Riding the Chinese Internet Early Days with TR Harrington

Curious about the China Journey As The Internet Opened Up (and Closed)?
Today you are in for a treat – we have someone that was on the ground and riding that dragon from the early internet days in China – and a guy I have looked up to for years – TR Harrington!

√ TR Harrington’s VIP Expert Page
√ MOX accelerator in Taiwan
√ Weibo.com
√ Taobao.com
√ China Startup Pulse podcast
√ Global From Asia VPN guide

Thank you TR actually, I did get to catch up with him in Bangkok. He is all over Asia. I guess I’m all over Asia too, and I had to catch him up on my return to China. TR it’s really, really great to have you. Thanks also for having me as a mentor at the Mox accelerator in Taipei, Taiwan. It’s a great place. Got a little chilly when I was there. It’s getting cold. You know, I’m getting spoiled here in Thailand for now, but I will be freezing cold pretty soon in North China.

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gfa283

[00:00:00] Episode 283 of the Global From Asia podcast. Today we’re in for a treat writing the early days of the Chinese dragon or the Chinese internet. Fascinating conversation with someone I have looked up to for many years. I met early on in my China journey. It’s a pleasure to have him on. Welcome to the Global From Asia podcast, where the daunting process of running an international business is broken down into straight up actionable advice. And now your host, Michael Michelini. Thank you everybody for choosing to download and listen to this show. Somebody’s trying to listen to this on Spotify. I’m getting old. I think it’s set up on Spotify, but I couldn’t even find it. I have to look into that. Sorry about that. Mostly on the old fashioned channels. I’m old fashioned. I’m getting old. You know, can’t believe I’ll be 40 years old soon as life is flying. And, uh, today’s show is, uh, you know, I’m really excited about today’s show a

[00:01:00] lot. A lot of you have been asking me about my own journey. I’m kinda, I’m going back to China for a little bit. I don’t want to clog up the intro. I want to get into the meat of the interview, but I think in the blah, blah, blah session, I will, uh, I will share a little bit about going back to China for some time. I know some of the listeners and friends have been asking me. So if you want to listen into mine, my China return, a little bit after the amazing interview today. Also, I’m here in Bangkok for a few days. Asia. Asia, excuse me, Affiliate World, Asia, AWA. I was invited as media here, did a little video, met some amazing people, going to get some amazing guests that were speaking there. Man, it was some pretty cool people, and, uh, it’s affiliated as a much different space than I’m used to. Uh, some very fun characters and a little bit more, a little bit more on the black to gray side of the marketing world for sure. Um, getting some interesting insights. And then tomorrow, well this will be done by now. Seller World

[00:02:00] Conference. We’re a media partner here at Global From Asia. Also Chris FBA for you and some other cool people. Howard Thai and some others were here. Zach Franklin brought a bunch of us, so I will be covering or attending doing a little vlog as well. Uh, if you wanna check that on our YouTube channel, youtube.com/global from Asia, we try to keep up videos, all split video versions of this podcast as well. So does some cool stuff. All right, let’s get into today’s show. It’s episode 283 globalfromasia.com We do have a website. I know like Peter and some others, listeners don’t even know you have a website. Man. We spent a lot of time on this website, but we have all the show notes. We try to put the transcription on there as soon as possible and other info that you can see. T R Harrington, he’s a little bit of a mentor of mine for many years. He’s a, I remember looking up to him, I went to an SEO conference in Xiamen, China in 2009 and I met him and he was running his own agency, Darwin Marketing. And uh, he’s done

[00:03:00] so many amazing things. He’s met, he’s met so many entrepreneurs in a, in a space. He’s co-director of MOX Accelerator. It’s Mobile only Accelerator in Taipei, Taiwan. I was invited up there to share and speak and we, um, we got to do this interview. So it’s a real pleasure. And there was so much to talk about. I think we got to get them back on the show. Actually, so many guests we have to get back on the shelf. But I, uh, I’m really fascinated by this conversation. It’s kind of like his journey coming to China and just seeing the internet evolve and how he took advantage of that and started an agency, got a partner, share some pretty interesting insights. Also some insights about social data, the Chinese internet opening and Chinese internet kind of closing and things like that. So if you’re interested, I really, really think you can enjoy this one. We did it in person in Taipei, Taiwan. Let’s tune in. I literally just paid my rents with Goremit.

[00:04:00] HK. My last rent’s in a while in Thailand, but it’s also useful for making payments into mainland China, into the Philippines, into Vietnam, and other countries as well. Those are where I’m using it for, for my programmers of Vietnam, for my amazing team in the Philippines, my rent in Thailand, my suppliers in China. All can be done from www.goremit.hk. It’s like a solution where you fund it from your Hong Kong bank or other Hong Kong financial sources. I know it’s helped out Chris Davey from FBA for you.com and some others at tough times. So it’s a really cool founder, Simon Lim and others there, and the team that have really gone above and beyond. It’s not just a service, it’s also people. So of course they make a little bit of money off the transaction on a percentage basis, but it usually works out to be, depending on the size of the transaction, less than a bank wires or a smaller, especially for micropayments. Team members in different parts of

[00:05:00] the world. I would recommend it also for small suppliers, maybe an eewu we’ve used it for payments and other places. Check them out at www .goremit.hk and tell them that GFA sent you. All right. Thank you everybody for tuning in. It’s a letter to Global From Asia podcast. We’re here in Taipei, Taiwan, and I get to meet an old friend, T R Harrington. Thanks for, thanks for going on the show TR. Thanks for having me, Mike. Yeah, that’s great. I’m here in the MOX Accelerator and TR’s the new head of the program, and it’s a pleasure. I’ll, I’ll. Haven’t done it yet, but I’m excited to share about what we’re doing right now. Content creation, content marketing, and uh, you know, like we’re just talking about some what of the listener feedback, the realness. And so, um, I, I’m excited to share it here at, at, uh, at the program. Uh, TR had so much experience, honestly, we talked for quite a while last night over dinner. There’s so many kind of angles. I also

[00:06:00] excited for you to have your will help, hopefully get you started on your own show, but, um, you’re, you’re in China. You were 20 years, 15 years. No, no, not quite. Not quite. So my, my China journey originally started in 1994 when I came over to visit a college roommate who moved there after we graduate in 93. And that began my fascination and you know, initial, I would say an introduction to, to China and certainly starting out in Beijing in like ‘94, bicycles, you know, almost no cars except for government cars and a few taxis. And then, you know, took the old trains, you know, the rickety slow overnight trains from like Beijing down the Nanjiang down to Shanghai. And just everywhere you look, there was construction, right? There’s,

