Tech serial entrepreneur Bertrand Schmitt on deciphering China's rapidly developing Tech industry

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. It will help you unlock actionable insights around the Asia region and the entrepreneurial agility that actually defines it. This first season, season 1 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 1, 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 place all day, every day, right now.

Let's go, Jio! Père Tran, bonjour, bonsoir, guten Abend. Good evening, all the above. Nice to see you, my friend, calling in from Seattle. Welcome to the pod.

Good to see you, Rich. Good to see you. It's been a while.

Been a while indeed. And great to see you keeping well and unsurprisingly thriving in your newfound home of North America on the West Coast. Really excited to have you on the show. I've always admired what you've done. With App Annie taking that concept, planting that seed in China and growing it to a mighty oak around the world, which is no small feat. And we're going to jump into that whole journey in China in a little bit, but I'd love for you to just introduce where you grew up and start talking about your path to the Middle Kingdom from the homeland.

Oh yeah, with pleasure. I guess it was a long path, not a direct one. So originally I come from France. I grew up in the west side of Paris, a suburb called Neuilly.

Lovely.

Interestingly enough, as a local mayor, ended up becoming French president, Nicolas Sarkozy. So that was a long time ago. So I grew up in that west side of Paris, started the first startup early, just before finishing engineering school. Which in France in the late '90s was not at all typical. There was very few entrepreneurs, even fewer who start before finishing school. So that was me early on focused at mobile solution. At the time we were talking about WAP. I don't know if you remember that, Rich. So Wireless Application Protocol.

Back in the day, yes. There's a new popular song, it's called WAP, but it's actually Wireless Application Protocol, like you said.

So I did that for 3 years. It started Well, but with telecom bubble exploding, it ended up being tough times. I had to close the business and we were like 20, 30 people raised around $1.5 million, maybe $2 million, and that was tough. And one thing I felt is that it's not just about the technology, it's also about how you market it, how you sell it, and how you finance it. So my decision was to actually go for an MBA, pick an MBA in the US. I ended up being accepted to a few programs and I decided to pick Wharton, do my MBA there. for 2 years.

Awesome.

I had a fantastic time there. It was really a big reset in a way for me to really think differently, think more globally, think in a way American, and think more business-focused, at least not just technical, try to combine both. I decided to come back to France after that. I ended up joining a startup, Zandan, as a head of marketing first, then as a COO. And ultimately we sold the business to an American company. And at that time, that was around early 2008, I had taken the decision to go to Asia, not just to Asia, but to China. And I took the decision because I felt that I had a more and more global mindset. I had seen the US, I had seen Europe. What's the bigger economic region you really want to know? Obviously Asia was the fastest growing, more reliable one, China. At the time in 2008 was really moving very fast. I still remember doing a few trips to China and I was very impressed to see that was the only place I knew I ever traveled to where entrepreneurs would give me 3 different business cards for their 3 businesses they were running in parallel. And I've seen one, I've seen 2, but 3 I have only seen in China and I have seen that a few times. So I felt there was an incredible energy and also that the time was right in terms of tech to start thinking about doing stuff in China, or at least from China.

But then can you peel back? Like, how did that actually happen? Were you saying like, I want to go to China, or were they saying we need somebody in China? What was the sort of progression?

Oh yeah, no, it was me. I want to go to China. My first trip to China was in 2004. I felt at the time, at least from my perspective, it was a bit early from the tech side. There was still a lot to be done and having always been in tech in my In my life, in my industry, I really felt that I was not going to change. So some people didn't mind going to China and do other stuff, of course, and not everyone comes from the tech industry, but I've always been and always wanted to stay in that industry. I just love this industry. So for me, in a way, China had to be ready. And of course, a lot of people will argue that China is ready in that, but I think for a foreign entrepreneur perspective, there was still a lot of infrastructure to be put in place. There was still a lot of people learning about tech, working For bigger tech companies, American ones specifically at the time. So there was a lot of learning to be done in China, and I felt in coming back maybe once a year around 2007, 2008, things were starting to change more. Investment, bigger local Chinese tech companies. I realized I could start to hire more good people, talented engineers in China. So for me, I felt that there was a combination of things, a very entrepreneurial-minded place, but also Locally, the ability to hire people. So I found a company after selling Zandan, that, that company I was working for, I found a company that was willing to send me to China. So I joined a company called Gomez headquartered in Boston.

Yeah, my hometown. Yeah.

