October 2009 Archive

Of *Actual* Cats, FAILure and New York-based Publishing Gaffes

Another crosspost from TechCrunch today. I've long wanted to write a piece on the smart business behind Pet Holdings-- the network that brings you I Can Has Cheezburger, the FAILblog and nearly 30 other humor sites. Time ran out this week when CEO Ben Huh came to town and starting blabbing to everyone about his business. Still, he was lucky enough to give me some news and insights yesterday over coffee. I've always liked Huh. In a blog world where very few people have built sustainable profitable businesses, he doesn't get enough credit for how smart he is.

Two side notes to this post: As I was writing it i was the very picture of one of those cat-geeks, stuck inside with one cat next to me and one on my lap. Nerd! Second: What the hell are New York Publishing companies thinking not giving this company a multi-book deal? This certainly puts the trouble I had negotiating deal number two into perspective. Publishers really are looking for any reason to say no to anything these days!

Ben Huh is usually holed up in his Seattle-based company Pet Holdings Inc—better known as the company that brings you I Can Has Cheezburger?, the FAIL Blog and nearly thirty other sites that aim to make you laugh for five minutes every day. But he’s down in the Bay Area this week to promote the launch of three new books “How to Take over the World: A LOLCat Guide 2 Winning,” “Graph out Loud,” based on GraphJam and “FAIL Nation: A Visual Romp through the World of Epic Fails.” A big party is happening tonight.

Annoyingly, Huh is also running around San Francisco this week doing all kinds of media interviews. But here are some things I pried out of him yesterday that you may not know.

A word first about Huh: People almost always open an interview by asking if he has cats or if he’s always been funny, which misses the point of what he loves about his job. Huh is a businessman. Unlike a lot of media entrepreneurs, he says his job has become more fun the larger the staff, the site, and the operational worries have grown.

People frequently forget that Huh actually acquired I Can Has Cheezburger? and the FAIL Blog—he didn’t start them. (More on that purchase price below…) Since then he’s opened dozens of humor sites, about 50% of which fail, but some grow spectacularly fast, proving that LOLCats wasn’t a fluke and that Huh has an eye for what makes something funny in that specific viral sort of Internet way. Right now, he’s got a spreadsheet of 150 ideas that he’s moving around, honing and assigning to a team of writers who each curate about five blogs each.

Simply put, Huh has built a serious company out of something inherently hard to take seriously. As he frequently says, it shouldn’t work, but it does.

Now, some details I pried out of Huh with the allure of coffee and a breakfast sandwich yesterday:

1. That I Can Has Cheezburger? purchase price was probably lower than the $2 million Time and others (ahem) reported. Huh is unflappably mum on what he spent, but he’s too good a business man to have ponied up that much—even as fast as the profitable site was growing. Plus, regulatory filings show his angel round he raised to buy that blog and build a company around it was just $2.25 million. When I asked why he’d spend almost the entire amount on one acquisition, he didn’t so much nod, answer or agree as make a face that said “Yes, thank you for not assuming I’m a total idiot.” But, yeah, he won’t comment.

2. Huh has really studied what makes humor catch and made an interesting observation: Male sites and female sites grow distinctly differently. Men tend to share by gut instinct, so male oriented sites grow faster but can churn users quickly too. Women are more trust-oriented, says Huh. That means they share links and sites less frequently, but with more credibility. So the sites grow slower but maintain their audiences better.

It’s an interesting observation given how much of the early breakout Web 2.0 were so male dominated, and Huh should know seeing the traffic patterns of Hawtness (slightly NSFW) and LovelyListing. (Guess which one is for men?)

For the record I Can Has Cheezburger? is about 50%-50% male-female, but nearly 100% geeks-who-love-cats, both of which have aided huge and sustained growth. As Huh explains it, dog people go to parks, cat people sit inside on computers.

3. Just how good that traffic is. The Pet Holdings Network boasts 12 million uniques a month and does 1 billion page views every four months. Those numbers are astounding for a 26-person, user generated content company built largely on frivolity.

