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Speaker 1: Back in two thousand four, a young guy called Colin

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Speaker 1: Huang joined Google as a computer programmer. His timing couldn't

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Speaker 1: have been better. He arrived at Google just a few

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Speaker 1: months before it went public, which meant Colin was given

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Speaker 1: stock in the company just as Google's value was about

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Speaker 1: to surge. Three years later, colin stock was worth several

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Speaker 1: million dollars. This young man from a Chinese family of

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Speaker 1: very modest means was now a millionaire many times over.

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Speaker 1: The thing is, if he had just stayed at Google,

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Speaker 1: Colin would have been able to cash in on even

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Speaker 1: more Google stock and gotten a lot richer. How does

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Speaker 1: it feeled to leave that money on the day. It's

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Speaker 1: not a very big decision for me. Actually, well it

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Speaker 1: sounds like a big decision. But at least at that time,

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Speaker 1: it was fairly easy for me. Not a lot of

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Speaker 1: people would choose to walk away from so much money.

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Speaker 1: I'm pretty sure I wouldn't. But Colin was confident that

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Speaker 1: he was making the right choice because I think I

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Speaker 1: will I will be rich, I think I will be well.

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Speaker 1: I was fairly confident that I will be successful, So

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Speaker 1: I think, um, the time is more priceless to me.

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Speaker 1: Today we can tell you that Colin turned out to

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Speaker 1: be right. He went on to create not just one,

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Speaker 1: but four companies in China as the country's startup scene

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Speaker 1: was taking off. He's become rich as a result, and

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Speaker 1: he's just getting started. Hi am Akito, and I'm Peter

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Speaker 1: Ahlstrong and I'm David Rambling. And this week on Decrypted,

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Speaker 1: We're going to hear from Colin about his journey from

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Speaker 1: the vegetable fields of rural Hanjo to the pinnacle of

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Speaker 1: success in China's booming startup scene. China still has a

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Speaker 1: reputation as a copycat. I Do is China's Google, Ali

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Speaker 1: Baba is China's Amazon. Even the smartphone Mega show Me

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Speaker 1: is mostly known as the local answer to Apple, but

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Speaker 1: founders like Colin are shattering those old ideas. So far

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Speaker 1: this year, China has created just as many billion dollar

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Speaker 1: startups as the US. Will explore the role that Colin

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Speaker 1: Huong and entrepreneurs like him could play in the next

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Speaker 1: phase of the global tech industry. And with these new

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Speaker 1: Chinese companies aspiring to global success, should Silicon Valley be

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Speaker 1: worried about these upstart rivals? Stay with us? Okay set

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Speaker 1: the scene for us here well, it was a beautiful

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Speaker 1: sunny April day, perhaps the best time to visit. Shanghai

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Speaker 1: is a population to more than twenty four million people,

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Speaker 1: by some measures, the largest city in the world. It's

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Speaker 1: a financial center and a transportation hub. Sitting at the

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Speaker 1: mouth of the Yankee River. For centuries, it's been a

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Speaker 1: critical port for trade between China and the rest of

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Speaker 1: the world. Mm hmm. You know, like most Chinese cities

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Speaker 1: these days, Shanghai is home to quite a few up

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Speaker 1: and coming startups. And even though we still use this

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Speaker 1: word start up to describe these companies, in reality, some

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Speaker 1: of these are massive businesses, right, that's right. There's some

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Speaker 1: enormous private companies in China. In fact, the seven most

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Speaker 1: valuable startups according to the research firm CB Insights, four

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Speaker 1: of those top seven are Chinese. Yeah, that's right. And

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Speaker 1: you know some of them are gradually becoming household names

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Speaker 1: outside of China. You know, Ali Babu is pretty well

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Speaker 1: known um as the startup that succeeded, and you've also

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Speaker 1: got the likes of Shami and you know, other companies

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Speaker 1: like that, and you're seeing real innovations come out of

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Speaker 1: China too. In particular, ten cent, which is probably a

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Speaker 1: bit less well known outside of China than Ali Baba is.

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Speaker 1: They've been able to pioneer their messaging service we Chat

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Speaker 1: in a way that is beyond some of the things

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Speaker 1: that we've seen in the West. It has payments included

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Speaker 1: in it and all sorts of apps wrapped into the service.

