500 Startups, one of the world’s most active investors in tech startups, recently released a report on China’s internet sector. The company suggested in the report that China is leading the world in several key internet technology areas such as mobile payments, bike sharing, e-sports and digital learning.
To discuss issues related to China’s internet industry and the prospects for Hong Kong startups, Mickey Fong of EJ Digital met up with Herbert Chia, a former Alibaba Group vice president who is now a venture partner at Sequoia Capital China.
Here are edited excerpts from the interview:
Q: 500 Startups stated in its report that many Chinese tech startups had done a pretty good job. As a respected authority on technology and a frequent traveler to China, do you agree with the view?
A: Yes indeed. A unique feature of China’s internet sector is the marketplace is completely new. When a technology product or service pops up, it can expand quickly and continue without hindrance.
Mobile payment is now popular in China, but it has come through a long way to get this far. People don’t remember the days when merchants rejected it as a payment method. But now it is widely accepted by even small vendors across the country.
One point to note is that both the dominant players, AliPay and WeChat Pay, receive strong support from their mother companies, a factor that has been instrumental to their successes.
Q: Tech startups in Mainland China are eager to source data to build machine intelligence, and then turn it into a business. What do you think are the advantages that Chinese firms have in this field?
A: People in Mainland China are eager to try new things, even for the elderly, which is helpful to product innovation. At startups, they actively attempt risky technologies with disruptive business models. As for the traditional enterprises, they remain slow to uptake new technology, and they have no idea on the application even if they have access to massive data.
Q: There are loads of startups claiming to be “powered by Artificial Intelligence (AI)” and “applying big data analytics” in China. From your experience, how can you tell if a startup is really disrupting something, or if it is just a well-made fake?
A: You can ask them where they intend to apply the technology, and also what sort of algorithm is used in big data analytics. If you adopt AI-based technology and big data analytics in problem-solving, there must be no other feasible technological solution. Perhaps the most critical question is: “what we can achieve if this technology can really fix it?””
Q: Hong Kong startup GoGoVan recently announced a merger with China-based counterpart 58 Suyun, making GoGoVan the city’s first ‘unicorn’ (an unlisted startup which carries a valuation of over US$1 billion). Do you think the deal can promote more startups in the city?
A: I am delighted with the news. Starting a business is not like a marathon, where you need to stay on the track and last until the end. It is more like a relay race; you have to pass the baton when the time comes.
Some people are good at coming up with new ideas, they prefer getting in a conference room to brainstorm ideas. But the person may not have the ability to lead the company to the next stage of its journey. What’s important is when the company advances to the next level, is there anyone who can take the baton and move on?
There would be changes in the management team or personal role when a company goes through different stages.
Among my friends founding businesses, there are technology professionals who reluctant to take the CEO role. And there are business professionals who are just right for such role.
Q: China’s technology sector has been growing aggressively, from being a follower to becoming a first-mover. For young talents in Hong Kong who are tempted to get into China’s tech industry now, what advice do you have for them?
A: First of all, he/she must be devoted to the technology area that he/she is interested in. If you have a passion for one thing, you will have an edge in it, and you should have no difficulty finding innovative and interesting ideas for it.
A senior in the tech industry once told me that the three most important qualities for startup founders are passion, perseverance, and curiosity. Startup founders, in general, have the first two characteristics, but they often lack curiosity.
There are still opportunities for Hongkongers to go north and enter China’s tech sector. Tech startups in Mainland China still focus too much on the domestic market. Tencent’s WeChat, for example, is not quite popular outside the country. A global vision to explore new markets and technologies overseas, combined if possible with know-how in AI and big data analytics, can be Hongkongers’ strong point.
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