We all know about Cheezburger, which surpassed 1 billion page views last month. But FAIL blog went from zero to 10 million page views-per-month in just 90 days, and the recently launched ThereIFixedIt.com has matched that pace.

That said, Huh doesn’t hugely care how fast a blog grows, as long as it grows. What gets one of his sites shut down is a huge spike and then a fall.

His newest site, NotVeryTalented.com launches on Friday.

4. Revenues. Huh has done a great job making money in tough industries. While a lot of blogs are sputtering, his have 30% margins, posting CPMs anywhere between 15 cents and $8. The least profitable is clearly Hawtness, which Huh doesn’t even try to sell ads on, given the dodgy inventory. “It just hooks in readers,” he says.

Here’s the shocker: The company also makes 30% margins from book publishing deals, and advances and royalties make up nearly a third of the company’s revenues, which are in the “single digit millions.” More shocking: Huh can’t seem to get a publisher to sign him to a multi-book deal. This despite the fact that the first LOLcats book spent 13 weeks on the New York Times Bestseller List. Really, New York publishing houses?

Huh plans on releasing six books next year and – SPOILER ALERT- the third LOLCats book will be all about kittens.

5. Huh has a social network too. Even if you knew all of the above, this one must surprise you because it recently surprised Huh. Pet Holdings has long offered a log-in and profile for contributors who regularly post images and passively given them the ability to friend each other. The result? A niche social network with 1.3 million users. Huh hasn’t quite decided what to do with this revelation, but he’s thinking about it. As comparatively well as he’s done with blog ads and book sales, to really scale the company, he’d like a sexier revenue stream that can grow fast without massively growing content.

Of Web Copy Cats, China and "What Men Want"

Apologies for my whining last night. As usual, insomnia and a feeling of total hopelessness lead to a pretty productive night of writing. I'm wondering if my Ambien habit is making me a worse writer, because while two hours of sleep doesn't feel great today I seem to remember some of my best stuff in the last book being written at 3 a.m. in a pajamas and a stress headache with nothing but the sound of Mission Street hookers outside to distract me. Actually that's not totally true because I lived in Potrero Hill during the last book so the soundtrack was the projects and gunshots back then. (Honestly-- why does the life of a writer ever seem glamorous to anyone?)

At any rate, here's the crosspost from my piece on TechCrunch today. I know most of the audience will say it's too long or why is this news, but I actually think this is a point lost on even senior executives at Web companies in the Valley.

I also know a lot of people will consider Li's approach sexist or too mechanical or offensive, but really it's not that different than the business of women's fashion magazines with a Chinese cultural filter. The biggest difference to me? We'd say "Oh there's nothing wrong with you! It's him!" These matchmakers will tell you the truth.

It's also evidence of why I spending so much time on the ground in countries. Sitting in the US, I never would have just known about this company or this entrepreneur, despite how widely respected he is in China. Enjoy.

At first blush, it seems like Song Li is one of those stereotypical Chinese Web entrepreneurs. The kind who rips off successful US sites and hopes operating in the world’s largest consumer Internet market will magically create a successful company. After all, he made a good bit of money investing in ChinaHR—a job board site that sold to Monster.com for more than $200 million over two deals –  and right now he operates Digu.com, a Twitter-clone, and Zhenai.com an online dating site that could be the Chinese Match.com.

But if you dig a little deeper into that dating site, you start to understand how differently Li thinks, and how that thinking reflects an aspect of Chinese consumer Web sites that Westerners frequently miss. Where Chinese Web entrepreneurs shine is in taking an existing business idea – ripping it off, if you like – but then completely rethinking and reinventing that idea’s business model and process. This not only makes the companies more profitable faster, it’s a big reason why home-grown Chinese versions continually beat US companies trying to expand into China.