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Speaker 1: And on this particular trip, you guys went out to

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Speaker 1: Shanghai to go visit Collin's latest company called pinn Dwo Dwell,

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Speaker 1: that's right, it's PDD for short, as he likes to

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Speaker 1: call it. This company is two years old and it's

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Speaker 1: grown so fast that it's now the largest private e

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Speaker 1: commerce company in China based on revenue volume. And David,

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Speaker 1: what was it like inside their offices, Well, it's an

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Speaker 1: interesting mix. Actually, you've got a lot of waterways to

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Speaker 1: boost the fung sway of the place, but it's also

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Speaker 1: head dick. You walk down corridor is filled with desks

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Speaker 1: and on them up engineers typing away or sleeping on.

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Speaker 1: Like most of the countries, engineers in China are not

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Speaker 1: only demitted, but actually encouraged to take naps whenever they tie.

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Speaker 1: Having a sum of cots inside rooms. Wow, and PDD

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Speaker 1: must have a pretty impressive valuation at this point. Well,

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Speaker 1: it's still a private company, so this is a valuation

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Speaker 1: on paper. But investors valued the company at about one

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Speaker 1: point five billion dollars after a recent fundraising round. That's

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Speaker 1: more than ten million R and B. Yeah, and Colin

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Speaker 1: says that gross merchandise volume, or g m V as

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Speaker 1: it's called in the e commerce industry, has now reached

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Speaker 1: about four billion rooming b per month. Rooming b is

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Speaker 1: the Chinese currency. We want it to be something like

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Speaker 1: an e commerce visual Facebook and Peter, what does he

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Speaker 1: mean by that? PDD is sort of like a mash

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Speaker 1: up between a social network and an online shopping app.

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Speaker 1: A few companies have tried this before, mostly without very

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Speaker 1: much success, And now pd D is really unlike any

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Speaker 1: other company out there. Compared editors are either just doing

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Speaker 1: e commerce, so for Ali Baba, for Taba, or for Amazon.

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Speaker 1: There they're just like a search engine, right. The search

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Speaker 1: engine serve as a scenario where I user has a

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Speaker 1: specific purpose or they're just in social networking. When you

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Speaker 1: go to Facebook, a lot of times you're just brows

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Speaker 1: You have nothing to do, You're just trying to waste

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Speaker 1: your time. But Colin didn't get here overnight, and his

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Speaker 1: journey to this point is so unlikely, it's pretty incredible

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Speaker 1: that it happened at all. So I was born in Hanzo,

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Speaker 1: but not in the in the center of the city.

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Speaker 1: I was born on the moor of the city. And

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Speaker 1: my parents are very normal people. They are both of

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Speaker 1: the man factory workers. None of them finished junior high.

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Speaker 1: I was pretty good at the math and I got

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Speaker 1: a meadow from one of the Olympic competitions in mathematics.

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Speaker 1: So I got a entrance to exam ticket to apply

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Speaker 1: to the high school I eventually went to, which is

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Speaker 1: Contro Foreign Language School, Hanto Foreign Language School. It's one

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Speaker 1: of the most selective high schools in the whole province.

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Speaker 1: At first, Colin didn't even want to go because the

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Speaker 1: name of the school is says foreign language school, right.

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Speaker 1: Because I was very u into mathematics and the physics

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Speaker 1: and all those and so I was talent. My teachers say,

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Speaker 1: and then my parents, I don't want to go to

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Speaker 1: that school because I don't want to study English. Colin

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Speaker 1: was only twelve at the time, and the president of

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Speaker 1: the school persuaded him to go, so he went and

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Speaker 1: it changed life, could open my eyes, right, a very

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Speaker 1: different kind of um, different kind of families. And for instance,

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Speaker 1: at that time, as I remember, the daughter of the

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Speaker 1: mayor of the city at that time was in my class. Um,

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Speaker 1: well for kids like Milly, but the mayor of city

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Speaker 1: is a very big, big boss. Right. Changing schools was

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Speaker 1: one of the early experiences that helped Colin grow more

