how to figure out a way to work together, identify a problem, and come up with the right way to solve it. And try it through trial and error to always use iteration to perfect the way of solving it until you get better at making that work.

Both having the business analysis recommendation experience from a professional job plus a startup experience, trying to make it work with no brand and on your own. Try to make your work with any resource you’ve got, try to be extremely creative and efficient. Having both such experiences, I think, makes it possible to build a successful VC career.

I think VC’s a job that can last a long time because you continue to build a brand over the years. You have better acumen, you’ve learned from your track record. It’s not something you should rush into. I think the most successful VCs tend to be the ones who have prepared themselves well early on. So by the time they start doing it, they are more ready for it.

If I look at my own career, the first 9–10 years were in investment banking, tech research, and startups. If I didn’t have that first 9–10 years of doing that, I don’t think my my second 10 years as a VC would have been as successful.

Rita Yang: Well, Zara got her first job with GGV as a fresh undergraduate, right? Zara, do you want to share your experience from that perspective?

Zara Zhang: Sure. I didn’t really imagine going into VC as a first job and I’m very curious why Hans hired me. Because I think VCs don’t traditionally hire fresh graduates so do you want to answer that?

Hans Tung: Well I think everything you did afterwards, the fact that you helped to build the 996 podcast, newsletter, and community justify why we hired and recruit to hire you in the first place. I think Zara’s ability to think critically, understanding of both U.S. and Chinese environment, and ability, right — to articulate thinking, and quickly process a lot of information in a short period of time makes her an ideal analyst candidate.

I’m very glad that Zara is working at ByteDance now, because now she is picking up good operation experience and exposure to Internet sector. And ByteDance’s one of the best in the company’s inner world. So for Zara, if she eventually wants to be VC, which I’m not sure she does, having this kind of experience will help her whether she wants to be a VC or be a founder at some point in the future. So having these right experiences along the way, I think it’s incredibly important for you to build a successful career almost at anything you do.

Zara Zhang: Yeah. Thank you so much for giving me the opportunity. And I think for me, I didn’t really know what I was getting into going into VC and it was very different from what most people outside perceive it to be. And I actually think a lot of the skill sets are very transferable between all the different industries. I don’t think it’s necessarily a good thing for new graduates to go into VC. I think it’s probably better as a last job than a first job.

Hans Tung: I would definitely agree with that.

Rita Yang: So the sixth question is from Jenny Niu.

Jenny Niu: Hi, my name is Jenny. I’m a Chinese MIT alumna based in Singapore and is looking to relocate to China within the next year. One common theme from the podcast is that entrepreneurs in emerging markets are increasingly learning from China and looking to Chinese business models for inspiration.

This is because whatever pinpoints that the emerging markets are trying to solve, China has probably faced that same problem before in one or more tiers of the cities — and someone has found a solution to it. The question is, what about  developed markets like Singapore, Japan, Korea — does China have anything to offer to these developed markets? If so, what are they? What can developed markets learn from the Chinese entrepreneurs and Chinese tech companies? Thank you.

Hans Tung: I think if we look at the case of Grab, it is — start off in Singapore, yet Anthony is someone who was educated in the West and understood that there are models that he can learn from, but at the same time innovate on his own in Southeast Asia. So teaching helped to bridge an investment from BD into Grab.

So I think Grab benefited from working with BD as well. And Grab also innovated by setting up an engineering development center in India to tap resources in both China and India to help itself grow in multiple countries in Southeast Asia. So I think that there are things that even developed markets can learn from China.

We look at the Lime in the U.S. that we are fortunate to be an investor in, the two co-founders are Americans but also same time, with roots from China. They saw what was happening in China with Mobike, with Ofo, and then later on with Hello. They learned all the right lessons and innovated and come up with the scooter sharing in the U.S. and now in Europe. So Lime is a great example of a company that knows east and west, and can leverage a supply chain benefits of being in China and the understanding of America, American market and have a global mindset to be willing to go to Europe.

So seeing Lime scooters everywhere in the top cities in the U.S. and Europe, have been incredibly satisfying to see that yes, these are models and ideas that are very global in nature. You look at what Facebook has been trying to do with Facebook Messenger, what Instagram has been trying to do with shopping — a lot of that were inspirations from China with WeChat and social commerce in China.

So it is now incredibly interesting to see the things that are innovating in far more countries, like China, that historically people think is a copycat nation. At the same time, I don’t think that innovation will only happen in the U.S. or China or even in Israel or Europe. The innovation will come from everywhere.

You look at what Oyo has been able to do out of India, expanding globally with their hotel room reservation app. It’s been incredibly interesting and fascinating to see a company coming out of India be able to do that well. And so I think that countries like Southeast Asia and India or LATAM, who knows? in the next five years may produce global champion in their own sector as well. So that makes the world much more flat and fair a place.

Rita Yang: Seventh question is for Zara.

Jonas Wolf: Hello. This is Jonas from AngelHack. I would like to ask how did you pick the podcast theme, content, and also the marketing strategy for it? Thank you so much. Love the content and all you’re sharing . Keep it up.

Zara Zhang: I’ll touch a bit on the marketing side. The short answer is we didn’t do much marketing. I remember when I first started the podcast, I asked Kaiser — how do we make people actually listen to this? How do we attract a lot of listeners? And his answer was simply just consistently produce high-quality content and the people will come.

So I think that has always been the philosophy for this show. We don’t do Facebook ads, we don’t kind of growth hack our way into virality. I don’t think we need to go viral as a VC firm because our goal is not to attract a million clicks. Our goal is to attract really high-quality entrepreneurs and talents that we can invest in and partner with.

And a lot of that has more to do with the depth of our connection with our listeners rather than on the quantity of listeners. So we’re really focused on having the absolutely best guests on the show and getting them to talk about things that our listeners really care about. And we didn’t do much marketing beyond like tweeting out each episode. And I think the community, it just spread organically and most people hear about it through word of mouth.

Hans Tung: Yeah. I think that by picking the — identify the product market fit or the opportunity, having a deficient product, helps to get users to talk about it. And we are quite fortunate in that respect, that by focusing on building the right — having the right content makes it a lot easier to build the right community. So it’s been fun working with Zara on this.

Rita Yang: The eighth question is from Barbara dos Santos.

Barbara dos Santos: Hi 996. This is Barbara dos Santos. I am originally from Brazil, but I am a PhD student in Washington DC. My question is how can founders and VCs in Brazil build strong bridges with Chinese investors and entrepreneurs? Is there something that makes Brazil different than other emerging markets in this sense?

Hans Tung: I think that — we see a number of Brazilian founders and VCs come to China. It’s great to see that happen. GGV loves to host them when they are in China, and share what we know, and introduce them to our portfolio companies in China as well.

And it’s also quite interesting to talk to founders in different emerging markets. I had a conversation with a founder of Loggi in Brazil which is a big portfolio company and the founder of Shadowfax in India. And it’s funny that both have told me that they are almost mirror image of each other — do something very similar in the logistics, warehousing, automation space. And they feel that when they read each other’s PowerPoint, they’re looking at exactly their own company. It’s how eerily similar they are coming with the ideas independently of each other for solving similar problems.


And when that happens, it just further validates our thesis that this world’s a lot more global than people think. The problems, opportunities caused by urbanisation, a rising middle-class are pretty similar and comparable. Maybe the specific implementation may differ, because different conditions in the local countries are different. But still, there’s a lot of similarities and just fun that the people in the same field — be able to exchange ideas with each other.

Rita Yang: The next question is actually from me. I’m also one of the original 996 listeners. How do you guys assess the quality of your decisions. Hans, you want to start?

Hans Tung: Quality of decisions in what context?

Rita Yang: Just in life or investment — do you have a principle in general?

Hans Tung: There is no what-ifs. You live your life. The decisions you make has incredible impact and it affects what you do next. So you can’t just go back and take a do-over like you can do with podcasts, obviously. So for me, I spent quite a bit of time thinking about what will happen in the next 5–10 years, and I constantly use that to guide the way I make decisions.

As Zara and Rita also know, I’ve lived in nine different cities in my life and most of the cities, I lived there, working as an adult. So also means my career has changed a lot, evolved a lot over the years. So it is very easy for people to —especially smart people — come out of school, to compare themselves against other peers — their peers from the same school, same classroom.

And I had encouraged people not to do that, even though it’s very hard. Because if you approach life thinking about what could happen in the next 5–10 years, and therefore go where the opportunities are — and try to do the right thing, try to help people, try to share what you know, try to learn from others by being good and by being helpful, good things will happen to you because you are going to be what the future is. So the pie will get bigger. There’s more to share and it just ends up being much better.

When I went to China in 2005, a lot of my friends from Taiwan, where I was born, and the U.S. where I grew up — both in California and in New York — told me not to. They said that’s a tough place, you’re not a mainlander, when you fo there you’re going to get eaten alive. This is not going to work. It is a very tough market. It is highly regulated. It’s especially not friendly to people from the outside.

So it is very easy to hear other people’s popular wisdom and follow the crowd and do what’s “easier.” But if you have a sense of where the future could be, how the world could be different, you want to be out there helping people and sharing ideas and learn from them. I think good things end up happening to those who are willing to take that kind of calculated risk.

Rita Yang: Ok. So the next question is for Zara. Hans has always suggested Chinese returnees to work in fast growing startup first and then start their own business. You have apparently followed that advice by leaving GGV and joining ByteDance. Now you have worked in ByteDance for a couple of months, what advice would you give to young Chinese people who have studied or lived extensively outside of China like yourself?

Zara Zhang: I think the most important thing I learned from Hans was probably the most exciting opportunity of our age today, for people like myself, is the trend of Chinese Internet companies expanding globally and becoming real global companies. And I heard that message over and over again. Every time I went to Stanford and Berkeley and Harvard — I’ve learned that the world needs a lot of people who can bridge China and the outside world especially in the tax-base.

And for me, I’ve always loved the Internet industry and how it has changed my life and the society I live in, especially in China and growing up with WeChat and all that. So I think my advice is always, no matter what you do, do something that’s China related. Make use of the fact that you’re from China. I can’t believe the number of my classmates from college who, when they are trying to decide what to do for their career, their cultural background is not even in their consideration.

They pick a job where they think to be the standard path or a less risky or seems to make a lot of money, but they don’t think about the fact that what really differentiates us from our American or other classmates is the fact that we’re Chinese. We can speak the world’s hardest language and we have cultural affinity with 1.4 billion people. I think that really should be everyone’s decision making process.

We’re really lucky to be able to kind of service this bridge. And there are a lot of opportunities in the space even though it may not be obvious in the beginning. I wanted to go into tech, but as someone in the humanities, I had no easy path. I couldn’t code or take up technical jobs but I went around about and went in — I did journalism internships, I wrote about tech in China, and then Hans saw my writing. So I joined VC and now I’m in tech, finally.

So I think if you look hard enough, there are actually a lot of opportunities for this space and especially now that Chinese tech companies are going global. They all need talent who have experience living, studying outside of China, who are fluent in English, who can empathize with users outside of China, to take these companies global. So I would really recommend everyone to kind of take advantage of your background.