[00:07:00] there’s just massive movement, infrastructure buildings going up and thinking at that time, you know, you know, 15 years or 20 years, this place is really gonna be something. And coming back for my return visit was in the year 2000, like for right around new year’s of 2000. And between the time I left and the time I came back. Like in Shanghai when I was there in 94 you went to the bund, you know, the famous along the river with all, you know, the art deco architecture, and you looked across the river and all you saw was the pro tower and fields and cows. Like there was nothing in Pudong in ‘94 and so to come back in the year 2000 and see all of these skyscrapers. You know, they build a city the size of

[00:08:00] Philadelphia near where I grew up in basically five, six years. So that was just as just mind blowing, you know, you see the speed of this infrastructure, you know, kind of development. And so then I started coming to China regularly from that point. I moved there for the first time in the fall of 2001. I was in Shanghai for about a month, month and a half. In that same college roommate, we made a bargaining. I told him I would build him his website, you know, do all the HTML and design. And in exchange, I wanted him to take me someplace in China where people didn’t speak English. And that’s, that’s how I ended up in man, studying Mandarin with, with a professor. And with a local, English language student. And that really got me my baseline in, in Mandarin and till I went to,

[00:09:00] business school, back in university of Virginia. And then in 2003 in the fall, um, I’m like most of my classmates who were preparing to you know, get into their consulting jobs or their general management jobs. I really was betting my future on China, so I decided to do the exchange program at CEIBS, the China European international business school. And, uh, by the end of, uh, 2000 or by the end of my, uh, business school program in June of 2004, um, that’s when I made the leap and started a move to China full time. Uh, and I was there until the end of 2016 so it was, you know, 12 and a half years full time. And then prior to that, like another, you know, six to nine months, you know, of living in  and kind of back and forth. So altogether. A little bit over 13 years

[00:10:00] amazing, you know, dog ears. They were fast and they were hard. Of course. I mean, I mean, you were there, you know, I saw it. Yeah. I mean we met, I met, cause yeah, you said he built an HTML website. You know, like you’re, you’re, you know, you’re a web marketer. I mean, Darwin Marketing is how I met you at a search marketing expo in Xiamen in Xiamen 2009 I think. If I remember right, 2010 or nine. Yeah, it was early. It was early days. It was definitely, it was the first search engine conference that I had attended in China. And I don’t think there were many more we talked about in Wei Mi, right. Our mutual friend from Xiamen who put together that conference and I think invited us both down there. Um, and, uh, Shaquille Khan, who I’ve mentioned earlier, who went on to do some pretty amazing things with a Spotify and, and so on and so forth. So yeah, that was, that was a seminal time. It’s, it’s a, we saw, I think that’s when

[00:11:00] a Weibo thing started or something kicked off. I remember seeing Weibo starting around that time, uh, the scene Weibo on. Absolutely. Yeah. And that was huge because that was one of the first times that really the, the, I would say the individual, you know, um, citizen in China suddenly had a, you know, like a, like a voice and ability to, to, to share something. And you know, particularly like when the, I think if you remember the high speed train crash in China, when, when that happened within, I think the first couple of months that they were running it. It was one of the few times when the media came out so fast. They couldn’t control it. Right. They couldn’t deny it. And, and that was, you know, really a, I think, a very important moment, for the Chinese citizens to have a voice, you know, with their

[00:12:00] own, you know, with their own government, you know, to be able to, you know, to, to, to share and to speak out. And I really think Weibo is an extremely important platform. You know, regardless of what you think about it from a marketing perspective, just as you know, like having a voice, in a place where it’s, it’s not easy either. Now where it is highly regulated when it comes to media, and it comes to content. I really think Weibo has, you know, provided a little bit of balance, out there so that, so that the, the average citizen does have a way to share. It’s true. I mean. It was definitely like a cat and mouse game. Sometimes the government will try to deny what control, what the mass media, mass media or what people would see. And then there’s these comments and news and resharing of posts. I don’t know if I want much of a tangent. I wanted to

[00:13:00] get onto this, but then there was a whole, what is it, 500 retweet rule? There was some rule that they came out with that’s. My wife’s friend and famous investor in Beijing got arrested because if they find out your post is false, you can go to jail. Folks did more than 500 times something or something. I’m not, I might be wrong on the numbers, but then even just some small difference of the color, like blue or black or gray or white. In the description wasn’t true. They could find something that’s not true to, they had to put you in trouble, right. You put to put, to put pressure. Right. You know, to, to, and also, you know, I think in some ways it’s not bad that there were repercussions. Because, you know, if we look at this from a us perspective. Right. And the way Twitter, you know, is out there, I mean, it’s very

[00:14:00] interesting, actually  in here. Recently the Twitter, decided not to accept political ads, you know, for the upcoming election. And Facebook is actually taking a completely opposite response. They’re doubling down, even after all the damage that they did, you know, to, to, to the US in that last election. But I, but I do think, you know, that having you know, do you having some degree of responsibility, you know, uh, for, for what you, for what you’re posting, particularly if you’re reaching, you know, so many people, you know, I, I think that there’s a good balance, right? I’m not saying the way that China does it, you know, is the right way or the way the U S does it is the right way. But I do feel like, you know, there could be, you know, somewhere in the middle is probably, you know, the better way to do it. Agreed. Yeah, I mean, you, you had said you moved back to this stay still at 16 rights or in this crazy election time. I mean, I remember

[00:15:00] watching it, watching it from the internet in Shenzhen at the time. And the world is crazy with social media. But let’s get back to the story. So I want today to be about, you know, the journey of entrepreneurship and China, and in some, some lessons people can learn as some takeaways for maybe. They’re trying to journey or, you know, um, so then Kunming, yeah. I remember when we even first met, you had told me you went totally submerged yourself to learn Chinese right away. And I think that probably was the right, the right thing to do. Did a business in China. Yeah. I mean, so, you know, prior to coming to China, I had been in Silicon Valley and I pulled up a lot of, uh, you know, experience. Doing digital marketing, very data-driven kind of optimization. Um, but at the end of the day, I knew if you are going to, you know, build a business, uh, particularly in a, in a different culture, uh, in a different country, uh, if you’re in marketing, you have to be able to

