An American Entrepreneur's Journey in the Middle Kingdom

Hello and welcome to the Rich Robinson Show. I'm your host, Rich Robinson. Over the past 25 years, I've been an entrepreneur, investor, advisor, and professor here in Asia. After nearly a quarter of a century in China, I'm now based here in Bali, Indonesia, the island of the gods.

Asia is my home now.

60% of the world's population also lives here, but I would contend 80% of the world's dynamism and opportunity is right here in the region. On the show, you'll hear candid and fun conversations with some of my friends and colleagues, people I've met along my journey, entrepreneurs, operators, experts that will help you unlock actionable insights around the Asia region and the entrepreneurial agility That actually defines it. This first season, season one of the Rich Robinson Show, is titled "At the Speed of China." Like, wait for it! At the speed of light, things happen fast in China, and in this season one, we're gonna take a deeper look at that: the rapid economic development over the past few decades, as well as the speed and cycles of innovation taking. Race all day, every day. Right now, let's go, Jio!

And we are back. Hello, one and all.欢迎光临 to the Rich Robinson Show Season One at the Speed of China. And kaboomtown, everybody, we have a get. We got a get today on the pod. My old friend and incredible China operator and really made a dent in China and the multiverse in his time in the Middle Kingdom and now doing some stuff back in the shitty of Boston, my hometown. at Harvard. He's wicked smart. Welcome to the pod, everybody. Mitch Presnick.

Hi guys, how's it going? Hey Rich, how are you?

I am well. I'm pumped to be exchanging ideas and reminiscing and learning new stuff about you, my friend. It was really nice that we caught up in the last few weeks, and I really want to dig in deep into your new appointment at Harvard University, amazeballs. But, you know, I'd love to just talk about, you know, a little like quick intro to who you are, and then like let's go back to the origin story, all the way back when you were bitten by a radioactive Chinese spider and became a superhero on your hero's journey to China. Please.

Gosh, well, good to see you, man. Sure. So my story started in 1983, so that's You know, a time before time. The reform and opening movement was five years in, and my great uncle Mike had come back from a trip to China where Sidney Rittenberg himself hosted his group from Est Earnhardt Systems Training, sort of human performance, human you know potential organization that was active at the time. And he went over with them, and they were so inspired by what was happening in China. He took me aside. I was like 15 or 16. He took me aside and he said, "You've got to go to China. You're going to go to China." And I was like, "What are you talking about?" You know, I couldn't believe. Like what? I was like, "Well, do I get to graduate from high school first?" You know, it's like yes, but you have to go as soon as possible. Like he was really serious about it. And you know, I mean, I considered the idea briefly, but then I decided it sounded preposterous, right? You know, I didn't have any knowledge of the history or culture or anything. He was just. saying basically, look, you know, for an entrepreneur, and I was an entrepreneur, I didn't know I was an entrepreneur, but I was, I was just a guy that was always trying to hustle for a business. There was always, you know, a lawn mowing market to syndicate, or, you know, there was—

If I ever met an entrepreneur, and I've met many of them, you, my friend, are an entrepreneur with a capital E.

Oh, man. Well, I don't know about that. But thanks. I think what is true is that I definitely Wasn't interested in doing something, you know, like what other people were interested in doing. Like most people were just looking to, you know, go step by step career, you know, house, you know, family, and which sounded fine, but it just did not appeal. What sounded great to me was to go find an arbitrage, something that was sort of like hiding in plain sight. Everybody was talking about Japan. Remember in those days, that was right. Japan was the thing. And, you know, Rising sun and everything, and I thought, well, it just doesn't sound right to me. Why would I go to a place? Everybody was telling me to go there. Why would I go to a place that's already there? What am I going to do? You know, if you could go to a place like China just as it was coming up, it was almost like getting in on a unicorn. And you know, and to me, China was one big startup. Like I have a whole theme on this, like I can go into. But like I've always saw China as much as a country. I've seen it as like a corporation, like a very well-run. Corporation almost. And there's a lot of similarities, but we can put that in the parking lot. But anyway, I thought about it and I kind of dismissed the idea. And then I saw Uncle Mike 3 years later and he was like right on me like it was yesterday. And he said, what have you thought about it? And I was like 19. I was in college. I said, oh yeah, you know, I don't know if it's for me. And he said, look, just take a course in Chinese language. Just take a course. That's all I'm asking. If you don't like it, you don't have to. And I did that. And I also I also took a course in economics, and I just came away very inspired in the economics course that I took. It was kind of on the developing world and sort of countries that had done it, what they had done, you know. But the main reason I went to China was I believed that when Chinese people would be allowed to make money again, that the entire society would skyrocket. And, and it would just seem like a no-brainer. That was a no-brainer, right? Anyone that had Chinese friends knew that these guys were, you know, by and large very focused and hardworking. And I thought, okay, if everybody is focused on on making money now, just imagine what's gonna happen. And my uncle was right, and he was totally right. So I went over. I applied to a program at Beijing University, and you know, and somehow I was accepted. I wrote an essay about how I was going to build business bridges with China. That was the idea. I was going to build business bridges between the U.S. and China. I didn't know how, but it was going to be something to do with brands. And I was gonna come from the future with all of this US brand knowledge, and I was just gonna kind of bring it here and share it and let them make money with it, and I'll make some money hopefully. And that was the plan. Like, that was the whole plan.

Wow. And you actually did it. You followed through on that plan, actually. How many people follow through on their college application essay? I didn't know that story. That's awesome.

Ideas are great, but right, it's really about stick-to-itiveness and consistency. It's kind of, it's that, absolute certainty that comes from commitment, right? That's what gets to the depths of your hidden reserves. That's where all the real resourcefulness, creativity, drive, that's where you find the magic. It's with the commitment. So yeah, so I made a commitment. I was going to basically, this was my plan. I was going to learn Chinese, work for another company for like 5 years, Go build a business, like blow it up, you know, make sure everyone makes lots of money and then like retire. That was like I had the— it's the most preposterous plan, but that was my plan.

Well, someone once said it ain't bragging if you can do it and it ain't preposterous if you actually manifest it.

Look, if I knew how difficult, I mean, like trying to build a business in China is like trying to like make, you know, a plant grow in pure acid. Like it's just not, it's not supposed to be possible. Like I don't think, I'm not even saying for foreigners, I don't think for Chinese people it's possible. Like, anytime I meet an entrepreneur in China that's successful, I'm always like, I know what you went through. I have extra respect. It's just so, right? So, you know, you just have to almost be insane, honestly. You know, you just have to have a weird cognitive dissonance for challenges. Because I had 20 friends that said, okay, even if you do this, aren't there other ways, easier ways to make money than trying to do this? Like, you know, turn yourself into a human Hail Mary and go across the world to a place where, by the way, when you would fly into Beijing, there were no lights on in the city. Like, there was no lights. It was like flying over— it was the most strange thing. You leave the US, constellation of stars. You're flying into Beijing. There's like one light there. There's one there. There's one hanging around like, you know, the head of a donkey. Like, I mean, it was like a few cars. You could see a few cars below. It was— wacky at night. But remember, that was the days before they had lots of excess power generation and they had to be conservative. Even the driver that picked me up at the airport and, you know, Sidney Rittenberg, who was my mentor, you know, he, you know, sent the deputy head of the Beijing Travel Service was his buddy. So the guy shows up at 8 o'clock at night on a, like a Saturday night. You know, it's like a hot— it was August 8th, 1988, by the way, August 8th.

Wow.

Can you imagine? Eight, eight, eight, eight. You know, you buyo, you enfenda. That's the you know. Isn't that funny? At eight o'clock at night on flight UA eight five two.

Sure, sure, you enfenda.