Also, at ByteDance we’re hiring a lot of these people so if you are looking to join a high-growth company anywhere in the world, because we have offices all over the world — not just China, U.S., Singapore — but like almost every country you can imagine. You can talk to me. I’m sure we can find something for you. You can either reach out to me on LinkedIn or on WeChat. I’m in the 996 groups.

Hans Tung: Is easy for some of us to see the talent in Zara, because not everyone was born an engineer at heart, a technologist, but at the same time we can analyze and appreciate the impact of technology in society. What Zara had was kind of a sociologist kind of a background. Looking at the world, looking at societies, analyze a system, and then be able to write extremely well to articulate that kind of contrast.

And so part of the job of being a good VC, is to spot talent — not just in the form of founders, but also talent in other areas. And when you can, in life, constantly think of ways to help other people, no matter the age, and put them in the best position where they succeed, in the long-run, you benefit as well. Because when have win-win relationships, it sounds trite, but when you actually do that and do that consistently, the good thing happens to you as well as the people around you.

And so if you have that ethos and constantly try to do what’s right and good, over time it’s like investing. The ones that do well, the relationships that work, really come back and make all the other past failures or mistakes much less insignificant. So in life, you will need to approach that not thinking always about yourself, but to think of how to make the pie bigger and make the world better in a business savvy way. Not just about saving the world and from a purely a deal sense, you can actually build stronger companies, industries, if not societies. So if you have that ethos, I think that it will serve you well and guide you well when you make decisions in life.

Rita Yang: Next question for Zara. Did you ever imagine that you would be able to do what you do now and having the career track you have?

Zara Zhang: No. In college, I didn’t even know what VC stood for. So I think the lesson of me growing up is I should never try to predict where exactly I will be or what I will be doing, because there is no point. Growing up, I had never imagined I would attend Harvard in the U.S. as someone growing up in Changchun in China. I never thought I would be going to high school in Singapore or go into journalism.

I never imagined my first job would be in VC and that I would be at a tech company now or I would be doing a podcast or any of that. I think I kind of just go with my gut and let serendipity guide my journey. So I think I met Hans because he read one of my articles on the information, so that really taught me if you do good work, someone will find you and give you a life-changing opportunity. And for me, the most I can do is whatever I’m doing, give it absolutely my best. And when the opportunity approaches me, just make sure to grab it and don’t let loose and good things will happen in the end.

So now I’ve learned try not to over-plan and kind of just be open-minded and just let things flow, because the world is changing so fast. In 10 years there might be a whole new industry, or concepts, or jobs that we’ve never heard of today that might pop up. And so I don’t think there is use in kind of planning where exactly I will be or what I’ll be doing. But I think having overarching principles for how do you make decisions will be enough.

Rita Yang: What’s your overarching principles for making decisions?

Zara Zhang: It’s constantly changing, but for now I want to do things that are interesting and challenging and kind of different. Yeah.

Hans Tung: Let me add a couple of points. I think Zara probably does not know this. I’ve been looking for someone like Zara for four years, during my first four years at GGV. It was not easy to find someone who can articulate, has that voice — that has understanding of U.S. and at the same time can explain things from a China angle and be able to tell a story that’s more “fair” to China’s experiences — yet, have a key understanding how the U.S. audience or global audience may interpret it.

So I think over time, there will be more talent who can do that. But it’s been incredibly hard to find it. So as soon as when Christine Hinton, my colleague in PR, and I read Zara’s article, it was very obvious to us that she is likely going to be the one.

So I think this is also when we see spot investment opportunities. If you have a prepared mind — that you thought through the issues and you know the pain points — when you see someone or meet someone who potentially can have a solution, that click, that willingness take a chance is almost automatic. We just know that it’s such a hard problem to solve, other people have not solved it. This person clearly has the best chance of solving it, so it’s worth the bat. When you can do that consistently, good things end up happening more often than not.

Zara Zhang: Thank you, Hans. And I want to add on how happy I am that Rita is here. When I thought about leaving, my biggest misgiving was I really wanted this to be continued and I wonder if we could find someone to continue the work we’ve been doing. And I think we’re really, really lucky to have found you, too — was a really good fit for this and I’m really glad it’s taking this to new heights.

Rita Yang: This is a podcast of three people speaking good things about each other by the way. Okay, so that’s a wrap. Thank you for being on the show, Hans and Zara.

Hans Tung: Thank you. Thank you, Rita, for doing this.

Zara Zhang: Thank you.

Hans Tung: Thanks for listening to this episode of 996.

Episode 41: Josh Luber of StockX: on Buying Sneakers the Same Way We Buy Stocks

On this episode we have Josh Luber, the co-founder of StockX. StockX is the world’s first online stock market for high-demand consumer goods, namely sneakers, handbags, streetwear, and watches. On the platform, buyers place bids, sellers place asks and when a bid and ask meet, the transaction happens automatically. The Detroit-based startup was launched in 2016 and has expanded to Europe by launching its first authentication center in London. StockX is a GGV portfolio.

Before launching StockX, Josh has built 3 other companies and worked at IBM as a strategy consultant for almost 5 years. He holds a dual degree in law and MBA from Emory University. None of this is as impressive as the fact that he started collecting sneakers from 10 years old and has more than 350 pairs of sneakers in his home. 

On the show, Josh shared with us how his online price guide for sneakers became a stock market for things, why the obsession for streetwear and sneakers is a global phenomenon, his definition of global company being a collection of local companies, having celebrities like Eminem as investors and how he found StockX’s new CEO Scott Cutler, who used to be the CEO of StubHub, eBay’s online ticket exchange platform. We also asked about StockX’s plan for entering China and some pro tip for buying sneakers on StockX. 


RITA YANG: First question I wanted to ask is actually for Hans, cause I know you’re a big basketball fan, so you’re not really a sneaker head yourself, so can you tell us the story – how did you meet Josh and what about StockX kind of excites you?

HANS TUNG: Sure. Our colleague Robin was tracking consumer spending and this trend of people buying street wear shot up on our radar, and obviously there were two companies in this space in the US that’s doing stuff. When we met through – it was Battery Ventures who put us in touch. Roger Battery who is an old friend of mine put us in tough with Greg and Josh. It was very obvious that there was just a lot of stuff that we could do together. And in the process of getting to know Greg and Josh, another friend of GGV – Scott ended up showing up on our radar and we caught up and he has recently joined StockX as the CEO. So it just all came together and it fit extremely well.

RITA YANG: Do you remember the first time you have met Josh? Are there any interesting anecdotes you can share?

HANS TUNG: Yes, I first met Greg and then Greg connected a meeting with Josh. So we met at the Menlo Park office of GGV and they were on the way to China or just back from China, so there was a lot of stuff to talk about, about China and its extremely refreshing to see a company from US that were so interested in what’s happening in China and recognizing that what China can do – that you can have the best supply in the world by being in the US. You have all the relationships with the brands by being in the US. You have the US pop culture that’s leading the world in what’s fashionable, yet there’s just a huge, huge market in china that’s number one in the world where you can somehow marry the two – you can build an unbelievable global business.

JOSH LUBER: Hans was helping us in China before – in fact actually before he and I ever met. Roger who was on our board had connected us to Hans when Greg Schwartz was our COO and third co-founder. Where Greg and I were coming to China and Hans had helped set up that trip before he and I had ever actually met and it wasn’t until we got back, it was after that trip that we actually got to meet for the first time in person and then those relationships stuck. But almost all of the investors that we have, VC’s – strategic and otherwise, they were all people that were actually helping us before those investments took place anyway.

RITA YANG: So why were you interested in China or coming into China in the first place?

JOSH LUBER: This is one of those most obvious questions in a lot of categories, but certainly for us – we sell and we’ve super fortunate to be able to sell the most highly coveted products in the world. Its Nike, Lois Vuitton, Rolex, Supreme – the products really sell themselves. We’ve built a marketplace. We’ve build a model that has been able to grow very rapidly and build a lot of supply and then the demand has been here and China has become 15% of our business almost without us doing anything yet, to really localize and really grow that market. For us right now it’s the highest part of our business.

HANS TUNG: Tell us a bit more about what you were doing before StockX?

JOSH LUBER: I have started and run three other startups before this. None of them had anything to do with sneakers, almost intentionally, so almost like intentionally separating business and pleasure in my life but the business that would have actually become StockX was a company that was called Campless and Campless was a price guide for sneakers. This is 2012 – 2013 – 2014. we were analyzing eBay data to figure out what are shoes actually worth, to create some idea of a true market value for sneakers and we were just fortunate I guess to be the only people doing real analytics around the secondary market for sneakers at the time and that as the core data layer, the core understanding of market value would eventually become the foundation of StockX as the marketplace which is a marketplace built on market value. On how stock market mechanics work, but understanding the true market value of any asset. Of any consumer good – that’s the real unique part of this.

HANS TUNG: Right. You money ball.

JOSH LUBER: You’ve got to understand the numbers first. You’ve got to understand the numbers, doesn’t really matter what you do on the field.

HANS TUNG: Josh, for people who actually don’t get sneakers, can you actually –

JOSH LUBER: Or sports.

RITA YANG: Or sports yes. Can you help us understand why sneakers? And I know you have a question about – is sneakers closer to drugs or to stocks? I find that question fascinating.

JOSH LUBER: At the core here – I mean this is supply and demand, this is econ 101 – at its very, very most basic and most pure. Even perhaps more pure than the stock market itself. In the stock market itself the market price of a share or a stock is ultimately actually a function of what people think that company is going to do. What their performance is going to be. Sneakers is just supply and demand. You have these products that the brands, in particular – Nike and Adidas and Jordan – really leverage scarcity in order to put out less product than there is demand for those products, and just based on economics, if there is less of something that’s available than people who want it, then that price will go up. And that’s what’s happening here.

Nike has been doing this for 34 years, dating back to 1985 in the first year of Jordan’s but it was always a very local, underground sort of thing and then in the last five to six years, really on the back of social media, Instagram, the sneaker market became a lot more mainstream, as more people wanted access to this market. And that’s really, really, really what StockX is about, which is access. And creating access for products that have really high demand, that’s hard to get, that’s hard to understand, where to get it? What’s real? What’s the fair price for it? And that’s really the core of it.

The question around stocks or drugs was one of the probably most popular articles that we wrote back in the day when we were just a price guide, at Campless, and it was this idea of actually looking at the data around sneakers to see that the mechanics of essentially the supply and demand and how people were buying and selling sneakers, looks frankly a lot like the way that people buy and sell both stocks and drugs, but the marketplace is fortunately much more legal for sneakers.

RITA YANG: You are a sneaker head yourself? Also a data nerd as well as a serial entrepreneur. Among all of these three things, which role do you think is actually the foundation of StockX?

JOSH LUBER: Well it’s definitely data, there is no question about that. We are super fortunate that we have been able to grow and become one of the maybe the largest sneaker market place in the world, but it’s almost a red herring. Sneakers are – it’s called StockX and not SneakerX – it really is about the motto, it really is about the economics and the data of creating a marketplace that’s built on those stock market mechanics and sneakers is really just the first category.

