China Archive
Shanghaied
I just spent three amazing days traveling thousands of miles of China by train and air, getting a whirlwind tour of a few second-tier Chinese cities. I'm not going to write about the experience here-- I need to save anything remotely intelligent for the book. But here are some photos below.
I got to Shanghai last night and spent several hours today with the CFO of online gaming company Giant Interactive-- a company I become more obsessed with the more I hear about it. I'll put it this way-- the 40-something Chinese founder got special permission to ring the opening bell of the New York Stock Exchange in a white track suit. That's the kind of anecdote that makes a business reporter drool.
Tonight will be low key. Just me and my laptop grabbing some dinner and then I'll try to sleep off a nagging cold. Meetings and more typing of words tomorrow and then early Sunday I'm off to Hong Kong. I've still got another week in China. I can't believe it. It seems like at least three months since I left San Francisco for Cape Town.
Shanghai is still not my favorite city. People tend to favor Beijing or Shanghai, and as most people know, I just adore Beijing. But I'm staying at a hip hotel called the Waterhouse that's pretty great. The service hasn't been the absolute best, but the room is awesome and a huge value for the money. It has a warehouse-y, industrial look with two terraces, a bedroom, an office and a huge bathroom. Very stylish.
Now, some photos:
(You knew something food related was coming. Consider yourself warned about Sand Tea Weight....)
Leaving Bejing Heartbreakingly Soon
I've had a whirlwind two days in Beijing where I saw many of my favorite people, had my favorite Beijing street food, stayed at my favorite hotel, and reminded myself why this is one of my favorite cities in the world. I even had a cab driver serenade me in Dixie and the Battle Hymn of the Republic last night. It was just like being back home in the South....sort of.
Unfortunately, I am leaving in moments on a seven-hour train trip into China's Wild West. If the country really wants to impress, it will have wifi on the train. Meantime, keep an eye on TechCrunch for my posts on Indonesia, the rest of which should run this week.
Thank God for China
I had a horrific travel day yesterday. We drove nearly three hours from our bungalow in Bali to the Denpasar airport, where I lunged out of the car saying a far-too-brief goodbye to my husband to catch my flight to Jakarta. And then, I landed and began a brutal nine-plus hour layover. The Jakarta airport isn't the worst. It's not Nairobi, but it's a far cry from the comfort of Dubai. I was twelve hours into my travel day before I'd even boarded my flight to Beijing and I'd drafted four posts, read half a book, watched four episodes of America's Next Top Model and I generally wanted to cry. I know I just spent a few days in Bali relaxing, but good God I am just sick of spending six to eight hours sitting and wandering around in International airports.
But the great thing about time is it passes. And it passes more efficiently in urban China. If there's an airport you have to fly into exhausted and over the whole travel thing, it's Beijing. We landed at 6:30 a.m. (30 minutes early) and within an hour I'd not only cleared immigration, customs, baggage claim and successfully negotiated a cab in a place where no cab driver speaks a word of English, but I was checked into my favorite hotel, sitting on the bed, checking my email, drinking a diet coke and watching CSI Miami. One hour.
China isn't perfect. But on a day like today, I'll take mind-bogglingly-efficient.
I'm Back. And I'm Leaving Again.
Hey everyone. I am back from Rio. I was totally MIA while I was there, again, because of threats from Brazil. So I've been posting stuff to TechCrunch about my trip and FRANTICALLY trying to get a chunk of the book drafted before I leave again....Sunday.
First off, Rio was simply wonderful. I stayed on the beach in Leblon and found if i could run jump in the ocean for even 10 minutes before or in the middle of a day of meetings I felt completely reinvigorated. I also loved wandering around the neighborhood (during the DAY of course.) Aside from that, I met some cool companies and had some really life-changing experiences. I flew and then trucked out to the basin of the Amazon where BS Construtora is building a 1,600 house village. (More on that here.) And spent a day exploring the slums around Brasilia with an entrepreneur who grew up amid drug runners and now is starting and Internet company in Sao Paulo. Then flew back to Rio and spent some time in a pacified favela with a company that's spent a decade building computer labs in the most hard-core slums. What I don't write about on TechCrunch in the next week will be in the book. Oh, I also met a couple who own a trout farm. They said I could come work on it if this whole writing thing doesn't work out. Mr. Lacy says he's game.