To a Valley entrepreneur taking someone else’s idea, improving on it and taking all the credit may seem unfair or even unethical. But Google didn’t come up with the search engine and Facebook didn’t come up with a social network. What mattered was execution. Put another way: Sure the Chinese can learn a thing or two about original Web ideas from the Valley, but the Web 2.0 generation can learn a lot about monetization from China.

So what does a Chinese Match.com look like? In Li’s own words, it’s very “practical.” China has a long history of matchmaking so just going online, finding someone you like and messaging them isn’t going to appeal to a lot of the population. The ones who are comfortable with doing that will just use social networks. For those who aren’t, there are already an established off-line alternative in some 200,000 very local, fragmented companies that specialize in matchmaking, charging anywhere between 2,000 and 60,000 RMB per six months—depending on the service. Even in comparatively cheap China, they’ve got pretty high customer acquisition costs thanks to all that brick and mortar and heavy placement of classified ads to keep bringing in new singles.

That’s where the Web should come in, but it’s a bit trickier than that. Here’s the rub in China: The entire consumer Internet—along with “old world” industries like consumer packaged goods and entertainment—are all growing and developing at in parallel. In the US, you could argue social networks are the Web 2.0 answer to the Web 1.0 online dating sites. But how do you build a profitable online dating company in a world where a million MySpace and Facebook rip-offs already exist?

Li has struck an interesting middle ground: A Web site that’s free to join and free to search, with revenues provided by a 350-person strong call center of real-life matchmakers. Once you find someone on the site you like you place a call to a matchmaker to be set up on a date. Using the service costs 3,000 RMB (roughly $430 in dollars) for a six-month subscription—about the low-end of a traditional matchmaking service – and at least one person going on the date has to be a paid subscriber. The matchmaker determines whether both people want to go on the dates, or suggests an alternative date from amongst the site’s 22 million registered members (growing by 40,000 per day). The matchmaker then sets up the date, and then follows up afterwards.

The matchmaker isn’t your friend—she is doing a job. If you suggest someone out of your league, they might, ahem, guide your expectations. “We just want you to be realistic,” Li says. And in the event of a rejection, Li’s team asks a detailed questionnaire to determine exactly why one party didn’t want a second date. And then they call the other party to explain – in precise detail – where they went wrong. “At least you know why and there are certain things you can fix next time,” he says. It may sound brutal but it gives the service clear value. Zhenai.com is profitable, generating about $2 million in revenues per month, growing at double-digit rates month-over-month.

It may also sound like labor-powered, innovation-free China, but it’s not. Li has built a specific CRM system from scratch to walk matchmakers through the matching process and he’s hired a psychologist to help train them on what questions to ask, and what to say to the lovelorn. Li himself has a PHD in finance from Cornell, where he also studied evolutionary biology and molecular genetics.

And then there’s the statistics. Not even Max Levchin—the PayPal and Slide founder who has graphed everything down to his past girlfriends’ bra sizes over time— could match Li’s love for charts and stats. All those brutally honest conversations about why dates succeeded or failed have turned into a trove of statistical data that matchmakers turn into pre-date advice.

A random example? 60% of women with long, straight hair get second dates—even when the data is normalized for Chinese women being more likely to have long, straight hair. The worst group? Short curly hair, which has only a 5% second-date percentage. (Note to self: Good thing I’m married.) “We’re not telling them what to do, we’re just giving them information,” Li says matter-of-factly. Men also like black pantyhose and shiny color-less nail polish. (Li blushes a bit when he tells me about the pantyhose.)

Li has also found that men are universally attracted to women with a .7 hip-to-waist ratio—something he believes is genetically hard-coded as a reproductive trait. “I can’t do anything if a woman is fat, but I can tell her to dress so it shows off her waist,” he says dispassionately. It works both ways, by the way. Women prefer dates wear a suit and because women are predisposed to look for “good providers” Li says he can track for every extra 1,000 RMB you make a month, statistically what percentage more attractive you will be to an average woman. “It’s a math fact,” he says. “I can build you a model.”