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Speaker 1: confident and evolved from the country kid to feeling more

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Speaker 1: comfortable with the best, the brightest, and more importantly, the

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Speaker 1: most powerful people in China. Colin went on to Zichang

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Speaker 1: University and studied computer science. Then he made another move

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Speaker 1: that changed his life. He applied to graduate school in

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Speaker 1: the United States. And what were your first impressions when

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Speaker 1: you went to you ask Wisconsin? You, Um, it was

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Speaker 1: very cold. It's really cold, um, and the food is

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Speaker 1: not so delicious. Other than that, it's pretty good. So

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Speaker 1: now Colin is in his early twenties and he's at

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Speaker 1: the University Wisconsin and Madison. At that time, Wisconsin ran

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Speaker 1: one of the most well recognized computer science programs in

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Speaker 1: the country. It was a prestigious place for Colin to

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Speaker 1: study and it had the potential to open up a

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Speaker 1: lot of doors for him. But Colin's biggest issue, at

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Speaker 1: least at the beginning, was homesickness. Um, but the food

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Speaker 1: was so you know, it's a big problem for me.

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Speaker 1: I just cannot I missed the Chinese food at that moment.

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Speaker 1: So I a half t a UM out of school

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Speaker 1: so that I have extra money to go to the

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Speaker 1: Chinas restaurant. Almost the average for every meal for anyone

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Speaker 1: who didn't go to college in the US at T

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Speaker 1: A short for teaching assistant. It's a way for students

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Speaker 1: to earn a little extra money. Colin did internships and

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Speaker 1: got to know perspective employers here. Turned at Microsoft in

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Speaker 1: China and then at the company's headquarters in Redmond, Washington.

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Speaker 1: He found out one important thing about the economics of

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Speaker 1: working in the two countries. I think in my last

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Speaker 1: year UM off my undergraduate UM, I went to Paging

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Speaker 1: to be a visiting student or intern of Microsoft Research Asia.

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Speaker 1: So yeah, so I did an interne there for like

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Speaker 1: three years four months in Beijing. UM. At that time

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Speaker 1: I think I got six thousand I m B a month,

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Speaker 1: which is which is already more than the salary of

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Speaker 1: my my mom um much more actually, UM. Then I

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Speaker 1: went to Universal Wisconsin, and in the first summer in US,

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Speaker 1: I went to Microsoft to Redmond, h and the salary

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Speaker 1: was six thousand of U s STRs and the same person.

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Speaker 1: You know, it's roughly seven times as much. Seven times yeah,

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Speaker 1: seven times as much. At the time, it's actually eight

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Speaker 1: times eight times as much. When he was getting ready

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Speaker 1: to grab wait, Microsoft wanted to hire him, and so

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Speaker 1: did a bunch of other top US tech companies. So

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Speaker 1: my professor wrote me, I think like several letters too,

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Speaker 1: like Oracle, Microsoft, im UM. So I got acceptance from

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Speaker 1: from both three. So at this point, most people in

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Speaker 1: colin situation would be over the moon. Choosing between three

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Speaker 1: of the world's biggest, best tech companies. That's something that

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Speaker 1: most engineers like him can only wish for. Colin did

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Speaker 1: something that was really unexpected. He actually went to Google's

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Speaker 1: website and he applied for a job. Remember at this

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Speaker 1: time Google was just to start up with a few

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Speaker 1: thousand employees. It had a promising product, and there was

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Speaker 1: a lot of buzz around the company, but it was

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Speaker 1: certainly no Microsoft. Microsoft was really famous at the time,

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Speaker 1: right and um, and it's very established and if you

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Speaker 1: want to get a green card, it's probably the best

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Speaker 1: place to go. Um And but the thing is that

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Speaker 1: after internal twice and like I spend more than half

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Speaker 1: a year at the Microsoft right both both in China

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Speaker 1: and US, I found that the company, it's a very

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Speaker 1: good company. But it's just that I was a very

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Speaker 1: too small part of that. Right, I had very little

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Speaker 1: influenced on what's going on in Microsoft. And I can

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Speaker 1: imagine who I will be like six years down the road.