One of the cutest things ever happened in the favela, by the way. A little girl-- dressed like an Indian for "indigenous people's day"-- just came up and grabbed my hand like we were friends. (See photo above.) Kids are always fascinated by foreigners. I've had them giggle, point, show me around, shyly ask me where I'm from, but none has just come up and hold my hand like we'd known each other for years. The level of trust from a child in a community that can't yet trust the city's pacification efforts showed how much things could change in a generation if the city stays committed to this. And thanks to the pressure from the World Cup and the Olympics coming to Rio, there's reason to be optimistic. I was so caught off guard and charmed and wanted to scoop her up and take her home. Wouldn't you?
Second off, the book. I've been talking with my publishers about titles and cover art so it's nice evidence I will actually have something tangible to show for all this work. I am somehow, amazingly, ahead of schedule. I spent the last week finishing drafting the section on India, and I'm drafting the section on Brazil now, hoping to finish it before I go. That leaves only Indonesia, Rwanda (which is half written) and the Epilogue and a TON of revising before my August 1 deadline. I can't actually believe I'm going to make it. The publishers do not want it over 70,000 words so I am really pruning and pruning each chapter. A lot of great stories are getting cut out, but I do think it's making the book stronger in the end. You will quite literally get a world of entrepreneurship in less than 300 pages.
Third off, I'm leaving again. For a long time. Five weeks. The longest trip yet. I have no idea what I was thinking, but now, barely recovered from the last trip I'm looking at this schedule and wondering if I'm going to make it. Fortunately, I'm equally as excited about it. Adrenaline don't fail me now... I am going to Cape Town, South Africa first where I'm speaking at the Net Prophets conference. Then, I head to Indonesia where I'll report around for two weeks and hopefully find some cool stuff. (Mr. Lacy is meeting me for the second week in Indonesia.) Then, I head to China for the last time. I've been to China more than any other country and somehow that section of the book has the most holes because so much has been off the record. I'll be a bit all over the place, including some smaller cities. Smaller being the operative word-- nothing is actually small in China.
Fourth off, reading list update. I am reading Nelson Mandela's autobiography now which is pretty great and I plan to finish before my flight. Taking with me "A History of South Africa," "A History of Modern Indonesia," "Asian Godfathers" and "China: Fragile Superpower." Amazingly I'll only have eight books left in my INSANE stack of reading once I knock those out. I have so much stuff about so many places coursing through my head I am forgetting basic things like, phone numbers and names.
Fifth off, packing. I haven't yet done five weeks out of carry-on luggage. There's going to be a lot of sink-washing going on...
My Favorite Books about Emerging Markets
I find the most helpful thing to do while writing a book is to read lots of books. Not only do you learn a lot about whatever you are reading about, but you see what works and doesn't work when it comes to voice, structure, tone and other dorky things authors obsess about.
Here's my current pile of reading-- the ones on the left are still to be read, the ones on the right are done. Actually both piles have gotten higher since I took that photo, and the pile on the right is just a bit taller now. But that won't last. Like Sisyphus, I stupidly keep buying books once the to-read pile starts to look remotely manageable.
I usually refrain from writing about books, because it's not much of a review if you only write nice things, and as an author its hard for me to write bad things about something someone worked really hard on. Just getting a book DONE can feel like a Herculean task and no book is going to be perfect for every reader. But someone asked me for a list of my favorites so here you go.
1. The Post-American World by Fareed Zakaria. It's really hard to write one compelling book about large, disparate chunks of the world (trust me on this) and Zakaria is one of the few that pulls it off. He's incredibly gifted at pulling together lots of strands to make one compelling central argument. My book mostly starts with the assumption that emerging markets are where the most economic growth is going to take place in the next few decades, but Zakaria's book explains why and what America's place in that world will be.
This is my only quibble: Indian nationals are incredibly patriotic and Zakaria is no different. There was a subtle shift in tone when he wrote about India and I felt like-- on the margins-- Zakaria cut India more slack on certain things. For instance, he praised the legal system put in place by the Brits. It may have been set up well back in the colonial days, but no one in India would tell you the legal system is anything to brag about today. Narayana Murthy, the co-founder of Infosys, told me that it would take 320 years to try all of the pending and backlogged cases in the Indian courts. "Can you imagine?" Murthy said laughing at the absurdity.
Still, this is hands-down the best overall book I've read on globalization and I highly recommend it.