[00:16:00] communicate. Right. You know, so being able to speak, and being able to, listen, you know, was critical for me. Like having a platform. I would say for the future to be able to build a business. And, you know, I’m an experiential learner. So I think you’ve seen here, getting there, getting there, getting into fire, and just, just, you know, throw it, throw it, throw me in the deep end. Right. You know, and, and, and try to find a way to swim. You know, I really tried to do, I would say the reading and writing as well. But I found in the first month. But my progress was just too slow, and I’d really kind of allocate it maybe like four and a half months of intense study where I wasn’t really doing anything else. But that, so the latter three and half months, I really just focused on, you know, kind of the verbal part of the language and, you know, I got a base, right. It still wasn’t good, you know. But it

[00:17:00] sort of enabled me to at least have like some basic conversations. Sharing with people. And I, and I felt like it, particularly when I was in Kunming. Um, people were very friendly and willing to sort of engage, you know, with me, uh, and even get over how poor, you know, my Chinese pronunciation, you know, was, I still think the Chinese are pretty supportive of foreigners learning.  I think they love it right there. Yeah. I, I do, I agree. I think, I think the Chinese, you know, as a general population, you know, they’re, they’re very accommodating, you know, with our imperfections when it comes to speaking their language. And that has not always been the case. I felt like in a, you know, I didn’t always feel that same warmth, for instance, in, In Paris, has, especially speaking my bad French.  Japan, they didn’t even let you, I don’t know so much about Japan, but in previous shows and things, they said,

[00:18:00] Japanese don’t even want you to try to speak. Right. They’re like, yeah. So, so in that case, yeah, I think that, you know, the Chinese are, are very open and welcoming, and you know, we both subsequently married Chinese women who dealt with our imperfections. You know, on, on many different levels. But, uh, but yeah, that, that was, I felt like that was an initial starting point. And, and, uh, the way I thought about this was that, you know, I, I was applying to business school at the time, and I figured if I didn’t get into a school that I thought was going to be a good return on investment, that, you know, my plan was to, instead of go back to the U S to do that 18 months, or you know, 21 months, uh, with the, with the summer off that I was going to be just moving back to Shanghai and I was going to try to find my way there. Yeah. So, uh, so, but 2002 I ended up in school in 2003 I came back and then

[00:19:00] 2004, it was like, okay, I’m in Shanghai and, uh, I don’t speak great Chinese. Um, I’ve, I’ve. I’ve met this incredible woman while I was there in 2003, who became my future wife. Awesome. And, but, uh, in terms of like, the internet development in me knew it was like dumbed down and, uh, and you know, like, even Taobao had not even really, you know, been, been launched. It, it wasn’t really till the end of 2004 when, when Jack Ma, you know, uh, brought out Alipay. Uh, and, you know, this was one of my first lessons learned. Um. The Chinese, uh, there’s a lot of rules and regulations. Um, but you know, you’ll see in the Chinese entrepreneurs, they are much more, uh, willing to take the risk and, uh, beg for forgiveness. Right. Whereas, you know, if you look at the international companies, uh, and especially if they’re, if they’re, if they’re large and publicly traded, you know,

[00:20:00] for, you know, legal reasons, they have to do things by the book. Right. Otherwise, they could get sued by shareholders, right. Or activists and so on and so forth. And so, my, my, you know, Jack, you know, saw this as an advantage for him to move fast, to get Alipay out there and to bring out Taobao as his eBay competitor. And, uh, man, did he eviscerate eBay? I mean, you mean they did? The company that eBay bought was called EachNet. And it was founded by a gentleman named Bo Shao. Um, who’d been like a BCG consultant. You know, he had some, uh, international money backing him, and they had roughly 90% market share. And, you know, the C2C marketplace, uh, at the time that eBay, uh, bought them, uh, via their vehicle in Taiwan at that point in

[00:21:00] time. And, but. You know, if the, the challenge for eBay, um, even after they bought it, uh, Each Net was, eBay was a global platform and this was a double edged sword for the Chinese sellers that enabled them to sell globally. Um, but it also meant that when eBay wanted to roll out any kind of new feature or function, they had to rule it out in Germany. They had rolled it out in Japan. They had to rule it out in Europe, and they had to rule it out. Of course, in the United States. And this meant that their release cycle was taking like nine months. Now on the other side, you have, you know, Alibaba, who was filing a completely different tact of, you know, almost like, you know, the, the Facebook move fast and break things. Um, and their cycle of releasing new features was roughly six weeks. So in

[00:22:00] nine months. They’re doing basically six turns. Okay.

[00:22:09] All right. So we had them a quick cut there. Yeah. I was always lots of action happening here at the MOX accelerator. So it’s never, never a dull moment here. Never a dull moment, but a to, you know, to what we were talking about before. Um, you know, like Taobao just moved so fast. Ebay because they are global, had trouble moving fast. The other thing is that, you know, if you think about the eBay model where the bids just keep going up, whereas the way Chinese negotiate, they’re negotiating from a high price and try to bring it down. That didn’t fit, but truly the thing, and actually it was very interesting to meet the, uh, the global head of the, uh, the, the Gucci group. Um, when he came out a couple of years ago and they had been a key client of mine at Darwin. Um, I explained to him, I thought like the, the, the real game changer

[00:23:00] for Taobo, more so than changing the way the model was done and buying a without the auction going up was actually at the introduction of chat into, into, into the transaction. Because then you could actually have a negotiation. Exactly. Because the most important thing that I think eBay failed to understand about the Chinese consumer at that point in time is. It’s not just the buying of the product, it’s the fact that you felt you earned that product by negotiating it down. Right. And if the price was fixed and you couldn’t do that, it sort of hurt the Chinese heart. Right. The idea, I didn’t get any discount. I didn’t move that price down. I failed as a Chinese person. Right. I didn’t, I didn’t do that. So I think, yeah, that’s a huge localization issue that I think, uh, eBay failed to