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Speaker 1: Collins says he always knew he eventually wanted to start

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Speaker 1: his own company. I would have about to choose something unknown,

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Speaker 1: although it may become something worse, but it could be

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Speaker 1: better because it's something else, all right. And right there

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Speaker 1: that day collins decision in two thousand and four may

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Speaker 1: have been the first time that Colin really showed that

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Speaker 1: he was different. He didn't want security, he didn't chase

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Speaker 1: after the green card in the high salary. He went

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Speaker 1: after uncertainty. He went after risk. And it paid off. Oh,

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Speaker 1: it paid off big. In the three years Colin was

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Speaker 1: at Google, its share price went from about eighty five

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Speaker 1: bucks a shared to more than five hundred dollars. His

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Speaker 1: options were worth a fortune, so seven he was ready

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Speaker 1: to strike out on his own. It's probably worth noting

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Speaker 1: here for our listeners that China's had an uneven history

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Speaker 1: with private enterprise. The Communist Party won control of the

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Speaker 1: country after World War Two, and it socialized much of

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Speaker 1: the economy. It wasn't until the economic reforms of Dum

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Speaker 1: Shopping in the late nineies and the early nineties the

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Speaker 1: entrepreneurs were finally encouraged to start businesses. He opened the

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Speaker 1: door to a new era. The quote to get riches glorious.

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Speaker 1: So it's really only one generation after China deregulated its

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Speaker 1: economy that Colin Huong, at the age of seven, decides

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Speaker 1: he's going to leave Google in the chance to make

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Speaker 1: millions more if he stays to start his first company.

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Speaker 1: We asked him why because of my father, I think um,

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Speaker 1: although he's a he only probably spent two to three

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Speaker 1: years in the primary school, but and he himself is

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Speaker 1: not a successful business man, right, but he always wanted

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Speaker 1: me to be a successful business man. Colin sold his

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Speaker 1: first company after about three years. He went on to

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Speaker 1: start two more companies with his partners, and those ventures

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Speaker 1: did so well that he had enough money to stop working.

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Speaker 1: At the time, I was not that old yet, right,

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Speaker 1: So I was thinking what should I do? Right? Um,

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Speaker 1: should I just go back to us and do a

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Speaker 1: hedge found and um trying to be smart in the

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Speaker 1: sevendary market, or or try to do something different or

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Speaker 1: to wrong business which is more inferential or a different

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Speaker 1: business model. The idea he eventually came up with is

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Speaker 1: a combination of social networking and online commerce. A few

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Speaker 1: companies have tried social e commerce, including Facebook and Twitter,

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Speaker 1: but none of those experiments have really worked out very well. Well.

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Speaker 1: I didn't know exactly how to do a social e commerce,

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Speaker 1: but I just have a very strong feeling that with

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Speaker 1: the booming of the social media, there got to be

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Speaker 1: a commercial model, commercial model that can monday tize there's

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Speaker 1: the social traffic. That's one kind of belief I had

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Speaker 1: that at a time, and the set I'm thinking that, Um,

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Speaker 1: I think if there is a social commerce or it

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Speaker 1: comes model, that it comes model that leverage is the

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Speaker 1: social media, then the team we had at the time

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Speaker 1: is probably the one that is most competitive in that area.

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Speaker 1: That's because Companies number two and three that Colin founded

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Speaker 1: were a back end services company for retailers wanting to

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Speaker 1: on the experience Colin had gained in both of those industries.

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Speaker 1: He reads Try Capital in May of and launched the

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Speaker 1: app a few months later. The pinj or Door app

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Speaker 1: quickly proved pretty addictive. So David, how do people use

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Speaker 1: the app? Most people use it within we Chat, which

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Speaker 1: is the ubiquitous messaging service in China. You open up

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Speaker 1: we Chat and you search for PDDs micro store and

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Speaker 1: the home screen comes up. It's got tabs like food, clothes,

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Speaker 1: and bedding. Once you pick a category, you get a

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Speaker 1: vertical list of products that you can scroll through, say

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Speaker 1: light cheese or apples in the fruit section. I'm looking

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Speaker 1: at it now and I can see a whole bunch

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Speaker 1: of weird looking tops and what looks to be some