2. India after Gandhi: The History of the World's Largest Democracy by Ramachandra Guha. I wish there was a book this good on the history of every country I'm visiting. It's whopper at some 800 pages, but Guha, a historian, takes you on an unbiased, thoroughly researched and riveting journey through India's first fifty years or so of independence. I came away understanding modern India a lot better and wondering why an over-the-top biopic had never been made about Indira Gandhi.
3. Democratic Brazil Revisited. I wish there was a book this good on politics like this for every country I'm visiting. This book is a collection of essays by academics that break down every aspect of Brazil's democracy-- from education to violence to economic and social policy. It's the update to an earlier edition that predicted some choppy waters for the Lula administration. Surprisingly, when they revisited the topic four years later, the researchers found that overall Brazil's democracy had outperformed their expectations. For what's essentially a text book, it's also amazingly readable.
4. Factory Girls: From Village to City in a Changing China by Leslie T. Chang. I mentioned this one in my last post but it bears mentioning again because it is one of the best books I've read over the last year or so. It actually makes me a little angry at how good it is. Factories in China are one of those topics everyone feels entitled to have an opinion on and it's usually: They treat workers like crap and make low quality stuff. What Chang uncovered by living among the girls powering China's factory boom was quite different. It was the story of empowered, ambitious young women taking low level opportunities and creating whole careers out of them. It tells you so much about the culture of modern China and is engrossingly written. As a writer, Chang doesn't get carried away with the sound of her own voice. She lets the stories of the girls unfold simply and beautifully.
There's not much info on Chang online. She doesn't appear to have written another book and I can't tell if she's even still a reporter. I hope she is. I also hope this book made her a lot of money because she deserves every penny.
5. We Wish to Inform You That Tomorrow We Will Be Killed With our Families by Philip Gourevitch. The world's longest and most confusing title, I know, but this is the definitive book on the Rwandan genocide. It's heartbreaking, eye-opening and frankly, will make anyone in the world with a soul embarrassed at how much we let Rwanda down some 15 years ago. Gourevitch did a follow up piece last year in the New Yorker about how Rwanda had rebuilt itself, that only barely scratched the surface of the strength and almost super-human forgiveness of the Rwandan people. Not only do I highly recommend this book, I highly recommend that anyone travel to Rwanda to see this amazing country for themselves.
Of Cows, Traffic and Elon Musk
Another cross-post from TechCrunch. This is for all the people who've complained I've been too positive about India. (I swear, there's no pleasing you people. ;) )
BANGALORE, INDIA — It’s almost as if Russian cell phone carrier MTS has bought the naming rights to Bangalore. I half expected my immigration stamp to read “BANGALORE! ™ BROUGHT TO YOU BY MTS.” The carrier recently launched service in the uber-competitive Indian telecom market and has erected billboards every twenty feet or so. I have never seen so much advertising by one company in one space. They all sport an agro looking dude with his face twisted in some rebel-yell while he does inscrutable things with robots and mechanical arms holding different tech gadgets.
Why have these ads made such an impression on me? Because I’ve spent a week sitting in stopped Bangalore traffic looking at them. Ironically one keeps boasting: CONGESTION-FREE MOBILE NETWORK. Sitting still and listening to the honking of cars, mopeds, bikes and rickshaws all around me, it’s an easy guess that, if true, MTS could be the only thing congestion-free in India.
I used to think I knew bad traffic. After all, I moved to Silicon Valley during the famed Internet bubble when Highway 101 slowed to a crawl during peak commute hours. And I’ve spent time in legendarily congested US cities like Los Angeles and New York.
Now that India has one of the world’s best mobile infrastructures, it needs a decent road infrastructure. And a smart entrepreneur needs to come up with a modern fix. But before we talk solutions, let’s dwell more on the problem.
Simply put: All of you Americans—or Londoners for that matter—who Tweet about 
sitting
in traffic have nothing to complain about compared to the emerging
world. And in my experience, so far, India’s traffic is the absolute
worst. A drive between cities that should take an hour takes four. A
commute across a city can routinely take two hours-plus. We’re not
talking about rush hour. I’ve quickly learned to allot at least three
hours for each meeting—one hour for the meeting and one each for
getting there and back.