[00:24:00] understand, you know, and they failed to move fast. Yeah. And, and, and, and when they introduced chat into the marketplace, it was just an absolute game changer. I think it’s, uh, I mean, didn’t it, buy Skype to try to integrate cha, I don’t know if that was because of China or not, but I remember eBay bought Skype. Well, I think they, that thing’s been sold a few times. I think Microsoft has it now, but yeah, I think maybe there’s, I don’t know if that’s due to China or not, but they were trying to integrate chat maybe. But I think also, like we were saying before we started recording again, was there they. These international companies think they can just translate it into Chinese, the business model, they can just translate, Oh, we just have our tech team localize it by translating ebay.com to ebay.cn. Correct. Correct. And a lot of companies, you know, like honestly, I would say most companies that they came in, internet, uh, consumer companies came into China just had a bad playbook. Right? Google tried to

[00:25:00] set up in Shanghai first. You know, you’re a media company, you kind of need to be in Beijing because they’re the ones who are making the rules and you need to work with them. And after like a year and a half, they had to blow up the operation in Shanghai and move up the Beijing. Uh, and then of course, you know, famously they left, you know, in a huff and like burn the bridges on the way out. And, and ever since, you know, there’s been a, there’s been a smaller part of Google that’s been trying to, some way crawl its way back in, um, you know, with, with another, with another attempt at like, say, a filtered search engine, right to reenter the market. They’ve always had a sales presence. Right. And particularly for the Chinese game industry, you know, selling into the rest of the world. They’ve had a good advertising business, as has Facebook, but they’ve never been able to regain, you know, a presence in China. And frankly, China doesn’t need them. Right? They just don’t need Google. They don’t

[00:26:00] need eBay. They don’t need most of these international companies. The one company who I will say doesn’t get enough credit for their playbook and the way that they did things. Um, and I would say actually what’s great is to contrast these two companies that came in roughly the same time. One was Groupon. Okay. Groupon. Did it all wrong. I was gonna say, I was scared me. I always like, I don’t know how I’m going to respond to that. No, they did it all wrong. Yeah, I was involved. I saw that with friends. They tried to hire and hire me or consult me more. I was like, you guys are just going crazy. Like you’re just hiring random MBAs. Yes, ours and say they they, they, you know, you know, basic- basically were helicoptering in like, you know, American born Chinese and Hong Kong and Singapore and everybody who could speak English and Chinese but really didn’t know the Chinese market. Right. And they

[00:27:00] famously did a joint venture with, uh, with a 10 cent and then 10 cent, like, you know, the same day, basically that was signed, you know, started their own competing, you know, Groupon company. Um, and out of that, there was so many clones that came out of that. And eventually, like you see Matron now is famously like this massive company, right? Who, who’s done very, very well. But Groupon itself, like just, they’d barely lasted, I think two years before it was just in tatters. I don’t know if you would remember or not. I remember being on the elevator and seeing groupon.cn, but if it wasn’t a groupon paper right. They had a lot of things that go wrong. Now compare this to at another company who came in roughly around that same point, probably just a little bit later, which was Uber and with Uber, I think a playbook did really well and entering the market is one. They raised the money for Uber China in China,

[00:28:00] and the great thing about doing that is you have rich, powerful people who are fighting for you in China who are Chinese fighting against other Chinese people, it’s a lot easier to fight Chinese people with other Chinese people. It’s a lot easier to, to, to have really strong and influential people finding other strong and influential people than to have foreigners try to fight because it’s not going to be a fair fight and you’re going to get your butt kicked, which most of them did. Right? This is, it’s a buzzword, but it’s true. Guangxi you’re not in the circle. They, you know, it’s easy to just kill you or crush you because you have no relationships here or it doesn’t matter. You’re just some outsider trying to take our money. Right. So, yeah. If I haven’t, yeah. At an exact one. One was the investment. The second was that they hired local talent that was really good. I mean, they execute it so well and they, you know, coming in against, you know, Didi.

[00:28:56] Yeah. Um, I, I think famously that like the head of Uber,

[00:29:00] China was even somehow related to the head of Didi China. Well, at some level. Um, but, but it, you know, I think that that whatever the, the association there is not as important as the team and the, and the people that they hired were really good operators locally, knew how to get things done, had the local relationships. And they execute it. I mean, as well as I’ve seen any international kind of internet company in China, right. And yes. Did they exit the market? For sure, but they walked away, I think what they, sh- share? Yeah, they got, they got something. Oh no, they got late 20% of of Didi so. You know, for those of us who can remember, you know, looking at Yahoo and going, Oh, that company’s not worth anything. Well, it isn’t, except for the fact that they hold all these Alibaba shares, which are really valuable. And for all those people who are looking at Uber and going, Oh, this company, you know, don’t forget, they own a significant portion of Didi

[00:30:00] and Grab. Right? So they’ve left these markets, but they didn’t leave these markets with empty hands. They left with a lot of equity in these other companies. So. You know, for foreign companies who are coming, who are trying to enter China, I strongly encourage you to look at the Uber China playbook. I, I, you know, so many companies did a horrible job. Google, Groupon, Yahoo, even right? eBay, you name it. These were all internet giants from the United States. You know, who came in and really got their butts kicked. But if you look at Uber, they didn’t really get their butt kicked. They fought, you know, pretty much to a draw. Yeah. Right. And I think, you know, the only thing at the end was you’re sitting across the table and Uber has all this private capital, like they raised more private capital to that point than any company had raised. I don’t know if we work ended up exceeding that or not, but it was a lie. But on the other side of the table, you know, what Didi had behind him was brother Alibaba and brother Tencent.

[00:31:00] And they’re, you know, their cash reserves far exceeded anything that Uber had. So if Uber wanted to come play the long game, they wouldn’t have won. Right. They, they, they made, they’re at the poker table and they made an assessment. I’m just going to take that 20% cash and walk away. And I think that that’s a great, you know, result. They were only in the market for two or three years, if I recall correctly. I think they came in 2014, if I remember, I remember they, they, uh, they also went to a lot of influencers. They got me and others in the local community. They had events. Data, obviously gave everybody free rides. I don’t know why you always getting free rides forever. That’s true. That’s true. And that, that was part of like, you know, the Wars between Didi and Uber was, you know, these massive incentives on writers. Right. And also on the drivers. Right. You know, like, you know, actually like the, the, the, for, for Uber, the, the, the biggest expense they had was acquiring the drivers. You know, the writers actually were, were, were