It bears noting that Li is not some fratty chauvinist pig. He’s a brainy, bespectacled former derivatives trading executive on Wall Street and Hong Kong, and, yes, he is married. He just likes to break things down into numbers and trends in an obsessive attempt to quantify the seemingly qualitative behavioral patterns of it all. And that makes him the exact opposite of any US consumer site trying to blindly “localize” a site for the Chinese market by just changing the language.

Anyone Else Having a Rough Week?

When I started work on this book-- and with it the generally insane travel schedule-- I knew it was going to be incredibly hard. But I always thought the exhausting weeks would be the ones spent on a plane for 20-plus-hours, jet lagged, in a foreign land, trying to build the kind of trust and sources in a few weeks that it took me ten years to build in the Valley. But increasingly, the weeks on the road are the ones I feel rejuvenated and alive and productive. It's the weeks in the Valley where I just feel like I get continual punches to the gut. Is that just what happens when you travel this much? All the annoyances of everyday life just build up and wait for you to come home?

I came home on Saturday with just a bit more than a week in between trips and nothing has gone as I'd like. My husband has had a horrific case of Swine Flu or something like it. One of my cats-- who I just took to the vet before I left town-- is making a weird clicking noise when she walks. I've really struggled to rewrite and make up all the work that I lost when I stupidly left my laptop and notes in a cab. I'm trying to toggle between book-writing, blog-writing and column-writing -- and it's all coming out like book-writing. (Which in some ways is an improvement because for a while the book-writing was all coming out like blog-writing.) And on top of that there's a lot of other bullshit that I'm not going to get into.

So I'm up at 1:40 AM trying to just physically push through my to do list because each thing I mark off puts me closer to leaving again, which is all I can think about right now. (Especially since Mr. Lacy is joining me for part of this trip, so leaving SF doesn't completely mean leaving him for once.) With any luck I'll have some fresh content to crosspost from TechCrunch in the morning, have sent my BusinessWeek editor a reconstructed column or at least gotten some sleep.

The Only Thing that Sucked about My Trip to China

Baijiu Anyone who does business in China warns you to avoid Baijiu. And yet, there I was Wednesday night at a fancy restaurant with high-backed Alice-in-Wonderland-style chairs having this conversation:

"Do you want to get a bottle of wine?"

"Well, you live in California, so any wine we get won't be very good for you. We could do baijiu-- you've never had the good stuff."

"Yeah! I haven't. And I haven't had any this trip. Let's do it!"

Let's fast forward to the next morning where I wake up in my hotel with a brutal, brutal headache. I looked to check my email. "Hey! Where's my laptop?" Must still be in my backpack. Um....Where's my backpack? Just as the cold sweat really started to break out I looked over to see my clutch purse sitting on my table. I lunged for it-- YES! Passport and credit cards are there. So where the hell was my backpack containing my camera, lenses, tape recorder, laptop, notes, flip cam and nearly everything else I use to remotely do my job?

As security camera footage would reveal later-- in the front seat of a cab. And perhaps now distributed all over China for everyone to enjoy. Just call me Gadget Santa.

There's a lot that made this not as horrible as it sounds:

1. Mr. Lacy had backed up the computer before I left and I have two other laptops at home.

2. Did I mention I still had my Passport???? Had that too been left in the backpack-- THAT would have been a nightmare to replace with all the Visas. 

3. It was self-inflicted. I'm the idiot who drank the Baijiu and forgot to pick up the bag after I put it in the front of a cab. There's really no one to be mad at but me.

The hotel-- as always-- was incredibly sweet in trying to do a range of things to recover it and loaning me a Dell for the rest of my trip. I don't mean to look a gift laptop in the mouth, but MY GOD Windows is just a horrible operating system! How do you people get anything done with those?

Of course, it wasn't the equipment that was the big loss-- it was all my notes and all the writing I did over two weeks in China, which was substantial. A lot about the book really started clicking on this trip and I wrote more than usual when I travel. I also had almost finished two BusinessWeek columns and had sketched out/half-written about five TechCrunch posts.