Even so, despite my best efforts, I’ve been late for nearly every meeting. In Mumbai one meeting scheduled for late morning took six hours out of my day. (Fortunately, the meeting was well worth it.) And in Bangalore my cab driver tried to take a back-alley short cut, when suddenly, our path was blocked by a cow just munching on some roadside grass. He honked and honked and she just looked up and batted her pretty brown eyes at me as if to say, “Oh, you’re not making that meeting on time, hon.”
Indians complain about the poor foresight and urban planning of their government, but it’s not all the government’s fault. The Chinese government is the master of over-building capacity to anticipate growth, and city traffic in China is becoming unbearable as well. It’ll only get worse as an anticipated 30% more cars per year come on the road.
The
problem is the hyper-charged urbanization these countries have
experienced. In the West cities grew over centuries allowing city
planners to adjust and modernize as industrialization drove higher
occupancy. And in the past few decades there’s been a flight out of
downtowns to suburbs. Of course that presents its own growing
pains—especially in US cities that have experienced massive suburban
sprawl like Phoenix and Atlanta. But in the grand scheme of things, the
moves have been predictable and manageable, whether individual cities
have handled it well or not.
Not so with the rapid urbanization of cities like Beijing, Shanghai, Shenzhen, Delhi, Bangalore and Mumbai. The step up in pay from hundreds to thousands of US dollars a year has been swift and far reaching. In China, agricultural classes have moved en masse to staff huge several-thousand-person factories, and for the Olympics, they moved en masse into hospitality jobs in Beijing’s raft of new hotels, malls and restaurants. This is to say nothing of the increase in government jobs and startups. There is simply no way to make remotely the same wage or have the same access to infrastructure and services outside a city. In some parts of India it’s been more pronounced as hundreds of thousands of sophisticated R&D jobs typically pay more than China’s factory jobs.
Here’s my point: All the existing Western solutions, endless government funds, underground subways and top urban planners will not solve this problem. Because simply put: The world has never seen urbanization so extreme by millions—maybe even billions— of people seeking a better life. We need some innovation here. And I know at least one guy who is thinking about it.
At a conference earlier this year, Elon Musk – the guy who co-founded PayPal, Tesla, SpaceX and laughs like a James Bond villain — talked about two new businesses he was mulling. One was electric, supersonic planes, which I’ve salivated over since. The other was pre-fabricated freeway overpasses to alleviate traffic by making it go vertical without the costly billion-dollar customized expansion fees.
I have to admit, at the time, I was more excited about the planes. But his freeway idea may be a better business. It would dramatically affect the lives of billions (literally) and create at least millions of revenues in the developing world where quick, cheap options are needed and there is hot-and-heavy government money to pay for it.
Now, clearly Mr. Musk is busy with existing ventures Tesla and SpaceX. So now’s your chance to steal the market out from under him! India and China are waiting.
Fire in the Belly
Up until about 48 hours ago the only time I'd gotten sick reporting this book was in London at the BT Tower. (We called it Scallop-gate. Paul Carr was also a victim.) But, oh, has India finally caught me in its Delhi Belly clutches. Mr. Lacy and I have spent about eight hours in the bed or the bathroom. We're sipping Gatorade now and hopefully on the mend. My stomach no longer feels like it's bleeding so that's a plus.
In news of a more metaphorical, good kind of "fire-in-the-belly" here are the links to a two-part series I wrote for BusinessWeek on the six different entrepreneurs you meet in China. I wrote it a while ago, and sadly, it might be my last BusinessWeek column ever. The new Bloomberg overlords have already canceled far fancier outside columnists like Maria Bartiromo and Jack and Suzy Welch, and my contract is up. I love writing it and have so much loyalty to BusinessWeek so I hope we can figure something out. But no matter what, I'm glad my (maybe) last columns were ones I was proud of.
Meanwhile, I should have a few more TechCrunch posts on India coming up...once India stops pummeling my digestive system!
Of Posts My Parents and In-Laws Really Shouldn't Read
Ok, I promised myself I was going to crosspost my stuff from TechCrunch from now on. This post is a tough call. I actually think it's a great business story and the entrepreneur in question is fascinating. But it's definitely, ahem, not my usual beat and may offend some people. Especially ones who gave birth to me or my husband. So let me be clear-- if you are likely to be shocked, don't read the following.
I’ve met a lot of expats in my time in China. Some decided to move during an Asian studies class in college. Others decided to move when they saw Mandarin-speaking colleagues getting a promotion over them at work. Still others may have promised a Chinese parent on his or her deathbed to return to the homeland.