So you know Gomez, Rich? So great company and they had a big engineering operation in China. I was the first, in total 300 people and in China around 80 people. I was the first non-Chinese, non-native Chinese joining the China team. I asked to join the China team, even if I was in charge of product, so I would be in charge of mobile products. So I was the first non-engineering, non-Chinese based out of Beijing for Gomez. And I went there without speaking a word. So a lot of people at that time going to China would, as you know, start learning the language or having learned the language at university first. So I was not at all like this.

Thrown in the deep end, like, wow. Even though that's a Boston-based company, when you're in an office with 80 other Chinese people, it's a Chinese culture. In terms of that. So that's a great, excellent way to turbocharge, accelerate your learning.

Yeah. And we were in that district northwest of Beijing, close to—

Changping?

No, it was close to, let me think. Oh, it's so long ago. Yeah. Haidian. Yeah.

Haidian, you mean? Haidian. Yeah. So first of all, now that's considered the Silicon Valley of Beijing, China, and that's the Silicon Valley area and that's where all the universities are. But I mean, back then that was pre-Olympics, right? You showed up right before the Olympics. I remember.

I showed up. So actually I came for the Olympics in China. I was traveling for fun. I was not officially based out of China for the Olympics, but I didn't want to miss that. I moved in January 2009 to Beijing.

So I had Porter Arisman on the pod recently, and he talked about how he was Jack Ma's right-hand man for international communications. And I remember when he moved to Hangzhou back in the day and it was like, wow, that was a big difference. But then living in Beijing or Shanghai, I think actually working in the northwest of Beijing back in '08, '09, you might as well have been in Hangzhou in some ways, right? Just like so few foreigners and it's like very much in China, right?

Yeah. Very few foreigners where I was working.

So tough to get cheese or any sort of Western food or whatever. Right. So. Especially painful for a French person who has a much more advanced palate, but great Chinese food, right?

Fantastic Chinese food. Some Korean food, some Japanese food. So Xinjiang food, actually.

Tell me about one thing that was like being a foreigner bridging, you know, you have the Western expectations, you have China reality. And I was like, we're a bridge. And he's like, no, a bridge is like a nice, solid, smooth structure that you can easily traverse over. We're cartilage. We're like in between. And even though that you were not necessarily really running China, right? You were running product globally, right? But still there must have been some of the ways that you got crunched like cartilage. I'm always like fascinated by those intercultural, you know.

Yeah, no, that was definitely a fantastic learning experience when I was at Gomez and I tried to learn as fast as I could, not just from the local team at Gomez, but also from other local people I would meet, foreigners operating in China in tech, usually trying to understand what Could be the best practices. And yes, I was running our mobile products from China, but all our clients were outside China. So 75% of the business for Gomez was in the U.S., and the rest was Europe mostly, a bit of Japan. So China was really a base of operation in order to do more with talented people, but also at cheaper cost, obviously, at the time at least, compared to our Boston colleagues. So our engineering team for my products were all based in China. So part of the day on Chinese time zone working with my team. being in their office and part of the day was being in the Boston time zone. So 12 hours difference. So that was kind of fun. I still remember when I had proposals for calls that were what, 3 AM my time on Saturday morning in Beijing. And I had to explain, guys, let's be careful, please. That's not okay. 3 AM, you can do it once, but not on a regular basis. So part of the bridge is adjusting people from every side to the different time zones, the different approach to business. But it's always amusing for me that how Simple stuff like thumbs up, people don't get it immediately. You have to be extremely clear about the boundaries.

Yeah, that's great that you say that, right? Really about setting boundaries is that I also had a woman on the podcast who was the first foreigner, Maayan Sharf at ByteDance. And one thing that ByteDance has done, the mothership of TikTok, has done differently is that they, they went really local with all of their foreign offices because the engineering and all the AI machine learning is in Beijing, but then Okay, we need marketing and sales and other administrative stuff. And they went really local in those markets, which is not necessarily the case when companies go into China or Chinese companies go abroad. Right. And then it was messier, different languages, different cultures and whatever, but things worked better, even though it was more difficult. Right.

I totally agree. And that's my approach to business as well. I did the same with App Annie. Each offices we built was led by someone local to the country. If it's a country director position, if it's a regional position, then they have to be local to the region. So we have been very careful there. If it's a global position, it can be from anywhere, obviously, but we try to be quite careful. I still remember seeing a lot of companies, Finnish companies, for instance, will send Finnish people everywhere running their offices all over Asia, US. I'm not sure it's sending the right signal. And of course, American companies do that. I don't want to single them out. But, uh, I don't think that's the right approach in this day and age. It creates, uh, some sentiment of, uh, an artificial glass ceiling that people will feel. And, uh, if I were in their shoes, I will not feel good about it. So I think you want that local expertise mindset, and that's quite critical. You don't just send people from your home country who barely know the region for the past few months to lead, uh, that country, that region in terms of sales or marketing.