Now if all that 14 year old kid knows is that we sell sneakers and they buy the next pair of sneakers from us, we appreciate that and we appreciate that business, but it really is about the bigger idea, which is why I get to come here and honk horn at Speak at Rise and go speak around the world and explain to people that this is about a new form of commerce that is – for lack of a less cliché way of saying it – truly revolutionary. This genuinely doesn’t exist outside the actual stock market and that’s the business here.

HANS TUNG: Right, so back to the question that you tried to answer. In your Ted Talk is sneakers more like stock or drugs?

JOSH LUBER: The interactions of the participants in the market is a lot more like drugs. When you see people that are buying three pairs in order to fund their collection and pay for one. If I can get a hold of three and sell two, I can afford one. The data and the supply and demand and understanding why a shoe sells for a certain price, is actually a lot more like stocks. Where you have this pure supply and demand and we then have built the marketplace around that, but that idea that is really just about how many people want it versus how many pairs exist. So it’s both. The data is more like stocks, the participant behavior is more like drugs.

HANS TUNG: A lot of people focus just on the sneakers part of what you guys do, but what intrigued me upon meeting you and Greg that it was very obvious that there’s many other things you could do beyond sneakers. Explain that logic.

JOSH LUBER: We didn’t make any of this stuff. All right. The stock market has been the most efficient form of commerce for 150 years and understanding supply and demand has been – everybody would have loved to understand supply and demand for any product they sell, but demand has always been a really hard thing to understand. Supply is easy. We know how many widgets the brand creates, but demand has been a forecast. A projection of off last year’s sales. A hope or wish or a percentage of marketing spend. Whatever it is. But in the stock market, demand is real. You know exactly how many people are willing to buy Nike stock at X price in Y time. And so by applying that same model to any consumer good, but understanding demand for any consumer good, you can just create a more efficient marketplace. So any product, any consumer good that you would ask the question – what is it worth? What should I pay for this?

That is a question that is best answered by supply and demand. And so some of the other categories that we sell today, watches, handbags, street wear, collectibles – these are products that are inherently worth more than they are often released for and they become more valuable because they’re a collectors because they’re scarce, because brands put it into the market – but it also works on the downside. It also works on discounting. We’re hearing in Hong Kong and its quite hot – we’ve talked about this quite a lot. So all winter jackets are 40% off on Nike.com or whatever they are. There is some discount because we’re off season, but why is it 40% off? If we understood demand for winter jackets here in Hong Kong in July, well some people might bid 10% off and some people might bid 20% off. You could have true variable pricing if you understood demand around those – that is just a more efficient way to be able to price those particular products in this particular environment. And that’s what it’s about. This is variable pricing.

RITA YANG: So the market it actually creates – I am thinking are there professional sneaker speculators now? Do people just do this to make a living?

JOSH LUBER: Professional speculators implies that it’s about necessarily buying and selling. When we say that StockX is a stock market of things, immediately people think about investments. That’s not necessarily the case. At the core we’re a consumer goods marketplace. We’re an evolution of eBay. All we do is connect buyers and sellers for the purpose of buying and selling a consumer good. And so there are absolutely professional sellers in the same way that there are professional sellers on eBay and some of those are – like one guy in a basement or it’s a big company.

Now the concept of buying and selling in order to speculate and make money, that’s the evolution of the business. The evolution of the business is not only allowing people to essentially day trade sneakers, to buy and sell sneakers the same way that we buy and sell oil futures. If you trade oil futures, those barrels of oil really do sit in a warehouse somewhere right. No one ships them to your house and you ship them back. That is the logical extension of what we’re doing here.

HANS TUNG: So besides Greg your other co-founder, you have a third co-founder Dan Gilbert of Cleveland Cavaliers, how did the three of you guys meet, and how did it go from an idea to what it is today?

JOSH LUBER: Greg Schwartz is the COO and co-founder who runs the business with me day to day and has been doing this for the last three years, Greg and I both started to run three other startups before. We never had a billionaire as a co-founder. We never had this big of an idea and this much traction this quickly, but the short version of what was a long story of how Dan and I got together was that – essentially Dan and I had the exact same idea independently. And I had never met him and I had never been to Detroit, I had never been to Cavs game but we both had this idea about a stock market for sneakers and for me it was very ground up. I’ve collected sneakers all my life and I had this company Campless that was around the value of sneakers. Dan was coming at it from the opposite end which was the stock market side of it. And you know with Dan it’s been over four years and I can’t get him to sneakers, but that’s okay. Dan had seen this idea from the stock market side and had been a fan of the efficiencies of markets and said well why can’t we buy consumer goods the same way that we buy and sell stocks. And then he saw his 15 year old son buying and selling sneakers on eBay. In 2015 like every other 15 year old kid, he took a closer look at that and said – well that’s a pretty crappy market leader, that would be a perfect place to start a stock market.

Greg was running another startup with Indane ecosystem in Detroit and Dan and Greg had known each other and Dan approached Greg and said – hey listen, I have this idea, let’s create a stock market for sneakers and Greg and his team – those guys didn’t know anything about sneakers but if Dan Gilbert says hey let’s build a business together then you at least take that call.

Those guys stared that business, they get a week into it and realize well man, we need a sneaker guy. Who’s the sneaker guy that’s going to help us run the sneaker stock market. So they go out, they do some research, they found Campless, they found my work around sneaker data, we got together and then we realized that the sneaker guy is also trying to build a sneaker stock market, has also started three other companies and worked for IBM and wasn’t a random guy. So it was a pretty crazy and serendipitous way that we got together but it’s been a pretty great situation for Greg and I to just sit there and have somebody that really understood the bigger idea and to have the resources on day one to just run the business and not worry about the rest of it.

HANS TUNG: Then how does Scott Cutler you new CEO fit into the picture?

JOSH LUBER: We launched the business on February 8th 2016. We started working on it the summer before. February 8th 2016 StockX goes live. On February 10th 2016 I got an email through LinkedIn from a guy names Scott Cutler who at the time was the CEO of StubHub.

EBay owned StubHub and at the time eBay was our largest competitor. At the time eBay was the largest marketplace for sneakers. So Greg and I were like man! EBay is coming after us this quickly! What is going on? But the reality was that before Scott was at StubHub, he was one of the leaders of the stock exchange. So Scott’s email basically said – hey listen, I’m at StubHub, I understand marketplaces, I was at the New York stock exchange, I understand – he was like – I get what you’re doing. I understand why a stock marketer thinks is a better model, I would love to help, I would love to be involved.

Well we vetted Scott to no end, cause we were like man is this guy a corporate spy?  But the reality was he just understood the model and honestly has the exact – his background is exactly what we are and then he ended up going and working at eBay but marketplace, ticketing, that whole world and then the stock market. Scott became an investor in the very first round, and became for Greg and I one of our closest advisors over the past couple of years in just helping think through the business and we never – frankly we never really thought that we could be this big this quickly that we could get someone like Scott. And when Scott was thinking about leaving eBay a couple of months ago, I said –hold on! Don’t go do anything else, let’s talk about this and figure this out. It was a very – not unlike meeting Dan, a very serendipitous opportunity came out. We weren’t looking for a new CEO, but it was the perfect marriage and we announced everything a couple of weeks ago and it’s been pretty awesome to have his here moving forward.

Frankly I’d take nine other CEO’s, nine other people like Scott, we are at 820 some people, and it’s still dazier. Everybody is still doing seven jobs. It’s still like when we were three guys in a garage and that’s the fun part of it all. It’s all just about great people so it’s exciting to have Scott here to move forward.

HANS TUNG: Right now I assume everyone is based in Detroit and now you just started operations in Europe. What’s it like to build a global business from Detroit and how was that first experience with Europe? What was that experience like?

JOSH LUBER: As you know as well as anyone, to be a global company, particularly a global marketplace in 2019 you need to be a collection of local marketplaces and a collection of local businesses. So when we turned on the website in February 2016 everyone in the world – most places in the world could buy or sell from StockX, but we weren’t local anywhere. We didn’t have local operations. Local teams. Local marketing. Local customer service, local shipping – and so we put our first team on the ground in London in Q4 of 2018 and have been slowly building that team. There’s close to 30 people now in London including both a business team but also an operations facility where we authenticate all the products. Local payment methods. Local marketing. Local operations. Local shipping. We just rolled out Italian, our first local language about two weeks about and we’ll start to roll out other European languages and then we get to do more local payment methods and then behind the localized site, then its localized marketing, localized customer service and everything else.

Again, we’re fortunate to be able to sell the product to everybody once, but we need to be able to create that very easy local experience so that everyone can buy it how they want to buy products and get products delivered faster and more efficiently and more economically.

RITA YANG: So in other words you have a very global customer base I would assume?

JOSH LUBER: One of the really interesting things is we have been traveling the world and we have a team now in Tokyo and we have been super fortunate we get to do a lot of press. One of the first questions that almost every reporter asks me in any local market is – what are the differences in taste here? What are the differences in products? The answer is – at the top, nothing! It’s all the same. Its Nike, Louis Vuitton, Yeezy, Supreme, Rolex, Off-white at the top. You have a long tail of different tastes and different markets, but for what we sell and those products, it is all the same globally. We get to be the ones to figure out how do you take that global supply and make it available locally, efficiently and everything else.

RITA YANG: Why is that? Who are the tastemakers?

JOSH LUBER: Its Michael Jordan, its Kanye, its Virgil Abloh you know what I mean? We get to draft on the back of the most iconic brands in the world and that’s just really a function of the products we sell and the brands that have created scarcity around these products and again, if there is one word for StockX, it’s about access. It’s about creating access for consumers who either didn’t know where to but this product or knew where to buy it but weren’t going to sleep outside a sneaker store for three days or didn’t know how to wade through eBay, or knew how to use eBay but didn’t know what was real. Or know what was real but didn’t know what a fair price was. All these things which made buying these products inherently difficult and a lot of friction, we remove all that and just create access for the products that people want. It’s great, I love the fact that Louis Vuitton and Nike do our marketing for us.

RITA YANG: StockX started with only sneakers and is now entering into handbags, street wear and watches. It comes with a layer of protection and validity by its verification model which is necessary today given the prevalence of knock offs. How do you balance scaling up the volume of goods in your platform and at the same time provide the verification process for all of that?

JOSH LUBER: I love that we didn’t start with authentication because we get a lot of value out of authentication. There is no question about it. Every single product that we sell passes through one of our now five authentication centers. We have one in Detroit, Tempe, Arizona, New York, London and now Eindhoven in the Netherlands. I’m sure we’ll have at least one or two in Asia very soon and probably have another one in the US and there’s a massive amount of value in that because there are a lot of fake products out there and if you’re a 14 year old kid you could care less what a bid or an ask is or what this means or you know you’re never going to get a fake pair of Yeezy’s – there’s massive value there. But you’re not unlike sneakers being somewhat of a red herring because we’re about a lot more than sneakers. Authentication really just facilities a larger model. It’s almost just the ante to play at this point and for us it’s about the stock market model. It’s about this model built on how the stock market works and if someone isn’t a 100% certain that what they’re going to get is real, it changes their perception of value. It changes how much they’re going to bid for something. If you’re a seller, you think you’re going to get a scam charge back that someone said you sold a fake – it changes how much you’re willing to sell something for. You buy a share of Nike stock on the New York stock exchange, you never worry. If you thought you were going to get a fake share of stock it would change everything. So for us, it’s just part of the larger model and even when Nike and Adidas have a chip in every shoe and every kid with an app can authenticate every product, we will still stand and mill that transaction and we will still run that same process because it’s about the larger model. It will just be easier and quicker for us to do that.

