Author: Blancer

Here are some of yesterday’s Gadgets posts:

iPhone 4S Battery Life Bugs Got You Down? Try This

Jawbone’s Fitness-Friendly Up Wristband Appears In Online Stores

Amtrak Adds WiFi To 12 New East Coast Routes, California’s Up Next

UPcload Uses Your Webcam To Help You Order Clothes That Actually Fit

Google TV Update Rolls Out Today, Already Hitting Select Sony Internet TV Devices

The latest session at TechCrunch Disrupt was a fireside chat between Sarah Lacy and accomplished entrepreneur Fritz Demopoulos — an expat who arrived in China in the late 90s while he was working at News Corp and went on to start (and sell) two very successful companies.

The conversation, which you’ll find a recording of above, focused largely on the issues facing Western companies as they try to make their way into China.

The issue, Demopoulos says, is that companies can’t simply look at China as an important market. CEOs and other executives have to be looking at China as a commitment, both from an organizational and financial perspective. Many companies, he says, scoff at the idea of putting several years or more into building a sustainable presence in China (in part, in some cases, because they’re public). But they need to be willing to do this.

Asked about the lack of acquisitions in China, Demopoulos said he’s hearing that more bankers and lawyers are actually working on M&A style transactions, so it looks like they’re picking up. He added that the shortage of M&A historically may step from a Romance of the Three Kingdoms scenario, where “everyone hates each other”.

Finally, the talk turned to what it takes to start a successful company in China. There’s a widely held perception that you need to ‘know someone’ with connections to the Chinese government to make it there, which Demopoulos addressed. To succeed, he says, you need to do one of four things:

• The first, is to be a broker or middle-man
• The second is to participate in the china information industry, or PR
• The third is to take advantage of government related opportunities
• And finally, the fourth is the find new markets or create great products

As for the government connections? Demopoulos didn’t dismiss that entirely (there are some times when they can help), but he said that when you think about it, there are probably tens of thousands of people with various connections. In some ways, it’s sort of a buyer’s market for those who need them.

Ecommerce in China is ready to take off and, more important, it’s ready to reach great heights on its own terms. Lu Dong of La Mui, Haifeng Ye of Mbaobao, and Fangfang Wu of Greenbox are three ecommerce pioneers who are, as we speak, redefining online sales in China.

“China is ready for ecommerce,” said Lu Dong. “People are moving to buying almost anything online.”

Haifeng Ye agreed. “We have a greater opportunity here in the Chinese market to make something new. In america the ecommerce market is quite established,” he said. “We can use ecommerce to build a new retail format.” He calls online sales a huge opportunity.

The three agreed that the biggest fish in the China ecommerce sea was Taobao and the importance of Taobao as a sales platform in China cannot be ignored. The company helps with settlement, logistics, and service and all three agreed that Taobao is “great.”

These entrepreneurs see things improving over the next few years and noted that ad rates have risen 30-50% while outside investment is down slightly but not enough to make these panelists worry.

Lu Dong said it best: “It’s important to raise money but it’s more important to make money.”

At this point, it’s no secret: Gaopeng (Groupon’s nascent effort in China) is a train wreck. By September of this year, the seven-month old endeavor had already accumulated $46.4 million in net losses with just $2.1 million in revenue. Meanwhile, a number of competitors in the region are predicting profitability within months.

In today’s “Attack Of The Clones” panel at Disrupt Beijing, a few of Groupon’s fiercest Chinese competitors took the opportunity to, well, attack. While obviously a bit subjective, their words do provide some insight on how a company so massive in the US could tank so dramatically on the other side of the world.

Panel guests Yinan Du (CEO of 24Quan) and Xing Wang (CEO of Meituan) agreed on at least two points: Groupon rushed their entry into China, and failed to embrace the culture (or hire people who could). According to Yinan Du, “Groupon didn’t have a chance from the beginning”.

“For any startup to be successful, there has to be a magic team behind it. They hired magic, but no one who understands both worlds. You have to be bi-cultural, you have to have someone who really understands how things work in America and how it differs in China.” Amongst the noted differences: margins. While Groupon happily pulls somewhere around 40% margins on deals in the US, no competitor in China is seeing anything above 14%.

Both panelists also harped on Groupon for their partnership with Tencent, calling it shortsighted and clearly not properly thought out. “They were focusing on PR rather than the business itself.”

Alas, Groupon was unable to send a representative as they’ve recently entered their quiet period in preparation for their impending IPO. Had they been on stage, however, there may not have been much they could have said to dampen the onslaught.