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Speaker 1: rip off Dora the Explorer slippers. The app has the

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Speaker 1: feel of a game, colorful photos and hidden bargains. Deals

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Speaker 1: change every day, and as you scroll through a category,

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Speaker 1: the discount of prices shown below the image. For example,

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Speaker 1: you click on an image of eight mangoes with the

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Speaker 1: price tag of thirty four point eight. Then, but when

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Speaker 1: you actually go through to it, if on the price

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Speaker 1: is actually thirty nine u N If you buy it

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Speaker 1: alone to get the discount, you actually have to find

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Speaker 1: a friend to join in the purchase. But because you're

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Speaker 1: already on we Chat, it's pretty quick to instantly pitch

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Speaker 1: to others. The most successful result of there's a Design

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Speaker 1: is that, um, a lot of people are sprouting words

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Speaker 1: of PDD by themselves, right without to add a TV commercial. Oh,

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Speaker 1: that's really something hard to achieve. PDD went from gross

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Speaker 1: merchandise volume of about a hundred million reming B a

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Speaker 1: month in early six to three billion by December. The

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Speaker 1: company has now got over four billion RMB per month,

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Speaker 1: or more than half a billion dollars in gm V.

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Speaker 1: One of Colin's top priorities now is dealing with counterfeit products. China,

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Speaker 1: of course, has a long history of fake goods being

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Speaker 1: sold both online and offline, and about two hundred of

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Speaker 1: Collins seven employees at PDD are working on quality control.

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Speaker 1: These are workers dealing with customer complaints about fake and

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Speaker 1: damage goods. But then PDD has to go to its

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Speaker 1: merchants and persuade them to actually compensate customers. More difficult,

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Speaker 1: it has to convince them to stop selling these goods

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Speaker 1: all together. And what was the reaction, Like, oh, here's

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Speaker 1: what Colin told us. And they even set people to

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Speaker 1: the office just to like throughout our employees right like

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Speaker 1: in the middle night and here the offices and you

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Speaker 1: know all the building. Yeah. Um, and that's why you

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Speaker 1: have the security guys. Yes, yes, yes, even like a

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Speaker 1: slash and into the face itself some Mafar employees. So

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Speaker 1: that's that's the things already happened. Um. Not only that

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Speaker 1: they even um chase um our employees back to their homes,

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Speaker 1: like even your hamjo and like when kind of threatened

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Speaker 1: their their wife their wives and a kiss. Colin Huang

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Speaker 1: and PDD are an example of how China's technology industry

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Speaker 1: is changing. There's more venture capital money, more entrepreneurs, and

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Speaker 1: more startups that work on real innovations. Ten years ago,

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Speaker 1: when I started my first company, I think, ah, almost

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Speaker 1: all the people are focusing on commercial success. H they

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Speaker 1: don't really care. I do exactly the same thing. But

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Speaker 1: now I think a small group of China's entrepreneurs are gradually, um,

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Speaker 1: sort of care more about the things the Silicon Valley cares,

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Speaker 1: which is the novelty of your idea, right, Um, the

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Speaker 1: the creativeness and whether there's something cool or not right

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Speaker 1: people will look at you, um, whether you're doing novel things,

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Speaker 1: whether you're really contributing value to the society. Um, these

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Speaker 1: things that gradually kind of uh growing. So, Peter, that's

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Speaker 1: an amazing quote from Colin because he sounds just like

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Speaker 1: everyone else and Silicon Valley here. What's your take on

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Speaker 1: where China's tech industry is right now, where the ecosystem

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Speaker 1: is for startups? Well, just the past few years, you've

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Speaker 1: seen a real increase in the amount of venture capital

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Speaker 1: money moving into these startups. Uh, And you've seen a

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Speaker 1: lot of very big companies coming out of China. Some

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Speaker 1: of the best known are d d for example, the

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Speaker 1: ride hailing app, but there's also a whole series of

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Speaker 1: other ones that are not as well known outside of China, David.

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Speaker 1: For you, as a reporter covering the tech industry in Beijing,

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Speaker 1: it must be a pretty exciting time. No, it is.

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Speaker 1: Every single time I go out to me to start up.