Can I recreate most of that? The TechCrunch posts will be the hardest. Those posts tend to be more focused on a particular company, versus 50,000-foot analysis, so they suffer most from my notes being gone. Rewriting my BusinessWeek columns will take a day or so, but doable. My book stuff? It worries me. But I think the biggest breakthrough over the last two weeks was figuring a lot of the structure, framework and themes out. It'll suck up time, but I think I can actually write it better the second time. 

Despite all this, it was with a heavy heart that I left China this morning. I love the electricity of the scene and the kindness and ingenuity of the people there. Thanks so much to everyone who made the trip unforgettable and if we didn't get to hang out this trip, hopefully next time. I can't wait to go back in March. Up next: India.

India: You're on Deck

I've still got another meeting-and-duck filled week in Beijing, but I'm already getting ready for my November trip: India. I have not been to India for the book yet, because I had Rwanda, Israel and China booked in the spring last year and everyone told me to wait until the fall when the weather would be nicer. As a result, it's going to be longer than my usual trips: Three weeks spread over Delhi, Bangalore and Mumbai. 

I have no idea what to expect. I've talked to people who love India and people who hate it. There's an undeniable spirit of innovation and entrepreneurship that comes out of the country, but many of the investing numbers have been declining since a few years ago when the Valley really had India-fever. And most of the story of India in the Western press has had to do with R&D centers and outsourcing, not entrepreneurship, which is what I'm interested in.

There are a zillion connections between Silicon Valley and India, so I've already got a lot of suggestions of people to meet with and people to show me around. But if you know an *awesome* startup, feel free to send me an email at sarah(at)sarahlacy(dot)com (put "India" in the subject line) or leave it in the comments. I'd also love hotel recommendations. I'll probably have two more trips to India early next year for the book, so don't think the delay means the country is getting the short-end of the stick.

Of Wild Expat Nights and Chinese Healthcare

Another crosspost from TechCrunch. I did ask Yan if I could link to him karaoke-ing before I did. He said yes but that he hopes the video loads as slowly in the rest of the world as it does in China.

I think the opening graphs of this story flick to a geniune tug-of-war that goes on inside most expats here. It's the mystery, challenge, electricity, complexity and domestic explosion that draws people here, but because so much is-- for lack of a better phrase-- "foriegn" in China, the pull to hang out with other "outsiders" can be strong. Especially in Beijing, where Westerners just out of Ivy League schools are just flooding into the market. Ten years ago in China, expats were forced to mix with locals more. I apprecaite Yan being honest about it, when a lot of other expats gloss over the issue.

BEIJING, CHINA– Give Yan Zhang (left) credit for honesty. You ask most expats about life in China and they talk up building bridges, mixing with the locals and their valuable expertise in building government contacts. When I asked Zhang about his expat life over breakfast he looked at me and said, “You do feel a little guilty about this life, because it can feel inauthentic.”

Inauthentic? Tell me more.

Twenty-nine year old Zhang, who has lived exactly half of his life in China, is a ringleader of a brat pack of smart, well-schooled Beijing expats working in everything from media to tech to education. I’ve twice run into him and a giant gang of friends in the Beijing nightlife scene. Said someone the last time, “Oh, everybody knows Yan.”

They genuinely work hard and most have studied in Asian history and Mandarin. What’s more these aren’t the expats of old with rich, corporate relocation packages. Most decided to move here first and figured out what they’d do second—even if many of them have family money that pays the bills in the meantime.

But many nights they also play hard—and usually just with other expats. (Ahem, see video here. That’s Zhang at the end.) They toss back drinks at Manhatten-esque nighclubs and British-style pub quizzes. I’m not judging. It sounds a lot like what I do with friends in San Francisco, truth be told. But I didn’t relocate to experience China either.

“Are we living the Chinese experience? Not really,” Zhang said. “But neither are expats who live on a Hutong and also go out with other Americans at night.”