[00:32:00] discounts. Um, and at some level they were offering. Uh, you know, the different, you know, you know, riders, uh, cheaper rides to just get them used to using it. But anyway, I, you know, Uber does not get enough credit for half for how they executed in the Chinese market. I agree. Okay. Let’s back to your story. So you were, you were a, if you went back to Shanghai, you stayed in to Kunming and you are assessing different things. When did. Yeah. So you’re from Darwin, but I’m curious where is to get, what’s this, what’s the story here? Yeah, so, um, when I left cooking, I went back to business school in the U S I came, came over as an exchange student at CEIBS. Right. And then after that I moved to Shanghai, you know, just straight off against all the smart advice, you know, for my classmates and for my, my, my professors, you know, and I had three, you know, the way I described as 3000 in my pocket, 100,000 in loans. And

[00:33:00] basically, uh, the two companies who were doing e-commerce, neither one of them. I was really like a good fit for it. And Alibaba or eBay, which at that point was already getting crushed. Um, so I would say I became an entrepreneur out of necessity, right. Because I, you know, my Mandarin wasn’t good enough. I wasn’t employable. Um, and, you know, a, what I saw was there was an opportunity perhaps to sell in a low trust market, which China is, right? It’s very, very difficult, I think, to sell. People don’t trust each other. Um, but I was aware of a pay for performance marketing, uh, you know, affiliate marketing. And so I convinced a local Chinese, you know, partner, um, my co founder to, uh, help me build out this affiliate marketing. A network, and that was the origin of Darwin marketing. Okay. First thing we built was an affiliate network called click value. Okay. And, um, we, uh, we both put in, you know, about a hundred thousand

[00:34:00] us each. Okay. Uh, I was doing that with like a consulting client that I had at that time. Um, and, uh, he had saved up some money. He had worked at eBay previously. Uh, and then we, we ramp that up to, you know, a couple of million impressions per day, 30,000 affiliates. Um, again, it’s relatively easy to sell to people when they’re only paying for performance. There’s not, there’s really no risk. Yeah. Just bring your customers anywhere in the world, especially Chinese, especially Chinese. Right. You know, so, so that was sort of like my, you know, my original insight and my original starting point to get in. And also like, you know, surely after that point, you know, I noticed, uh, that Google was starting its rise and that search actually data was extremely valuable to e-commerce, uh, transactions. And that’s kind of when I started to, I think my Chinese co-founder thought I was crazy because less than six or nine months after convincing him that affiliate marketing was a future, now it was written around saying, well, no, we have to do

[00:35:00] search marketing. You know, this is, this is the bigger opportunity. You know, Google is even bigger. Baidu is just beginning. And also the way I like to phrase it, as if I had been just a little bit sharper and smarter. If I had just taken that same hundred grand. And instead of putting it in my Darwin marketing business, I just bought stock and buy a new eye. That would’ve been a much bigger exit than the one I eventually got to it. Um, but yeah, so we, we, we started building it out. We were an early API partner with Baidu, which was very interesting. Um, you know, seeing how they develop their, their platform. Um, and, you know, within three to four years it was, you know, every bit as sophisticated as what Google was doing. You know, they changed from being a mercenary ranking on the paid ads where whoever paid more got the top position to doing it more like Google, where it was based on some sort of click through rate. Right? So, you know, we got to watch that sort of rise and we always sort of stayed close to data-driven. I would say sales right from affiliate, but then we were doing it with search engine marketing

[00:36:00] and then we had clients like, you know, one of our key clients since the fora come to us and be like. We need to do SEO. And then I was like, okay, why do you need to do SEO? And she was like, we need to do SEL. And I’m like, you don’t know why you need to do SEO, but somebody telling you that you need to do it. And we were able to sort of follow our client’s needs and move from say, affiliate search, paid search, SEO. And then eventually we really started to see, like you were mentioning way below. One of the more interesting things we saw is that a way bla from a social media perspective was influencing search behavior, right? And in say SEO or in the search engines itself, you were seeing more and more content that was coming from social itself. And so we felt like, well, if we’re going to really leverage, you know, search on behalf of our clients, we can’t just focus on like the stuff that they publish on their own website. We have to really be trying to figure out how these different platforms worked. Um, and so one of the first sort

[00:37:00] of like, I would say, uh, software hacks that we put together was I was convinced it social was driving search behavior, but it was really hard to prove it. And, uh, we ended up putting together a dashboard cause Weibo released an API. We already had the Baidu API. Taobao had an API, right. And we wanted to see. When somebody was like, you know, searching for something in way, blah, like maybe like hashtag, you know, what was happening in Baidu and what was happening in Taobao. And we also were very fortunate because if our work was for, Oh, you got an opportunity with L’Oreal when T mall actually launched, you know, with the, the more the B to C model and the big brands. I told my team, I want you to track. All the keywords for L’Oreal in a way, bra and tau, and in Baidu, right?

[00:38:00] Because people around the time team, they’ll start at like white blood already sort of like had its peak and was coming down and we chat was rising. And so everybody’s like, Oh, Weibo’s dead. It’s all about WeChat. And I’m like, I’m not so sure about that. And what we found after the first like 11-11 count it kind of campaign was that the things that people were posting in social media eventually was driving search behavior inside of Taobao itself. And actually that was leading to sales. And so we found like say, an undervalued asset on behalf of the client. It’s because everybody’s saying it’s all WeChat. And we’re like, well, if we say that people are searching for this thing in Weibo before 11-11 and then they’re buying it during 11-11 then actually Weibo was not dead. It’s driving, you know, these, these key transactions. Now this was kind of like, I had a

[00:39:00] hypothesis and then I was able to track, you know, some of this data. We’re using the APIs, and eventually what was interesting is that I put in a, Yokuo. As well into this dashboard because I also believe that a video was going to be a big driver from a media perspective of what people search for within two years of me, you know, kind of hacking together this dashboard other than Baidu. Alibaba owned it all. They bought in to Weibo it was true, and there’s no way they’d buy into Weibo if they don’t think it’s driving the transaction. That’s true. Right? They bought into Yokuo and there’s no way they’re buying it because both of these enterprises were not necessarily doing well. Right? I mean, Yokuo was growing, but it was losing money. Right. And Weibo already sort of dropped down like it was being left behind by WeChat. But really all that matters. What’s driving the transaction,