Right? Hey, you buyo, you enfenda law. Why? So you know. So we're driving in and the driver has the headlights off, and I asked why, and he said, "Well, you know, saving energy." That was the place that we came into in eighty eight. So you know, I mean. Yeah, it was a bit— it looked like a low-probability shot. It didn't look like this country was going to be like an economic juggernaut. I mean, it did to me, but not to most people, right? You have to be able to see things with your vision. It's like if you look at it the way everyone else does, it's going to look the same as it does to everyone else. You have to see the opportunities, the patterns in the mist. And it just so happened I was fortunate enough to get some good advice and I took it. So that's any— anyway, that's how I ended up. That's how I ended up in China.

Good advice from Sidney Rittenberg. I mean, you know, the man who's left behind, his book is amazing. I spent a little time with him. He is a living, like, a legend. Maybe you could share just a little bit about, about him, if you don't mind, and anecdotes.

Sure. I mean, yeah, no, Sidney, I mean, first of all, he was a real character and he called me the plucky kid from Brooklyn. You know, he really, yeah, he liked me.

I was plucky.

I never— yeah, Sidney, I love that guy. He was so great. So Sidney was friends with Mao and everyone, like back, and not when it was fashionable. Like he was like a true believer in the cause. And he went, you know, to Yenan and he was living in the mountain caves with the Central Party leadership in those days. Remember that was after the Long March, you know, they're decimated, you know, and there's this long march all the way through the middle of China and all the way up into the northwest part of China.

Yeah.

And they end up at this, you know, basically very— I mean, I stood in Mao's cave. I was there once. We wanted to go with Super 8 to get the feeling of Yan'an spirit, right? We wanted to try to feel what these guys were feeling when they had nothing and they were going to somehow take over the country from this cave. You know, it was amazing to stand in there, but that's another story.

You know, if I may interject, actually, you, as far as I understand from Sydney, you probably did not stand in Mao's cave. They actually, he told me they put a nameplate above the biggest cave. But he said that was the storage cave. Mao had a little cave over there because he was communist, but he's like, ah, just leave it. But anyway, so I mean, like, that's the kind of thing you get when you meet Sidney. He's like, that wasn't Mao's cave, but whatever. You know what I mean?

Like, it's just Sidney was so cool. You know, you know what Sidney, one time Sidney gave me the best advice on China that I ever got. Would you like to hear it? He said that, he said the success was based on 3 things as a foreigner in China. He said patience. Candor and three times the preparation that you would normally make because everyone's really prepared. So he basically what he said was, "You think you know about people that are organized and hardworking, but you really have to reset your expectations here because Chinese people are are just like on another level." And he gave me that advice early. It was very good advice because it also reminded me I had to bring my own A game, right? Because you know it can be easy to get lulled into complacency when the guy across from you is wearing like. You know, a short, short-sleeve white shirt with an egg stain on it. And he's like, you know, and you're going to be taking advice from him, but he's actually wiser than you are. Like, he was. I mean, there was, you know, the country is just full of very, you know, very experienced together people. And that was like my first real encounter with that was his advice about how to be successful, you know, in China.

Thank you. Thank you for sharing. Yeah. And like, as you said before, Someone once told me China offers everything but gives you nothing. And, you know, as a matter of fact, it's a, it's an opportunity multiplier, but it's a risk multiplier and a, you know, headache and hassle multiplier even bigger, right? So you have to— yeah.

I mean, think about, think about the kind of person that system will produce. They're not complainers, right? They're going to work hard. They're going to have the right kind of a mentality. It creates a productive—that kind of pressure does create a productive individual. I mean, you know, that's just systems create outcomes, you know. You know, but it definitely helped us get our game upright. I mean, we we benefited greatly by being there because, you know, it's great because you you do end up having to make quite a sacrifice. It's not an easy place, and it can be stressful. But for the right kind of people, you know, it's such a rush to be like, you know. in a place that has such interesting characteristics. And, you know, it's interesting for foreigners like you and me who've spent like decades there, right? I was there 3 decades. I mean, it definitely helps us, you know, in ways that I think, you know, had we not gone to China, we wouldn't necessarily have those skills. Like, I definitely think, you know, you pick up certain approach to things and skills that, you know, are quite Useful, you know. And what's interesting is there's a lot of people out there these days, especially, you know, from the US, that somehow have some kind of a claim to being a China specialist. A lot of them, you know, a lot of them are, but a lot of them haven't really spent much time in China, and they overvalue book, book, you know, smarts, where it really just comes down to how much time have you spent there, how many Chinese people have you really worked with. It's not like, it's not like you can get away with the kindergarten Class, you need to have people that actually have both. You need to have people that really understand just how to get things done and also understand that particular you know area. You know, which is like just China as an area of knowledge and China business and China you know negotiations and China you know China political economy. These are all specialties. Specialties. It helps a lot to be someone who's spent time there. Like, it's not like before, you know. I think what's interesting is it doesn't seem to be a requirement necessarily of people in the US that their China experts be people that have a lot of experience, which is interesting because it's like supporting the middle class. It's kind of not something that, that you have to really think of as partisan. Everyone can agree on it, you know what I mean, that that's a good thing, you know. So it's interesting that that's not, you know, more prioritized.

Certainly. So let's start your China journey. You land in the late '80s. It's still very much, you know, Russia's gonna destroy the world if, you know, Japan doesn't take it over. Cold War, and China's not even in the spotlight at all. So your first—

Yeah, no, I mean, so I was there in the '88-'89 school year. So like, so Tiananmen Square happened while We were there. I mean, so, you know, my first year started off, you know, like Beijing Spring, like just everywhere you go, optimism and happiness. And then it ended in martial law with, you know, tanks guarding the bridges and, you know, trying to like, you know, trying to pay off like a driver who'll take you to the airport because nobody wants to drive on the roads. So that was an interesting, like, I think it was probably a good education for a young foreigner. To kind of see what China is capable of in terms of like, you know, what could happen while you're there, right? Because it was on the one hand just euphoria, on the other hand, you know, pretty sober, you know, pretty, you know, upsetting event. So that just sort of set the table for my China experience, right? Because the next year I went back to finish up my program at the, you know, Chinese literature department. Underneath it, there was like a language school, and you know we were there. But going back and finishing that second year, the first year, like the students around Peking University were just you know super friendly and really eager to make friends with foreigners. And it was like you know everything was sort of in a really amazing vibe. And then the next year, they had all gone through military training during that summer beforehand. I think it was mandatory. So when they got to school, they were already like. They had been trained in some kind of, you know, military program and they weren't really able to interact with us. I mean, I don't think it was a direct prohibition, but I think it was just like, you guys, you know, do your thing. And I still had some friends that I saw, but it wasn't like the first year. So yeah, so that was kind of, you know, an interesting— I mean, that someone is going to actually write a book about just that time from a foreign student's point of view. It was just an amazing time. I mean, just Like a snapshot of something I don't think will ever happen again, even in the later years where I thought you know China's had some really amazing years between then and now. But I think when I think about you know really interesting years, that '88-'89 year was special. Ambassador Win Lord and yeah, you know just very different times.

Yeah, I mean John Pomfret, who we both know, I mean he wrote a book about his experience in you know '81, which is only. You know, single-digit years before you and how he met a, a woman in his class and then they did a side deal. Okay, we're gonna go to the, you know, Fragrant Hills and we're gonna go for a hike. And they got on the bus together, but, you know, separate doors, didn't say hi, went hiking, hiked for 20 minutes, and then finally came together, started talking. And then a guy jumps outta the bushes, takes a picture of them and runs like hell. And there it was like, that was only a few years before you got there, right? And how cool is that? Quickly and rapidly things changed, but then kind of changed back again. And, you know, that rapid pace of change that kind of defines China.