But unlike a lot of gadfly expats I’ve met in two trips to China, Zhang is building a real company. He’s been at it for two years. It’s actually aimed at the Chinese market, while a lot of expats just seek to leverage China’s workforce. And it’s not a U.S. copycat site. In fact, it’s a site that wouldn’t work in the US.

Zhang’s company is Meiloo.com, a site that helps Chinese Internet users find, source and compare doctors and hospitals for elective surgery. It’s not one of those Silicon Valley thank-God-the-URL-wasn’t-taken, nonsense word companies. It means “happy and beautiful.”

Elective health care services are a $10 billion a year market in China that already heavily advertises on TV, billboards and the Web. Elective medicine doesn’t just refer to things like plastic surgery here, but also to preventive care like annual physicals and dental check-ups. And unlike in the United States, where HMOs and private insurance companies own or control much of the market, in China’s growing, fragmented market finding a good doctor for a good price is, well, a lot like the challenges in comparing and sourcing travel in the pre-Web days, Zhang says.

Will the whole Chinese market jump to use Meiloo? No. But Zhang points out that Chinese travel site Ctrip taps less than 10% of the domestic travel market and is a multi-billion company. And Meiloo’s 15% cut of any service or surgery booked online can add up a lot faster. Plus, the demographics will increasingly work in Meiloo’s favor. The largest base of Chinese Internet users were born in the 1980s, and increasingly that audience is aging and will want – and be able to afford—dental work, plastic surgery, and laser eye surgery that government plans don’t cover. In fact, government health care doesn’t even cover annual physicals.

Meiloo is growing transactions at a pace of 15%-25% per month, and has helped book nearly $1 million US dollars in transactions in the last twelve months. Those numbers aren’t massive. But the biggest victory, according to Zhang, is that patients don’t use the system for research and then go around it to actually book services, and that doctors and hospitals actually pay Meiloo’s cut. 90% of Meiloo’s account receivables are resolved in sixty days. “We’ve worked to align everyone’s interest,” he says. “That’s the key to doing business in China.” So far there are 330 clinics on the system and 1,100 doctors listed. A lot, but a drop in the bucket by Chinese standards.

There are two other things I like about Meiloo. One: Zhang’s co-founder Jeffrey Wu (right in the picture above) isn’t your typical smart engineer plucked out of a top Chinese school. In six years, he went from a drop-out running a bar in Shanghai to CTO of DangDang, one of China’s largest e-commerce companies. In my interview with Kai-Fu Lee earlier this week, he noted that all multinationals use universities as a hiring filter and admitted it’s not always the best or most fair way to find talent. Wu’s story proves it. I have a feeling that scrappy gray area is where many of China’s best entrepreneurs will come from in future years.

Two: So far, Wu and Zhang have bootstrapped the company with a group of angels from California. Zhang let it slip that he’s going to the Valley in early November. Given his anxious behavior as I asked more and more questions about the trip, I wouldn’t be surprised if a Valley funding round is on the horizon for the young company.

Non-Risky Business

My new BusinessWeek column is up today and it's about the lack of risk taking in the Valley right now. Rather than my usual just bitching about it, I breakdown why no one is taking as much risk. People like to bitch about VCs or entrepreneurs or Wall Street, but the bottom line is the Valley is an ecosystem and everyone plays a part. Read it here. Please. I don't want to get my contract cut under the new over-lords!

Back in Beijing for a Week, No Broken Legs to Speak of

Shenzhen was amazing. It was totally different than I expected. I'd heard it was just factories and gangsters. In fact, I'd heard that the gangsters drive up on the sidewalk, hit you with their car/motor bike and break your legs so you can't run away and then they rob you. At the risk of disappointing my many haters, that didn't happen. Sorry guys.

Instead, I found a city that's a crazy mash up of Vegas and Time Square all with a very certain techy Silicon Valley flavor. If Beijing is like San Francisco, Shenzhen is like San Jose. I mean that in a good engineer way, not the ho-hum suburban way. The real, hardcore tech stuff happens down there, both in factories and in terms of innovation. It's got the same transient-I'm-here-to-prove-myself-and/or-make-my-fortune feel as San Jose does too.