[00:40:00] and Alibaba is the only one who knows where the source of the traffic is coming from is, you know, you can’t track anything inside of these platforms, right? There’s this wall between Baidu and Alibaba, between Alibaba and Tencent. You can’t track across anything. So this. Putting together this dashboard of like what hashtags and search behavior across all these platforms was a way for us to try to understand what was the user journey that was ending up in these transactions and whatever that hacked together dashboard we built was in the end it was like, well, we had an idea. Alibaba has the data. They knew what we were just guessing at. Right. And I look at those acquisitions or those, you know, kind of majority investments sort of is like, not that I was right, but I was, I had a good guess and they sort of validated

[00:41:00] it for me. That makes sense. Yeah. I mean, I remember do Jack Ma, they were like kind of jealous or I remember some articles where he’s, I think they, you know, of course they, all these internet companies and try to try to make their own. Like especially the way water was Tencent whiteboard or seen a Weibo. There was all these different Weibo cause Weibo means micro message micro blog, like a blog Weishin is micro message, which we chat but um, they’re all trying to do it. But then we will did a good job getting all the influencers, the big famous people on there. Yeah. I mean I actually think that they missed a huge opportunity because they had already had the blog. With all the celebrities and they were getting paid all the advertising around those blogs. What was really shocking to me was that when it shifted to the micro blog, right? They, they empowered all these influencers and they became the dominant, you know, microblogging platform as a result, but in a really odd way. They

[00:42:00] weren’t. Generating or capturing a lot of the value themselves. They were letting the KOL these  right. To take the money directly or like an agency like us to be like kind of managing the middle between, you know, the influencer and the brand. Um, but anyway, I think the answer to that, or at least my, I think you might agree, or I’ll have your opinion, is because there weren’t a product company or a media company, they didn’t have tech like, wait, Whoa. Is not really well developed. Developed. Right. Whereas Tencent is, I think by far the. Well, obviously we use it, we chat now, but they were by far the best product company, I think. Oh yeah. They’re, they’re are phenomenal product company. And Alibaba is also pretty good product or user-focused. Whereas, yeah, I think each one of these, like as you point out, each one of these respective companies had their core focus. Siena was very much a media company, a portal. Right. You know, you know, eventually moving into the micro blogging. You know, uh, Alibaba was

[00:43:00] always about like, eCommerce and, and very, you know, how do I make the, the, the best, you know, consumer, you know, transactions, you know, like, how do I make the best experience for consumers, you know, uh, buyers in China. And then Tencent was always, how do I help people to connect? Right. You know, uh, and it from, from QQ, which, you know, you remember as like, you know, the precursor way that we would, we would do things, you know, communicate. Uh, right onto two, two ways. Shame. Right? And eventually, you know, I would say these, a lot of these companies, uh, in particular, Alibaba and Tencent became like the, the super app, right? This idea of we’re going to vertically integrate everything, you know, you know, from e-commerce to payments to rideshare to. You know, uh, delivery last mile. I mean, it’s a, and then, you know, if you think about 10 cent, the fact that they were able to build such a strong payment platform without actually

[00:44:00] really having like, uh, an eCommerce marketplace like Alibaba had, right? I give them tremendous credit. They did. They had the foresight to invest in the ride sharing, but then eventually like buying DN pain. Right. As a way to drive the payments platform. Yeah. I mean, from that sense, I think Tencent made some brilliant moves, just absolutely brilliant. And of course, my favorite campaign of my whole time in China combat. Yeah. The red packet. Yeah. We all knew we needed that. They were going to kill it. They did it right on the Chinese new year TV show. Exactly. Yeah. Yeah. So I mean. You, you know, that that easily could have been something Alibaba did. But Alibaba was thinking much more from, you know, from an, from a commerce perspective. Whereas Tencent, again, they really understood like the, the, the, the connection and the heart, right? So they were able to make that connection between like the home bow and a way to actually

[00:45:00] drive their payment platform. Just that was, I mean, again, I still think that’s the best campaign I saw in all my 13 years in China. It was just brilliant. Great. So this has been fascinating. I mean, we’re kind of getting, well, maybe we get you out another show in future, but, um, maybe some, some tips for, for listeners trying to, I guess both you and I are not as active in China now, but for those that are brave to conduct. Following our following there and, well, yeah, I would say, um, well one is, you know, uh, on behalf of like say a Mox. Right. You know, uh, and I’m the cope program director and I’m not running it by myself. Jenny, Jenny and I are, are, are working on this together. Um, but, uh, we’re, we’re fascinated with trying to help companies, um, uh, penetrate into Southeast Asia. Which, you know, I was in Silicon Valley and then I was in China from the mid two thousands until, you know, like, you know, the mid 2000

[00:46:00] tens you saw these two huge rises. And I really believe that Southeast Asia is going to be like the next core growth engine, you know, for all of these internet related economies. Sure. But the other thing is, you know, our sister accelerator where. Uh, I was a mentor, you know, and you are a, you’re an alumni, China accelerator, you know, I mean, I would say if you’re, if you’re interested, um, in, in thinking about how do you, you know, go cross border into China. Um, you know, look, go into the, the, the, the China accelerator. Uh, look at some of the companies they’ve invested in. They have their own, uh, podcasts as well, the startup polls, right? And Oscar does a great job of bringing in people like the head of Airbnb, China, who, who’ve also, I think done a pretty good job in terms of market entry, you know, in there. Um, but  to, to your point, like some quick tips. Um, you know, China is a relationship driven culture,

[00:47:00] right? This concept of Guangxi, uh, we’re guanxi means to me is, is not as much as who, you know, um, it’s who knows you and for what. Um, and so, you know, I, uh, worked hard to become like known as like a, like the search guy, you know, in China and, you know, and people, you know, would come to me, you know, if they had questions on, you know, and how to leverage the search engines in China. Um, and I tried to be as helpful as possible with that. Um, but Guangxi also means if somebody introduces you, if that relationship or if that introduction is somebody that they don’t care terribly much about. Um, then you’re at a tremendous risk, um, because if that person were to do something terrible to you, the person who introduced you wouldn’t really care, right? Because that person’s not that important to them. Now, if that person, uh, is who they introduced to you, right? It’s a person B.