HANS TUNG: Speaking of a few big names, you now have Eminem, you have Robert and others being part of the company as shareholders. What’s it like to get them involved and how has that helped your business?

JOSH LUBER: Not unlike how you and I first met, we created a venue for some of those folks to invest because they were already helping us. We never – never started this business thinking we were going to go out and get the most famous people in the world involved in this business, but it happened super organically.

The first one was Mark Wahlberg. We were in a meeting really early on with Dan and it somehow just randomly came up that Mark Wahlberg wears a lot of Air Jordan’s and Dan says – oh I know Mark. An hour later I’m on an email chain with Dan and Mark, two days later I’m in California at Marks house going through his sneaker closet and he’s like oh we should put this on StockX and I was like – okay! And then a couple of weeks later something very similar happened with Eminem and Eminem’s manager Paul Rosenberg, they are both from Detroit and Paul was in the office working with people on Detroit things and it was also a very organic thing that we came in contact and they were helping us.

So we created that first round primarily to get those guys involved. The greatest value we could give was to let them invest. Me writing a $10,000 cheque to Eminem doesn’t really move the needle. That was the beginning of it and then it was organic growth around – as we came into contact with other people and we’ve been super fortunate. We get a lot of people that are interested in being involved because of the products, because of Dan, because of the NBA, but we get to choose those people that are genuinely in it for the right reason and who can add real value.

HANS TUNG: Speaking about Eminem, how many people have told you that you look like Eminem?

JOSH LUBER: Do you know the first person that ever told me that – the first person that ever told me that I look like Eminem was Eminem! Which was really funny. There’s a scene in this video that we shot where I say – I’m here with Eminem to pick up shoes for the charity auction and Eminem goes – I’m here with Eminem also. And I was like – yeah All right!

HANS TUNG: The first time I actually met Josh, that was the first thing that came into my mind and I never said anything because that was the first time I ever met him, but that was exactly what I was thinking.

RITA YANG: That he looks like Eminem!

I actually would think street wear is something that is less global and more local because of the influencers. If you think about the influencers who are in the US, influencing what people are chasing after versus the influencers in China, it’s quite individualized. So what do you say about that?

JOSH LUBER: Street wear just gets the long tail a lot quicker, but the top – Supreme. Supreme is the Nike of street wear. At the top everybody wants supreme. Underneath that there’s a couple of other brands that aren’t nearly as big but have – BAPE which is a Bathing Ape from Japan and then there’s a few other brands – Palace and then it just gets the long tail a lot, lot quicker. But at the very top, its Supreme. That is the clear leader, I forget at the top of my head the exact number but it is overall majority of our street wear business in terms of dollars and units and its Supreme!

HANS TUNG: Yes in China it was pretty obvious that Du (毒) and Nice, and several others are always trying to be in this space and you can tell, it is a growing fan base for sports, for sneakers at the consumer level and its much bigger than people thought.

JOSH LUBER: It’s so much bigger than what people thought because the end result of this is actually a convergence of the primary and secondary markets together to just be one market. People always ask – what’s the resell market? How big is it? US we think it’s about 2 billion, globally maybe its 7 – 8 billion and growing, but the global retail market is a 100 billion and that’s a fact! That’s ultimately the real market here. It’s the whole thing and for us and for our growth it is about that next customer, that retail customer that bought their last pair of shoes at Footlocker or Nike.com, that never would have tried to wade through eBay three years ago, because you go walk into Footlocker and there’s 300 – 400 pairs of shoes on the wall. There’s 26,000 different shoes on StockX and its not just $1000 Yeezy’s it could just be a $100 shoe that’s a different color than what’s on the wall at Footlocker and its selling on StockX for 110 or 95. 25% of our business is actually less than retail price, and it’s that. It’s that long tail of the product that’s out there and that’s why it’s a convergence of all of this. This is just sneakers – it’s a 100 billion. It’s not 2 billion.

HANS TUNG: Correct, and for sneakers, the brands – most of them are based in the US, designed and started in the US – what kind of relationship do you foresee with them over time?

JOSH LUBER: The sneaker brands and even the street wear brands and luxury and everywhere else, it’s all converging in the same place which is to ultimately work together. The best example of where this all goes is what happened with ticketing. 10 – 15 years ago, teams and leagues were arresting ticket scalpers, they kind of shutdown ticket websites. Today StubHub is the official resell marketplace of major league baseball and other teams and other leagues and other ticketing websites started to pair up and now StubHub has primary ticket deals, of the Sixers, the Yankees and few other teams. What they’ve done is they’ve basically created one marketplace. There’s no longer retail and resell, it’s just one market. And that’s what that stock market is. So for us, that’s the evolution of this. To work with Nike, to work with Adidas, to work with the Street wear brands to release products directly into the market. To literally IPO products into existence.

HANS TUNG: Initial offerings of new products.

JOSH LUBER: Exactly and so we’ve done some of these and stay tuned – in the next 3 to 4 months we’ll probably have another half a dozen IPO’s coming with brands, including some really big sneaker brands and that’s really the evolution of this – where you get to a point where you just disappear this line between retail and resell. There’s just one market and it’s about those brands engaging with us and with the secondary market to say – hey listen, you guys have more website traffic than footlocker. We have more customers than any sneaker boutique or sneaker retailer, so it’s an evolution and an inevitable evolution that we all end up working together.

HANS TUNG: Right and these IPOs could be global and launched globally for consumers everywhere.

JOSH LUBER: Exactly. Yes.

HANS TUNG: The other side of the equation is obviously offline retail. You mentioned Footlocker. So over time how would online commerce interact with offline stores?

JOSH LUBER: We just opened our first brick and mortar location in Soho, in New York, actually about two blocks South of Supreme on Lafayette and I was careful to say brick and mortar and not retail because we don’t sell anything. We are a marketplace. The primary purpose of that location is for seller drop offs. For sellers who have already sold something on StockX. To come in and drop it off. We authenticate in the back of the store, so someone can get paid out much quicker and then we can have that product and get it to the buyer much quicker but the evolution of that location and then we’ve done pop up locations in London, LA, Chicago, Atlanta and we’ll continue to do more and continue to get more permanent. The evolution – it’s about the brand. It’s about having a brand experience on the ground, in these locations where sneaker culture and street wear culture and our customers are and it’s a really favorable situation to be where I don’t have to rely on brick and mortar sales in order to pay the bills and once you do that and think about it from a brand standpoint, you can be more creative. You can take risks. You can have a lot more fun in doing that, knowing that the core business is online. This is how you just amplify it.

HANS TUNG: I have seen in Japan and in Korea, Taiwan and now in China, that you can go to offline stores, use the QR code, scan it, buy something, you don’t have to take it with you because they will ship it to your house later. So you don’t have to touch anything, just scan, pay with mobile wallet and go. Extremely easy and frictionless.

JOSH LUBER: Well so it’s a phenomenal example of consumer behavior because for us what happens is – when we opened the first pop up, we only had people that were working at the pop up, authenticators, intake, and then we very quickly realized that the most valuable people to have on site were customer service and to have people there that could answer those questions that used to come in via email or chat and then we would explain it. So they could buy something and they could – and that was massively powerful, cause it leads to exactly what you just said, because then people are happy to sit there, shop on their phone who otherwise had questions and had friction around using the product and now they can do that and the product will show up at their house in a couple of days.

HANS TUNG: Exactly.

RITA YANG: Why is eBay not doing this?

HANS TUNG: That’s a question we get asked for many of our portfolio companies.

JOSH LUBER: EBay is great and will always be great for that long tail product. You want to find some unique one of a kind item, eBay has a scale ready for that, but the eBay model is antiquated. There’s no catalogue basis, there’s no structured data and to implement this for even just that quarter reason – if you would look for the shoes I’m wearing right now on eBay, you will get 500 listings a 1000 listings and then you as a consumer have to figure out should I buy from this person or that person? Why is this for 600? Why is he selling it for 800? How many reviews does this person have? Why is there a cat in the picture? All that stuff is nonsense, it’s just confusing. You go on StockX, there is one product page of that product. You want to buy a share of Nike stock, there is one ticker symbol for Nike stock and everything happens at that one place. That’s the starting point.

The standardization to be able to have a single product page and a catalogue based experience that eBay would literally have to create an entire new – they would have to rebuild their entire site to be able to do that. We’re not as concerned about someone like eBay coming in and replicating what we’re doing as much as – we would be more concerned about someone building something from scratch and competing with us somewhere that we’re not, whether that’s geographically or different products. Every single thing that we have done is in facilitation of that model and how we handle payments and how we handle shipping and that customer experience and what’s great is, it’s taken a while, but every one of those things builds mote around the business because you have to be fully committed to that model in every way that you build the product to be able to actually do that. To Hans’s gut reaction to that question – eBay is probably the last person that can replicate that.

HANS TUNG: For someone who has seen NBA just took off from ground zero in China, the big power house today, drawing so many fans. It is not hard for us to see StockX doing well in China. Over time. What are your plans regarding China and what do you think about building the presence there. You already have 15% of your buyers coming from China without doing anything. Its already indicating that something big could be happening. Yet there are also local competitors, players that are very sizeable already. What do you think about the Chinese market?

JOSH LUBER: This is probably the most important question for us right now, in terms of our short and medium term strategy, China is maybe the only thing that we don’t know exactly what we’re doing and we’re still exploring a lot of different options because there are very formidable marketplaces on the ground in China for sneakers. But we have the supply, and there’s a really unique distinction between what has happened in the past with marketplaces and US companies coming into China versus this scenario that we have the supply – because most of it comes in the market through the US and that’s where our sellers are. We have some big decisions to make very quickly around who we partner with? Who do we try to compete with? And where do we set up those teams and those operations? I mentioned earlier – 100% of bottlenecks in every part of the business is just people and that’s no different here as well.

We still need to hire a great leader for not only China but also for all of Asia pacific and build a local team. And whether that local team sits in Hong Kong or Singapore or mainland China and then where does the operations team sit when we authenticate products? Does that sit in either of those three places or somewhere else? Those are the key questions and then it’s a function of who do you work with here? Do you work with one of the existing sneaker marketplaces and partner with them? Do you compete with them? Do you work with one of the big players? The Alibaba’s or JD’s? Those are all the different decision points that we’re in the middle of discerning right now.

Like I said, everywhere else we have a really clear vision of how to execute this in the short – medium term and man! There are just so many different options for how we can do this, knowing that 15% of our business is already here. A couple of weeks ago, Chris Woo wore a shoe and all of a sudden it was the biggest shoe on StockX for a week. The impact is so, so clear. Over the Chinese new year, there was a shoe – this is the best story – there was a shoe it’s called the Jordan One Mid – this is a shoe that is a discount shoe, nobody in the US wears it, but there was a black and gold color wave that Jordan One made that during Chinese New year it became the number one selling shoe on StockX for two weeks. It was because it was black and gold, it was because it was during Chinese new year and some celebrity had worn it and all of a sudden – and all the US sellers figured out – they were all going to finish line and buying it on sale and then reselling – I mean, it is so clear the impact in China so it is important for us to figure out the right way to do it.