Of course, all those analogies aside, Shenzhen isn't really like any of those places. It's China, after all, and nothing is like anything here.

After Shenzhen, I went to Hong Kong for two days. (I've discovered it's really easy to accidentally type "Honk Kong" which keeps making Mr. Lacy laugh on our twice-daily Skype chats. He now calls it "Honky Kong.") I have to confess I didn't see much of Honky Kong because I holed up in the W and did a ton of writing and had a nice spa day. And by "nice" I mean, it was great until the masseuse bruised me! I said medium pressure!!

The W was fabulous. Really, really fabulous despite its odd attempt to make me cheat on my husband. (I'd link to the post that makes this comment make sense, but I'm back in Beijing and my site is blocked. Scroll down to the one about the W. Sorry.)

I know they're a little look-at-me-trendy but I've always loved Ws and the lobby of the San Francisco one is one of my favorite spots to write. But the Hong Kong W was a whole different level of awesome-- great service, great room, great views and of course, there's the rooftop pool. Really good writing vibes. I would go there again just to stay at the hotel and write. 

So I felt mixed when I checked out to come back to Beijing. Let me tell you-- my favorite Beijing hotel, The Opposite House, was not about to let the W have the last word. One thing I've learned living out of hotels for half the year while I write this book is that good ones make you feel like you are coming home. When I came into the Opposite House after an hour in horrific traffic and a slightly hungover flight, the guy at the door saw me, smiled broadly and said "Welcome back, Sarah! How was Shenzhen?" (They have no clue I keep blogging about them, btw-- they're just this great to everyone.) It's the first hotel I've stayed at in China where they call me "Sarah" and not "Miss Lacy." I love that.

When the manager came over to check me in, he frowned and said, "You were supposed to be here yesterday, Sarah." It's true. I was. I decided to stay in Hong Kong another day because Liam Casey, an Irish entrepreneur who absolutely hogged my time down south, promised me the world's best Peking duck if I stayed another day. (It was pretty damn good. Of course, I could also eat Peking duck every day of my life and still look at a menu and say "Oh! Peking duck! That sounds good!" so I'm probably not the best judge.)

Rudely, I didn't call The Opposite House to tell them I'd be a day late, so they canceled my reservation. (With no penalty. Are you listening every other hotel in the world???)

"I know!" I said to the manager. "I am really rude. I should have called, I'm sorry."

"Well, we don't have the same room for you," he admonished me.

"I'll take whatever you have," I said. "Anything!"

He insisted on escorting me up to the room, and it was a huge suite. Every time I come here they put me in a bigger room as a nice little surprise. A few more trips and my Beijing hotel room is going to be bigger than my house in SF. I mean-- there's a dining table for six in here!

It's like when I'd come home after curfew as a teenager and my mom would be stern for 20 minutes the next day and then make me breakfast. To extend the metaphor, I went to Sureno-- one of the hotel restaurants-- for dinner and was working while I ate. One of the managers came over to tell me to eat my food before it got cold, just like my mom would.

Casey, btw, is one of those weird people like Paul Carr who only lives in hotels. I've never understood how anyone could do that because I really like my own space and my own kitchen. But if they were all like the Opposite House, I'd consider it.

The downside of course is now that I'm back on the mainland, sites like Twitter and Facebook are blocked again. Small price to pay for feeling at home.

Sensibility Over Sex Appeal

I really, really hate to put a post above that brilliant rapping pig, but in the spirit of being better about cross-posting from TechCrunch, here's another post from China.