[00:47:57] um, I get introduced by person a to person B,

[00:48:00] who is also Chinese. If person a is extremely important to person B. He’s very unlikely to screw me. Person C yeah. Right. Because he doesn’t want to destroy his relationship with person a. If he knows that person, Hey, is very close to me and I’m person C, person B is not going to screw me. But if person B is not very close to person a, you know, it’s the whole, you know, it’s the whole frog. With the scorpion on its back. You’re jumping across the river, you’re going to get stung. Right. So Guangxi I think is very important to differentiate between just having somebody introduce you. It’s, it’s how important those relationships are and how important you are to the person who’s making the introduction. If you’re really close, then you’re in a good spot. That’s great. Yeah. Well, of course these programs totally helped that too. Like I’ve been here. Let’s watch some of the talks and just other startups, even helping others and other mentors. Making introductions definitely also helps a lot

[00:49:00] for them. Yeah. Right. And both in both the, you know, chat accelerator and mocks were very much mentored, driven programs. Um, I’m actively, as I, as I told you, I’m actively traveling now throughout Southeast Asia, trying to grow our mentor network. Um, as a, one of the ways to help our startups, you know, with growth, even though I’m like a marketing guy by nature, and I can certainly help some of these teams, like improve the way they think about data-driven, you know, growth. Um, one of the things that’s so important, and you and I both know this from being in China, is the local context. You know, it’s, it’s like you need to know people who are on the ground in the dirt. Right. You know, to, to, you know, it’s not enough to know how to run a search campaign, right? Or how to run like a social media campaign. You have to understand what is the local context and local dynamics and really to get the most value it, you need to have people who are on the ground there, who can tell you what it looks like from the inside out. Okay. Makes sense. And what, I guess the last thing, links are

[00:50:00] ways people can find, I guess it’s mobile only mobile only X DICOM, right? That’s our website. Um, you know, we’ve got, uh, we’re up on Twitter, we’re up on LinkedIn, we’re up on Facebook. Um, if you want to find me, you can find me at, uh, net China on Twitter. I’m not super active. I don’t do a lot of posting there, but I, I do read my DMS, so UCM me, I will find you there. Awesome. Thanks so much. Glad we made this happen. Thank you so much, Mike. It was very great to be here. As I prepare to go to the amazing mainland China, I am preparing for my VPN solutions. We have VPN guide@globalfromasia.com slash VPN or we have different sponsors and supporters of the glow from major show. And it’s also not just sponsors. It’s also a very resourceful, we have a how to use the guys are different VPNs and we try to keep it as updated as possible. If you’re are needing of a

[00:51:00] VPN or solution for using the internet and places that restrict the internet, go over major lakes, the open internet, and we recommend you invest in this. Www.globalfromasia.com/v PN.

[00:51:17] N. thank you. Thank you. T R actually, I did get to catch up with him in Bangkok. He is all over Asia. I guess I’m all over Asia too, and I had to catch him up on mum returned to China. He’s like, what? He just left and uh. But, uh, yeah, TR is really, really great to have you. Thanks also for having me as a mentor at the  accelerator in Taipei, Taiwan. It’s a great place. Got a little chilly when I was there. It’s getting cold. You know, I’m getting spoiled here in Thailand for now, but hobby freezing cold. I will be freezing cold very soon in North China. So I know Frederick was asking, you know, regular listener, Chinaimportal.com also a guest on the show and

[00:52:00] supports it so much with what we do here. And a lot of others like Mike, you’re going back to China. And then some people think we want to shin gen. Some people would think Manila. It’s, it’s really confusing. I just put stuff out there, you know, I do have my personal Facebook. Did. She can stalk me on, and I don’t know, people like it. Some people say I’m too weak, you know? Some people reply to my newsletter saying, Oh, Mike, grow a pair. You know? But I like to just be totally open. And when I got back from Taiwan after recording this interview, my wife picks me up in an airport with the kids and gives me my welcome back kiss and talk and says. Uh, there’s some something I got to tell you. I’m like, go, yay. So she says, uh, her. Mom has, uh, been in the hospital for five days and nobody in her family wanted to tell her until she got out of the hospital. Her dad, which, you know, I know a lot of you listening know, he helps out so much. When I was in Shenzhen, even in Thai, Thai land,

[00:53:00] all these different places and he says, uh, he was back cause he’s having heart problems. He had heart surgery and my wife’s grandmother died last month in November. So I dunno what’s going on. Her aunt’s also really not feeling well. I don’t know. I’m really nervous to even go there, man. I don’t know. It seems like everybody’s getting sick, but she says she’s, you know, got to spend time with the family. You know, they don’t know what’s, uh, you know, don’t want to get too morbid, but, you know, don’t know how long her parents or her family will be around. I mean, that’s a scary thing in my life. That’s the hard thing about being away from your homeless. Especially in a cross border, and it’s making me think, my dad gave a hundred gallons of blood in the last 45 or 50 years. You know, that, or maybe even more than that. Um, that’s not our discussion, but you know, I don’t know. It’s also my family, you know, family’s sick or not feeling well. So. We made the hard decision to decide to go back to China, to her hometown. It’s not

[00:54:00] Shenzhen. I know some of you know about China. Somebody don’t know about China, but this isn’t Shenyang. She’s a Dongbei girl. She’s a Northeastern, which is up past Beijing, up kind of almost near Korea. Give you a little bit idea, you know, kind of like, I don’t know about its relevance to Japan, but pretty far up North where it snows and it’s freezing cold, so I will be going there. We’re packing up box and stuff up, but we are not like leaving Thailand. The idea, the plan, the discussion is we’re switching schools too. Uh, we found some other schools, you know, and they were actually, it was hard to move this school too. So man, it’s rough. You know, I had some comments on my personal blog and Mike’s blog.com, like, Oh, Mike, you know, doesn’t this make you want to go back to America? Whereas easier and more stable and less crazy? I’m like, I guess, but if my wife’s parents got sick and she’s in America, she probably would have flown back to China. What would I’ve done left. I guess I take care of the kids in America or,

[00:55:00] you know, I think it’s maybe just the life I live. I was also talking to tr the guest today, and you know, he’s, he has a Chinese wife and he’s traveling. He has kids in the U S and in China, and, and it’s all, it’s just a part of our life. So I don’t know. I don’t think will ever be easy for me. I think I’m still that blog comment, but. You know, we, um, didn’t extend the school. We only did half years. So luckily we didn’t pay for the next semester in Thailand and we’re gonna start the money’s gonna go down into, uh, the school, a new school for August 2020. So the big question is where do I go? The kids and the wife are going to go up to. Live with the parent. It’s up in the Northeast of China and freezing cold. Like I’m talking like, you know, knee deep snow, freezing cold, you know, um, Cindy Juju, you know, uh, she says, Oh, go to Harbin and the ice festival. I’ve never been, maybe I’ll go there, but