Yeah. And you already had deep expertise in global mobile product, right? So you had the deep desire and openness to be in China, right? So I think that was a great move for you and for the company. But what was the story before we dig into App Annie, which is a fascinating story for me because it's really, you created this thing in Beijing for the rest of the world and set a new kind of tone for that. But Gomez had this very sizable, like, I mean, 80 employees, it was like 30% of the global employees were in China. Like, how did that happen? Like, what was the origin story of that? You know?

Yeah, the origin story was the CEOs, the CTOs had connection with someone who was based in the US but originally from China. They, he proposed them to set up an engineering office at cheaper cost out of China, and they said yes, and they took the bet to see how it could work. And step by step, they grew up this office, and they were very attracted by the ratio of talent versus cost that they could get from China. And it was working very well and they got excited and they ended up doing more and more from the China office.

Yeah. And there is incredible engineering talent in China, but I think especially at that time, even still now, I think a lot of people look to India just because linguistically and maybe logistically, like there's a lot of history around that. Like let's go outsource to India and maybe it hasn't been quite as common to have that engineering team outsourced Into China and be able to scale it and do it well. And I think if you're able to kind of harness that, especially if you're doing something in mobile, because China is really a mobile-first society and doing so many great things, then you can for fun and profit grow that well. And that's what you did next. But please talk about that.

Yeah. And one thing that at least personally being non-Chinese and non-Indian, so not having specific roots in any country, my analysis was. a bit more, I would say, rational. And from my perspective, what I saw was a few things. One is I felt that China was, how can I say, it's tough to say more entrepreneurial than India, but probably—

No, I don't think it's tough to say that. I disagree. I think China's more entrepreneurial than any other place.

So we're in agreement. So that's one thing I felt. And for me, even if initially my goal was not to sell products in China, I felt that it would be great to also have the opportunity to have a big giant market that We could sell to. So not just to operate an engineering team out of China, but ultimately to have also business opportunities. And I was not seeing that in India. I was seeing that in India as a base to do cheaper development, for instance, potentially. But I was not seeing India as a potential market in itself, at least for my industry, the tech industry, the mobile industry. So while I could see China going there much faster than India, that's indeed what happened. China led India by 10 years, probably. In that industry, so for me that was quite critical. And maybe one last piece: I saw that there was the start of a few local tech giants out of China. I was not seeing that out of India, and for me that was quite critical because if I want to hire good engineers, I I need to hire them from somewhere. And what a better place than them being trained by local big tech companies or local global tech companies? And another piece maybe some people miss about India is that pretty often it's really not core engineering outsourced in India, where in China, a lot of companies, at least back in the days, were outsourcing part of their core engineering. So that was also a different, in terms of, big difference in terms of type of talent you could find. You couldn't find people locally in China in product or engineering who had built and scaled Huge product reaching dozens, hundreds of millions of people. You couldn't find that in India at the time, at least in the tech industry.

Excellent points. That's terrific. Thanks for sharing. Yeah. And I think that whole feeder ecosystem from those big players used to be known as BAT, Baidu, Alibaba, Tencent, but now it includes JD, Meituan, ByteDance, and many others.

And at the time you had also the Microsoft, Google, IBM. Were also there and pretty important at the time, bringing definitely expertise and experience from the West. They are less important now, I guess.

Yes, because back then they were attracting big talent, but now all these other players are just mopping up all that talent. Indeed. And from that ecosystem then spawns, you're like, yeah, of course, engineers, other, you know, my ants, as they say, to come together and just code en masse. That's how These companies like ByteDance have grown from 3,000 to over 100,000 employees. But there's also from that angel investors and entrepreneurs and other parts of the ecosystem, which has fueled this very vibrant, dynamic ecosystem in Beijing, which a lot of people don't really know about or think about because it's been very internally focused. I think until the Alibaba IPO and until maybe TikTok became this global phenomenon, people didn't really think much about China. When I first got to China in '96, there was less than a million people online and now there's a billion, right? Let's say, and there's still room to grow. And China economic or entrepreneurial ecosystem has been focused mostly internally. And if you don't speak Chinese and you don't have access to the apps, you don't know that. And it's a very vibrant—

True. And one of the things I noticed when I was thinking about going to China was that inflection point in 2004, that was the moment, the inflection point of VC in China. It was low, growing little and mostly flat, and suddenly it goes like this. So that's something I noticed and that was pretty important for me as a signal that stuff were changing in China. And obviously coming from Europe, I've been very impressed how the VC, the capital market in China have grown super fast, becoming the second biggest in the world after the US. And that's something that luckily is changing also in Europe now. It's also moving super fast, but it's amazing how China moved fast in the tech industry.

Excellent points. And we're going to dig into that speed. And I think some of the background that I set up about this ecosystem in Beijing is I started my first company, a mobile gaming company in '01. We became top of the charts in China mobile just because there's not really much competition. We were able to license games from abroad and that was very short-lived. That was very short-lived, right? That was like an anomaly, right? That wasn't like I had any chops. It was just that there's nobody in there. Right. And then Very quickly it became like, okay, wow, I want to play in this sandbox, but where do I fit as a foreigner? And very quickly I started figuring out, okay, I can take this kung fu ball of power in China, push it out to the rest of the world. And I quickly became either marginalized or optimized as I'm the co-founder, but head of international. And then I have one other Chinese co-founder and now we have 350 people in the company. And I'm still the only foreigner and we're pushing it out to the rest of the world, right? You really made us proud, the other foreign entrepreneurs in China. You've started a company in China, leveraging the core talent and skills and insights from China. And then you push that out around planet Earth and tell us about that origin story with App Annie and your journey along the way there.

Yeah, of course. So first with Gomez, I joined in 2008. And left in 2010, and I left for 2 reasons. One is that we sold the business in late 2009. We filed for S-1, so we are preparing to go IPO, and a few weeks before going IPO, we, we were on a dual-track process. We got snapped up. And so the change was good for everyone involved, but for me, it was also a signal of time to change. And the other piece is that I was seeing the rise of the iPhone, of Android phones, of the app stores. And I felt that there was a dramatic change happening and I wanted to be part of this change. And usually when you have a big technological disruption, market disruption, then that's the time to start new stuff, focus on this dramatic change. And I was also very excited because I felt it, we needed to change the old ways that we experienced these crappy operator portals, early 2000s with WAP industry that you have trouble to download or perform.

Yeah, maybe you could explain a little about that if you don't mind, about the big change in the ecosystem for people listening to this that weren't, you know, the feature phones and the operator decks and what that changed into.

Of course. So yeah, what you had is that in late '90s, you had the launch of a few different protocols that enable you to provide some version of the internet, a mobile internet, as well as some applications. So the local mobile internet is WAP, Wireless Application Protocol, in terms of technology that was mostly used in Europe, in the US. You had iMOD launched in Japan, and you had different monetization options with that. iMOD was probably the most advanced in terms of monetization options. And you had some application models like Java, J2ME, BREW with Qualcomm in the US. So you had different ways to build apps, but there as well, monetization options were difficult. And usually monetizations were centered around the carriers. So the carriers had carrier store, carrier deck, whatever you want to call it. And it was a nightmare because if you wanted to distribute your content and monetize it, you had to have deals in place with every carrier in every country. So you will focus, of course, a few countries, a few carriers, but usually it means if you want to target, I don't know, 20, 30, 50 partnerships before you could even launch your apps. And these guys will try to take a huge amount of money out of you. The distribution of the revenue split was more 50/50 or 30/70, 30 meaning 30 for you as the application publishers. So when I see people complaining about Apple or Google approach, I'm like, you guys have got it easy. 20 years ago, it was a fucking nightmare. You had to distribute, and I'm using the word a bit strongly, but that was the reality. It was bad. People forgot how it was a dramatic positive change for consumers to move to Apple and Google platform.

And if I may, I started a company with an Israeli buddy of mine, Ariel Reviv, who lives in Seattle now. I should connect you guys. I think you'd enjoy chatting with each other, but we had a porting company and the biggest nightmare I had was, hey, maybe it costs $15,000, $20,000 to make a game, but then it costs $15,000, $20,000 to make that game compatible for different devices. And at the peak we had over 1,400 phones, but that wasn't enough because the phone's screen goes this way and one screen goes that way, different buttons. You had to make different versions, mostly for Nokia phones. Each carrier, different version, different screen, entry screen, right? And sometimes different languages as well too. So we had one mobile game that we had like maybe 3,000 versions of it. Like, what is there that has 3,000 SKUs? Like nothing. Like we couldn't even think of any parallel. And we ended up selling that company to Tencent because it was such a nightmare that they were like, we just want to buy a company that just does that. Right. So it was an absolute shit show and a mess. And then you go to these 2 decks, just like in China, it's more split up because there's no Google there. And then you see this big opportunity in the decks, right? I mean, not the operator decks, but the iPhone, Google platforms.

Yeah. So for me, it was the iPhone and Google platforms. And for me, having been in that industry for so long, more than 10 years, immediately saw the benefit. It was very clear that the benefits were drastic. Suddenly you have on one side, a better browser, a full-scale internet browser on your phone, not some smaller-scale limited browsers that can only do some crap. And 2, more important, was applications that were very powerful, very easy to develop, and where it was also a very easy way to distribute, discover, monetize these applications. And that was a game changer for publishers, but also for consumers. And at the end of the day, a fantastic revenue split where Apple, Google were only taking 30%. Again, people forgot how great of a deal it was. And I'm still thankful for them for really changing the habits in the industry. And if you think think also about Apple. They changed the way carriers were monetizing the mobile internet. You used to pay by the megabytes before Apple came, and suddenly they proposed some version where you got every month a significant amount of bandwidth available for your use, which was just a game changer because 3G with limited bandwidth or expensive bandwidth was kind of useless.

Indeed. Yes. Such a game changer. And even then, people could purchase things like ringtones or graphics, and there were subscription models, but those SMS-based and just so clunky.

They created a lot of trouble for the industry in Germany, for instance. Subscriptions were forbidden by the government for a long time after that because a lot of people created this, they abused this subscription business. People didn't know how to remove themselves from the subscription. So again, when Apple and Google launched a subscription business, it was so much easier, centralized and easy to manage and control. It's amazing what they have done over the years.

So I remember like the early days of the internet, like '90s, mid-'90s, where you had to do some sort of dial-up and like getting a browser and plugins and all the clunkiness around that. And it was pre-advertising and pre-e-commerce. And then of course that's smooth as silk compared to that now, the before and after with feature phones and the smartphones. And I feel now with like blockchain and NFTs, it's the same thing where If you want to do something with NFTs, you have to go into MetaMask and you have to own some tokens and it's a really clunky process. And I think that's going to be much smoother and really going to have a really marked difference like before and after. So it's interesting. You talk about pattern recognition in your career and I feel like that's a thing that's coming up, but anyway, let's get back to the whole hero's journey with App Annie. So you have this industry Insight in a way, and you really smell it. Like okay, with these two new ecosystems, there's going to be pain, and inside the pain cave, there's a little gold idol like in Indiana Jones, and there's the opportunity.

Yeah, that's a great way to put it.

So actually, I co-founded Appany with Bjorn Stabel, another kick-ass awesome lawai jiejia in Beijing. Love that guy.

So Bjorn, Appany initially was started as part of a lab experiment from his company ExoWeb at the time, and we. decided to do something out of it and spin it off. And I ran with it. And for me, it was key because it was really a separate business opportunity. His company was really at the time focused more on the service industry, developing software for other companies. And actually step by step ended up becoming a gaming company. We started App Annie in 2010. We spun off App Annie in early 2011. And at the same time, we got our first investment in Series A, but at the time Series A was only a million bucks. And we got investment from IDG Capital at the time. And here's belief with App Annie is that you have a new media, the app industry, the app ecosystem, and you need a new way to measure what's happening in that industry. And not just to measure what's happening to your app, but also to measure the overall ecosystem. So we felt that there was an opportunity to create a new Nielsen, a new Comscore for the app industry era. That was really our motivation. And I was coming from it because I was trying to make sense of this new ecosystem and I had trouble to make sense of it. It from a business perspective. I understood how you develop it, how you publish it, but understanding the business opportunity I felt was difficult because we were missing data about what's really happening in this ecosystem. Which country is growing the fastest? Which segment of the app ecosystem is growing the fastest? Getting estimation of revenues for some apps. All of this was for me key to better understand this industry, and that's why step by step We end up building App Annie that way to help people in the app ecosystem to better make sense of it so that they can more efficiently invest either again by geo, by industry, by type of apps, invest their efforts, their development, their business, also invest from a marketing perspective. So that was really the key idea, how we help entrepreneurs, publishers, big tech companies ultimately. Make better sense of this new industry and make better, more scientific decisions in terms of where to go next.

That's great. And for people listening, like, how does that work? Like, what was your secret sauce? How are you getting the data? And what was the business model around that?

Yeah, so business model has evolved constantly over the years, but originally it started with scraping publicly available information coming from the app stores. Themselves, which app is ranked number 1, number 2, number 10, number 100 per country, per category, per store, Apple, Google. At the same time, combining this data with other data we had about the industry, about millions of apps in terms of their downloads, revenues, and trying to correlate these different sources of data and make sense of it to create estimates of the industry market day by day.

And how has that evolved? Like, where is it now compared to when you first started?

Oh, now it's not just estimates of downloads and revenues. It's also estimates of usage, number of users, time spent, retention rate. It's also around marketing, advertising. So understanding which apps are being advertised, where, at what frequency. It's understanding keyword optimization on the app stores. So it's tracking also the mobile web. So it's tracking a lot more data at even bigger scale. So of course we started with Apple ecosystems and added Android, Google, Google Platform, Google Play, then support for the China ecosystem. So it has been to grow in multiple directions all the time in terms of what the product can do and trying to become more and more accurate over time to provide the best data to our clients.

That's great. Yeah. I really enjoyed when you got a shout out in HBO Silicon Valley. Our App Annie is all grown up. You're on TV. But also another Beijing-based entrepreneur, Brian Sloan, who's also based in Seattle, a sex toy king or sex appliance king. His sex toy was also featured in HBO Silicon Valley too. Kind of interesting, but he's been on the pod as well.

Small world. We didn't pay for that. It got completely random.

So tell us about that journey. You started in China and how big did the team get before you started getting some pull in moving the mothership from Beijing to Silicon Valley?

Yeah. So we started in 2010. We got spinoff in 2011, first Series A investment in 2011. So relatively small team at that time when we started, we were 5 people. Then we moved to 20 or so. We kept growing the business pretty fast. We were growing initially 3x year over year. So that was really fast growth. Nearly every 15 months on average, we were doing additional financing in order to add fuel to the rocket. So that was moving pretty fast. In 2012, we started our first international offices. So we opened on top of our original HQ in Beijing, we opened an office in San Francisco, in London, in Tokyo, all over 6 months from mid-2012 to early 2013. And in the US, what we started was obviously regional sales. Sales in the U.S., but we also decided to headquarters sales from San Francisco as well. So all our sales operations were run from SF starting 2012. Then in 2013, we moved marketing to San Francisco, global marketing. And then in 2014, I moved mostly every team from Beijing to San Francisco, from product to finance to HR. What stayed in Beijing was to have headquarters for engineering. So we kept headquarters for engineering for a long time in Beijing. So it was a very gradual process. It was not one day to the next. And me during these 2 years from 2012 to 2014, I was spending a lot of time in the US, in San Francisco. I mean, maybe, I don't know, one month a quarter. That was pretty intense.

Wow. Building up a really nice mini shampoo collection from there. Tell me about that transition then of you running things from San Francisco then. Changing the whole mothership there. What was that like?

Yeah, it was relatively smooth transition because I was spending so much time there already that I knew very well our team and our clients in the US. My own direct reports moved with me, were started to move from 2012 to the US. So my own direct report were really the same people and they, they moved with me over these 2 years. So it was a very easy transition from that perspective. In terms of day-to-day, it was very similar. It was just easier for me because I had less to So it was a relatively easy transition from that perspective. What was harder was suddenly product and engineering were not close by anymore. So that part was harder to do a lot of change in how we work with our products, making sure that we're very careful about the time zones, make sure we started to invest in good quality video conferencing solution. At the time we were using Skype, it was total crap. We were using then, I forgot which one, BlueJeans. So step by step, we invested into full room video conferencing solution. Because what we noticed is that we really had to provide something that just worked for the team, else it was too much of a nuisance. And we wanted to keep the very close relationship between engineering and product. And that goes through meeting daily people, seeing them face to face. And by doing that, it really helped us. But that part was initially hard for the transition.

Has that engineering team remained in Beijing over the last 7 years? Has that changed?

Yeah, we moved. We still have quite a bit of engineering in Beijing, but now engineering is much more global. So we have teams in France. Vancouver, we have team in SF, we have teams in Europe. So engineering is much more global now.

And is that changing to be more remote and less like sort of city clustered with the pandemic?

Yes. So that's a big thing. I think the pandemic forced everyone to think differently for some positions. And at Appen now, it's much more distributed, not just by city as we used to have office, but we have started to hire a bit of people everywhere, at least for in regions or Our countries where we're already operating, we are more open to people from different locations and work remote. Myself personally, I had that vision a few years back, not too long before COVID one year maybe before COVID that the world was changing. I think in 2010, 2012, when we started that mini global company, it was very rare at the time to be so global so early on. We were just 200, 300, 400 people across Across 10 different office locations, uh, 40% of our team in North America, 40% in Asia, 20% in Europe. That was really not typical.

Mm-hmm.

Your typical American global company starts very centered US and a few offices, small offices in Europe, then step by step Asia. Us, we went global very quickly after just 2 years of operations, but we still had that mindset of operating per office, which I, I think at the time was the right option because from home, access to good camera, audio, video equipment would have been very difficult. But now it's obviously very different. So I'm a big believer now that the next step for every company is to go very global, but more from a one-by-one perspective. So everyone working from anywhere, might be from home, might be from somewhere else, but giving that flexibility and opportunity for everyone. And I think that's very exciting times. We talked about pattern recognition. I felt 10 years ago you had this new ability to create global company relatively quickly, but you had the constraints of your environment. That's why you go by office. But I think now you don't need that anymore and you can have a very different approach. Obviously you still have constraints in terms of how you hire people. So you have tax compliance. So you have a lot of things to still think about. But at least on the tech side, everything is possible now.

Yeah, that's a great point. I remember hearing Matt Mullenweg, the inventor of WordPress, which powers a quarter of the internet. Maybe, you know, I've never met him, but good friends with Tim Ferriss. And he was on the Tim Ferriss podcast and he said, we do not deliberately have anybody in the same city. We hire the best person in the world for the job, not the person that lives 60 kilometers from our office. And I remember that was probably 2017, 2018. And I just was so fascinated with that. And I also met one of the founders of GitLab, Sid, at Web Summit in Lisbon in 2018. Uh, 18. And I remember they really crushed it during the pandemic and how that was still very unusual that they were remote-first company. And Matt Mullenweg said they don't do interviews because people can game the interview process. And he said a lot of his workers, employees, partners, whatever he calls them, come from referrals. But he said, we engage them with a project. So they'll do a 2, 3-week project. They get paid. They do a 360 review. Everybody, do we want to go to another project and they do like a 3-month project and they do another review. And I'm sure it's changed since that podcast, but we actually just test people out and they test us out and then we go deeper. And then once a year they bring people together physically as much as they can. But that seemed so incredibly sort of pioneering and groundbreaking just a few years ago. But now, of course, you know, it has to be the future.

Yeah. I was following all these trends closely and was very excited about that. And I think Zoom and Slack are some of the final pieces of the puzzle to make this really happen at big scale for nearly every company and make it really more mainstream. And that has been exciting. But I see these guys from Automattic, others like GitLab, people who are like pioneers, you know, trailblazers. The total opposite of the big Salesforce tower on top of San Francisco and some would say Sauron Tower because they display that on their screen at some point, which is really the old way of the old world to have your huge tower and force people to go everywhere, all of them at the same time at this office. And then it's gridlock in the city and then nobody can find restaurants available. I mean, it's just such a stupid, inefficient model.

It's stupid. You're right.

Yeah. It's optimized for the constraints of the current system. I mean, what was then the current system, which is it's It's more efficient to bring everyone in the same office because if you work from home, you don't have the right tools and we don't have the right tools to interconnect you. But now that we have the right tools and the right way to interconnect you, this makes no sense. That's the reality. And some people will tell you otherwise, but to be frank, all the people who don't know better, that's it.

I mean, look at you, right? You decided to make that move from San Francisco to a lovely, like you told me, I want to optimize for my wife's Taiwanese, so I'm going to a place That has a lot of Asian food and culture. And then I want to be on the West Coast and something that has some tech related, but optimized for lifestyle. And then you're like, I'm going up. Yeah.

And I made that move in October last year when I saw that there is a lot of things going right in Silicon Valley and California, obviously, but there are also a lot of things going wrong. I think a lot of people are kind of stuck there because you feel, you know what, I'm going to accept all this shit. Because there are tremendous opportunities working at this specific location. But my conclusion was expecting remote work to move slowly, build up, keep expanding the next 5, 10 years. What I saw is that the game is changing and it had a dramatic impact. And I think that someone was telling me, you are not going to put the toothpaste back into the tooth tub. And that's true. It has spilled out. VCs are not going suddenly to say, you know, You know what, we're going to go back to stuff like they used to be 2 years ago. We are only going to fund you if you are just 25 miles from our office. That would be insane. You would be dead competing doing that. And that's true for everything. If you want to compete for talent, hey, you know what, we are kind of old school. We don't really know how to work remotely anymore, but can you come back to the office? And yeah, I think for me, at least for companies like us in the tech industry where you don't rely as much to physical presence and you have optimized And can optimize your business fully with that mindset, you should take full advantage of it because it's a war for talent. It's a war for cost optimization, and that's the only way to get there. And if you're not doing it, your competitor is doing it and your competitor is going to hurt you. And many more people, I mean, talents are just discovered also for many discovered that actually remote work is not so bad. It can actually be much more efficient. And let's not forget, all of this forced remote work was not done in the nicest of times. It was at a time where you cannot go outside, you cannot meet your family, you have to take care of your kids at home because there is no school anymore. So it was not remote work in the nicest way. You had to endure it and it was remote work with a gun on your head. But still people realize that it could be fantastic. So if you think about remote work in the best of times and And I think everyone will discover that it's really a great way to do business going forward. And simple stuff like, I remember just 3 years ago, you couldn't meet clients on a video call. I mean, people would think you are weird if you propose them a video call 3 years ago. Now everyone is used to do a video call for a sales call. And my point is that again, you are not going to put that back. You are not going to say, you know what, now I just meet people who want to talk to me in real life. And that's my point that this is not changing and people discover it's 10 times more efficient. I can do 10, 15 meetings a day instead of 5. Why would I go back to that if people are happy to see me on video? That makes no sense. So this is not going back. This is not going back.

Yes, totally. And I think it's also like you made the move and I became a pandemic refugee with my family here in Bali, which is a pretty lovely place to be stuck. And 2019, I was here with my wife. She was doing a sabbatical. I wasn't on a business trip. I wasn't on vacation. I just worked during the day, but I was exercising, hiking and having dinner on the beach with her at night. And I was like, wow, this is really efficient. I might as well be at a WeWork office in Beijing or a cafe or working from home at my back in Beijing. And like, can we do this? Can we just move here and do that?

Nah.

That's crazy. Like we were like, that's crazy town. Our dreams and tans faded. We went back to Beijing. And then last year she did the same thing, longer sabbatical. I visited her again and then the door closed behind me in Beijing. And, uh, we're in West Coast in Sanur near the international school. Our kids go to the Bali Island School and then up going to like Green Camp up in Ubud and pretty soon to Palangi, our little girl. But it's a sleepy, it's like the Shuiyi of Bali. Sanur is also nicknamed Snore, but it works. Right. And it's just, it's some, I've even had somebody move here with his family. I have other people and I was like, you know what? I can't really recommend Bali, to be honest, in all good conscience. Well, except for the nature, like the beaches and the waterfalls and the volcanoes and the mountains and the rice fields. And come to think of it, also the weather, like it's 8 degrees south of the equator. And even the wet season is pretty nice. Also the 2,000-year-old Hindu kingdom here and all that really fascinating culture and the people. Who are like super friendly, very warm, very kind. The price point, the international food and the best non-urban airport international hub in Asia. And other than that, don't even think about it. It's so fantastic. Lifestyle is optimized and I'm doing everything through this little tiny pinhole to the rest of planet Earth. And it's like, I couldn't even imagine that. I spent 20 years in Beijing and I love Beijing, but I feel about Beijing the same way my wife feels about me. I love you, Rich. I don't like you sometimes. I really don't like when you do that. And Beijing with the weather, the pollution and the traffic, but it's a tough place. It's not optimized for lifestyle, right? It's optimized for opportunity, same way San Francisco is. And a lot of friends who are just like, pull the ripcord and I'm out. And I'm going to our friend Ian and Leslie. They're in Ecuador right now. Right. And they may move to Bali and other friends are like, I'm going back to my hometown or I'm going to go to the beach or I'm going to go to the mountains or Or I'm optimizing for lifestyle and I may take a 10, 15% haircut in my pay, but I'm saving 50, 60% and I'm increasing my lifestyle by a factor of 0.5 to 3. Right. So it's like, that's fascinating to me how that's like unlocked all these global possibilities now. Right. But you kind of pioneered that by doing a lot of international stuff in the beginning. And it's fun to see now you've moved up to the board of App Annie, and I look forward to hearing about your next adventures, my friend.

Thank you, Rich.

I really appreciate you taking the time and all the best and hope to see you in Bali or Seattle or the other Bali, Paris someday.

Yes. But he said the Chinese way. No, my pleasure. And we'll be glad to spend more time on further topics.

Great. And I didn't mention your Deciphered podcast, but I'm going to put that in the show notes and put other links to more information about you.

Oh, thank you so much. Yes. Thanks. It would be great.

All the best.

That's a wrap. Thanks for listening to this episode of The Rich Robinson Show, season 1, at the Ski to 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. Zaijian.

Cheers, y'all.