Yeah, it does. I mean, and also change defines China, but then also that there's certain themes that run through. Like, for example, you know, everyone, everyone gets really hung up on the whole idea that China is communist, but actually Confucianism and, you know, 4,000 years of emperors, it's pretty much authoritarianism. I mean, you're talking about a country that has no tradition Of the things that we find very important here, and then we're going to say with our 300-year history, you know, hey, you guys should be doing this and that. And they're like, guys, you just got here. We've been around. We've been doing it. You know, that's a little surprising. Like that's surprising. That doesn't sound anti-American or pro-Chinese to me to just kind of, you know, look like a business person at what is reality. And this is the reality. These guys have been fielding teams in the World Cup of business for, you know, for 4,000 years. It doesn't seem like that hard to imagine they would be good at some things by now. And maybe even in, you know, rejuvenation, right? I mean, things. So it's very interesting. Like, you know, as we're looking at this, I thought to myself, how different would it have been like in the, you know, 12th century and, you know, the end of the Roman Empire, you know, or the early European empires interacting with China?

Not much. And I love that you said World Cup. I talk about GDP since Jesus. in my MBA class at Beida. And like, they had 1,820 trophies from the year zero till the Industrial Revolution. They were number one all the way through. And then, you know, hard reset for 150 years and then getting their seat back at the table, right? So, yeah, I love that. The World Cup of business.

Right. Yeah. I mean, they've just— look, there aren't many countries that have survived with their cultures intact in any form I mean, not that many. There's, I mean, look, there's 200 countries in the world. Just think of all the millions of tribes that have like funneled up to get to these guys. And then there's the few that have really like done well over millennia. And then that's an even smaller club, you know? And if you look at ones that have actually like remained intact and still functioning and able to accomplish things, like think about it, all of the things that were accomplished by China while we were there, including the Three Gorges Dam and the entire infrastructure creation of the country all happened while we were there, not to mention all of the other stuff. So we saw it. I mean, do you think that most countries could do that? You know, those kind of— like when you go to the Great Wall and you just try to imagine doing this kind of a project at this scale, what it tells you is that the Chinese people are especially good at organizing and being unified around ideas at scale. Like, how much a country can scale that is relative to— but they happen to have a society which they've created, which I believe is why that they're so competitive after so many millennia, is because that's a very effective model. Call it what you want. Like, I mean, I'm not really that interested in politics, thankfully. I don't even really like to pay attention to the news.

Nor am I. Yeah.

Yeah. think I'm gonna get any better as a person watching the news. You know, I know that that sounds strange, but also I don't like the idea of being addicted to things that, you know, that I don't really have control over. You know, like, it's not a— you know, being addicted to news or the cortisol, you know, from that, it's not for me anyway.

Yeah, you can be informed without being on the news cycle, that's for sure. And that's, you know, and then you don't have to engage Politically in China, I was barely— everybody thought that you really had to be joined at the hip with the government. But the fact is, you know, it was actually really quite freewheeling times. And it was, you know, I was as busy as I could be in the business sector without really having to deal with government or bureaucracy at all. It was, you know, front row seat at the show and let it rip.

Yeah. I mean, look, I think, you know, the thing is when we think of the government, We think of it a little bit differently there. The government is your competitor or your partner or your investor or your regulator, and sometimes it's all of the above, and it somehow works. But you know, it's a very different model, and I think it works really well for most businesses. Like I mean, geez, I was part of the team that brought Budweiser to China, so I was working directly for the old man. August the third, who's an amazing CEO, and you know he said that basically China was the most interesting market he had ever seen. And I thought you know watching Budweiser develop in China was a great microcosm of how U.S. and China can get along on things like and work really well together. And it was such a marriage of like perfect complementary pieces. And I was I've always been very bullish on the U.S. and China relationship at a person-to-person level for that reason. I've always found the US and Chinese folks get along really well together. And despite a lot of people that disagree, I actually see a ton of similarities between the US and China. In fact, I don't know about you, but I find it funny.

Please share that and then tell us more about your, you know, career journey. So some of the parallels that you see.

Well, I mean, one of the biggest ones is obviously the idea of exceptionalism. Like, both the US and China, pretty much everybody feels that they're exceptional, that their society is exceptional, that they're part of an exceptional place. And I know people will say, well, everyone feels they're very exceptional. But the difference is these countries are at the top of the leaderboards economically, and they feel that way. So they both At least in the case of the U.S., you know, it's relatively, you know, since World War basically World War II. But you know, when World War I, you could argue, was when the U.S. became very consequential. But China's, you know, kind of used to that feeling, right? They've had that feeling for quite a while. You could argue the U.S.'s too. We were used to having that feeling, but they've used it. They're used to having it for a much longer period. So that's a really huge similarity.

Even the name of China in Chinese for the non-Chinese speaking listeners, you know, Zhongguo. Like Middle Kingdom, right? The idea is that kind of like the Hub is an old nickname for Boston. Boston's kind of egotistically saying that they're the hub of the universe, right? But China has much more ability to be able to state that they are the Middle Kingdom since when Zheng He went out on his ships and cruised around the world and said, nope, there's really nothing out there. We're just gonna stay within China and we're good.

Yeah. Right. Yeah. Well, I know it's true. China, you know, was very unique that way that they built tributary states, right? And, you know, what they were basically doing with a tributary state is just acknowledging the difference in power between their country and another country. And it was very Confucian. It wasn't something they created to try to, you know, keep others down, but it was just an acknowledgement of the relative power involved. I mean, every country, I think, can understand that. And now they're building a, you know, one could argue a new one with kind of the Belt and Road Initiative and, you know, creating a lot of relationships which are mutually beneficial, very businesslike and very hands-off, kind of like, you know, again, very corporate. You know, it's, you know, we're not going to tell you how to do things in your place generally, but we like harmony and we like, you know, good business environment. It's fairly predictable and it's fairly durable. But that's really what's going on, in my opinion, with BRI. And why not? I mean, you know, the world needed it. We weren't stepping up to do it. And, you know, they were able to basically find a place to export all of that infrastructure machinery they had built for their own infrastructure. And now they can export that. It was genius, actually. You know, I mean, it was disappointing that we didn't join in. I mean, politically, that would have been very difficult. But they were offered in 2012. I think Kerry was offered Directly by President Xi, and I guess for whatever reason it never made it to Obama or something like that. This was apparently a request that we were invited. We chose not to participate. Somebody at some level, which is you know it's too bad. I mean, that's those are the kinds of cases where I kind of wish business sort of was a little bit more in charge, not less. You know what I mean? Because the one thing people forget is. That like shared interests are what create stability. Like people talk about good defenses are really great to, you know, to reduce the likelihood of war. I think that's probably true. But what also reduces the likelihood of war is common interests that are very important. Sort of relationships that are too big to fail for everyone is actually in everyone's interest. You don't want a relationship that's not too big to fail because those are the kinds of relationships you end up getting into a war over. But ideally, You want it to be too important, you know. And I think that's good because this is going to— and this is like, this is kind of why I'm here at Harvard. I think it's all about trying to get to something that reflects the time we're in, a relationship the US and China share for the 21st century that reflects the age of artificial intelligence and, you know, and the hyperconnected world we live in. And the idea that even if we could decouple from one another, Which is impossible. It's like trying to, as Elon says, trying to separate conjoined twins, which practically speaking it is. For example, we need rare earths. China is the only game in town for lots of rare earths. I'm sorry, but that is the reality. So that means disengagement would mean strategically disastrous things for us, things we need we can't make. So, you know, you get through the Kindergarten conversation about why these guys can't have their toy. And we get to the serious conversation about, you know, even if you want to decouple, we in the US basically control global payments and the US dollar is the reserve currency. And that's a very, very interconnected system with the world economy. So the US, you know, basically is very connected with the global economy through that and all the debt and the financing and all of that. On the other side, China is the global leader of trade and manufacturing. It is completely connected into the global economy too, right? And is the only supply chain for many things. So, the combination is we can't decouple from each other without decoupling from the entire global economy. So, whoever we're— it's actually like a nuclear trade kind of a bomb that basically neither country can do without the global economy, therefore can't do without each other. So we kind of get through all the conversation on uncoupling and all the conversation on decoupling, and we get to the reality of, you know, bringing, I'd say, new thinking to a 21st century U.S.-China relationship. That's what's got to happen, because the conversation you hear on every other topic sounds like the 20th century. Except for the one about the US and China, and that sounds like an 18th century conversation. Sanctions, tariffs, you know, who could beat who in a war. I mean, honestly, if you change it to the 16th century, would it sound any different at all? I mean, we're using— I mean, it's a little diminishing, I think, to say that. It's a little unfair. But nonetheless, we're having a very sophisticated conversation about very honestly outdated concepts. dominance and actions which would be not just, not just the cause of unforeseen, you know, issues, but would actually accelerate the actual goals you're trying to avoid. And that's, you know, that's why I think, you know, we need to have some new thinking on how this relationship prosecutes in the future, don't you?

