Michael Li explains why IoT extends far beyond remote controls, touching manufacturing, retail, and utilities with potential trillions in value. He describes his firm's support system: Yindan connects startups to 8,000 suppliers, Tencent provides 12 million hardware testers, and JD.com's platform enables low-risk product launches.
Chapters
That'll be the last one. This one?
My question is about IoT.
Sorry, question about?
IoT.
IoT, yeah.
Most people think IoT is just a way to control or monitor devices remotely from anywhere. Why do you think it's bigger than this, and why do you think it's the future?
OK, well, first of all, I think that's only one particular specific application that you mentioned, the control things. I think more importantly, From my point of view, I think IoT will offer a chance for a lot of industry to be revolutionized. For example, let's take manufacturing as an example. You guys all know that the conventional manufacturing is actually a top-down approach, right? You have a product design, you think it's cool, and then you organize a bunch of resources and try to produce that at your best cost and then try to market and sell it. That's the conventional way, right? There's a lot of risk involved, a lot of waste involved. Now IoT really gives you a much more economic and efficient way so you can massively customize and meet customers' needs. For example, you have your own desire of your own choice of clothes, right? So you can really, in old days, there wasn't a way, economic way of doing that, right? Unless you are a king so that you can have any clothes you want. But for a regular consumer, you cannot do that. But now with today's technology, with IoT technology, you really can do that. And that's really, you can massively collect aggregated customers' order, various different order, personalized order, and aggregate them together and send it to the manufacturing, have them to meet your needs at even cheaper cost than before. Then your whole— that's only the manufacturing part. Also, the whole supply chain and the logistics part will be changed as well, becomes much more efficient as well. So there's a lot of, a lot of value will be created along the process. So I would imagine, I've seen a lot of reports, I also tend to believe those numbers, you're gonna see trillions of dollars of value being created. And not only for manufacturing, for retail, for utilities, for almost, for travel even, for almost every industry that you can imagine.
And what do you recommend to me is like to understand Internet of Things like deeply? Sorry, what do you recommend to me to do to understand the Internet of Things deeply?
About IoT?
Yeah.
Well, there, let's see, I can think of probably a couple books, a few articles. If you give me the contact information, I can send it to you later on.
Well, maybe some of you should work at some of his portfolio companies. That's probably the easiest way to Just learn something a couple years, and then come back to him for funding.
Yeah. Kevin. Thank you for speaking.
I want to ask because you say that you are you are investing in a very early stage from C to A, but you also talk about that many first year investors can go go wrong. But how can you tell that this stuff? this idea can go global? Because if I want to do it by myself, I would say, do they have a local partner? Do they advertise their products welcome in the local? But if it's very early stage, like it's still in China, how can you tell this?
Well, first of all, the honest answer is you really cannot tell. I mean, we're in the venture business. That's why it's called a risky business. But there's a lot of— Along the process, there's a lot of help you can get. That's also what we're trying to offer. For example, if you are doing IoT device, smart device, we have— can I talk about Yindan? Yeah, absolutely.
Yeah, please.
We have a strategic partner called Yindan. It's based in Shenzhen. It's a platform that can help startups doing things in a much quicker way and much safer way. First of all, they have more than 8,000 suppliers and components suppliers where they can help you to do the purchasing. These guys are of very rich supply chain expertise. That's their business. So when you finish your hardware design, so you need to consider your procurement and all that. So they can help you to get the best price. Usually as a small company you cannot get. That's a really important part of consideration for manufacturing. That's number one. The second is if you are a hardware team, you may not necessarily be good at industrial design. So they have about 120 industrial design, international ID design teams on the platform. They can help you. You can find your best team, ID team, on the platform. And also they work with Tencent. Tencent would feed about 12 million early hardware testers for your hardware. You can sign on a bunch of volunteers with a certain level of knowledge about your hardware. So they can do a lot of iteration in-house before you send it out to the market for testing. So that would greatly reduce your risk of launching a wrong hardware product. And the other aspect is they work with a company called JD.com. It's a leading e-commerce platform. They are running the largest crowdfunding platform in China. So they work with JD.com, say, you know, once you complete your hardware design, you seal and then try to do the product launch, that we can go through the JD.com platform so that you can have a, you know, relatively limited risk exposure by targeting a small group, you know, working with them. So I think those are very useful ways value that it can bring to startup company, help to reduce your risks.