RITA YANG: I was on YouTube last night and there is actually a tutorial on how to buy sneakers from StockX on YouTube – for Chinese consumers and it has 150,000 views.

JOSH LUBER: Well because we don’t have local languages yet, we just rolled out Italian and we’ll continue to roll out European languages, but obviously it’s a bit more complicated. Rolling out local languages here, local payment methods, WeChat, AliPay there are some parts of this we know for sure we have to do and we’re in the process of doing it, and then the bigger strategic questions around who do you partner with is figure out –

RITA YANG: What do you say to sneaker heads who says to you – having a stock market for something that we love, is kind of ruining the fun?

JOSH LUBER: The fun doesn’t exist.

HANS TUNG: It’s a notion.

JOSH LUBER: Yes it so is. This idea that you can go find great sneakers for a deal or discover them – it just doesn’t exist anymore. In the mid 90’s there was a guy, his name was Bobbito Garcia and he wrote a book that become the sneaker head bible in the mid 90’s and the title of the book was – Where do you get those? That used to be the seminal question. Nobody asks that question anymore. We have the internet, we know where to get everything. We know when everything is coming out and where its being released. Now, can we get it? Can we physically be able to get it? No, because we’re not willing to sleep outside of a sneaker store for three days or we don’t know the manager of the store. But it’s all a game, that idea of – oh! There’s a community where we can all – no! That doesn’t exist anymore. What we have done is we’ve created access and transparency around what has become a very fragmented and messy game that it is hard for anyone to be able to play unless they really, really have that sort of inside baseball opportunity. It’s an old notion that just doesn’t exist.

RITA YANG: So in other words, sneaker heads nowadays actually really appreciate what you’re doing?

JOSH LUBER: Yes they certainly have voted with their wallets right.

HANS TUNG: What’s your MPS score again?

JOSH LUBER: Not only between MPS score but just the massive growth. For us it’s about awareness. It’s just an easier way to be able to buy any product and that’s ultimately at the end of the day what consumers want. I had a really interesting conversation last night at dinner with a woman who said – listen, a lot of people want to talk about sustainability, but for consumer good’s people don’t necessarily vote with their wallets on sustainability. They vote on access, price, ease of purchase and that’s what the stock market model creates for StockX.

RITA YANG: As a serial entrepreneur, do you have one piece of advice that you want to pass on to other people who are thinking about doing it?

JOSH LUBER: I have two related piece of advice that I always use in here and they’re the most basic things ever but they’re so important.

So the first is talk to everybody about everything. Don’t think that someone’s going to steal your idea or show up with an NDA to talk to someone like – the refinement of those ideas and finding those people to work with, it’s just important to get out there and talk to everybody about everything and then secondly, just do something. The idea that you have to have this perfect idea and perfect plan, it’s just completely illogical. I could never in a million years have predicted or planned to meet one of the most successful business people in the world, Dan Gilbert and that he would have the exact same idea as me, I didn’t know that when I was creating Campless. When I was going through millions of  rows of excel spreadsheet to clean all this eBay data and build a price guide, but there was something there and we had to just be doing something to push that forward and those things ultimately put me in a position to meet Dan and to be able to do that. Talk to everybody about everything and just do something.

HANS TUNG: Great advice.

RITA YANG: Thank you. We’re going into the last part of the podcast which is a round of quick fire questions. Just say the first thing that comes to your mind.


RITA YANG: Can you give us some pro-tip for shopping on StockX?

JOSH LUBER: Have bids. Bids are by far the most valuable part of the whole system. Almost everything I buy on StockX is – I have a bid out there that’s a beacon to the world and let someone know that I’m willing to buy this product, and so by understanding how to use bids, there’s so much data, there are so many different parts of the product of the business, but the holy grail of all of it is bids.

RITA YANG: Who is the entrepreneur you admire the most?

HANS TUNG: Besides Dan. That wouldn’t be fair.

JOSH LUBER: I’m not going to answer it, I don’t want to put a spotlight on this person but I’ve me multiple people. Different people at different times have really inspired me and helped me along the way and I’ve never had one mentor, but different people at different times have helped where I was in that and its almost always been some entrepreneur that has been 2 – 3 – 4 steps ahead in my journey. It’s not me to Steve Jobs, it’s who is the guy that’s built the company that had three times as much traction as my company. Those are the people that have been most helpful to me.

RITA YANG: What’s something that you’ve read recently that you would recommend?

JOSH LUBER: I joke that the only thing I read anymore is my email, but I’m in the process of actually listening an audio book, Bobby Hundreds book called This is not a T-shirt and Bobby Hundreds was one of the founders of the street wear brand The Hundreds and one of these really OG originals street wear brands. It started back in the early 2000’s – 2003 I think. So to be around 16 years in that game and is a really good story of the evolution of the culture of our customers and the culture of supply and demand and street wear and how it’s all grown. That’s what I’m currently listening to and its awesome. It’s just a really, really great story of not only an entrepreneur but someone who has built a really successful business that was never a billion dollar business but it’s been going on for 16 years in the industry that it did – I’m a big fan of what he wrote.

RITA YANG: What’s a habit that you have that you think changed your life?

JOSH LUBER: You didn’t necessarily say changed your life in a good way right? I’ll tell you what it really is and it cuts both ways which is – I don’t really sleep much anymore. I sleep usually about 4 hours a night, I usually go to bed between –

HANS TUNG: So you work 996 – out of enthusiasm.

JOSH LUBER: Man! When I heard about that for the first time -! What happened is, the bigger the company became, the more that was going on, the less time you have to do any real work during the day and so I’d come home, I’d put my kids to bed, my wife would go to bed, and from 10 pm to 2am, from 10 pm to 3 am, from 10 pm to 4am that was the time to do work and have time and all of a sudden – my sleep schedule is pretty horrible, its changed my life positively in the business, it’s certainly not necessarily healthy and at some point I will have to figure out how to get more sleep, but you never plan that. You just stay up five minutes later every night and then all of a sudden you’re going to bed at 4 am, but it’s because there’s just so much amazing stuff to do and it’s just so much fun.

HANS TUNG: Now you’re running a more global business, makes it even tougher to find time to sleep.

JOSH LUBER: Being on this side of the world is so much harder. By the time I’m trying to go to bed, emails are flooding in and everything else, but yes, that too.

RITA YANG: Hans can tell you how to sleep on the plane, he knows all about that.

JOSH LUBER: I’m really good at  – I steal sleep. That’s the other part.

HANS TUNG: Yes you have to.

JOSH LUBER: I sleep on a plane, in an Uber or whatever, I’m sitting here with Katie who runs PR for StockX and she is often very embarrassed for the different places that I can steal sleep but you have to do what you have to do.

HANS TUNG: That is exactly that. I don’t really care, you don’t have to fixed schedule about this.

RITA YANG: So what do you do when you’re stressed?

JOSH LUBER: I don’t know. I don’t really feel stress as much as frustration. Its more about frustration with inability to be able to control certain thing. I’m just not worried about failure, I’m not worried about that. My stress, my frustration really comes around not being at home for my kids and that sort of stuff. You deal with that in different ways. Whether its facetime or whether its canceling a trip to be home, those are the sort of things. That’s the flipside of all of this. My daughter is almost seven, my son is four and it’s amazing to be able to have these opportunities to travel around the world and do this, but the flipside is just managing that part of it.

HANS TUNG: What was it like to meet LeBron James for the first time?

JOSH LUBER: LeBron and Dan don’t really have the best relationship.

HANS TUNG: That’s why I asked.

JOSH LUBER: Yes, so it took a minute for LeBron to see through that I wasn’t just like Dan’s guy in StockX cause he knew about that, but we had done this project where after the Cavs won the championship we did a really swift Nike – where Nike gave us LeBron James first retro sneaker and we created a sneaker box out of wood from the cavaliers championship court. So the Cavs cut up the court and then we included actual Cavs championship ring in the box. The first time I ever met LeBron was after that had already happened and it was funny cause his initial reaction was not very positive but then he was like – Oh! You did that with the – he said – Oh! That was great and we talked about the project for a while and he was super complimentary of the project and it was really nice.

RITA YANG: What’s your favorite pair of sneakers?

JOSH LUBER: It changes every day but the shoe that I have the most of is the shoe called the Air Jordan 1 Lansmountain White, it is collaboration between the skateboard at Lansmountain and Air Jordan and I have seven pairs. I buy that just by the math of it I think that’s my favorite shoe.

HANS TUNG: Have you ever met Michael Jordan? What was that like?

JOSH LUBER: I have never met Michael Jordan in person, but I have been now on three conference calls with him, all three of which have been me pitching StockX to him as the leader of Jordan brand and I know both of his sons really well. I think it helped that it was on a conference call and not in person. He was super professional, knowledgeable of what we were doing and all that, but they still haven’t said yes to release with them.

HANS TUNG: So keep on working.

JOSH LUBER: Yes, we’re still working on them.

RITA YANG: Thanks for being on the show Josh, we really enjoyed it.

JOSH LUBER: Thanks for having me, it was awesome.

Episode 40: Renee Wang of CastBox: on Building America’s Top-Rated Podcast Listening App

In this episode, we interviewed Renee Wang (王小雨), the founder and CEO of CastBox, a global podcast platform often referred to as the “Netflix for podcasting”. It uses natural language processing and machine learning to power unique features like personalized recommendations and in-audio search. According to a report from Sensor tower in April 2019, Castbox is now the biggest 3rd-party pure-play podcast app. 

Before launching CastBox in 2016, Renee worked for Google in China, Japan, and Ireland. She holds a bachelor’s degree in Peking University in psychology and mathematical statistics. While in college, she taught herself coding and became one of the earliest Android developers in China. 

On the show, Renee discussed user acquisition in international markets with a cross-cultural team, integrating Chinese social app features into its global podcasting platform, the landscape of consumer-facing audio apps in China and her strategic decision for not entering the Chinese market. She also shared her journey of landing a job at Google without speaking a word of English, selling her apartment in Beijing to fund her startup and leading a diverse team spread across the US and China.


RITA YANG: On the show today, we have Renee Wang, or Wang Xiaoyu in Chinese. She is the Founder and CEO of Castbox and as a self-taught programmer. Castbox is a global podcast platform that is often referred to as the Netflix for podcasting. It uses natural language processing and machine learning to power unique features like personal life recommendations and in audio search. According to a report from Sensor Tower in April 2019, Castbox is now the biggest third-party pure play podcast app. Welcome to the show.

HANS TUNG: Before launching Castbox in 2016, Renee worked for Google in China, Japan and Ireland. She holds a Bachelor’s Degree in Peking University in Psychology, in Mathematical Statistics. While in college, she taught herself coding, and became one of the earliest Android developers in China. Welcome to the show, Renee.

RENEE: Thank you.

RITA YANG: First of all, can you tell us the story behind your English name, Renee? We heard it has something to do with Google. 

RENEE: Yes, it was a long time ago. At the very beginning even, I began teaching myself how to code. Google was my dream company and a dream offer. I wanted to apply to Google. But, I think, five years ago, I just graduated from Peking University with a Psychology Degree. I did not have any internet genes in my background, in my resume. But, I tried my best to apply to work there, at Google. I prepared for about eight months. Until the eighth month, I continuously applied to Google. It was really funny, because at that time, Google had the following rule. If you apply for one job and you get rejected, you cannot apply again during the next six months, because they feel that you cannot improve that much during half a year. I remember I applied for the Engineer Team, the UI Team, because I did learn a little bit about Photoshop and coding. I did also apply for the Ad Words team as well as the Google Maps team. It was really fun, because at that time, I had already quit my job. I stayed with a friend of mine, who was a computer science student. Every day, I was hiding in the building, because computer science students had friends performing internships, internships in Google. I wanted to ask them to do a referral. I didn’t want only one referral, because I didn’t want my resume to arrive only through one channel. I changed my English name. I changed my email, and I changed my phone number for different resumes and applied for different roles. Because the whole building knows that I’m applying for Google, so they also tried their best to find…

HANS TUNG: The right opportunity for you.

RENEE: Yes, the right approaches. Finally, I got the opportunity. It was not an interview at all. It was kind of like Edison having an event, a saloon. I was using my friend’s master email to apply and tried to join this event. The event was on the seventh floor. When I was in the elevator going up from the first to the seventh floor, I continued to perceive who looked like the kindest person. I tried to befriend him and asked whether there was any role in his team. He said, oh, we do have a role. Finally, after I jumped out of the elevator, I tried to find a common friend between me and that guy, because I didn’t know that guy at that time. I tried to find a common friend.

HANS TUNG: On which app?

RENEE: I just asked.

HANS TUNG: I thought you checked out their WeChat or something.

RENEE: I just asked whether or not we have a conference. Then I went out of the elevator to go to the female restrooms. I called my friend out. You have to apply again. Help me to apply to Google. Edison said that people delivered my resume to that team, because I already know the team during Edison’s online/offline events. He said that you can get an interview. Edison, I think I had six onsite interviews. It all got positive feedback. 

HANS TUNG: No technical questions.

RENEE: No, not at all. It was Edison’s Team. But at the final interview, they felt that I’m too junior, because I applied for a senior role. They felt that my internet background was not strong. I failed again. I felt as if this was the end of the world. Anyway, I was still applying for some other roles. After, I think, one month, Edison’s team called me. They said that the role you applied for previously requires a more senior professional, but there is a junior role open. Do you want to apply again? I said, of course. At that time, I was already getting an offer from Oracle. I was almost under the training process. But, then I quit my job. The HR said, no, you should not quit, because it is only an opportunity, because you have already been rejected by Google. This one has a record.

HANS TUNG: Which name did you use for that?

RENEE: Renee.

HANS TUNG: It is Renee.

RENEE: He said, you are Renee. You have a record proving that you are not suitable. There is a lot of risk even if we gave you another opportunity. I said, I don’t care. That’s why I quit my previous training process on Oracle. Then I prepared all the essays and all the reference letters. After another two weeks, I finally got an offer. The reason I used Renee as my name was that at that resume I delivered to Edison’s Team, I also used Renee.

HANS TUNG: How many English names have you had during the Google process?

RENEE: I think at least ten. But there were all similar to Renee, like Ren. That’s why all my friends know this history, because at that time, I tried to approach all my contacts to try to get any potential opportunity in Google. That’s why when I quit Google about four years ago, when I said I want to do my own start-up, they felt that I am insane. 

HANS TUNG: You worked so hard to get here. What are you doing leaving?

RENEE: Yes, that’s true. Before Google, when I was applying to Google, the most difficult part for me is not only the interview but also my English. Before the application, I could speak zero English, almost zero. That’s why at that time, I bought an interview book. Literally, I repeated every single word in that book. Also, I think I wrote down my experience in Chinese into the A4-paper in 17 pages. Then I asked my friend in the US to translate that into English. When I interviewed for Google, besides the 17 pages and that book, I could speak zero English. It’s true. The funny part of that is, as I mentioned during Edison’s interview, the people who interviewed me said you are great. But your only disadvantage is your English. In my mind I thought, you don’t know my real English level.

HANS TUNG: It’s a lot worse.

RENEE: It’s much worse. That’s why for every resume, it was not me who made the changes. I had to continuously ask my friend to change the resume. Every time I had to change a little bit of those 17 pages, because the role I was asking for was different. At that time, I tried to remember the top values of Google. What is left for Edison? What does Edison mean? Basically, I could remember the definition of the Google Edison webpage. I knew the team members. But they didn’t know that, but I knew that.

RITA YANG: Obviously, you’ve always had this all-in mentality in you. In fact, when you started Castbox, you sold your house in Beijing. I’m just a little bit curious. Was that a difficult decision for you at all? Where does your conviction come from?

RENEE: First, how I got the house. I want to share this for a bit. I began to develop Android since 2008, about eleven years ago. At that time, people always said, there were about 100,000 apps on iOS. At that time, there were only about 100,000 apps on Apple Store. There were only 20,000 apps on Android. My friend said, you should learn Android. There are a lot of opportunities there. That’s why I began to learn coding. At Edison, I developed a lot of apps and a lot of games. There are some apps I developed that are really complicated. I felt like people may like it. But as a result, people didn’t care about the app that I felt might become popular. But, there are some stupid apps. Even when I code, I never do the test, because the apps are too stupid. I didn’t want to try and do the QA. But those games get a lot of users. There is one app we called Bomb Bomb. People just doing nothing, just clicking on the screen. Then all that fruit, if they’re similar to each other, they become a bomb. They disappear. That stupid app was in the top three on Thailand’s market after the launch on Google Play, two weeks after we launched it on Google Play. We got a lot of advertising revenue from that app.

RITA YANG: You built that app yourself.

RENEE: Yes. As I mentioned, it’s a really silly app. I do not recommend you to download it. But the users like it. As I mentioned, it went to the top three and got a lot of organic downloads. At that time, every upload you upgrade the app. It will show up on the top apps, or top new apps. That’s why I continually upgrade. I continually get this app exported to the users. The promotion is free. But the advertisement is real money, a little money from this part. Also, I get a little money from YouTube channels. You cannot find that anymore. At that time, I felt that there’s a lot of engineers asking questions on Stack Overflow. They’re asking, for example, how to use the Android, or how to use the Android studio, and how to integrate AdMob SDK. The answers are all not very good. That’s why I searched all the top questions on Stack Overflow, asking about Android, because it is my only ability concerning coding. I then do a YouTube. Then I tried to answer the questions. Then I copy and paste back the link to the Stack Overflow questions. Also, the most important thing, I noticed that time on YouTube, there were a lot of people searching for Asian girls. But they were not searching for a photo. That’s why I changed the name of my YouTube channel to “Asian girls are teaching Android”. That’s why I got a lot of traffic. But I didn’t show my real picture. But now, you cannot find that anymore, because it’s gotten down by Google. I got a lot of traffic, and people want to learn how to code Android, maybe. That’s why I got a lot of advertisement revenue as well from YouTube, and using the money I got it from those. But also, I got some extra money from the previous savings when I worked for Google. I bought a house before I went to Dublin. Then from Dublin, I moved to Japan. Then in Japan, when I had the idea I wanted to quit my job. I thought I should find some investors. But at that time, I didn’t know anyone.

HANS TUNG: No one, no VC.

RENEE: That’s true because I’d already been out of China for almost two years. I had no connections. I really wanted to create the startup though.  I then made a really quick decision in one minute. How to sell the house? That’s why I found this previous agency who helped me to buy the house and asked it to sell the house again.


RENEE: It was a quick decision. But I got the money later, because there was a loan. I had to follow the process and the decision was really quick. I just feel that even I failed to establish the start-up, I could still find a place to sleep. I could still go back to my friends.

HANS TUNG: At her apartment.

RENEE: Yes, at her apartment. 

RITA YANG: Using her credit card.

RENEE: I can go through that again. 

HANS TUNG: How did you decide that you want to do a podcasting app?

RENEE: At the very beginning, the first app I did was a yoga app. Also, I tried horoscope apps. I made them all happen. At the very beginning, I developed until 1 or 2 am every day because it was only me at that time as a full-time employee. I had some friends for part-time help. But none of them succeed, because all of them failed. I continued to develop. You can see that we tried more than 20 different kinds of directions, not only ideas. I made them happen. I went to the Github to find an open-source to secure the MVPs as fast as possible. For the podcast, I already had the idea. At the end of 2015, I met a friend, who is now still working for Google. He said that internally they had good feedback for this podcast app. iTunes has its own podcast app, and Google, at that time, did not have one. The guy who works for Google Play said that I have told my developers to try this direction, but none of them are ready to take it up. I said, maybe I can do it. That’s why I took his advice at the end of 2015, which was on December 31st because there was a concert.

RITA YANG: New Year’s Eve concert.

RENEE: Then on January 1st, 2nd and 3rd, I made it happen. On the 4th, I put it on Google Play. The way we made it happen was that, first, I went to GitHub to find if there was any open-source commercially, a friendly open source. I found a podcast, which is MIT lessons, which means that it’s commercial friendly. What we did during the first three days was I changed three things. Since that app was developed by a real developer, all its rankings were similar to Linux development, and TED Talk about the tech part. I changed the ranking from this kind of thing to Joe Rogan to target more general users.

HANS TUNG: General public.

RENEE: Yes, I changed it first to Joe Rogan. I changed the second one to The Daily, or something like that. This is one thing I changed and then was changing the ranking. The second thing I changed was adding languages. They only had that one in English. I added about seventy languages.

HANS TUNG: Seventy!

RENEE: That is true. But I used Google Translate to do the translation. This was the second thing I made. The third thing I made was making the UI beautiful and better by changing the logo. During the first three days, I did all that stuff, and then put it on Google Play as a first version. Also, it was very buggy, but I found that people if they already found this app they spent half an hour a day to listen to all the content. Then I said, maybe this is something worth risking. That’s why I spent all the money I got from selling my house to begin promotion from day two i.e. since I noticed that people were spending those thirty minutes on it. I thought, there is a real value in this. There’s a real need. In just the first month, we got $1 million.

HANS TUNG: In the first month?


HANS TUNG: Just from two key changes: the language and the new logo. That’s it.  

RENEE: That’s true. 

HANS TUNG: The friend who gave you the idea is still at Google.


HANS TUNG: Did he ever consider joining you?

RENEE: No, he’s happy there. There’s free food. 

HANS TUNG: He’s the most suitable for a multinational job to come up with ideas. You’re much more entrepreneurial, so you started to pursue it.

RENEE: Yes. Even though at the time, there were a lot of other podcast apps. What we were trying to do different at least for the first year was that we tried to run as fast as we could. I remember in the first year, we upgraded the app about three times a week for every version. At that time, we didn’t have PRD, any kind of product road map or document. We only had one A4 page. Every morning, we talked about what it is we want to do and they wrote it down with a pencil on one A4 page in the back and front. If we did not finish, he would not leave – every day. As I mentioned the first version was buggy. It wasn’t that functional. The function is not that satisfactory. I just looked like competitor-apps and got the whole list.