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Speaker 1: It's really interesting to see the little things of what

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Speaker 1: they're doing. You know, if they're not if they're not

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Speaker 1: sleeping on couches or you know, at their own desks.

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Speaker 1: Then frankly by the Chinese standard. They're just not working

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Speaker 1: hard enough. I went to one place, which actually the

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Speaker 1: startup that does hot time job searches, and they actually

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Speaker 1: had a small room right next to the CEO's office

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Speaker 1: when they had three bunk bits for sales, stuff to sleep,

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Speaker 1: and they worked too hard into the night. Earlier on

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Speaker 1: in the show, we talked about how Colin isn't the

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Speaker 1: only serial entrepreneur out there, that there now quite a

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Speaker 1: few people in China who are on their second, third, fourth,

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Speaker 1: maybe even fifth start up, like a lot of the

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Speaker 1: famous founders here in Silicon Valley, UM, Peter and David,

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Speaker 1: Can you talk about some of the other people who

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Speaker 1: are like this in China. One of the other serial

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Speaker 1: entrepreneurs is Late June. He's been involved in a number

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Speaker 1: of startups, most recently uh show Me, the smartphone maker. Uh.

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Speaker 1: It's been giving Apple and Samsung challenges within the country.

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Speaker 1: It's been expanding outside of China, particularly in India, and

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Speaker 1: now show Me is diversifying beyond smartphones into all sorts

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Speaker 1: of other products. And you've also got ten Cents pony Ma.

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Speaker 1: I mean, his main company is listed now, but it

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Speaker 1: continues to be a factory of startups churning out new

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Speaker 1: products and new services, some of them that copy each

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Speaker 1: other every single day. With China's new push to innovate,

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Speaker 1: I asked whether this is a threat to the US

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Speaker 1: dominance of the technology industry. I want to say it's

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Speaker 1: a threat. I wouldn't say it's a complimentary. It's just

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Speaker 1: that like people are doing different things, and like we're

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Speaker 1: trying to find the areas that we can do better.

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Speaker 1: But Colin doesn't think there is an equivalent to PDD

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Speaker 1: in either Shanghai or Silicon Valley. He's told some investors

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Speaker 1: it's got the potential of drawing to become one of

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Speaker 1: the biggest e commerce giants in China. Well, if it's

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Speaker 1: as if it's only, um, hey, little dog, I shouldn't

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Speaker 1: I shouldn't want him to be an elephant. Right, If

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Speaker 1: by nature it's an elephant, then I shouldn't be satisfied

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Speaker 1: or I shouldn't kind of trying to controuse the elephant

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Speaker 1: to be a dog. Right. So if it's an all phant,

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Speaker 1: then it has to grow to be elephant to be healthy. Right.

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Speaker 1: So it's really a question of whether that e comments

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Speaker 1: a very shop Facebook, how big it is, whoa I

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Speaker 1: thought it was a mouse. Now Dan, I think it's

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Speaker 1: a dog. Now I think it probably maybe it's an elephant,

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Speaker 1: but I'm not sure. And that's it for this week's Decrypted.

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Speaker 1: Thanks for listening. We'd love to hear what you thought

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Speaker 1: of this episode. Record a voice message and send it

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Speaker 1: to us at Decrypted at Bloomberg dot net or I'm

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Speaker 1: on Twitter, it's at p Lstrom and you can reach

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Speaker 1: me at David Ranting and I'm at Akita seven. If

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Speaker 1: you haven't already, please subscribe right to our show on

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Speaker 1: Apple Podcasts or your favorite app. While you're there, please

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Speaker 1: leave us a rating and a review. It really helps

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Speaker 1: more listeners find this show. This episode was produced by

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Speaker 1: Pia gut Cary, Liz Smith, and Magnus Hendrickson. A big

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00:27:15,400 --> 00:27:17,760
Speaker 1: thanks to Robin and Jello, who edited the Prince story,

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Speaker 1: David Ramilly and I wrote about Colin Wong and PDD.

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Speaker 1: You can find it at Bloomberg dot com slash Tech.

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Speaker 1: Alec McCabe is head of Bloomberg Podcast. We'll see you

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Speaker 1: next week,