A friend and I in attendance at CHINICT

This week I took part in the 8^th edition of CHINICT, a technology and entrepreneurship conference in Beijing. It was a busy few days, and I did not have the opportunity to digest and solidify the content from the conference itself. But now that the whirlwind has passed, I wanted to personally spend some time to recap a small part of the conference; both to increase personal retention of information, and to help organize data for use in academic papers. And since I believe the information may be of value to others, I have decided to publish my brief summary on this blog. If you’re interested in learning more about what I gained from some of the speakers onstage, read on!

Aigo CEO Feng Jun

The first speaker was the energetic Aigo CEO Feng Jun. He mentioned that China was on the fast track to adopting IPv6, because there are not enough IP slots assigned to China. He draw an example stating that Stanford was assigned as many IP addresses as all of Mainland China – which is hardly enough for 1.3 billion people. Therefore, look for China to lead the world in IPv6 adoption which would give China an advantage in advanced networking experience. Aigo is also looking forward to what they are calling “global time” for China, and that the moment has come for China to “Win-Win” with the rest of the world. In the past, only SOE’s in China had the resources to go abroad, which is why overseas Chinese firms have tended to perform poorly. But now financially healthy Chinese companies are ready to make the leap and gain international market share. Previously, products were “Made in China” but not branded in China, but now it is time for “Designed in China” and for Chinese brands to become international players. While I’m not sure the world is ready for Chinese brands to dominate, they are coming. And with their capital and enthusiasm, they will be difficult to ignore.

CEO of Qihoo, Zhou Hongyi

Another speaker was the CEO of Qihoo, Zhou Hongyi. He shared the challenges he faced as an entrepreneur with the audience. He also mentioned that to be successful, you must think outside the box and expect people to think that your ideas are foolish. He also said that the biggest challenge of going international is the localization problem; therefore it is essential to obtain the right partners as you go abroad. It was mentioned that the next battle ground would be for the mobile internet space, mainly due to its growth potential. When asked if foreigners could succeed in China, Zhou replied that China was not a happy place for foreigners because of the excessive amounts of copycats and the difficult environment facing startups. Even if you can get money (which is getting easier), it’s still difficult to get other key resources in China that money cannot buy. Finally, Zhou said that entrepreneurs should stop reading books by successful people, stop wasting time discussing ideas on forums/BSS and quit attending meetings to consider starting a business. Instead, young people should simply go home and get straight to work on creating a service or product that delivers value to others.

Dave McClure of 500 Startups

In the afternoon, Dave McClure of 500 Startups answered a few questions related to Venture Capital. He said that he only realistically expects 5-20% of his investments to be successful. As a result, he now emphasizes lean startups; with more emphasis on product development instead of capital investment – similar to the movie “Money Ball”. Also, many VC companies now have a tendency to make safer bets instead of focusing on home runs like Facebook or Twitter. Dave did mention that VC firms are increasingly going global, since “it’s pretty narrow to believe that the best innovation will only come from North America.” Also, the best VC firms now come in with resources beyond money, including proper mentoring and incubation. Dave also foresees a shift in Venture Capital. He believes that Venture Capitalists are underworked and overpaid, and that the VC industry has not innovated as much as the companies they have been investing in. But now that VCs also get involved in management, it is now critical for VC companies to have people with operational experience – especially since this is the main need for young companies; this is how the VC industry will scale with growth. Finally, Dave believes that the period of social gaming and deal sites are over, and that it is time to be more imaginative. Key areas to move in include the financial, educational and life-development industries.

A more creative perspective on Dave McClure

This is my summary for just three speakers who presented on the first day. Since this post is running long, I will save the possible day 2 recap for another time. If you are interested in experiencing the conference in its entirety, you can watch the preserved live-stream at the CHINICT website. CHINICT was a great experience here in Beijing, and I look forward to following the companies and people I’ve met during the conference. In the meantime, I plan on diving further into the industry in China – hope you’ll come along!

One of the investment banking capitals in the world.

There are many flaws in our education system. The idolization of the investment banking industry is one of them. It’s an absolute crime that our smartest and brightest are motivated by careers in banking and finance where their primary job description is to push imaginary money around on computer screens 60 hours a week and hope to end up with more unseen money at weeks end than when the week started. These are brilliant minds that would do great in pushing the boundaries of science through research or could contribute greatly towards policy creation though quantitative analysis. As a result, the boundaries pushed by our species have been artificially handicapped by a society that rewards the increase of a concept which is meaningless in and of itself. But this is changing, and I can’t wait for what I see as the next wave of opportunity for the youth in America and other developed countries.

A city which has elected to focus on the future.

In the early 90s, there was a rising wave of interest in the investment banking industry. Getting involved in IPOs and securities exchange was popular and fashionable. With an infrastructure backbone (which also contained internet traffic) that facilitated instantaneous transactions and a period prior to strict regulation, every single MBA graduate was rushing to sign on with a major financial institution to cash in on the gold rush.

Later, in the late 90s to early 2000s, the hot area became management consulting. Often considered a shortcut to gaining executive-level experience straight out of an MBA program, many students rushed at the idea of obtaining an opportunity to experience a wide variety of industries within a single profession. The thought of influencing a CEO on major business decisions was appealing enough for applicants to overlook the long hours and low success rate within the industry.

Then, from the management consultant period until the present, the focus of MBA students turned to private equity. As business became increasingly volatile and globalized, the need grew for specialists to conduct transactions in a market isolated from public influence. Even to this day, hoards of candidates are scrambling to gain work experience in the fields of private equity, and its younger sibling: venture capital.

Where is the next wave? In the new flat world where creativity is of utmost importance and specialization is all but necessary, it is my belief that the oncoming industry of significance will be entrepreneurship. And honestly, this is due to the maturation of all sectors above. Thanks to the infrastructure demanded by the investment bankers, we are now a globally connected community capable of sharing information instantaneously. The exploration of management consulting has educated students in the art of managing a wide and diverse amounts of businesses. And private capital, along with the subcategory of venture capital, has served to empower and increase the flexibility of businesses – particularly businesses in the earlier stages of growth.

Therefore, it is my belief that the jobs sought after by future business students may not be the ones defined by financial institutions or consulting services. Instead, many students may seek to carve out their own niche in their respective environments; which, in my opinion, is the ultimate pinnacle of business and society. For businesses are designed to solve problems, and the more brain power and resources allocated towards solving problems we have, then the faster our society will mature and develop.

A look into one of the most influential individuals on our planet today. Seemingly humble and naive in some of his responses, one can still decipher a underlying tone of strength and intelligence in his responses. Perhaps he himself may not be of utmost importance, but his compositions and legacy will carry through for generations to come.