HANS TUNG: Of what features they have.

RENEE: Of all the features and see what they have done within one month. We said this is what we are going to do in one week. As I mentioned, for every week, we have three minimal versions. If you see on the App Annie or some other third party moderators app, you can see every two days, there’s…

HANS TUNG: A new version.

RENEE: A new version. The whole update is at least ten. That’s why in the very first year, we only tried to catch up and tried to see that, if there is something already proven to us by another platform, we try to make sure we have at least the core functions. That’s why in the first year we got the highest rating and we got a lot of “editors-choice” as we are the most user-friendly.

HANS TUNG: Comprehensive.

RENEE: That’s true. There are several extreme examples. One example is that there is one person, a Russian girl. She’s blind. She said I’m using your app, but you do not have the voice-over feature. I cannot know what all your pictures are about. We received her feedback, and within one day, the whole team tried to add the labels to all the single pictures, and then develop an update.

HANS TUNG: Another version.

RENEE: Then we gave it to her, and she was so happy. She shared the app. There’s a kind of community. She shared the app with all of her community. There’s another example. There was one US user. In her mornings, she’s using our app. She gave her feedback. She said I like the app, but there is a really important feature but you guys don’t have it. We received her feedback. It was evening already in China. We believed that this is important and decided to finish it. The engineering team didn’t leave home until we developed that feature, and upgraded the version on Google Play, because Google Play is quicker. You can upgrade after a few hours. Then in the user’s evening, when she’s back from work to her home, she apologized and changed her comment because in Google Play you can edit your previous comment. She changed her comment and said: I didn’t notice that they do offer this feature. I am recalling my comment.  

HANS TUNG: You just changed it very quickly.

RENEE: That’s true. She didn’t see that we didn’t have the feature that morning. All competitors that have been in the industry like Pocket Casts, it’s true, that they are really great. We respect them very much. But after one year, in terms of functionality, total downloads, or ratings on Google Play, we were number one. If you see a lot of third parties, like App Annie or Sensor Tower, are all ranked from in terms of downloads and the number of daily active users. I think we were also number one among all the competitors. But branding-wise, we are still lacking because branding needs actual time. We need at least three, or four, even ten years to build the brand. But user-wise, the data-wise, we did try to be more competitive. This was during the first year. But during the second year, it was getting harder, because we had to be innovative. 

HANS TUNG: That’s right. You were copying. Now you are the leader. You have to come up with new features on your own then. 

RENEE: That’s true. That’s why I think, from a user’s perspective, we were getting slower since the second year. But that’s why we try by all means to be innovative.

HANS TUNG: Do users give you new comments, new feedback, new ideas?

RENEE: That’s true. We have two telegram groups. One is called Castbox Ambassadors. The other one is called Castbox Users. They give us a lot of feedback. We tried to find all this feedback to filter on whether or not, we can make it happen. In the second year, we tried to be innovative. We tried to be more creative. For example, to be honest, we tried a lot of things. In the community, you search for comments. Also, we tried to have loud cast i.e. adding timestamps for every single audio clip as well as episode labels recommendations. We tried all the things. I mean, some of them didn’t work at all. For example, we tried episode label recommendations. We spent a lot of time doing a recommendation based on the episode. For example, we’ve tried to understand whether they are similar episodes talking about the same thing, but data-wise this is not that good. We just try to drop that idea, and we try some new stuff. Also, financially-wise, we tried premium content. We tried everything. We tried to make sure that we have podcasts of many types. If it works, we make sure it continues to improve. If it didn’t work, we just drop it. That’s why during the recent two years, all that we’re trying to do is try to learn whether there’s anything we can do to be different. We can be a little crazier in this industry. For example, the most recent thing we are doing and trying out is called Live Cast. It’s a sort of loud interaction for live videos. But compared to traditional videos, people can do the real in-app call in. People can leave a message. They can even send you a virtual gift. At the very beginning, we didn’t have high expectations, because we had so many failures during the past two years. 

HANS TUNG: This one is the one that we discussed. Live Cast, right?

RENEE: That’s true. But now it’s totally beyond our expectations. If you see inside the app, people say that it is the real thing. People comment that if you can continue to make this happen, you can compete with Netflix within three years, or this is the next version of a real social network. Also, people began to follow each other. People began to send you virtual gifts.

HANS TUNG: When did you launch this feature?

RENEE: About three months ago.

HANS TUNG: Right. You and I talked about this idea about five months ago. You moved so fast. I was shocked. I just had an idea and you moved immediately.

RENEE: Yes. Also, if you see, every day, we have a different version. For example, recently what we just launched for the desktop version, we added audio clips. We did an on-cloud recording, which we all didn’t have at that time. We did that for the desktop version. They can easily set the mean or set block users. It offers greater control. Also, we already have a lot of big names that will appear in Live Cast next month like Gary Vee.

HANS TUNG: Of course. He’s a good guy.

RENEE: They already agreed to come soon. We are preparing to get him onboard. This is something we finally see a lot of social elements, and we see a lot of people beginning to create. It’s a sort of a little lower threshold for people to create content. That’s why we get a lot of feedback. That’s really funny. 

HANS TUNG: Your app definitely is becoming more social because of that.

RENEE: That’s true. The funny part is that we have a team member called Tina. You also met her.

HANS TUNG: I remember.

RENEE: Last time when we went back to the office from GGV, Tina said that she really likes this feature, because it made her want to do something. Tina said that finally, after so many trials, we finally found something that…

HANS TUNG: What a good idea.

RENEE: Yes, I said Tina, I’m sorry. We gave you constantly all the bad experiences. Because innovation is really hard. You never know. That’s why I continued to try to empower the team, and remain always very positive. Whenever we have a new feature, that’s what I say.

HANS TUNG: Your enthusiasm is very impressive. 

RENEE: But the funny part is every time there was a new feature, I said to the team, this is the future.

RITA YANG: That’s somebody making her speech.

RENEE: Finally, Tina said, that you repeat that sentence so many times – every time there is new feature like the comment-thing, the premium-thing, the analytics or the claimer. Anyway, this was a startup. It was really hard. Whenever I go home, I think what I should tell the team tomorrow. It was really hard from cross-cultural aspect across Castbox team members.  

HANS TUNG: Between US and China.

RENEE: That’s true. I totally understand that for our US team members. They kind of get disconnected with the engineering team.

HANS TUNG: Because they are all in China.

RENEE: That’s true. They feel lonely. That’s why I have to empower them using future stories. Back to the topic, talking about the future, I can totally understand that our US team feels frustrated, because there was a lot of generation for our US Team. At the very beginning, I never worked in the US before. As I mentioned, I used to work in Dublin and in Japan, but never in the US. Even today, my English is not good.

HANS TUNG: No, it’s amazing now compared to your Google interview.

 RENEE: Before, I’ve never officially came to the US, before I opened an office here. It was officially my first time I went to the US.

HANS TUNG: You opened the office on your first trip.

RENEE: That’s true. The first team members I have for the US branch were good people, but they are not suitable for…

HANS TUNG: For doing Chinese work.

RENEE: That’s true. It was terrible. A lot of drama at the same time. It’s not their fault. It’s my fault. I don’t know how to find the real users. That’s why I really appreciate Tina as the first team member of the group. She is still there. I owe her a lot. I continue to show her the greater future. At the very beginning, there was a lot of drama. There were a lot of conflicts and a lot of disconnection between China and the US. This was the first group of people. But we didn’t have a lot of connections. We just caught whatever we could catch. But there were many conflicts between the US and China.

HANS TUNG: What was an example of a conflict? The famous, the dramatic.

RENEE: There’s a lot of huge ones. There are too many, so I cannot remember one in particular. There was a really big fight. In the China team, because we are disconnected from the market, we try to make all our decisions based on data. But the US people are not operation-driven. In their decision making, they are trying to understand the market. There was a lot of disagreement on certain decisions. For example, in China, because we believe in data, we did spend a lot of money on user acquisition, since data-wise, ours is the highest, if we calculate the retention, and calculate the annual star rate. But the US people feel organic growth is the most important metric they want to purchase. That’s what they want to pursue. That’s why they said, you guys should not spend any acquisition money. You should spend all the money on paying for the creators to do the shout out. They did prefer this kind of organic growth from word-of-mouth, from branding awareness. But for that part, it’s really hard to marry. Even for the user acquisition part, there are many conflicts. US people feel that you’re doing the Google, Facebook. It feels like stupid money. Why not to collaborate also with influencers? But the Chinese people do not understand this. Influencers are really hard to track especially, for this kind of audio content, which the network effect is not that big. Methodologically, they are different. There are a lot of big discussions. There is also a difference in lifestyle.

For example, we hired a really professional guy. He’s really nice. He’s very professional, very smart. But during the first week he was at the office, he spent several hours talking with our HR regarding why his phone bill should be paid by the company. But the Chinese Team feels that he should just get things done. Stop spending time on discussing, whether or not the company should pay the phone bills. But as the US people said, oh, this is very crucial. This should have been done at the first day, talking about whether or not this belongs to the company or to the…

HANS TUNG: Individual.

RENEE: Yes, to the individual. The Chinese team feels that this is just wasting time. Why are we not spending every single minute developing?

HANS TUNG: Improving the product and getting users.

RENEE: That’s true. But US people believe that these are the rules that we should talk about first before we jump into work. This is a work-style difference. There are other differences regarding our communication style. The China team is a bit shyer. They just keep doing, doing, without too much communication. But the US team members, they always want to engage in a critical discussion or a strategic discussion. Before they do anything, they want to… 

HANS TUNG: Talk about it.

RENEE: That’s true. We spend time talking and talking. But the Chinese team, they’re really quiet. They’re just getting things done. Even if they don’t work, they don’t change. That’s why the US team members wonder why do the Chinese engineers never talk? We didn’t even know that this thing changed. But the Chinese wonder why are we still talking about it? 

HANS TUNG: Do your job.

RENEE: That’s true. I can understand both.

HANS TUNG: Now you can.

RENEE: I’m in between. But it’s really hard to try to balance their mindset or try to balance and face the conflict. Nowadays, we still try to make sure that they are communicating with each other very well. But there are still many conflicts. I don’t think this will get fixed at the end of the day. But now, we are trying to leverage both advantages. That’s why by doing this, we try to save cost, by hiring more engineers or operational team members in China. But we try to be more professional and more local by hiring BD people.

HANS TUNG: Marketing BD people in the US.

RENEE: That’s why nowadays, I feel much better, because they do not cooperate with each other.

HANS TUNG: They don’t talk to each other that much.

RENEE: But still, we try to have some people in between to try to serve as a bridge. But anyway, we do respect both team members.

HANS TUNG: They all have strengths.

RENEE: That’s true.

RITA YANG: Regarding your users, are they mostly based in the US or where are they based?

RENEE: Half of all the users are from the US. Another thirty percent are from some other European countries, including the UK and Germany and Northern European countries.

HANS TUNG: Initially you had 70 languages, and English immediately became the most popular one?

RENEE: That’s true. Because about 70 percent of our users are English speaking users, because Canada, the UK and Australia also speak English.