China-byd-house-small SHENZHEN, CHINA– One of my very early posts for TechCrunch referenced the “futurism” of 1950s Americana, where companies like Monsanto and Disney played out dreamy visions of a new automated way of living that never quite came true. I’m writing this post from Shenzhen, in Southern China—a place whose jaw-droppingly impractical-yet-beautiful architecture and building-size LED-lit billboards make the city look like it could be the set for just that kind of dreamy science fiction megatropolis. (Example? The other night I had drinks outside the InterContinental’s bar, which is shaped like a huge pirate ship.)

So imagine my expectations when I set out to see BYD’s “Village of the Future.” BYD—for those who don’t know—is a Chinese powerhouse of battery innovation with more than 130,000 employees, roughly 10% of whom work in R&D. The company is a living, breathing reality check to Westerners who think Southern China is merely a hub for assembling the technology U.S. designs. My BYD guide told me that the company gets at least one member of Western media coming through the office a week, many of them shocked that a Chinese company could be so innovative.

In recent years, BYD’s founder Wang Chuan-Fu has leveraged an un-sexy expertise in lithium electronics batteries into an electric car business. And, now, the company is harnessing that same technology to make solar panels that can efficiently store solar energy and manage it. It’s impressive enough stuff that Warren Buffett paid $230 million for 10% of the company in 2008, spurring every major media organization to start taking BYD seriously. (According to a great article in Fortune, he wanted even more.)

But you want futurism? Go somewhere else. This house of tomorrow—totally powered by solar power and piped with recycled rain water—looks just like any suburban house in the world. (See picture above. Yep. That’s it.) Turn on the tap and it’s just like turning it on at home. The air conditioning sounds and feels like the AC in my hotel. The company uses the top of the concept house for executive meetings. The conference rooms only stand out in their unremarkableness.

And, while it may make for uninteresting photos, that’s what makes BYD so impressive, and part of what would attract someone like Buffett to break the same cardinal rules of investing that convinced him to avoid the late 1990s dot com mania: Stay away from what you don’t understand. When my guide was taking me through BYD’s “museum” of its products, she waved her had dismissively at a sexy electric convertible, saying the ho-hum practical sedan was the company’s best-seller. What sells in a country where millions are scrambling into the middle class is practicality, not sex appeal.

Similarly, BYD’s house of the future is steeped in practicality, not look-at-me tree hugging or science fiction. That’s something that could actually make a difference for the solar industry and for smoggy, energy-guzzling China.

Pigs, Rabbits and Social Morality

O.M.G. Paul Carr read my previous post and found the swine flu rap on YouTube. This makes me doubly happy because I was going to Flip-cam it on the way back to Beijing but my Flip broke. I love it. The female pig sneezing at the end looks so miserable. Poor thing!
Sarah Lacy’s entertaining and informative tour of the world’s fastest growing economies undeniably proves what we’ve known at Endeavor for more than a decade: that impressive and inspiring Entrepreneurs can truly come from anywhere! In taking us on a whirlwind journey bursting with frenetic energy – matched only by that of the amazing entrepreneurs she meets – Lacy gives us an important glimpse into the future of the global economy – a place where the craziest, high-impact entrepreneurs from anywhere and everywhere set the pace.
Brilliant. Crazy. Cocky.

New Book

An unforgettable portrait of the emerging world's entrepreneurial dynamos Brilliant, Crazy, Cocky is the story about that top 1% of people who do more to change their worlds through greed and ambition than politicians, NGOs and nonprofits ever can. This new breed of self-starter is taking local turmoil and turning it into opportunities, making millions, creating thousands of jobs and changing the face of modern entrepreneurship at the same time. To tell this story, Lacy spent forty weeks traveling through Asia, South America and Africa hunting down the most impressive up-and-comers the developed world has never heard of....yet.

Excerpt »

Buy it from these sellers

Srah Lacy

Sarah Lacy is an award-winning reporter who has covered high-growth entrepreneurship for more than fifteen years. She is the founder, CEO and Editor-in-Chief of PandoDaily.com, the site-of-record for the startup ecosystem. She lives in San Francisco.

Learn more »

Updates

Get updates delivered directly to your inbox. Just enter your email address and click Subscribe: