The Story and Journey of China Tech Analyst & Creator of Tech Buzz China, Rui Ma

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 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!

Hey, so welcome, Ma Ray, Ray Ma, Ray.

Hi, pleased to be here.

Excellent, really glad to have you on the pod. Welcome, welcome, Huan Ying, the podcast welcomes you. So, so tell me a little bit about. Your story, your China roots and connection, and also your experiences in the Middle Kingdom in the tech space. I'd love to just hear that origin story of you bitten by a radioactive Chinese internet spider back in the day to become the superhero that you are in the internet space now. Not at all.

Well, so you want to hear my story about like my time in China tech?

Well, yeah, I mean, but I'd love to hear your origin story too, like where you grew up and then, you know, your whole journey between China and the US.

Uh, yeah, so I was born in China in the— so I would say in the mountains. So I was born in China in the mountains outside of Xi'an, which is, you know, where the Terracotta Soldiers are. So in the middle of the country, and that's not where my family is originally from. My family is really from the South, like both sides of my family, but they were all relocated there because they were, you know, working at the time. You know, the government tells you where to go, right? So my whole family was in sort of engineering, factory work, et cetera, as most people were back then. And so I grew up with my grandparents in, in actually what I would just call like a research compound, like in the middle of nowhere.

So, so, so there was a radioactive spider.

Many, many, many years later, I learned that because like when I was little, I would have these crazy breakouts of like, just like sores and blisters every summer. And then I think now I realize it's because where I grew up, there were, I think like some kind of rare earth mine or something that probably was—

Wow.

Yeah. This is probably the closest. Yeah. That, and then we would go swimming in the rivers in the summer and then I'm guessing that has something to do with all the blisters.

Yeah.

Wow.

I wasn't the only one who had them. I was kind of like, it was just, it was just like, okay.

So I don't know. So you're with your grandparents in this research compound up in the mountains.

Like a research compound makes it sound a lot more formal than it is. They worked on some kind of civil, like airplanes. This is just where the factory was. Uh, yeah, maybe I shouldn't call it research compound. So, but it was like basically like a commune in the sense that everyone All lived in this gated place in the middle of nowhere. And you know, everyone who lived there worked for the factory. So that was quite common. Well, that was a very, very common setup back in the day where you wake up to like loudspeakers telling you what time it is, blasting the news, et cetera.

You can still see that in some villages in China, but not quite as common. And then from there to explain your perfect cleaning.

Well, my parents basically, my parents were in grad school and then my dad was just one of the first people to go to PhD programs here in the US. That was in '85. And then I just immigrated with my parents. I mean, I didn't really know what was going on. I was just told to go get a visa, get a passport. I didn't really understand what was going on. People just set me to do things. And then I got a visa interview. I was successful, I guess, in getting a visa. My parents were both in the States, and then we just like immigrated, um, to the States. And for me, that was in '89 when I was 8.

Mm-hmm.

And then we were in South Carolina for a few years as my dad finished his, uh, PhD program, which was in engineering. And then we moved wholesale to California, Bay Area, where my dad found his And that's where I really spent the majority of my childhood. And then because my parents were engineers, I just didn't really— I was completely unfamiliar with other careers and happened to be okay at math and science. And then just also went for engineering when I was going to college. So ended up just staying in the Bay Area because I went to Cal Berkeley.

Excellent.

Yeah. So didn't leave, didn't leave tech, didn't leave really the Bay Area. For a long time.

But during that time, the '90s and into the early Zips, that was an incredible, heady, beautiful time to be in the Bay Area.

Yeah. So I happened to be in college, so I entered college in '98 and then of course, immediately people I knew in college started dropping out to go, you know, be part of startups and then become paper millionaires. And I was like really too young to fully understand what was going on. And then, you know, 2 years later they came back to complete their studies because most of their startups have failed. So yeah, that's what I perceived to have happened from my perspective. It's like, oh, you're gone. Oh, you're back.

Excellent. And then what about the China connection? I guess by 8 years old, you're already starting to read and write Chinese. Did you continue to go to Chinese school and was that the language at home? And was there still like really like the neighborhood you lived in? Was there, was it more Chinese?

So yeah, I have to thank my parents. My parents never intentionally tried to make me study Chinese. Honestly, it was mainly because their English was really shitty. And then also my grandparents often came and visited because I have a younger brother. So they would come visit for a couple months or years. They also ended up immigrating, but the family just would speak Chinese. And I just—

Great.

Like, I never went to Chinese school, but by the time I came to the US, I was— I had already finished 2 years in school, 2 and a half years in school. And if you're familiar with Chinese, basically by the end of your first year in school, you are literate. You can read like 4,000 characters or whatever it is. It's more just the knowledge, right? So I happened to be a big bookworm when I was little and then happened to have like best friend who was really into martial arts novels. Like, I really have to thank everything to martial arts. Exactly.

Oh.

Because my parents didn't care at all. Like, they were really busy and they never really focused on trying to make sure I like kept up my Chinese or anything. And I basically just got really into martial arts novels, reading wuxia under the covers at night. And that's really, I think how— that's really, I really sort of attribute my cultural understanding and also my language fluency in large part to those years where I just like read everything that we had in the local library and also amongst friends.

That's amazing because it was really fun. Right. And it was something from your peers and not necessarily dictated by your parents. And it's interesting because I didn't know that you had immigrated so young because I know that you're Chinese. Like there's a lot of people at 8 years old that are just like, they stay at that level and then they're, you know, then they enter the business world in China and they're not, they're not really able to shift gears so well. But you have this complete bicultural and bilingual fluency. That's really That's really fascinating. You know, that intrinsic motivation. Wow.

Yeah.

I would say I just got lucky. Got, got very lucky. Yeah.

Excellent. And then what about coming to the, the motherland back to the Middle Kingdom? Yeah.

So unlike, actually, unlike most people I know, like when I was little, my parents were too poor. We didn't really go back at all to China. I never visited regularly. I don't even think— I also grew up in a neighborhood that was just very average and I didn't even know anyone else who did it regularly. So I was very shocked actually when I I was an adult and I met all these people who were like, oh yeah, I always spend my summers in China. And I was like, what? Never flew, never, you know, didn't think international trips were a thing that we could afford. And I only went back to China actually once, and that was right after high school. And that was really honestly to visit my dying grandfather.

Hmm.

So our whole family went and then we took a trip. That was really probably like the only time.

Like how did that square with like your remembrance of growing up there and then having, you know, a decade in the US? Like what was that kind of experience? Was it jarring? Was it comforting?

This is like '99 or 2000, I think. First of all, it was mostly for leisure. And then I just, I don't think I thought too much of it. It was just like a family trip and didn't really, you know, you're still a kid. It's just like, oh, it's this. Poor, much poorer place. Oh, also we weren't living in Beijing or Shanghai. I think we visited relatives in Shandong, Xi'an, et cetera. I guess I didn't really take away too much from the experience. It was just like a time to hang out with my cousin that I didn't— hadn't seen for a long time, hang out with my parents, see some more distant relatives. And I didn't really try to compare the 2 countries because the experiences were just so different. I do remember being just very frustrated that the internet was not really available. Because at that time there was already, I think it might've had DSL already or something close to it in the US, but in China you still had to go to like the PC cafes. That's what I remember. Like no one really had, you know, internet connections at home. That was sort of the only thing.

Yeah.

So I guess back in '99, 2000, it was really like going back to, you know, much earlier, right? There's just a much bigger gap. I think development. So, okay. And then from there, what was the first time where you started to really think about, wow, this could be interesting for me to go back?

Yeah, actually. So I didn't, I think a lot of people assume that I like had some plan and I didn't, and I actually didn't want to move to China. Like it was not in the cards. It was because my ex-fiancé at the time Got a job in China and then we were already engaged, trying to get married. So we decided that it was easier for me to do an internal transfer and sort of follow him there. So that's exactly what I did. At the time, I remember thinking like being actually quite bitter because I wanted to move to New York or London. And I was like, damn, why couldn't you just get a job in like a normal city? But he was, I think, a lot more bullish on China at the time, if I remember correctly. But Yeah, he basically got a job and then I ended up there, and then his job had some delays, so I ended up being in China like maybe almost a full year before he was there. And then we broke up like quickly after he landed, so then I was like kind of stuck there. Yeah, so I ended up going to China like kind of honestly on a fluke, but I was like, oh, it's okay. I didn't think it was going to be permanent or anything. We were just like, I'm gonna be there for a couple years.

And what year was that?

That was 2007. So I had just finished, I graduated from college and started working. Actually, I took a little bit of a detour, but mostly ended up working in tech investment banking. Really liked the job. And so that was also another reason why I didn't want to leave because there was really no tech in China at the time. So I had to settle for going into real estate investing because at the time that was the only position the firm I was working for, which was Morgan Stanley, had in China. Yeah, I got lucky actually because they were like, we need someone fully fluent in Chinese and we only have one position. And it came up sort of at the last minute. Otherwise, I would have had to be in Hong Kong and then my fiancé would have been in Shanghai and then, you know, we would have still been long distance. So I was like, oh great, I'm fluent in Chinese, I'll take it. So I went to Shanghai and even though I was like, Man, what is this real estate thing? I don't wanna do real estate. So I had a bias against it, but I landed and then started working in it and sure enough did not like it.

Suck.

Yeah, really, really missed tech. But I guess like overall it worked out because it wasn't like the group blew up, but of course you remember the great financial crisis, the main problem was with real estate. So I got laid off at the end of 2008. And I couldn't come back to the States because the financial crisis had a much bigger impact on the economy actually in the US. And, you know, at the time my old group was like, yeah, you can come back, but we'll just have to put you back 2 years. And I was like, what? I've worked 2 years already. Like, you know, I want full credit for all the years I've been working. So I ended up not taking that offer and then going with another offer. Which was a joint venture between a US investment bank and a Chinese state-owned investment bank called CITIC Securities. And then that was like a really wild experience, even though it was a brief stint.

Share an anecdote or two from that. That must've been a really interesting, um—

I mean, first of all, real estate was already insane and really bizarre and really weird because You know, real estate is one of the most localized industries in any country. And then in China, this was like, you know, a boom. And then also we were one of the few very active foreign investors with a lot of money. There were a lot of investors, but I think we were definitely one of the biggest ones. I think Morgan Stanley might've been the second biggest at the time and was very early in China. I ended up working for my boss at the time. He actually ended up going to jail for violating Foreign Corrupt Practices Act. So I never saw any evidence of wrongdoing, but anyways, he was convicted. So that was— but going from, you know, Silicon Valley where my first deal, I got very lucky, was eBay Skype, and then working directly with eBay team, like sitting in the same room as Meg Whitman as she's like, whatever, putting together this deal.

Wow.

And trying to work on the PowerPoint ultimately for the investors. So it was so like this very highly educated, very strategic situation, and then going to Chinese real estate, which I quickly realized—

Smoking in the boardroom.

Yeah, well, not even that. It was just like a lot of entrepreneurs were actually very poorly educated. I mean, their Chinese was worse than mine. Like, they would get like lots of chéngyǔ— like, they would get lots of chéngyǔ messed up. They would not be able to speak Mandarin properly.

Oh, that's funny.

When you ask them for models, it would just be Very basic math. It'd be like, so why should we invest in this project? Instead of, you know, you're expecting some good marketing speech, it'd be like, look, I have 30,000 units, you know, or like whatever, however many square meters, and it costs this much to build and this much to sell. You do the math. And I was like, wow, so I can basically add, you know, subtract one number from another. So I felt very kind of deducted.

Hand me that napkin that you wrote on.

And then it was also, yeah, not to like be super dismissive of people working in real estate. I think it can be very tough, but at least the projects I was sent on were like in very large part stuff like this. But so many crazy stories from that time period because, you know, what I did learn very quickly was in the US, in this very organized tech group, I was an analyst working on Excel, cranking out really whatever complex models, but in China, the way the team worked was I was just a lowly associate, but I would just be thrown to go and, you know, look at whole projects and make not like the final decision, but initial decisions on whether or not to pursue things, and it was very quickly given a lot of responsibility, and then, you know, if you couldn't figure out something, there was no one really else who had time to ask, right? This is a very hot market. And like everyone's working on multiple projects, so you just figured out like how to work on things yourself. So in a way, I do feel like that was a really huge growth period for me because I not only switched countries, but I also switched industries, which is usually something people like say don't do. But after having gone through it, I'm like, no, whatever, just do it. You know, if you're gonna have to absorb lots of changes, why not? Like, Why don't you just change everything? It's not going to be the same even if you stay in the same industry anyway. So just make all the changes that are necessary and then you'll find yourself on a steep learning curve. So I did already have somewhat of like learning to basically run my own deal, just taking the lead for everything and then just assuming no one's really going to back me up, right? No one's going to tell me what to do. Not no one will back me up, but no one will tell me what to do. You're just like sort of thrown a thing here of like very ambiguous directions. So I was kind of getting used to that already by the time I went into the second job. But the second job was, in some ways, unfortunately didn't fully take advantage of those skills I had because it was a little disjointed. Like, it was just a very disorganized organization. The JV was sort of set up last minute because it was supposed to be originally between CITIC and Bear Stearns, but then you remember Bear Stearns died. So like, very quickly found another partner, and this partner had no experience in China. So, I ended up working— so, there was this idea that like SOEs in China were going to start expanding abroad and doing cross-border acquisitions. At the time in 2009, this is like a very reasonable narrative.

Reasonable.

Yeah. You could see there were some small pockets of this happening, and, you know, I went into it just because like the MD who recruited me was very persuasive, and then I should have known something was wrong when he didn't ultimately join. And then I ended up with another boss, but you know, I was like too low level really to know. I was above my pay grade to know exactly what happened, and I needed a job, so I just joined. But I ended up in this place, like I was saying, where we're focusing on SOEs. And even though I was working in real estate before, which I said is a very local industry, I was—

SOEs are even more local. Yeah.

Yeah. SOEs are very, very different. They're very hierarchical. And so it wasn't just SOE clients, but it was the fact that I worked like, you know, in this JV that was part of this mini SOE. So like, I had to learn a completely different way of operating, which included taking minute notes, taking meeting minutes. I remember, and I was like, I didn't know that was my job to take meeting minutes. And then they were like, yes, it is. And then I was like, well, can you show me what meeting minutes look like? I don't know what they look like in Chinese, and I've never taken them in English, right? Because They made it seem like this is like a big deal. And then I read some samples and I was like, oh, okay.

It is.

It's like a very formal thing. And then, so I learned to do that. That was really fun. And then I guess the highlight was, so we met with a ton of SOEs and never met with the chairman because that would be extremely, extremely difficult. So just many, many layers of meetings. But the highlight was I met with— this is not an SOE.

This—

I forget the name of his company. His name is Liu Han, who is the guy that was eventually executed, the billionaire that was eventually executed because he was involved in some kind of corruption, something, something. So, met him personally. I had no idea who he was. I just knew this was some kind of energy company that we're pitching to as potential buyer for some assets abroad. And what I do remember was going into his very cavernous Office, and he didn't talk to us about business at all. He just talked about his like Xi Wang Xiaoxue, right? His donated yeah, like these elementary schools that he had donated because at the time, like his yeah, his were the ones that I don't know if you remember, but like when the Sichuan earthquake happened, his were the ones that like were left standing. Yeah, well, whereas many others fell. Yeah, yeah, exactly because of corruption, bad construction, but his. were the ones that were famous because he was like, I guess he was probably like, oh guys, I know how this works, right? So his schools, I think, didn't fall at all and like no, no kids' lives were lost. So yeah, he ended up showing us like pictures of that. And then it was like a lunch, and then we had lunch meeting. Yeah, like we were fed like baijiu at lunch, which is—

Yeah.

So I had, I had drank like a good amount of baijiu from my real estate days, but I was still like, wow, lunch is quite aggressive, even, even for China. So, and then later, of course, like a few years later, he got in really big trouble, got executed. And I was like, wow.

Wow.

That was my, that was like a brush with infamy, I guess.

For me, it's an excellent way to put that. Yeah. Terrific. Wow, man. Yeah. So I think, you know, China's still developing in that space, but then you get to drink out of a fire hose and get thrown in the deep end, like really running your own deals. So. Instead of going backwards 2 years, you went forward like 20 years almost, right? You were like, that's what China can do.

That's a great story.

I didn't even know about that chapter in your life, really.

Yeah. I mean, I think I really appreciated because it gave me, I think honestly, tech in China is much more Westernized than most other industries. And most people did not get the exposure I did to these again, extremely local enterprises and personalities, which are, you know, like they're much more like quote unquote real China, right? So.

Indeed. Yeah. The whole drinking, you know, rice wine, rice liquor, that's something that I hear from friends that are in manufacturing or some sort of infrastructure or, you know, SOEs, but I never heard about anybody really being forced to drink baijiu in the tech sector, right?

Yeah. Exactly. But in real estate, that's very common. I would always be paired because my alcohol tolerance was very bad, but you know, you always had to like drink a little bit to give face. You learn to give toasts, especially like if you are the potential buyer, you want to like make the seller feel good. Right. So I was always paired with a generally male colleague who was good at drinking. And almost every single time the male colleague would have to be like, excuse me, I need to go to the bathroom. Go there, throw up.

Right.

Yeah. Grow up and come back.

It's like, it's like gladiatorial. Like I, I learned something from an older China hand, which, um, served me well, which is I've been in that situation a few times. Sometimes when you're, especially when you're in like, you know, secondary or tertiary provinces, and then if you're the only lawai, then it's, it's so competitive and everybody's trying to, to hit you with the shots that then you're just gonna wake up, you know, the next day and be like, what happened? So, uh, he taught me something, which was, Go, go to the bathroom after, do, do 5 or 6 shots, get some toilet paper, wrap your head, half your head with the toilet paper, wrap your arm with the toilet paper, wrap your leg.

Oh, yes.

And then just try, try to get some hot sauce and put some like blood spots on there. And then get a broom and turn it upside down and walk past the table like you've been really injured and like hobble past them and everybody laughs like crazy. And then get the hell out the door and then go home. Right.

Go back to your hotel.

And that's like one way that, that, that they will allow you like, You've given face and you've waved the red flag, the white flag, right? So anyway, so, so from CITIC, next stop after that?

And then I basically got recruited back to the arms of Morgan Stanley alumni who were looking for people to join a new fund and firm they had founded called RAINN, which was working in private equity and media. So it was a merchant bank, which meant it did both advisory, which I was already very familiar with, and then also investing. And this is a new fund at the time. They had like literally just like bought the domain, I think, when I joined. And the focus was on media. And I, I honestly joined at the time, like really not thinking about it because I was like, I just needed to get the heck out of SOE land. So I was like, no, my, my bosses had both quit. Like, you remember the original one that recruited me didn't even join. And then I had 2 other MDs.

2 more.

They both quit. And then I was like, okay, I think I should leave. And so I didn't stay there very long. It was like 9 months, 7 months, something like that. I don't remember. And when this opportunity came up, and I was like, yes, Morgan Stanley alumni, I know how you guys work, right?

Mm-hmm.

Like, great, I will join. And, you know, media was kind of interesting at the time. So it was partly owned by WME, now called Endeavor, which is like the second largest Hollywood agency. And the 2 founders focused on, I would call it sort of 2 big sectors at the time. One was film and sports, and the other one actually was SoftBank. So one of the founders had really, really deep ties to SoftBank, so we did a lot of deals and work for SoftBank. So it was kind of tendential to tech, and I got very lucky in that my MD was, first of all, just really great and really nice, great manager, and then she Really just let me run my own deals. She just said, you know, like we have a fund, you know, we have some advisory work that we're obviously constantly trying to get paid for, but then we also have a fund and we don't know what we're doing in China. So you go figure out what can be investable. But there were a lot of things happening in the media at the time. So in China, it's considered, what do they call it? 文化产业, right? So cultural things. So like I joined again in 2010. I think I joined in 2010. So if you remember at the time, like China film, animation, music, very, very, very early stages. So you could really go talk to anyone, and I looked at all sorts of industries. I talked to all the leading music festivals. I talked to the leading animation studios. I talked to like foundations that were raising money. Of course, like all the film people. I just reached out, and I think at the time it wasn't too hard just because we could be like, hey, we're part of William Morris Endeavor. And then of course my, my bosses at the time had already like pretty strong ties in some certain sports and other things. But it, you know, I was able to do a lot of BD on my own, and that was really fun. And actually throughout that process, I was able to meet up with certain other VC investors.

Mm-hmm.

because they were also considering some of the same sectors, right? I remember animation especially. I remember meeting like the founder of Northern Light, who is like very experienced and like starts asking me like a lot of questions about the animation sector just because, like literally because I think I had looked at like 3 more companies than he did, you know? And then, but he was like, but you guys are part of this entertainment group, so you must know what's going on. And yeah, met a lot of people that way.

That's great. Yeah. I think that's when I first met you and you were, you were very, yeah, cuz I think you have kind of a, like really, you know, good turn of luck to be able to have that. I think it was Deborah, was your—

Yes.

Deborah May. Yeah.

She was great. And she gave you all that rope, but you're also like a really terrific analyst. Like you can be geeking out over a spreadsheet, but you also have this great EQ and, you know, just personality as well too. Right. So it's like not all people that are really good at the analysis, you know, side are really good out in the, out in the wild, so to speak. Right. So you have that, you know, terrific blend. So I think that's where you made that pretty big mark. I think in the industry, a lot of people got to, got to know you.

Yeah. Oh, and then from there I was like, I think the difficulty with that business specifically in China is that while the fund was great, the management was great. The fact of the matter is that for like real media businesses. I'm talking about traditional media, right? It was just very restricted. You couldn't really invest in sports. You could invest in gaming, video gaming, which I looked at a little bit. But, you know, the other thing, like even music, these were just like really tiny businesses, first of all, but there were still a lot of restrictions. So really what you ended up doing was pivoting more and more into like the scope got bigger and bigger, right? Because all these Places were restricted, so we looked started looking at e-commerce. We started looking at education, edtech, advertising tech. So anything that was just like even loosely related to media, and then I was like, I like these businesses a lot more. That's how I started my career in tech, right? So wanted to return to tech, and I had at the time actually I was thinking about moving back to Silicon Valley because I wanted to be in tech. And 2012, 2013, tech is actually still very small in China, and the quality of companies is. was really not there. So I had actually— I was like, I think I was in final rounds with Dropbox. Yeah, I was in final rounds with Dropbox strategy, I think might have been the job. I had like done this whole PowerPoint for them. It was like this whatever, it was this case study interview. And then in parallel, I had been talking to Dave McClure, who you also know, who was running this incubator and accelerator A seed fund in Silicon Valley. And he was like, hey, you know, some other friends of mine say that you seem to be a good candidate for my grand expansion plans into China. Do you want to do that? And then I thought about it and I was like, man, that sounds kind of fun too. So I think I just like dropped Dropbox and then said, okay, I'll do 500 Startups China. I mean, to be very honest, I didn't do that much DD in how I could do it because no one knew. Like, early-stage investing was super, super rare in China at the time. Seed stage, right? There were like not very many investors in the space and the market was just super tiny. And I didn't even honestly look into like, well, how will we invest USD? I just sort of like assumed like, hey, I've been watching YC, who I I've watched from the beginning because I have friends who went through YC first batch ever, right?

Who was that? Who is that?

Yeah, my high school classmate Gary Tan. He went through YC first batch, so I've known about YC like very, very early.

What company?

Now very successful. Well, his company was Posturous, which was— Oh, sure, sure, sure. But now he's famous for being the first investor in Coinbase and Instacart. So yeah, but anyways, I knew about YC very early on. I actually talked to them about, you know, like even independent of Dave being saying like, hey, is there some way I can work for you? But they weren't looking into China. So, but anyway, so when Dave came, I was like, hey, you know, I'd been thinking about this. This could be fun. And so I had to decide where my parents like really wanted me to be. So I said, why don't I try out this 500 thing for a couple of years and see how it works? So I ended up joining 500. And then that, that took me fully back into tech, but also into this weird unknown space of seed investing that was not a thing. It was barely a thing in the US back then, but it was not a thing at all in China.

And you were a real pioneer and talk about weird, unusual spaces. I remember that first night that you officially joined, Dave's like, hey, what are you doing? Come on and join us. And you and he and I went to Chocolate, this underground Russian nightclub in Beijing with this dwarf at the front door greeting you. And I don't know if you remember that going down into that subterranean nightclub.

Maybe.

Yeah, I've been to Chocolate a few times. I also remember going there with the UFC guys, but I guess that was not the same night.

Maybe it was even your idea, but I thought, yeah, but yeah, I mean, what a, what a great flag to put in the sand. And you were like, I'm going to go give this a try on and do another thing that's really kind of just developing. So yeah.

Well, kudos to Dave for having the guts to hire someone like me when There was no, there was like no example to go after in China. And then, you know, but we were basically doing education, I think, for the first couple of months at, you know, first year or two, actually.

Sure, sure, sure, sure. Yeah. But you were well suited to do that. A very ideal candidate for that. It was great. And tell me a couple of anecdotes or adventures along the way in 500.

For 500? Oh, there's like a ton. First of all, when I tell people that there were maybe like 12 angel investors at the time in China, active angel investors, meaning doing more than like a handful of deals every year, people don't believe me, but it's true. There's like actually a book, I believe. I forget what the name of the book is called, but I think it's like Angel Investors in China or something. There are literally like 12 people and, you know, some of them have the names that you would expect, like Lei Jun is one of them.

Yeah.

It was like, these people are, you know, still very active and famous. But at the time, they were like the only angels in China because no one was going that early. So I'm not like at all joking when I say that. And then I just like, you know, whatever, asked favors and asked people to connect me to one of them, who is—

Mm-hmm.

Zeng Liqing is one of them. He is one of the co-founders of Tencent. He left fairly early, and then he'd been angel investing very actively since then. And I remember like me and Dave got a meeting with him like fairly easily because again, like Not many people from Silicon Valley early stage, like much less like running an accelerator, were coming to China. So, I guess I should thank Dave because, you know, as soon as I explained what we're doing, people are like, yeah, come on over. Like, we want to know what you're doing. And then, so going there and meeting him, and then I remember like one thing he was like, you know, I used to take 70% of the equity of the company.

That's the thing.

But now, yeah, but now I think it might have to be 49%. That's how early we were.

Yeah.

It's not angel investing. It was devil investing.

It was—

people were taking majority stakes in the early days because there was no supply and demand. Indeed.

Yeah. Yeah. And I think people didn't realize that was the case in 2012. That was absolutely the case if you want to get money from a quote unquote quality angel like Zeng Yiqing, right? Who again, actually has real money and could back you up. And at the time, I don't know if you remember, but one of the companies that he quote unquote co-founded this way, Talmi, which was a gaming company, was Like, I think started precisely this way, but that's how it worked back then. And not even that, like another story I have is I was advising this one company who I wanted to invest in, but they could only take RMB. So we didn't have any RMB. So whatever, I would just occasionally talk to them and help them. And they sent me their term sheet that they finally got from one of the RMB Chinese funds and stated very clearly in the term sheet was that you had to put your mortgage—

Yes.

Sorry, your deed. Yeah. The deed to your house as part of the—

Personal liability.

Yes.

Exactly. That, so you would lose your house if your startup failed anyway. So that was also standard.

Or I've even seen terms where they sort of like guarantee some kind of return in a certain, you know, timeframe. Right. So, but I guess the situation is like if the market is just not robust and it's certainly not the case now, there, there's so many more angels, so many more minted millionaires from The unicorn factory that is China, but wow.

Yeah.

And then, and then from there?

So I basically started at the very beginning, like January 1st, 2013. And I started working on— I was probably— so, so I like to joke to people about the pandemic and working from home. And I was like, I've been working from home since 2013 because I have, because there was no office. It was just me, you know, like Dave would come maybe every 3, 6 months for a few days, so it's not like anyone was overseeing what I was doing, so I would just work out of my house. I didn't exactly know what to do, but I think first started by meeting all the early-stage investors, then started trying to find ways to source like early-stage companies. I constantly explored ways to see if there was a way to set up a local accelerator, have a local fund, you know, that was always something I wanted to do. But yeah, unfortunately I never, never quite got there in the way, in the years I was there. But the scope of my work just ended up being very broad because after we started investing, we realized that number one, and this is again going back to the fact that I didn't do a ton of DD before I started, which is that a lot of companies couldn't accept USD at that early stage, right? And a lot of them, it didn't make sense for them to like convert their vehicle into something that could accept USD for one investor. And we will a very small investor because at the time we're only putting in $100,000 as per sort of Silicon Valley, um, standard, right? And so that simply didn't make any sense. And then a lot of the things we were offering, which was like growth marketing tactics, access to US investors, didn't really fit with Chinese startups. So the scope of my work ended up shifting a little bit. So I was still looking for companies that had maybe an international angle or had some or were set up, for example, in Hong Kong or something or Taiwan and could accept USD and could benefit from being taught how to, you know, growth hack Facebook, but not majority. Like a lot of the time also ended up trying to set up partnerships with local organizations and fundraising from local entities. So I actually, I think I'm one of the few people I know that worked like, like visited a ton of local governments. And in fact, raise money from local governments in China. So yeah, so when people talk about how the local governments work, I'm like, hey, I have firsthand experience not just meeting them and talking to them, but actually getting real deals.

Tell us a little bit about that because, you know, in my experience, they're actually pretty commercially minded and pretty, you know, aggressive and entrepreneurial.

That's exactly how I'd characterize it.

Yeah.

It's, you know, they have a certain goal. And that goal could vary, right? Like, it depends on who you're talking to. They could have a goal of like how many foreign companies are registered in their district, literally just like registered, right? Like, they don't even care what, you know, like profits or whatever. They could have something else, which is like money deployed. They could actually have something more concrete, like actual revenues that are being generated by these companies. So maybe they're looking for more mature companies or funds to work with. But At the end of the day, it's very clear. They're usually very direct. They have very clear KPIs. They'll tell you what the KPIs are, and then you work with them.

Yes.

See if there's a way where you intersect. Right.

And they, and they, then they have budget and they have, you know, good people that are younger and more switched on and driven that are executing stuff. Like, you know, the purpose of this book that I'm writing at the speed of China is what can be taken away and learned from what's happening in China. And you look at this Gigafactory that Elon Musk built. And how quickly that was deployed. And, you know, on the federal level, any government around the world, that's a whole different beast. But on the subnational, like local level, I think there's a lot to be learned from how the government officials are incentivized and motivated and how driven they can be to really make change. There's a group called the State Legislators Leadership Foundation, SLLF, and I'm on the Asia board. And it's actually an NGO in China signed in place by Xi and Obama. And the idea there is that these state legislators, they want to do deals. You know, they want to sell their soybeans into China, into Zhejiang Province from Indiana, right? They want to have a glass factory in Michigan from Fujian. And people really want to do deals. And I think China's really done a really good job on the local level of trying to Accelerate that.

Yeah. Yeah. They work really hard. So I think that like, like a great example is I remember Guangzhou, which is one of the tier 1 cities in China. Forget the name of the district, but it's one of the central downtown districts. And who's in charge of innovation and entrepreneurship in China, like he, he, the way he held his meetings, a very, very vivid memory for me is that number one, he was like Can you show up at 9:00 AM on Saturday? I was like, okay. And he's like, at this restaurant. And I said, okay. So like, I'm thinking like, it's weird. Okay. But whatever, 9:00 AM at this restaurant. And then what happens is that he basically has one of those like large private dining rooms, and then he has food on the table and then a table that seats like 10 or 12 people. I don't remember. And I was there at 9:00 AM. I had half an hour, an hour with him, and then other people were also sitting there. So it was just like a whole room of people. And then after I left, it was like the next person and the next person, you know. And then maybe half the table were his lieutenants. And I, I actually asked him very directly, I was like, first of all, I didn't realize this is your meeting area. This is where you normally meet? He's like, yes, like on the weekends I always, I always meet here. And then he's like, I work both days, you know, 9 to Like 9 to 9, whenever the restaurant is open to whenever it closes.

Wow.

He works very, very, very hard. Like, I think that's what people don't really realize is that, like, especially in the States, we have this perception, which, by the way, is probably not true, that, like, a lot of government officials are just very lazy. But at least in China, my experience is that, like, a lot of the government officials were actually very, very efficient. Again, it's going to vary from city to city. But here we have like Guangzhou, right? And very, very wealthy district in a very, very wealthy city, a person in charge with all these resources. And he was very clear on what he was trying to do. He was just like, I have this many square meters of space downtown. I want to convert it into innovation. What is your plan for helping me do that? You know, he's just very direct. And then I remember coming away from the meeting going like, oh, okay. I understand why Guangzhou is very rich now. So.

Fascinating.

Wow.

So, you know, it's funny. So towards the end of my time in Beijing, 'Cause I'm splitting time between Beijing and Bali. I, you know, I'd get a lot of people say, can we meet up for a chat? I want to talk to you. And towards the end, I would just, I would get a table or I would just have this rotating thing. It would only be for maybe an hour and a half or a couple hours, but I would just, yeah, come on. And you can meet the other entrepreneurs or investors or people visiting town. Right. It was a little bit messy, but it was also pretty awesome too. And I just found it was a really efficient kind of like salon. I mean, that's the one thing that I love about China is that You know, does it work? Is it practical? Is it pragmatic? Then abandon everything else and just like, let's just do what works. But you know, for him, you know, I only worked a half day on Saturday, 9:00 AM to 9:00 PM.

Right.

Wow. Intense. I mean, how many times have you pinged, like the accessibility to people in China when you're like, can we meet? And they're like, hmm, can't meet now, but I can meet you at 11:30 in the lobby of the China World.

Really?

Yeah.

And you're like, okay. Right. I've set up meetings like that for people. People are like, oh, I fly out at 2:00 AM. And I'm like, oh good. I have an 11:00 PM meeting for you at the China World Hotel lobby. And it's just enough time for you to get to the airport. And like, wow, that's an aspect of China that I think is accelerating even more. So, um, speaking of that, tell me now, like, do you have a few other, you know, ideas or anecdotes about like what that China speed means to you or what somebody who Doesn't, you know, have as much experience in China or even people that do, what are some of the things that you've seen with companies or entrepreneurs or just teams that are doing to prototype and execute and launch at breakneck speed?

I would say there's lots of examples, right? So one, just from my time in this early stage investment mania in 2013, like I said, when I first started, there were no accelerators, nothing, no early stage funds really. And like I said, you You could meet the handful, you know, angel investors, right? Pretty much pretty easily. And then by, I think, the end of 2014, less than 2 years later, I don't know if you remember this one business model, which was called innovation cafes. Do you remember like Chonya Cafe? So these like basically coworking spaces that were cafes, really, really cheap coworking spaces that also made money selling coffee. And then people would just go there and like work on their startup. Well, like one of them worked in Beijing and then got covered by CCTV. And then the government was like, hey, we want entrepreneurs and innovation in this country. This is really important. And then boom, after that, there were just like thousands of these innovation cafes. And then people got word of like accelerators and how accelerators worked. And these cafes were kind of accelerators already because they were also raising money to try to invest in the startups. And then boom, like Again, by 2015, I think it was like 4,000 accelerators slash these cafes were in China. Like everywhere I turned, there would be one. And I think because we were one of the more well-known ones globally and early in Silicon Valley, like I would get pulled into just like all these WeChat groups and all these events. And people just like wanted to know how we worked and what does it really mean? But that's exactly what I mean. That's exactly what happened. Like people would just like, you'd be like, I think that's a good idea. I don't really know how it works, but I can corral the resources to make it happen. And then I'll just ask the people who made it work, like how it works, you know, definitely building the airplane as you're flying it. That happened quite a bit. And then yeah, the government was really, really willing to invest, but so were companies, right? Like I didn't talk to just governments. I also talked to corporate investors and I remember just like super, super efficient, super curious how to learn. One example I like to give is like Huawei. Huawei, like the very, you know, Everyone else should know about Huawei, right? I think I gave like a presentation somewhere and then someone in the audience was like from Huawei or something and then went to his colleague and was like, hey, you should— you guys should talk to this girl because they're working on like innovation stuff. So he reached out and we had a meeting immediately. And then like within, I want to say within 3 months, we had met with the CEO who was on a trip to Silicon Valley, who gave us like 2 hours of his time, us, this like tiny fund he'd never heard of. And then within like 3 months, like he had floated the proposal to invest in us to the board level. It got rejected. So never got money from Huawei. Let's make that clear. But the speed at which things that were happening was just crazy.

Hmm.

For you to get to a board level agenda on anything, right, in that period of time without having some kind of warm relationship. I did not have a warm relationship. Like I said, it was just like, I don't know, someone heard me. And then that level of curiosity that they have to try to understand what's going on in the outside world and like not lose any opportunity that could potentially be helpful, that drive is, I think, yeah. Really, really immensely powerful.

Fascinating.

Fascinating. So, you know, I, I, I had a, a gaming company, Cookie Panda. We were doing Flashlight, but then we moved into HTML5 games and Flashlight never, never took off. And HTML5, we were way too early. But one Friday night we met the chief strategy officer of Alibaba. And then the next day on Saturday, we met with their investment team. And then in Tuesday we're in Hangzhou. So it's like Friday night and then Tuesday we're, we're in Hangzhou and then they're doing due diligence the next week after that. And unfortunately there was a bit of a delay in closing out the documents, but we actually signed the shareholders agreement. And then unfortunately Jack Ma apparently showed up to the investor committee meeting and killed 20 of the 26 investments. So it never happened, but there was no recourse even though we had a signed shareholders agreement. But the fact is that I think it shows that people are willing to look at things at a board level. And to really get involved and like validate or invalidate something. And, you know, I talked to Porter Arisman, who's senior guy running communications for Alibaba, and he's like, yeah, that's Jack's MO. Like he'll look at something and go, nope, we're switching directions. We're not going to go that direction anymore. Sorry, out. And I think the decisiveness and the willingness to look at things at a, at a very high level, you know, you look at a lot of the leadership of Chinese internet companies, it's still the same. Founders who are still there, even though they have no, no real financial need to be there. It's decades and decades really being deeply involved in the direction of the company for better or worse. But tell me, tell me about what, what you think the speed of China means for some, some larger companies. Like I know, you know, a lot about, say, you know, really juggernaut companies that are easy to start to get like calcified and slowed down. Because of their size, but continue to embrace this agility and speed?

I'm much more familiar with ByteDance. I'm actually working on a case study about the company. And I would say that for ByteDance, the thing is I would still characterize them as a fairly young company. They just turned 9, so not quite old yet, but I do see them as a great example of the new generation of Chinese tech companies that are embracing sort of Western management methods. So the China speed thing, I feel like, is sort of an ecosystem. Like everyone must do it because all your competitors are doing 996 and, you know, working Sundays, whatever, like pushing code out the door every day. But for ByteDance, I think that they have also like very, you know, a little bit different from the other companies there. It's partly because the founder is so obsessed with management and just studying like success, that he really like focuses on how do I think about the company as a product as well, right? That's one of his favorite sayings, develop the company as a product. So, he thinks about the high-level organization and the strategy as well. And I see that he borrows a lot from Western, or I should just call it ex-China, because it's not just from like, you know, Europe and the US, but also plenty of Japanese entrepreneurs, right? He really takes to heart a lot of these management methodologies, so the way he's built the organization culture, as well as how the organization looks and like all the pieces, how they interact with each other. I think that's going to be very important and a big differentiator going forward, because the way I think about it is that Chinese companies in the past, like a decade ago, lacked capital. You could argue that they also lacked talent, but capital is a huge barrier, right? Once you had capital, you could start hiring like really good talent. Anyways, so I would argue like a huge part of the deficit was because they lack capital. And then once the capital kicked in and you had also the talent, then really what you are competing on, especially at the consumer internet level, right? Let's not talk about enterprises and like market readiness and whatever, but at least in consumer internet, really China and the rest of the developed world is really on the same level. So then what you're competing on is how efficiently you can mobilize the resources you have.

Right.

And how well you can organize. If you're ByteDance and you have all this money and cash you're generating, and you're Facebook, you have all this money and cash you're generating, and you can hire, you know, the top engineers of whatever, Silicon Valley, of Beijing, I don't feel like there's a big difference. I don't think there's an argument you can make that really the competition now is, okay, you have all the capital and talent in the world. How do you strategize and how do you effectively allocate these resources and how do you capture the bubbles of innovation opportunity that show up. And I think ByteDance is really well positioned to do that. It has— I mean, I think any system is going to have some problems. So it does have some problems, has some overwork, as attested to by many of the employees I talked to who are not a fan of its 996 culture. But I think at the same time, the fact that it's been able to so quickly push out, you know, these really amazing products, it like—

Yeah.

expand into these seemingly unrelated sectors and achieve, at least in my opinion, some measure of success. That makes it very, very different actually from a lot of the Silicon Valley companies. And I think ByteDance is probably the example I know the best, but if I had to pick some of the other internet companies, I think probably Meituan. Meituan is probably similar. And then of course, like Alibaba and Tencent are up there, but I do think they're much slower. I do have to say they're slower. If I had to pick like the best example of China's feed right now, it would be the company ByteDance. There is also Pinduoduo, but I think the difference between ByteDance and Pinduoduo is that number one, I just don't know that much about Pinduoduo internally, but I also think that the way that ByteDance has thought about its organization, that doesn't seem to be as thoughtful from Pinduoduo.

No. Yeah. I mean, ByteDance is much more international once they did the Musical.ly, you know, acquisition. I think it's funny because I actually bumped up against a team, there's a Singaporean in there, and what they wanted me to help them to do was they were going to all these Silicon Valley companies and they were just trying to get to know how they operated, just, just to meet with them and find out their best practices.

Yeah.

I thought like, hmm. And they wanted to go into Facebook and I was like, don't you think that Facebook's maybe a little bit, you know, that's a little proprietary and they might be able to, you know, but we actually spend a lot of money on Facebook advertising. So we just wanna meet with them and see what they do. And I was just like, wow, I've never heard of anybody even doing that before, just being like, let's just do it. Let's just like, let's just meet with Amazon and Facebook and, you know, whoever else in the Valley and just try to, you know, get them to teach us how to be better and learn from best practices. So I thought like there was something that's very impressive, but I think also too, so many companies fail going into China and not that many Chinese companies have been that successful outside of China, at least, you know, sort of in intentionally, you know, expanding outside of the borders of China. And I think partially that's a function of there hasn't been that much, that much pull yet. You know, there's so much to do inside China, but I've been really impressed at how, as I understand it, and you can correct me, is that ByteDance is just the practical, pragmatic view of like, let's go to a different country, let the local team run stuff in kind of local language. And it's going to be messy because we're not sending like the one Chinese guy that speaks French to go to Paris and the Chinese woman who used to work in Latin America to go run that, right? We're, we're actually letting like the local teams do things well. And they're sort of enabled to do that because everything that they're built upon is this, you know, whole machine learning AI foundation that enables them to like remote control stuff from the mothership in Beijing and then let the local teams do sales and marketing and Everything else, which is just kind of unusual because, you know, up to that point it was really difficult to kind of take, let's take WeChat and let's bring WeChat to Indonesia or to India or to the US and some sort of like discrete product. Like before, what you had to do is maybe invest in like a game company and just be arm's length and let them run it, you know, locally, like Supercell in Finland or something. Right. But I think ByteDance has cracked something in a really impressive way. I mean, they have How many employees these days outside of China?

Over 100,000.

Yeah.

Yeah. But I don't even know if they're counting all the people they outsource. Like, I think, I think Dong Yiming said it in one of his speeches that they don't count the teachers, of course, on their edtech platform because I guess these are gig workers. I don't know if they fully count all the content moderators, etc. It could be much bigger than that.

I went to visit Mayan Scharf. Do you know Mayan? She was the first—

oh yeah, yeah.

Slaw Y that, you know, got hired there. I went to, you know, at the headquarters in Beijing and I want to say that was like 3, 4 years ago and there was like 2,000 or 3,000 people in the company. Am I remembering correctly?

2,000 or 3,000? I think it's a bit more than that, but I don't think it's much more than that.

Yeah.

Maybe 3 years ago there were like 20. Yeah.

It was like 4 and a half years ago or something like that. It was like 4 and a half years ago. It was a very, very Chinese company and it was starting to, you know, really get traction around the headlines locally with video and other things, but wow, it's really a phenomenon now. So.

I would say it's still a Chinese company and it has a long way to go in internationalization from all the people I talked to there, but I think that it's making progress, right? At the very least, I would say one thing that I'm very bullish on ByteDance about is that it realizes this is a problem. I'm not sure that many other companies when they were expanding even realized it was a problem. Right. Like, they don't think empowering the local employees is important, or they don't understand, like, how vital that is to their business. And I think ByteDance does realize it and is trying to make it better.

Yeah, that's great.

Yeah.

I mean, that's probably one of the number one things that killed foreign companies coming into China was not really fully—

I know that. That's actually— I think— I hope that's something you address in your book, actually, because I I find that to be one of the most, like, biggest misconceptions that, like, it's somehow the government or nationalism.

Yeah.

And I'm like, no, it's because you didn't really let your local employees, like, make decisions. And by the way, look at Google. Like, so many people left. And come on, it's so sad for Google. Look at all the ex-Googlers who went on to found unicorns. And all of them, you can find stories of them being really frustrated to have to go through headquarters for every Little thing, and they were just like, "Dude, screw this. I have an idea, and I know this works." Or I like I'm from Google, and I was like a top engineer or top student. I'm going to be able to raise money like no matter what is I want to do. Yeah, like all the talent they lost, to be honest. We actually yeah, China Tech should really thank Google.

Sure, yeah. And you know, there's great examples of you know in Japan with Yahoo becoming totally localized. It can work, right? That's not to say though, because the other thing is that. But even if you localize your team in China, then the competition, like that's the one thing, you know, that Dr. Kai-Fu Lee talked about, that gladiatorial competition. I think that's one thing that people in the West generally don't understand is how just brutal, brutal, brutal.

Brutal.

Because it's, because it's so internalized, like you can't smell it or taste it unless you're inside the shark tank, because from outside you can't see it because you don't know the apps, you can't read the news about it and you You don't know the teams, but yeah, there's a whole nother level. And now that China's, you know, almost a billion mobile, like there's not that many new users that are coming on board. And of course, yeah, people's income is rising, but now it's going to be much more of a clash of titans in a way between Silicon Valley and China. Right. And it's fascinating to see, right? I love both places. Like, like Joe Wong, you know, the comedian Joe Wong, I've done a bunch of shows with him and he said, you know, China is my mother. America is my wife. And they're, they're, they're both arguing in the living room and I'm hiding in the kitchen because I'm really afraid because they both have nuclear weapons. I just want them to get along. So yeah. Anyway, Ray, lovely, lovely to hear your origin story and your full journey and your thoughts. I always love your energy. It comes through so well. You need to do more of this stuff. Like you've really positioned yourself as this amazing bridge between China and the West. And like, you're the perfect person to unlock all of that awesomeness and, and, and make it less mysterious and more open and interesting for everybody around the world. So thanks again. Really appreciate it.

All the best.

Thanks. Glad to be of help. And then let me know if there's anything I can help with.

All the best. Thank you so much for your time.

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. Say, gent, cheers, y'all.