HANS TUNG: But you also have a Chinese version initially. But it never really took off in China.

RENEE: We have zero Chinese users. If the Chinese want to use our app, first, they have to buy a phone that has Google Play.

HANS TUNG: It’s not on any of the Chinese Android platforms.

RENEE: No, because if the phone didn’t have Google Play service, even if they download the app, they cannot open it. But for Apple Store, you have to have an account outside of China.

HANS TUNG: You could have made a Chinese version and have it be on mobile Xiaomi, on Tencent app stores and so forth. But you chose not to.

RENEE: That’s true, because firstly, we do not have the ICP license, which we have to get if we want to.

HANS TUNG: You can get that. It’s not hard.

RENEE: That’s true. Also, secondly, we have only 70 people in the team. But if you want to do content, then you have to do a lot of reviews, which is out of our organizational capability.

HANS TUNG: Sure, but after you raise money, you can do that too. You made that decision early on. You didn’t want to have an app for China.

RENEE: That’s true, because the two ecosystems are so different to be honest. To be honest, I want to say that the audio consumer-facing product in China is much more cutting edge and advanced compared to…

HANS TUNG: Anything outside of China.

RENEE: That’s true. If you see recently, there are lots of apps banned recently. But if you see that like Zhiya (吱呀), like Bixin (比心), like Yu’er (鱼耳) and Kong’er (空耳), there tons of really good social apps, and are very popular. Monetization is huge.

HANS TUNG: In China?

RENEE: In China. If you’re talking about the non-social apps like podcast streaming apps, I think Himalaya (喜马拉雅) and Lizhi (荔枝) and Qingting (蜻蜓), they all are also doing really good. Also, Lanren Tingshu (懒人听书). They are making a lot of progress. If we’re talking about some other new apps, a new kind of format like Soul, even though they were banned recently, but this kind of audio combined new formats of apps, they are also much more advanced than what is now in the…

HANS TUNG: Have you incorporated any of the Chinese advanced app features into your English. 

RENEE: That’s true. Beyond Castbox, recently we launched a new app called Cuddle. It’s kind of like more social. It’s only targeting the younger generation. There’s a lot of gaming…

HANS TUNG: Different features.

RENEE: That’s true. That’s more a pure application content consuming app. This is an app. We really learned a lot of ideas from those Chinese apps. But we do our own approaches on the localization.

HANS TUNG: The users also give you feedback as well.

RENEE: That’s true. For example, the new app Cuddle, is really amazing. It was a really fast decision. We decided to make it as a separate stand along with live social audio apps as of the beginning of June, June 1st. 

HANS TUNG: June 1st of this year?

RENEE: Yes, this year. It was live on June 15th, within two weeks. Until today, we haven’t promoted the app that much. But we get only several thousand daily active users. But even with these several thousands of active users, people spend hundreds of US dollars per day.

HANS TUNG: Hundreds of US dollars per day per user.

RENEE: Not all the people, but several people, US $200 per day, not all the users but some users.

HANS TUNG: What do they spend money on. 

RENEE: Just the tipping and gifting. Also because they want to jump into the ranking, top ranking of sending gift. All these methodologies are already proven.

HANS TUNG: In China?

RENEE: In China. We just try to see whether or not, it will work in the US. It has been proven that it works. Even with only several thousand active users, we can still see people spend hundreds of US dollars.

HANS TUNG: You haven’t even started promoting it yet.

RENEE: Not yet. It’s organic. Only through word of mouth or some CB users from Castbox. This kind of app is still very new. This feature has not been developed well. If this kind of app is sold in China, people will feel that it is very underdeveloped. 

RENEE: As I mentioned, we developed the app in two weeks. Now when we sell it in the US, people feel, this is amazing.

HANS TUNG: Something new. 

RENEE: I don’t want to say that, but it’s true. Back to your question, why we don’t want to depend on the Chinese market but stay focused on the US market: it’s because of all these features. Consumer-facing products in China are much, much more advanced.

HANS TUNG: Do you think that people in the US think that Google is a great company? And it is, but when you look at the things you get at Google China versus what was happening at Baidu, or Tencent, or Ali, what’s the difference that you see in speed, in the sophistication of work and et cetera?

RENEE: For example, before I quit my job in Google, I said, Google is amazing. They have a lot of innovations and a lot of fundamental infrastructure, technology, skills. But after I quit Google, I began to meet more contacts and communicate with all these Tencent and Ali guys. I feel that they are much more advanced in all kinds of business models of commercialization.

HANS TUNG: In monetization and also in social features, product features.

RENEE: That’s true. It’s much more advanced compared to the US commercial facing apps if we’re talking about B2B business or SAAS business.

HANS TUNG: Of course the US is more advanced. 

RENEE: Much more advanced, but its consumer-facing, as you mentioned, is ByteDance and Tencent. They are all engineers and product managers and even operations people. They are very strong, especially for operations. For example, I think even in the US, when we talk about operations, we think about people who are working for Amazon, packaging staff. Operations-wise they are doing a lot of stuff.

HANS TUNG: Operations already exist inside Google.

RENEE: That’s true. They call doing user-support operations. But in China, the operation is totally…

HANS TUNG: It’s a science.

RENEE: It’s a science. That’s true. But the US people don’t feel that it’s important. When they talk about gross hacking, they are talking about operations, but more tech-wise. Even the word “to hack”. In China, for the whole operation, they really know how to make the online/offline, how to make more money, how to put in the game theory, or some game elements into the application, into the whole ecosystem.

HANS TUNG: For you, how do you do operations from China for US users or European users?

RENEE: This is a really good question. For example, regarding the new app called Cuddle we are now trying to hire people from MoMo (陌陌), from YY. They’re really familiar with the operation methodologies. They have them. But they are not good with English. For every single operation person, we get them with 2 interns, who can speak really good English, almost native English.

HANS TUNG: Interns from where?

RENEE: From Stanford.

HANS TUNG: From Stanford, Berkeley in California, who are Chinese-American.

RENEE: Chinese-American. They work as a very close group. For example, responsible for a Cadoo operation, for example, is one person from MoMo (陌陌). He really knows how to make audio games and social gaming fun. He can create a whole list of how this operation masses and how we can make the app really funny, more attractive. Then I ask his intern to translate, but not only the language, but translate the culture as if this would fail. This would not work. Then we’re using this translation to go to the localhost to say, this is how we can do. That’s why basically in this process we need three people, people who know operations in China, people who know the local culture, and people who engage in real communication with local BD people. It’s a little complicated, because in China, only one person can do what three do.

HANS TUNG: One can do all three jobs. Here, you need three different people to do it. But no one else can do it. That’s your mode.

RENEE: That’s true. At least they can do it. Also – to answer your question about what I think about Tencent or local Chinese companies – what is the most important thing, to be honest, when I first went to the US, is that I felt that all those US people, especially people working at Silicon Valley, are really smart. They know a lot of methodologies. Even today, I feel so. That’s why I said, I should have to be as humble as possible. I should learn from you guys, learn about the MVP theory. The class is taught by a YC. I do think there is a lot of things I observed from you guys. But when I met some local Silicon Valley startup core people, they felt the same. They feel they are good. I feel they are good. They do know about the WeChat Pay. But they only know about WeChat Pay. They didn’t know what is really happening.

HANS TUNG: What’s the real methodology and the philosophy behind it.

RENEE: That’s true. That’s why I think there is a lot of new stuff happening: because all these Chinese startups like entrepreneurs like me, or like big companies. When we came to the US, we try to learn. We try to observe as much as possible. Then the US people first of all, they have not been in China. If they go there, they try to teach.

HANS TUNG: They don’t learn. They are only teaching.

RENEE: That’s true. That’s why I think a lot of new things are happening in China. We can leverage the advantages from both sides.

HANS TUNG: That’s one of the reasons we decided doing this podcast series with Zara in the first place. There are so many things happening in China now which is just not taught or shared on a global basis. Not only, the Silicon Valley people but the people in New York, Toronto, or Sao Paolo, Jakarta, Bangalore, New Delhi, Bogota can all benefit too. I noticed that you’re also producing original content based on our discussions before. How is that going? 

RENEE: I have to say that at the very beginning, we didn’t spend too much stupid money in the content business, because it was not our strength. I have to say that we still continue to develop our original content. IP is will maybe be purchased by bigger movie companies. Maybe, it’s still an early discussion. Also, we try to monetize by creating bonus episodes, or integrate audio ads. But generally speaking, I have to say that I hope that I will not spend too much money on the original content, if I go through that again, if we look back.

HANS TUNG: At least not right now.

RENEE: That’s true. I think there are three reasons. The first reason is that original content is not something that we’re good at, because our strength is our product. It’s our technology. And it’s our operation. It’s not our content or culture. It’s not our…


RENEE: Yes, DNA. The second reason is that, content business is like a Hollywood business. You can never predict.

HANS TUNG: It’s a hit business.

RENEE: That’s true. We cannot predict. Previously, the content that we spent more money on brought the smallest revenue. The content that spent less money brought more revenue for us. That’s why I feel this is too unpredictable. It is not our focus. The third one is that we are now trained to do more innovation especially after Spotify and Google jumped into the industry. Since, for example, Spotify spent $1 million for his first original show. But we can never use that money. Even if we continuously compete with the original content, which we were doing two years ago, there was only us. But now, there are a lot of industry giants. If we keep doing something that is not competing with them, we can never survive. That’s why we’re trying to create all the utility tools to try to make the threshold of creating content easier.

HANS TUNG: Being social I always thought to be the best way for you to grow. 

RENEE: That’s true. As I mentioned, the third reason is that the competitors’ environment is changing a little bit. But, our original content also has some advantages for us. We didn’t learn by doing. We have a deeper understanding of the industry. Even though we didn’t continuously spend too much money, we still allocated a small budget to continuously find some good content, and try to build better and deeper relationship with those content creators.

HANS TUNG: What is driving you? What is motivating you to work all these hours? 

RENEE: For me, it’s very simple. When I was younger, my biggest driver to do things is to avoid failure. Because when I was younger, I was not that confident. I was always trying to say that I don’t want to fail. I don’t want to make mistakes. But when I’m getting older…

HANS TUNG: Applying a job at Google..

RENEE: After finally, getting my dream offer. Nowadays, I’m doing things, because I want to become a better version of myself. I think it’s a very positive mindset. Because even I met difficulties, I met problems. For me this is an opportunity.

HANS TUNG: To get better.

RENEE: To get better, to overcome the difficulties. When I get some really good data or good results from a product, I will still be very humble. This is only a very small step. If I want to achieve a better version of myself, I need to be standing in a higher place. That’s why I can have a whole picture, the bigger, have a bigger view. For me, this is not the result. This is only a process through which I can be better. Back to the topic, nowadays, the only thing that I really need to continue to work on, is to become a better version of myself. That’s why I feel that during these three and a half years, were much, much, much better than my work in Google. Google is great. But I feel that Google, after the first two years,  repeated the same things. But for a startup, everyday…

HANS TUNG: Something new, full of surprises.

RENEE: Full of surprises.

RITA YANG: All right, thank you, Renee. This was a fascinating conversation. Thanks for being on the show.

RENEE: Thank you.

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


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.