I fully agree. Yeah. And like, you know, as you said, so many parallels, the exceptionalism, the the population size, the GDP, right? $110 trillion globally, $27 trillion US, $20 trillion China, I think. So 40% of the global GDP, bigger than the next dozens of countries combined. There's so many parallels and that relationship is so critical and important and impossible to truly decouple. And it's actually not even preferable.

Yeah.

People say enemy, but yeah, adversary for sure. sure you decouple any sort of espionage or anything that's going to compromise us militarily. Competitive? Yes, we're very competitive. Cooperative? Also cooperative. Also friends. Also cultural and other exchange. So I think it's so much more nuanced than whatever we saw with Russia in the Cold War in the '70s, '80s, right? And I'd love to dig deeper into that. And I'd love to really see really what you're doing at Harvard, but I'd also love to hear more about your journey. So I know that you were the, you know, founding team member of Apco in Beijing to spark up that incredible institution. Tell us about like that path and getting some, you know, dirt under your fingernails and then starting Motel 8, because that journey is so just, you know, get your popcorn and buckle up, everybody. Let's go.

Oh, man. Okay. Well, you know, I was in Hong Kong for a few years after graduating from Peking University. And the reason was because after Tiananmen, there were some sanctions and the economy had barely sort of seen green shoots even then. So, everybody was in Hong Kong, right? And at that time, Hong Kong's GDP was like 25% of China's. So, I went down there and got a job basically as a clerk for American Airlines, but it was a analyst job. And, you know, and I got a name card, I got a Hong Kong ID, and, you know, and got an apartment. So, like, I was established. But it was a tough thing to do because nobody showed up in Hong Kong looking for work, really. It was just like so many things that I did that, you know, probably weren't the smartest way, but they were the only way that I could think of. So, I just, you know, I was living in Chungking Mansions, this like, you know, This like world-famous, world-infamous, you know, guest house where foreigners would come.

And it's like a step up from a homeless encampment for people that don't know, right?

Something like that. But great food and really interesting people. And I would leave my apartment, my little, you know, tiny room every day and, you know, get ready to bring like my dot matrix resumes, you know, around and I was trying to get a job. And anyway, I mean, silly. Anyways, yeah, so I was there for a number of years, and finally I was invited to work as a consultant for Budweiser. They were looking to hire someone to help them with government affairs in China. And so, you know, so I kind of came on as Budweiser's government affairs, you know, representative. And that was 8 years of just pure, like, amazing, interesting experiences traveling all over the country and watching an American brand develop throughout. And it was something that like Chinese were excited and they had a really interesting positioning. Like they were really smart about how they did it. And more than anything, I watched how they worked collaboratively with local partners and how local partners loved being part of Budweiser. And, you know, so that was an amazing experience. And then during that process, I was asked by Abgo which is a DC public affairs firm which does some, you know, issue management, you know, strategy work around that. But they work a lot in the policy space. And, you know, look, risk, you know, risks need to be managed when you're a company. And the fact is policy risk is a really important, you know, type of risk to understand and mitigate whether you're in the US or China. And actually they're both complex places to do it. So, I started Abgo, and Abgo was a really successful business. Like all businesses, they're successful or not based on the timing as much as anything. And timing on a project like that was just perfect. I think if I actually sometimes look back on some of the fortuitous timing opportunities that I've just kind of fallen into, I become very grateful because I realize so little of it necessarily had to be like my vision or my hard work. A lot of it just happens to be, you know, you just work hard to get lucky, right? But one of those lucky experiences was starting AppGo in '97 because it was like the perfect time for like serious issue management work because, you know, in the past, China had been a place where, you know, you're just kind of, you know, right, you know, la guanxi, as they say, right? You know, you learn how to make connections and connections became valuable and they also helped you protect your business in a market that didn't have a lot of ability to enforce legal, you know, rules to protect you. So you were kind of on your own and you had to be very creative. You know, we had a lot of that at Super 8 too, if you can imagine. Yeah. So we did that, you know, and that business ended up, you know, blowing up as well. We had like over 50 consultants when I stepped down because it was time for me to figure out how to start my own company. I had gone to China with a business plan, right? About how I was going to start an American brand, bring in a system, and, you know, and then bring it out. And I looked around at what I thought could be interesting in 19— you know, sorry, in 2002, around 2002. And I looked at, you know, gyms, like I looked at Gold's Gym and I looked at a few other brands. But when I came upon an idea that a friend had for bringing an American economy hotel chain, I just thought, this has got to be a great idea. And I started looking into it. And I wrote a proposal to the owners of Super 8, which, you know, involved like running around, like, you know, doing like a 2-month market research project and then developing a plan. And I flew back and presented it to them. And I said, it's my gift to you. If you want to use this plan, you're welcome to use it. But otherwise, I'd like to buy the brand. And I'll use this, this plan. And they agreed to a letter of intent that day. And then another, it took another year to negotiate the license. But yeah, the capture of a brand like Super 8 was, you know, sort of, you know, a really big, you know, in itself a big achievement because I didn't have the money and I didn't have the hotel. So I had to basically, you know, find somebody who would come in with the money if I had the hotel and some, then find someone who had the hotel, which I had, you know, somebody who was kind of like a big brother of mine there who was, you know, An owner of a hotel, right? So can you imagine, like right in the middle of you know upper north Wangfujing, which is sort of the you know the Fifth Avenue of China. Yeah, primo. And it was an amazing location right next to this old church, you know kind of tucked away. And it was just like it was just a great place to develop a brand from. And so, you know, but I do remember most people thought I was crazy, which I thought okay that's not you know. And a lot of them thought maybe it'll work, but there's got to be easier ways to make money than trying to teach China franchising and economy hotel chains. There was no law protecting franchises, so we had to help write— I mean, we had to like help them, you know, basically we advised them on how, you know, we brought— just advising them was just basically bringing them, you know, knowledge about how other markets, you know, regulate their franchising operation. So, we did that. We just brought them a lot of information and then summarized some of it for them and helped them write it. So, these were all the parts just so we could build the brand, right? Because we didn't— again, we didn't have much money. We started with $500,000 in startup capital and had an angel. And, I had to use a lot of that to buy the brand and that was just the down payment. So, it was an interesting time. I mean, it was like always on the edge of failure. We were always holding it together. We had momentum. There was always good things happening, but there was always challenges. And we were doing it on a shoestring. And nobody in their right mind, honestly, should ever try to start a national brand on a shoestring.

Let me just pause right there because you said that you were lucky. And I think people talk about making your own luck and I believe in my marriage, my second, current, and final wife, that the most important thing in a marriage is selection, just making the right choice from the beginning.

