I talked to the founder, Frank Nazikian about China, what CHINICT has to offer, and the problem facing foreign companies wanting to enter China.
Frank, we met so long ago, when you started, how has CHINICT grown in the last years since the first one? What have you learned?
Since we met CHINICT has become the largest conference on China tech innovation and entrepreneurship. And I learned that you should trust your vision with patience and integrity. I love this quote from "The" Michel Angelo: "I saw the angel in the marble and carved until I set him free". This is what we have been doing every day at CHINICT: work hard to evangelize the rest of the world on the silent yet very real tech innovation & entrepreneurship revolution China is undergoing that will soon position China as the leading powerhouse in global tech innovation and entrepreneurship – as Silicon Valley is still today..
I see there’s a big roster of speakers and guests, in particular CEO of Kaixin001–he’s so hard to get! How did you convince him!? He’s the only other guy I know in tech and fashion! I cant wait to meet him.
Kaixin001 has been coming to CHINICT since their very humble beginning when Cheng Binghao was still looking for raising his series A… We have always been very supportive in showcasing the birth of a Rising Star company and I think that Rising Star companies such as Kaixin001 as well as their investors (Qiming Ventures in the case of Kaixin001) have been trusting CHINICT as the leading brand in China tech innovation and entrepreneurship for quite some years now – and that’s why they are always happy to join.
What are you bringing this year to the attendees that is so special? What’s the theme or the message you want to convey / inspire?
CHINICT is special every year as the situation and the speakers are new. The message we want to convey to everybody is that China is the new powerhouse for tech innovation and entrepreneurship and we want to entice more foreigners to come to China and start their own company. We also want Chinese tech companies to gain more confidence in their global potential and start expanding internationally – which a few are already doing with success (Huawei, Tencent…).
Exceptionally for the past year and a half, I spent most of my time in China going back to school to study intensively Chinese… Otherwise, I generally share my time between China, the US, Brazil and France.
At GMIC there was a pannel warning foreign tech companies to be very very careful when choosing to enter the Chinese market? They warned that the Chinese are ruthless and that you need to really really find a partner you can trust–and not to trust anyone! It was a tough message. What has been the key to your success and what advice do you have for the foreign companies attending the conference?
All this type of easy propaganda is crap in my opinion and that’s a shame that some embrace this consensual yet absolutely false way of thinking. If you come to China with stupid attitude and behavior, and many foreign companies do, you should not be surprised and accused the so-called "bad Chinese" for hurting or taking advantage of you. From what I have seen and done myself here in China, I think that one key element to be successful in China is to re-invent your company as a true Chinese company (and not a copy/cut from the West with Chinese translations and a few minor adaptations – which anybody could do). Instead, you should use your own "ingredients" and "recipes" and make sure you keep control of them at all times and that you still the best cook in your own kitchen! This is easier to say than to do and this is closer to an art form rather than a methodology to follow. That’s why, it makes no sense to read trendy books about how to make it in China; better would be to read History books in order to at least start creating your own opinion about the Chinese idiosyncrasy.
What do you think a foreign company can expect or define as "success" in the China market?
Being able to create long-term ties and deep roots in China, while making enough money to keep on progressing and – more importantly – while contributing to the development of a harmonious society in China. This is fundamental in a country where you don’t want to piss 1.4 billion people off.
Which speech should we definitely not miss?
All of them are going to be great – because the CHINICT format is short carefully prepared on-stage interviews so people have no time to get bored and really learned something or get outstanding inspiration – unlike many other conferences. Now, I am impatient to talk on-stage to Baidu’s #2 Haoyu Shen – who will be creating Facebook in China and Baidu chose CHINICT to share its first in-depth insights regarding this outstanding news (probably the most exciting news in the past few years regarding the China tech scene). But I am also always very curious to understand straight from their founders and leaders the stories of such incredible companies as Qunar, Qihoo, PPlive, Linkedin, Groupon or Wukong – all led by incredibly talented and already prestigious entrepreneurs.
The truth is that not one foreign tech company has been successful in China, not Google, not Ebay, not one. In fact they were run out of town and their copy counterparts, Baidu, Alibaba, etc have all thrived. How can you say that the Chinese tech industry is not ruthless? If that were so, then why do you think not one foreign tech company has been successful in China?
All the companies you mention such as Google, Ebay and many others are mainly from the US (still the mecca for tech innovation) and came to China – without re-inventing themselves as I was saying earlier. As I mentioned, they copied their US model and pasted it onto the China market adding a few translations and very minor adaptations – and hoping it will miraculously work as it did in highly US-friendly markets such as Europe – but it did not obviously. What they should have done instead would have been to re-invent themselves in China using their own know-how acquired in Western markets but applied to China in a different way. Such an approach takes much more efforts than the copy/paste approach – as it implies generally that the company’s leaders/founders do have a genuine interest in China and invest most of their time and energy to re-invent themselves as a Chinese company. Google, a late comer in China, with limited resources, has not made such efforts and yet, with over 20 % of market share in China, Google is a billion dollar company in China – and highly profitable, so we could definitely considered it a success compared to the amount of investment made. Other tech successes in China include companies such as Cisco or Nokia – very efficient in their Chinese operations but also very discrete about their Chinese success. The idealized perfect Chinese local partner that will help a Western company thrive in China is definetly a myth: as the leader of your tech venture, if you want to be successful in China you have to come to China and make it hapen by yourself with the help of different partners and employees. An alternative may also be to find the right M&A target. Indeed, acquiring or merging with an existing Chinese company, when it is done properly, can definitely help foster a Western company’s operations in China – but it also requires a lot of time and efforts from the top management of the Western headquarters. Amazon, after initial failure in China, finally acquired Joyo and seems to be on the road to success; more recently Zynga’s acquisition of XPmedia seems to put Zynga’s operations in China on the right track. Other tech companies, in particular in the gaming industry, have started highly successful operations in China – such as Ubisoft, EA, Playfish (now part of EA) – using the drastic or more cautious approach I have just described.