Click to view slideshow.

Memo to Chinese startups: You made for a late night of deliberations. We typically pick five finalists. There were a few companies that were clear picks, captivating everyone– from the judges to the staff to people we talked to in the hallways. Then there was another group that each had passionate advocates on staff, making for some tough decisions.

Ultimately, the staff got down to six we liked and couldn’t agree on which one to eliminate. So in the spirit of rule breaking, we decided to pick six finalists. Here they are in alphabetical order:

Anquanbao
Anquanbao’s presentation

8 Securities
8 Securities’ presentation

Moglue
Moglue’s presentation

OrderWithMe
OrderWithMe’s presentation

TouchPal Contacts
TouchPal’s presentation

UnitedStyles
UnitedStyles’ presentation

These companies will duke it out in front of our finalist judges just before lunch. You won’t want to miss the drama!

To kick off Day Two of TechCrunch Disrupt Beijing, our own Sarah Lacy interviewed Lei Jun — one of the most successful entrepreneurs in China, whose resume includes cofounding Joyo.com (sold to Amazon in 2004), sitting on the board of Kingsoft, and chairing the board of massively popular mobile web browser UCWeb (he’s also made numerous investments in successful Chinese startups).

Most recently, Jun is the founder of Xiaomi Tech, a startup with a very ambitious goal: it wants to take on the likes of Apple in the mobile phone industry, by producing a high quality phone that’s sold at prices significantly below the competition. You’ll find a video of the interview above, and here are some of the highlights:

Asked about the fact that his new company includes many former employees of tech giants, Jun recounted a joke — he said that if he could merge Microsoft, Google, and Motorola, he’d be able to take on Apple. So he went after employees from each of them as he builds a new mobile phone company.

Lacy then asked about the difficulty involved with launching a new phone, which isn’t something many (if any) startups in the US would attempt. Jun pointed out that the Chinese mobile phone market is more open that the US market — unlike the United States, where the phone you use is largely dictated by the carriers, in the Chinese market the phone manufacturer doesn’t need to maintain good relationships with carriers, as consumers can buy and use what they want.

Jun also discussed the long-term strategy for Xiaomi: they’re going to sell their hardware at around cost, then make money through the software, which gets updated every week. The phone sells for 1999 RMB, which is not cheap, but is less expensive than competitors — it’s around $240 in the US. The company has faced unforseen challenges in managing the supply chain (recent floods impacted some suppliers), but Jun says he’s confident they’ll push through them.

Asked whether Jun thought Chinese consumers would favor his phone over, say, Apple, Jun said that he thinks that there will be some sway, but that it won’t be a crucial factor. He points out that half of the OS’s users are international.

Asked about his success as an investor, Jun outlined his strategy. Five years ago, he identified three key areas to invest in: mobile internet, ecommerce, and community/social networks. Those twenty or so investments have proven to do quite well: Jun says that the companies now have over $1 billion cash combined.

Finally, to conclude the interview, Lacy asked Jun about his key advice to entrepreneurs. His answer?

“Do what you want to do. Do what you like to do.”

Instagram co-founder Kevin Systrom took the stage today at TechCrunch Disrupt Beijing to talk about the photosharing startup’s international efforts and how it plans to deal with the onslaught of clones, including over ten Chinese copycats.

During the talk Systrom revealed that the startup has now hit the 12 million user milestone, with 100K weekly downloads coming just from China, impressively. The app sees around one download per second worldwide, with that rate increasing on the weekends. “The amount of interest people have [in Asia] is huge,” Systrom said, “Japan is our second largest market.”

It seems like the international appeal of Instagram wasn’t that unexpected; The app was translated into 10 different languages four weeks after its launch, with two of those languages being simplified versions of Chinese.

Systrom also confirmed that the company was in contact with Chinese companies like Weibo, in order to better tailor the social app to the uniqueness of a market that has little access to Twitter and Facebook.

Again, these user engagement numbers are made even more poignant by the fact that Instagram still only available on iOS, with a promised Android version still in the works.

I’ve been able to finalize the TechCrunch Shenzhen and Hong Kong meet-ups and thought I’d post here for folks who RSVPed and didn’t get an email response.

The Hong Kong Event (Facebook Link) will be held at 7pm on November 2 at Pier 7 Cafe in Central Hong Kong. I may be slightly late – I’m landing at 6:30 and will take the train straight there, but I look forward to seeing you all.