Right.

I think you chose China even when that didn't feel right to most people. But then, that's the whole thing about a startup is that if something feels right, then the large incumbents are already jumping You have to choose something that's non-intuitive, but you have to have some kind of insight that that's going to be the way forward. And I think you chose really well with Super 8, and maybe you could set the tone and the context of what China was like at that time and why that was a good, good decision in that industry. Yeah.

Yeah. So, you know, when I was a student in my first year at Beida, we went on a, like, a bit of a, I don't know, a student trip. Just a bunch of us students got together. There was like a couple of German women and there was an American guy and then there was a Scottish woman and a British guy. And we were just kind of on a little tour and we took a train up to Arnhem, which is right at the border of Mongolia and like Inner Mongolia in China. And then, we stayed in this engineering town there, Örenhot, for a day or two. And then, we started hitchhiking. We were going to hitchhike across the Gobi and then come down. We saw there was this road that came down from Shilinhot directly over what looked like nothing and then back to Beijing. So, we were going to hitchhike. And, we got as far as Nart, which was a town which I don't think had ever seen a foreigner by the way they acted. But after that, we couldn't get anyone to give us a ride any further. And somehow we coaxed the bus driver to take us across, like take us because we formed a human chain across the road. And, you know, we were so silly, honestly. And we hopped on the bus and next thing you know, we're arrested because apparently that was one big military reservation that wasn't shown on the map. And we were too dumb. As foreigners to like realize that you're not supposed to hitchhike through Mongolia. So, you know, so we ended up getting under house arrest and we wrote confessions and, you know, I wrote a sincere confession. I did feel badly about it. I honestly didn't know that there was a law that you couldn't hitchhike. It just never occurred to me. But, you know, it's China, right? It's better to ask for permission sometimes. More often than not, it's better to ask for forgiveness, you know. And, you know, we were a bunch of silly students, so they didn't really, you know, But I'm sure that confession is somewhere now. Somewhere. It's probably somewhere digitized.

Probably somewhere. Yeah. Yeah. So in that, in your travels, you sort of just felt that there was really a gap in the, even the major cities.

Oh, I was going to tell you a story. So on that trip was the first time I encountered Chinese accommodations and it was like, and I actually asked The West Chinese, but enough to ask simple questions. And I asked the manager, you know, why weren't there any, you know, sheets on the bed? Or, you know, like it was just all like it was a beanbag pillow. I mean, you know, you're, you know, and he said, you know, it's a, it's luxury for us to travel. Really asked for a lot. And that was kind of the hotels that became the one-star hotels that people were staying in in China there, right? You know, at that time it was very early and there was a lot of variance in quality and everything. So There was clearly like there was a lot of market for low end of accommodation. Thought that people were prepared to pay a little bit of a premium to have a little bit of quality and consistency and value would become more important than price. That was the idea, and and I thought the timing was right for that. And a lot of people thought I was crazy that Chinese wouldn't their franchise fees. That they wouldn't necessarily be willing to follow brand standards, and there was a lot of things. But I thought that we could probably get over those things with shared values and shared interests and shared you know goals. And but I was right. Half like do something anyway. The point is that that the accommodation market was ripe for standardization, right? And couldn't all be new build hotels, you know. And and I knew that. Was making a killing, and they were charging like 30 or 40 percent of the room rate for the hotels on listed because there were no brands. And so these no-name hotels, none of them had really. The bigger hotels might have a little name for themselves, but remember, like this was you know, it's like very early. You know, the internet had only been around a few years at that point. So you know, it was a very early time. There weren't a lot of. Ways for access customers through the couple of big platforms. So we knew that, we knew that it was needed and we weren't the first, but we were the first to do it with franchising. We were the first to do it with an American brand. We're largest by number of properties still, but we used to be the largest foreign hotel operator in China by number of properties, not rooms, but by properties. Because all of our properties are small, but there was a lot of them, right? We have like 1,200.

Wow. And how, how, how long was that journey from that first trip to the mothership in the US to actually selling the company?

So in 2004, we opened 3 properties, Beijing, Dalian, and, and then the next year we opened 10 more and then that 26 more. But by the end, we were opening up one every day and a half. You know, and that process took about, yeah, you know, six years. Six years. I mean, you talk about, and by the way, the name Super Eight in Chinese, like the you know the character from you know快速 or like like speed actually is like the number eight. And of course, eight, you know, I'm sure everybody knows.

Yeah, because eight is八. And then also when you say恭喜发财, like八 means earn. So 8 is— that's why when you said in the beginning that you showed up on 8/8/88, and that's why the Olympics launched on also, you know, 8/8/2008, right? So also, also very lucky. So yeah, I mean, that was a match made in heaven. That was, that was a really excellent— like, that character, like, is like perfect.

Yeah, it worked well. Yeah, it's funny, in the case of both Super 8 and the case of Abaco, I came up with the Chinese, you know. It's like I just had lucky shots on the people liked him. I have to go is pretty good too. Anke, anke, ping an da an, yi da ke, anke. It's like a positive, peaceful, positive, you know. So that's a good name too. Anke Guwen. Anyway. But but you know what?

Like you say you got lucky and you very modest guy, but I I knew you from Hong Kong days. a bit, and I knew you during your journey there, and it was absolutely grueling. Like, it was, even as you had success, like, the more success you had, the more grueling, as any entrepreneur. But then, of course, in China, when you're doing something like you were, I don't— never met anybody ever, very few Chinese people that do everything and something in every province physically. Like, you were in all 31 provinces. And like, you gotta share some anecdotes about some of your trials and tribulations along the way. Some of the, the many.

As drunk as I am with the vice governor of Shandong Province, like big brother in Beijing who gave me the first hotel. This amazing guy, like, like super key, just, just like a really interesting, very successful real estate magnate. But he basically, yeah, he went to Shandong to meet this vice governor because I was trying to break into the Shandong market. Shandong is like 120 million people. It's, it's, you know, it's, it has a lot of industry. It's like, it's like a special province. You don't hear a lot about it outside of China, but it's like one of those provinces that's quite unique.

It's rough. It's like, yeah, mining and yeah, like, yeah.

Yeah, mining, but, but more, you know, and, and like very strong liquor, right? Liquor. And it was the only place I'd ever been where, like, when I show up at this banquet, it's just me. And I had one of my, of the came along. from Beijing. I don't care. Maybe he was someone in development. I think he was someone from development. And so, the two of us, and normally, the boss will try to get the— to help. So, I tried that. That wasn't happening. The vice governor slammed his hand on the table, was like, if you don't drink with us, you're not our friend. If you don't drink with us. And I was like, dang. So, they started me off with a tumbler of 52-proof. I mean, I know this sounds like— Oh. Everybody But it was like the first of 8 of like tumblers full of 52-proof Baijiu. And yeah, I was like so drunk that I had to, I literally had to get up from the table and I ran to the bathroom and I threw up. And they were so happy. They were so happy after that. They were like, they were like, I had like the next day I had 10, I had like 10 Super 8s signed by the end of the day, like the next day. Yeah, they sent like all these guys are like, okay, you know, they started sending over all these hotel owners. They're like, we like this brand. And next thing you know, we were signing, like just signing, signing, signing. Yeah. So I mean, you know, that was stuff that used to happen then. It was a different time, you know. Number of gosh, I could, I don't even know where to begin. I mean, basically I've been everywhere, like, and, you know, and I'm with fun because they're all entrepreneurs, all of the super developers and franchisees. They're all like people that started with You know, like somehow, or the brother-in-law who works in like some debt department over at like the, you know, ICBC branch, you know, he'll be like, hey, we have a really interesting, you know, this hotel is, you could lease it. So I just couldn't get a shot, but they would always kind of, you know, that's where the guanxi wang kind of mattered as people kind of getting a heads up on interesting opportunities. That would happen a lot. Then once they had that, the next thing you know, they're looking around trying to raise money. They fly to Beijing or they try to get us to fly there to sign with them because once they got that, then they could get loans. So that was kind of the model. It was a model that, you know, the kind of people that did this were entrepreneurs. They were kind of hustlers. But they weren't just your average hustler because they have to be able to pull together a hotel deal. And that requires a big lease and, you know, relatively large amount of capital outlay. It was like, I think, I think we said it was like the neighborhood of like $10,000 US a key was the amount it would normally cost them to renovate a building in common areas. So it was about a, you know, bigger million dollars worth of investment, plus taking on a lease. And that's what these guys were basically able to pull together. And, you know, and that was That was a kind of person, you know, that was like able to do that anywhere you went in China. And there was a lot of differences between regions, but the same set of skills and, you know, and natural talents that made them, you know, the kind of people that could do that. And then once they had one, you know, they'd pick me up in a, like a Xiaoli Che or whatever they could, you know, whatever kind of car. But the second or third time, they'd always be driving in a Mercedes and they'd have like 4 Super Eights.