[00:56:00] I don’t know. I don’t know if I can really stay up in the deep Northeast of China and try to run my online business and run my business, you know, I guess I can spend, but the hard part is, what about my kids? You know, they’re five and three and they’re gonna be fully submerged back into China. But the wife also wanted to have more time to learn Chinese for the kids. They don’t know written Chinese at all. They can speak. And her English is so much better. I know some of the people watching my videos, uh, my kids are like, wow, their English is much better. So yeah, it’s true. Their English is much better, so it’s already gotten better. Um, I guess it’s not going to go away. They’re gone for six months in China, in China, in a fully, I guess there’ll be a Chinese school. We’re still looking at schools. There’s supposedly like kindergartens walking distance from my wife’s family’s house. The cool thing is, a funny thing is they have like four or five condos and it’s

[00:57:00] one big, you know, garden complex. You know, in China they have these huge gated communities. So they, the aunts and the uncles and the grandma, and they’re all like walking to each other’s houses and different buildings and this huge, like complex multiple building complex. I think people in China, no, I think in the US it’s like that. I can’t remember. But, so there’s space, there’s rooms, you know, there’ll be staying with the aunts and grandparents. Um, but I guess I’m going to, my plan is go down to Manila for half a year. You know, I’m a partner in Alpha Rock. I’ve been helping out with the podcast. Definitely check out the Alpha Rock podcast. I’ve been hosting that weekly on Fridays, more e-commerce investor mindsets, thinking if you want to check that one out. And you know, and they’re of course happy to have me down there hanging out and spending more face time. So I think that’s the plan is Manila plus of course. Alvin editing this today in Cebu. We’re gonna. I’m going to spend time meeting up the team that helps make this show and a Global

[00:58:00] From Asian Shadstone team and all the content we do here. So it will be a good time to get to be in the Philippines. It’s always more fun in the Philippines. There’s nobody to say, but it’s temporary, you know, I guess January until the summer, and uh, but then my kids do, I just not see him for six months. It’s not that close. We’re talking like, you know, malt. I don’t think there’s any direct, there’s no direct flights from my brief research of airlines from Shenyang to Manila. So there’s some Guangzhou or Kunming or Shanghai layovers overnight, you know, crazy shifts of flights. So I don’t know, I just got to decide how often to go back. But it seems like the rough plan is December 20th it’s funny, actually, a little, another story. This is the blah, blah, blah. You can end, if you don’t want to hear me, blah, blah, blah. Right. You got the interview, you got the meat of the

[00:59:00] show, so if you want to hear the little personal stuff, but my wife wanted to go back to China earlier, but there’s a Christmas party or a holiday party, wasn’t politically correct, and she’s like Tell me about the book flights. I’m like, what about the Christmas parties? She’s like, that doesn’t matter. She doesn’t like it and it’s got a page to go. And I was like, well, I don’t, I don’t know if I really want to go either, sorry, Miles or Maggie. But as I got to ask the kids, you know, and they’re getting old enough, they know what’s up. So they were actually really excited to go back to China and we’ve been telling them about it and they’ve been missing China because they keep seeing like grandma, grandpa coming in and out, auntie Wendy’s sister coming in and out from China and . So they’re really excited, but they are also, I’m not sure about the Christmas party. So we asked them and they’re like, no, must. I, my limited Chinese was a cause. They talk in Chinese to mom, my wife, no. Like, no. Must must go

[01:00:00] to Christmas party, which is on December 19th in Chiang Mai, Thailand. So when Wendy’s like, okay, okay, so we fly out the next day, December 20th because we boxed all this stuff up. Oh man. It’s been an emotional, she’s like giving stuff away, even though we’re just going to come back in August. She’s like, you got to most often, you don’t use this. And I’m like, Oh,

[01:00:23] TR and I are having a fun chat about that. Last night at dinner, Bangkok. But yeah, I mean. Basically we’re boxing stuff up. We got somebody to take over this, a house in Chiang Mai and other, my wife’s using her Chinese network of WeChat groups to rent it out and we’re going to come back in about eight months or so as also kind of good timing. We skipped this burning season. It’s really not recommended to be in Chiang Mai in a burning season unless they somehow change the policies or the laws, but it seems like the farmers just get away with burning crops and burning mushrooms or burning

[01:01:00] trees. It’s just not recommended to be in Chiang Mai from like March and April, maybe even some of end of February. It’s like horrible there. So we kinda got out of that anyway. So it seems like it kind of worked out. It’s just I got to decide I could stay in China with them and  do that. I mean, that’s one of the beautiful things about working online. I kind of can work almost anywhere, of course, but the internet just doesn’t freaking work in China. I know under is of course the VPNs and stuff, and gold razor has a top blog posts above EPMS. I’ll, I’ll link it on today’s show notes. If you want some tips. We have a pretty UpToDate VPN guide. Maybe I should, uh, talk about that later in the future. But man, it still is not reliable. It’s not fast. I mean, I’m spoiled now. Chiang Mai. Internet is fast and we can get these shows online and upload them to the Dropbox and other online sharing tools. Work with my amazing team online, but I don’t know if I can do that in, in, in, in a deep North East

[01:02:00] China in a snow. And, uh, don’t think so. So anyway, that’s kind of what I’m losing a little bit of sleep on, honestly, is do I part ways with my wife and kids for six months or not? Or I guess it can be like I can go back after three months and then another three months, meet them in Chiang Mai in the summer. Anyway. It’s the life of what I guess what I signed up for right. And probably a lot of listeners, you know, I think you guys deal with this cross border business, cross border relationships, marriages, Child’s personalities. It’s insane, but all right, that’s it for the blah, blah, blah, limit even a little bit 11 minutes. Anyways, you can always skip that as well. I don’t mind. Well we at the end, thanks TR for sharing and everybody. Take care. Bye bye. To get more info about running an international business, please visit our website at www.globalfromasia.com that’s

[01:03:00] www.globalfromasia.com also, be sure to subscribe to our iTunes feed. Thanks for tuning in.