Thanks to Michael Tanenbaum for setting this up and thanks to our first sponsor, SecondMarket, for supplying some of the booze.
We’ve confirmed the spot for the TC Meet-Up in Hong Kong next week.

The Shenzhen Event will be held on Friday, November 4 at 7pm at Le Bistro. Thanks to Michael Michelini for setting things up and I look forward to seeing you there.

You can contact me at weibo.com/johnbiggs or twitter.com/johnbiggs OR text me at +16462515666. My week will be fairly packed in both cities but I’ll be around on Thursday during the day in Hong Kong (until I head over the border) and Saturday morning (until I head back to Hong Kong.) If you have a start-up or product you wanted to discuss, please prep a card with some information and a website with images etc. and pass it to me during the meet-ups. I can’t carry much paper.

In case you haven’t read through the 50 or so China posts on the site right now, the last day of our first international Disrupt conference will be starting at 9 am Beijing time/6 pm PST today. If you need even more reason to watch, catch Sarah and I above, talking about who we’re most excited about in today’s lineup.

And for some reason you can’t make it to China this morning/afternoon, you can find the livestream here.

What’s most amazing about TechCrunch Disrupt Beijing is that our Startup Battlefield format has proved applicable internationally; There’s something universal about giving your all in a pitch to people with money I guess. After watching the seventeen companies take the stage yesterday (and blogging all day), TechCrunch’s John Biggs, Greg Kumparak and I went backstage, exhausted and inspired, to discuss our favorites and who we thought had the best chance of winning.

Because startups are serious business, the three of us tried our best to be professional. Unfortunately (or fortunately) a maintenance woman accidentally walking through our set about one minute in put the kibosh on that plan. The resulting hilarity was so good we couldn’t help but post it exactly how it happened.

This is how the sausage is made folks.

We are kicking off the last day of TechCrunch Disrupt Beijing 2011 at 6pm PST. Thanks to Ustream, we’ve embedded the livestream of the event here.

Be sure to tune in and don’t forget to follow along by searching for the #disruptbj hashtag on Twitter!

The agenda for today is below.

Tuesday, November 1st

9:00am – 9:10am
Opening Remarks by TechCrunch

9:10am – 9:40am
Fireside chat with Lei Jun (Angel Investor, Co-founder of Xiaomi), with Sarah Lacy

9:40am – 9:50am
Xiaomi Demo

9:50am – 10:15am
Founder Stories with Kevin Systrom (Instagram), with Gang Lu (Editor of TechNode.com)

10:15am – 10:40am
Attack of the Clones: How Some of the Largest Group Buying Companies are Killing Groupon in China: Yinan Du (24quan), and Xing Wang (Meituan), with Bill Bishop

10:40am – 11:00am
BREAK

11:00am – 11:30am
Ecommerce Panel: Ecommerce Finally Takes Off In China, Lu Dong (La Miu), Ye Haifeng (Mbaobao), Fangfang Wu (Greenbox), with Bill Bishop (Digicha)

11:30am – 12:00pm
Why do Westerners Always Fail in China? With Fritz Demopolous (Qunar.com) and Sarah Lacy

Startup Battlefield with Richard Robinson

12:00pm – 1:15pm
Final Session

Judges:
Peter Fang (Innovation Works)
Steve Ji (Sequoia Capital)
Hurst Lin (DCM)
Hugo Shong (Accel-IDG)
Greg Tseng (Tagged)

1:15pm – 2:30pm
LUNCH

1:45pm – 2:30pm
Lunch-time Startup Marketing Roundtable; experts provide tips for best marketing practices
Hosted by Ogilvy & Mather

2:30pm – 3:00pm
Building the Anti-Zynga: Founder Stories with Phil Libin (Evernote), with Sarah Lacy

3:00pm – 3:30pm
Is the IPO Party Over? The Future of Returns In China: Steve Ji (Sequoia Capital), Rocky Lee (Cadwalader), Hugo Shong (Accel – IDG), Hans Tung (Qiming Ventures), with Sarah Lacy

3:30pm – 3:45pm
BREAK

3:45pm – 4:15pm
Founder Stories with David Li (YY.com) and John Biggs

4:15pm – 4:45pm
ShoeDazzle: Where Chinese Manufacturing Meets Kim Kardashian: Brian Lee (ShoeDazzle), with Sarah Lacy

4:45pm – 5:15pm
Internet Memes and How Everyone is Ruining Content with Ben Huh (Cheezburger)

5:15pm – 5:45pm
Closing Awards Ceremony