And And a leather, a leather, a leather purse full of like 10,000 renminbi, just, you know, and, you know, 3 different, 3 different phones. Yeah. Chain smoking. I know those guys well.

Exactly. I was actually like, you know, driving around in an Audi 5000. It wasn't new, you know, and these guys were all picking me up in brand new Bentleys and, you know, not Bentleys. Well, a couple of them did actually, but most of them, yeah, Mercedes and Audis and, you know, all kinds of These guys were, you know, really successful, and it was a good model. That's why it worked, because it actually worked because people made money with it, guests had a good experience with it. Like, there's no way that, you know, that this would have worked had we not executed on the plan, which was really difficult because, you know, it's famously hard to systemize, right? I mean, you know, it's like everything was at that time more sort of on a, you know, human basis. It was all sort of Oh, this person's really good, and they've been around a long time, so they know everything. So there's a lot of there was a lot of human knowledge cap, but systems for you know how to make sure that hotels were consistent across like different provinces that required different things. So you know that was the hardest part, but that was also where we could bring unique value, right?

So it's fascinating if I could share an anecdote. So there was a group. I won't say who they are, but they got a deal to do hair salons inside car. Carrefour. So Carrefour was pretty prolific in China. And you go to a Carrefour, you walk in and there's a place to buy, you know, maybe dumplings and there's a, you know, maybe little phone shop and there's all these little services along the way. So they had these hair salons and they had hundreds something of them and they couldn't make them work. And then a Chinese guy came in and took it over and it was profitable within 3 months and they couldn't understand it. And they went in and they said, what'd you do? And he said, I went into, You know, every region, and I said, you're all fired and you can come back and work, but you all have to invest. And I don't care where you get the money, maybe from the gray market, maybe from your family. And now everybody in the shop is an owner and everybody is invested in the place. So now instead of taking somebody and say, hey, come to my house and I'll cut your hair in my apartment, or, you know, I'm gonna change the shampoo for my shampoo and, you know, sell that. Or the guy lazing around who should be sweeping. Everybody is like, let's go, let's go. So in effect, he kind of franchised it out to all the owners. You were actually really brilliant. You're like, there's no way I could ever independently run and manage all of these locations, 1,000+ locations across all of these provinces. But then you give somebody ownership and agency. And then they become, you know, they're sharks, but they become your shark. And then it's completely, you know, intertwined. And it really, it really works.

It, it worked, but it wasn't without its challenges. We did have like a franchise revolt.

Can, can, can you share people who tried to de-dock and go independent? Of course. Because there's always testing boundaries in China. Of course.

No, there was always that. The hardest part was You know, if somebody was terminated, they just would leave the sign up, you know, and they would still sell themselves as Super 8s. And so, you know, it wasn't until years later that we were able to work out an agreement with Ctrip and the other online travel agents that they couldn't just list a Super 8, you know, once we got rid of— so I mean, because it was really hard, you technically, you couldn't really— we wrote it into our contracts in the early years. You know, we tried the best we could to like, you know, have control of the ability to go take down the sign if they didn't pay or whatever. It was really hard to execute on that. It was hard to enforce. So later we tried to write it into the agreements that we own the sign and that was part of the, you know, so it was actually, it's easier to get, take something back if it's yours. It's hard if it's like, we realized this later, we were like, you must take this down. But in the localities, they'd be like, well, wait a minute, they paid for the sign. It's their hotel. You got to leave it up. So that's what happened a lot of time in practice. But once we owned the signs, I think then it was, you know, if we had to, we could take it down. And we didn't want to take it down. You never want to take it down. But there are times, there will be people that just won't pay, right? And that's true anywhere in the world. But, you know, but we had our share of it too. And, you know, and a lot of it was just testing boundaries, how much they could, you know, we did work out the best we could to, you know, to be able to pull down the sign if we had to, which nobody begrudged us because, you know, obviously, if people think they cannot pay Who's going to pay franchise fees if they don't have to? But for our part, we made sure that there was always a lot of value being driven from us so that they never really minded paying their franchise fees. But we did have a franchise revolt where everybody got together and refused to pay fees because they were collective bargaining on a lot of things they wanted. The problem was the things they wanted were things I couldn't even give them. And so, I basically had to like— it was like a 9-month process where we weren't getting paid by anyone. Wow. But we had to keep running. We still had to pay, you know, fees back to the, you know, the mothership to own the brand. So, it was a difficult time. I mean, you know, right around the time we did our Series A and we raised $50 million, pre-money valuation of $50 million. So, post-money, it was a $100 million company. I mean, when we did that time, you know, we were pretty low on capital and they knew that, but we were pretty low on capital because we'd been But luckily, we were able to pull it together. I think we— there was out of 104 franchisees involved, 4 left, I think, you know, or were terminated, and then the rest stayed. So it's like 7 months of, you know, of pain. But you have to like, you know, you have to be a mensch, you know, you have to be very, you know, human about behavior, you know, there. I mean, that was, I think, what saved us, you know, we were very reasonable about it. And if we tried to handle it the way a Chinese company would have handled it, we would have gotten our ass handed to us, I think. But the way we did it out, because we, you know, we, we were fair in what we did, we did the best we could, and, and we gave them an ultimatum. We said, listen, it's the best we can do, you know, we're not going to agree to any of this, you know, we can't even if we want to. And everybody agreed. And then after that, we really like hit new heights, and that's How we made it to you know to where we did. But I'm not involved with the business anymore. I haven't been involved in years. I'm still a small shareholder, but my picture is still up in all the locations, so you can find my picture in every one of them on the history board. Colonel Sanders, you know I really do such a like fond memories of that time. It was so difficult, and we had to like you know we were constantly trying to to to solve impossible problems. It was an exhilarating time too, and there was so much growth and development. It was also an exciting time to be in China. Right? That whole decade, 2004, like 2012. I mean, that was right around the time of the Olympics. Like China, you know, was like hitting a new gear at that point. And they were getting a lot of attention because they had been an artistic success. But the people that, like, like us that were around in like the '90s and, you know, and then the 2000s, you know, we saw China that was kind of hitting its stride and was Impressing in a lot of important ways, but, you know, off of a small base. And it was going so fast that even I could see it in real time. That was what I remember thinking about. Remember? I mean, because most places you don't really notice until you look back. Oh man, that's really a lot of change. But we were watching change happen right before our eyes all over the country. It was incredible to watch.

It was like one of those films where a flower blooms, you know, in You know, sped up. Yeah, that's that's fascinating.