For Chicago-native Brian Sloan, it was about the time he was being questioned by police for trafficking and dismembering human skulls.
Sloan seems normal. Even boring. I met him with some other Beijing entrepreneurs last week over hot pot
and he refused to eat anything out of the spicy side of the pot. He has
a slight build, non-descript features, and mousey brown hair. He even
has a law degree from Penn State. But his life took a more interesting
turn in 2004 or so when he started to scour antique shows and auctions
for things he could sell for more money on eBay. What motivated him?
“Making money,” he says. Not so much for the cash itself, but the
chase, the deal and the challenge. Buying something undervalued—even
weird— and figuring out who would highly value it.
Long story short: He starting to realize China was a treasure trove of things to buy low and sell high—among them, human skulls that he imported in a box marked “TOYS” and then boiled, cleaned, broken apart and screwed back together and detailed for medical students. A good skull would cost about $100 each and he could sell it for as high as $800. (What makes “a good skull”? Turns out it’s the number of teeth.)
It all went well until the day an eccentric Chicago puppeteer named
JoJo Baby came by the house to buy some mannequins and saw some skulls
boiling on the stove. He naturally assumed Sloan was a serial killer
and called the cops. This YouTube video
(also embedded below) pretty much says the rest. It bears noting, Sloan
was never actually arrested or charged, although he still complains
that he never got his “inventory” back from the mustachioed,
gum-smacking Chicago brass who spent days trying to work him over
Law-and-Order-style while TV satellite trucks camped out in front of
his apartment.
Sloan moved to China soon after. It was considerably closer access
to the things he was selling and, let’s just say after the skull
incident, filled with more open-minded people. “In China, people
respect what I do as a business,” he says. Which would be a boon in his
next career move… making latex fetish-wear.
(Link very NSFW.) And that’s where the Chinese supply chain magic came
in. He was able to tailor nearly any outfit in any size and ship it at
a healthy mark-up. Some outfits go as high as $800.
But even that pales next to his new business. How should I put this
and still be a lady? The product is called “AutoBlow” and it has
nothing to do with cars. Here’s the site. Warning: It’s very, very Not Safe For Work. (Yes, I’m spelling the letters out this time, just in case.)
Like a lot of entrepreneurs in China, Sloan is cagey about what I can and can’t say about how the operation works. That’s not because it’s illicit—it’s because it’s so incredibly lean, flexible and outsourced that he doesn’t benefit if competitors realize exactly what he’s pulled off business-wise. But suffice to say with a small army of employees peppered around the globe, Sloan—aka the “Kinky King of Beijing”—is looking at an incredibly profitable business that’s already generating more than $1 million in revenue and growing quickly. He’s exploited what each region does best: Romanians are his programmers and SEO, Indians and Brazilians do his Web design, and China does the manufacturing and fulfillment. He hired his whole staff without leaving his living room. His next act? Finding new products and following the same playbook.
My point here isn’t to write a salacious post about skulls and sex toys—as much as I enjoy watching Michael Arrington squirm. My point is that for all the talk about how much harder it is for a Westerner to do business in China, in a lot of industries there are far fewer barriers to entry than anywhere else I’ve seen in the world. And – huge 1.3 billion person domestic market aside—that’s what is making China such a Mecca for scrappy, pioneering entrepreneurs right now. You may find Sloan’s ventures distasteful, indeed he says his mother still changes the subject when friends ask what her son does for a living. But change the nature of what he’s selling and Sloan thinks just like any good entrepreneur pushing the boundaries in any pioneering market.
We like to think that outsourcing manufacturing to China or call centers to India revolutionized American business. But America hasn’t seen anything like the truly flattened, profitable, deconstructed and then ingeniously reconstructed businesses I’ve seen in China in the last few weeks.
People who say China is all about outsourcing the supply chain and not innovation have it backwards—the deconstructed supply chain is precisely what’s opened China up to a world of innovation. Imagine the way the Web democratized media and content and now apply the same ability to break a staid practice into Lego-like pieces to any physical hard goods industry whether its sex toys or iPods or pharmaceuticals.
We’ve only seen the first few innings of what this means for global business and smart entrepreneurs in China – whether expats or locals—have the advantage.
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.
The Only Thing that Sucked about My Trip to China
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.
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.
Buy it from these sellers
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.
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