Yeah, first time I went to was coming across from Louwu. You know, we took the train, I guess. You know, and then we ended up, you know, taking you know walking across the border, and there were water buffalo in what's now downtown Shenzhen. That was 1989. I mean, Shenzhen looks like Tomorrowland now, and that was just and you know, and that's that's the thing. Like it's just really hard to get your head around. Unless you were there, just, you know, like how monumental the scale of the change is there.

Even '99, when I would go there, I would go across with my buddy John Hakim and we would eat duck tongue at a nightclub. And it was, it felt like Tijuana. It felt really like the Wild West. It was really a big bifurcation, you know, even in '99. And then, yeah, you're right. Absolutely is Tomorrowland, but that Tomorrowland already happened, you know, 10 years ago. So it's just incredible how quickly things have shifted and how quickly Chinese people have adjusted to it. There's one guy we had on the podcast, Zach Dykewald, who talks about Live Change Index and how there's just no other place in the world that's had, you know, probably no other time in history, no other place in the world has had this rapid of experience in their life in one generation. So tell us about what actually concluded your time at Super 8. What can you share about the exit and what you've been doing since then?

Well, I, first of all, I knew, look, I knew that I was a 0-to-1 entrepreneur, not a 1-to-N. Like you have to kind of know your lanes, right? And so much of success is just focus. And I knew where I was strong was in the inception stage, have some other idea about how I usually— I have a secret, something I think to be true that the rest of the world doesn't know yet. Right? And then I want to bring everyone in on that secret. And I wanted to capture support for an idea. That's the founder's process, right? That's what I like. And so I knew I wasn't going to be running the business forever. And I wanted to localize the business as quickly as possible, because You know, we didn't overemphasize. We did have like a U.S. system map, I think, in the early days. But after that, we just put the Chinese system map up. You know, it was like basically it was one of those things that we thought was just kind of like, you know, a nice to have. But it really did kind of round out the whole motel feeling that, you know, the motel system was on the map and it was updated. We'd send new updated maps every month to everybody. And it was like kind of a nice little consistent point. I remember it as a kid staying at Holiday Inns, and they always had these, like, these cups, or they were glasses maybe, but they were always, like, wrapped in paper. I remember them being wrapped in paper, and it was, like, kind of a consistent thing that I somehow felt reassured by. So we wanted to give them this map that they could feel reassured that, like, wherever they go, every Super 8 has this map, you know? And it was cool. It was, like, you know, something we did. Yeah. See, that was basically 2010. I stepped down. I agreed to stay on as chair for another 5 years. But I remember like a private equity firm basically, you know, controlled the company now. So, for me, it was a matter of getting out of the way and letting them run it. And, you know, we had given it a good momentum and they took it to much greater heights. And it was a good collaboration. But yeah, they're still running it now.

Amazing. Terrific exit. You and Fritz Demopoulos, another amazing American entrepreneur in China making money from that travel industry. He's also been on the pod. Also knew him from the '90s in Hong Kong. And you guys both smelled it. You guys saw it. And that selection and that industry insider secret, you got that from being on the ground.

I mean, I had the pleasure of meeting Fritz when he was still building So Fritz built Chunar, right? He was with a couple of partners, and I thought to myself, this guy's brilliant. And I really didn't even fully understand the model, although it, you know, I understood it well enough to know that it was successful. And I asked our team to support them as much as possible. And Fritz, you know, is a good friend to this day. But yeah, I mean, Chunar became a much more successful company than almost any other startup that I'd ever encountered. It was Yeah. With the possible exception of Jack Ma and Alibaba. I did get a chance to meet him.

Tell me about it. I used to have consistent breakfasts with Fritz and he's like, I got this idea. Google went public and they make all their money from lead gen, but what's the one thing you're going to spend more online than everything else combined, an order of magnitude more? And I was like, well, of course, trains, planes, automobiles, hotels. He says, exactly. So, I'm starting this like search engine for travel. Chunhar means where to, and $3 million valuation. And I was like Finding Nemo where I was like, Nemo, oh, that's a nice name. And I like, I was just like, angel investors. Oh yeah. But I was like, I can't be an angel because you need a high net worth of $10 million US.

Wow.

I had money. I could have thrown $100K into it, but I didn't. And then he sold it for $3.6 billion. So I actually refused to actually go to that cafe ever again. It's like, I can't even sit inside here because that was a 1,200x that I passed on. But, uh, but good for him though. He's a, he's a genius.

Yeah. Honestly, I think, you know, that was, if you play the percentages, then not investing is the only way to play any single venture capital.

Right. I mean, because they're most likely going to fail.

90% do. So, I mean, yeah, ideally you want to invest in the companies that are able to benefit no matter who wins or loses, which, you know—

I wanted to invest. It was 2005 and I just had this idea in my head that an angel investor, you needed to be accredited and, you know, whatever. But anyway, I've learned my lesson since then. If you feel like that person, you got to bet on the jockey and not the horse. Then you write the check and you, you, you know, look, I remember I was sitting in, in Wyndham's headquarters.

Wyndham owns Super 8. And it was right during the global financial crisis when the stock market was melting down. And we didn't know where it was going to end up. And there were people talking about a new Great Depression. And I remember looking at whatever it was, my PalmPilot or whatever, and I could see that Wyndham stock was at $5 a share. And, I knew the brand really well because I'd been working with them for now at this point 7 years and we had a really good association. And, I knew they were a money machine and they were fine. They had a great balance sheet. And, Wyndham was trading at $5 a share and it ended up, by the way, by the time the GFC was over and it was a few years had passed, it made it all the way to $60. So, you could have bought a listed company that I actually knew. I mean, public information, but I knew that they were a well-run business and I knew that business was just like printing money. Like, not that business, but that model is just, it's a very positive model. Everybody wins. It's a, you know, it's a good value chain.

And did you?

I did not. That's what my point is. We all have our— yeah, that's, I mean, that would have been a 15x. The worst thing you can do is ever give any second thought to those because honestly, overall, you just got to just look forward.

So pulling on that thread, right now everybody is like, oh, that was it. 40 years of China, it's over. That's the end of the growth, real estate bubble, and too autocratic, and it's hostile to Jack Ma and the tech industry. And it's kind of over. And you know what? Now we have to switch gears. And my gut and my experience and my insider secret there is that there are just way too many incredibly intelligent, incredibly driven, innovative people inside China. And China is just getting started in so many ways. And that relationship, that dance, I love. I've quoted you before on the podcast talking to Jim McGregor that, you know, I'm not a panda hugger, nor am I a panda slugger. I wanna dance with the panda. We gotta dance with the panda. We have to do it. We have to do— let's not step on each other's toes. Let's not start, you know, doing Brazilian jiu-jitsu on the ground with the panda. Like, let's make that dance work.

Right.

And I think it's important. So let's talk about like your amazing new role at Ed Hovind. Like, your next act is incredible.

Well, thanks.

No, I'm thrilled to be here. So I arrived at the Fairbank Center for Chinese Studies in August, our year began. And, you know, it's a visiting fellowship that, you know, that I think, look, for what I'm trying to do, it's, it's an extraordinary place. I mean, the China specialists and scholars at the center here, you know, just incredible. And equally great is that there's other great experts in the area and from outside the area that come and we interact together. So, it's quite a meeting place here, which is really terrific as well. So, yeah, basically, I was in Hong Kong for about 10 years. I'm a permanent resident of Hong Kong. I was there from 2010 to 2019. I had lived there for 7 years in the '90s. So, you know, but I've always kind of maintained a place in both Places as soon as I could afford it. You know, as early as Budweiser days, I was living in Hong Kong, but I had a place in Beijing, and I was going back and forth. And so that was a nice arrangement because you know Hong Kong is a whole other thing we need to talk about. But Hong Kong is an extraordinary place, and still is an extraordinary place, although it's changed a lot. Yeah, I mean, all of this is going through a lot of change, right? But anyway, I came here because I was listening to the rhetoric around U.S.-China. you know, at that time, decoupling was the term. And I was really disillusioned to think, you know, there's got to be a better way to do this than the way that we're doing this. Like, you know, this just doesn't feel like it's appropriate for the times. Like, I mean, we're in this hyperconnected world. And, you know, we're in the advent of AI and the Fourth Industrial Revolution. And, you know, autonomous driving vehicles will be commonplace in 10 years. And here we are speaking about these issues Like with this fantasy that you can just close your borders in an interconnected world and you can get by that way, or that you can close your border off of one other country. And it's also, it's asking a lot of the world to really, you know, take sides between superpowers. Honestly, that's, I mean, it's just so the whole thing seemed like this can't be the best that humanity can come up with in 2023. And I decided that, you know, I was going to try to research new, new ways forward for the US-China relationship, you know, getting beyond conversations about coupling and decoupling. You know, I think that this moment calls for new thinking and new perspectives. And I'd like to bring a founder's mentality to this problem and look for, you know, what do founders like to do? We like timing opportunities. We like win-win. We like you know, practical solutions based in, you know, reality, you know, cold, hard cost-benefit analysis, right? You know, so I mean, I'm not an idealist or an ideologue, you know, I'm actually quite flexible about, you know, whether you achieve it this way or this way, as long as nobody gets hurt, you know, I think everybody can win. And I think that we need to sort of create new language around the US-China relationship. No, we need to, you know, the people who are having the conversation are having the same conversation that we were having 50 years ago. We were talking about Taiwan 50 years ago. We're still talking about it. You know, Taiwan was the impediment to normalizing relations. They found a way that did help sidestep the issue for whatever it is, 45 years, which I say is a big win. And, you know, And we tip the hat to Dr. Kissinger for that.

Indeed.

Especially Nixon. But, you know, but, but here we are now kind of back, and we need to create new language because this is a different time. I mean, do you find it strange at all when you're watching the news about issues like we're hearing about in, you know, in Gaza or in Ukraine? I mean, do you feel strange at all that this is where humanity is in 2023? Like, we're still resolving problems this way where, you know, you guys are right, you guys are wrong. Like, I mean, I don't know, there has to be practical. Like, I'd like to see governments deal with one another the way corporations deal with one another, right? You can have vigorous competition, but there's— first rule of thumb is like, we won't be doing anything self-destructive or that doesn't serve our interests, or you know what I mean? Like, something that take the emotion out of it. We know of all the D's involved in the US-China relationship— de-risking, decoupling, The only one that I really like is de-escalation. That's the one where we need to, you know, because we're just not at our best in this heightened state of like fear and, you know, zero-sum thinking. I don't think that that kind of thinking is going to get us anywhere that we want to go. Like, I think that, you know, yes, these are very smart people having very important ideas. But honestly, it's very much based in zero-sum thinking. It doesn't lend itself to solutions that are going to create any kind of overlap in the Venn diagram. And that's where conflict happens, when you've got, you know, the inability for both parties to be able to come away with the win. It doesn't work, you know, it doesn't work unless you get some new thinking here. Like, there's so much upside in this relationship. And there's also the ability to manage our differences much better. You know, and I'm not Pollyanna. I'm actually quite realistic about the likelihood of this happening. But I do know one thing. I do know that the American business community in China has been unfairly, you know, condemned for whatever people feel is the outcome that we're in now is somehow undesirable. But actually, it was the American business community working in China that actually created like millions of person-to-person relationships that have created a lot of ballast here in this, you know, and an understanding of how things get done, you know, in a way where— because you always hear people talk about, oh, you know, at the people-to-people level, US and Chinese get along very well. Well, okay, so business is more people-to-people than when governments are dealing with governments, right? Business is a little bit more in the realm of practical reality and working together and finding solutions and that sort of thing. So I think having neutered the voice of the American business community because of some perceived, you know, giving away the store, I do agree that it would have been difficult for the US not to approach things differently than the way we had been. I think the, the era of engagement and sort of that real sort of heady You know, like you know rapprochement and all of the benefits of and the the enjoyable interactions and all of that. That was a heady time. I think that time probably needed to come to an end for all parties. I don't really think that it could have continued that way. So we were going to be in a post-engagement relationship one way or the other. There was no way around that. I think that in that regard, you know. We should just be glad we enjoyed the time we did. But this post-engagement relationship that we define, right, it can be defined with things that are quite a bit more practical than where we're at right now. And I think that kind of thinking has to be informed by finding ways for us to focus on issues of obvious common interest, like Climate change, like AI. These are things that we need to be doing together because separately we won't be effective. And I think you know you find a couple areas like that. Look, I mean the U.S. and the USSR cooperated on some space exploration, and I remember the Friendship, you know Soyuz. Well, we had a space station cooperation of some kind. Even during the height of the Cold War. So I mean, there is a lot of precedent for the idea of ring-fencing certain things, and those things will also provide ballast. All right, you know, right now what's happened is for the last 5 years or so, the U.S. business voice has not been able to really speak at the, you know, policy level, the strategic interest level. But actually, the U.S. is a capitalist country, and in fact, some of our best and brightest are with corporations. And the U.S. multinational is the most powerful invention the U.S. has ever created because it's created all the other ones. So I mean, even for those that are looking to purely try to protect and enhance American strategic interests, they should be working with the business community much more than they are. Behind the scenes, it's probably happening more. But I say whenever there is a veer to the rational, you know, when we stop talking about certain types of sanctions because we knew it could result in things like being excluded from rare earths, for example. That's somewhere behind there. There was, there was a business voice that said to someone, this is not in our interest, and it worked. I think there's a need for a lot more of that. So what I'm trying to do is research around finding those kinds of facts. Where do we see, you know, an opportunity or, or something that's not working that that needs to be reviewed. And I think there's an American business voice that really wants to be part of that conversation.

Fantastic. Very important and useful work, my friend, and a terrific use of your skills, experience, and network. I love it. It's a real amazing culmination coming at the right time. Talk about timing. That's the secret to startups and life and comedy. What's the secret to comedy timing?

That's really good. I've heard you say that. That's great.

And you used to very graciously sponsor our Chopsticks comedy shows when we were able to bring foreign comedians like Jim Gaffigan and Louis C.K. and, you know, Marc Maron to China back in the day. That ship has sailed, but I think that kind of—

I remember a couple of those shows and they were really great. And Yeah, you did some amazing stuff in China over the years, you know, and and I'll tell you, you know, like the whole sort of cultural aspect to the U.S.-China relationship is it's a really interesting conversation, you know, just by itself for another time. But like sort of, you know, there were a few pioneers that were out there trying to create cultural exchange like that, like and you were one of them. There weren't many. I always appreciated that. This relationship between the U.S. and China has developed over many years. Like it's become much more nuanced and enriched, you know, through stuff like that. You know, you were doing important stuff back then.

Oh, that's fine. That's kind of you to say. I was more scratching my own itch, like, wow, I'd love to be able to bring some of my heroes to China and to the rest of Asia and get up and blather away and tell a few jokes and make the professionals look just that much better in comparison to me. And I did my job well. So anyway, hey, I'd love to give you a hug and break bread with you in my hometown, in the city of Boston, when I get back next. And thank you for sharing your amazing hero's journey and the, you know, continued adventures along the way. Really appreciate it.

It's great to see you, Rich. Yeah, I really enjoyed it. And it's so fun to have a chance to talk to you about these, you know, days, days gone by and days to come.

Lovely. All the best. Thanks, my friend. See you, man. That's a wrap.

Thanks for listening to this episode of The Rich Robinson Show, Season 1, At the Speed of China. Visit therichrobinson.com/show to smash that subscribe button. Please also go to iTunes or whatever platform of choice Rate and comment, and until next time, thank you very much.再见，谢谢。