Speaker 1: Back in two thousand four, a young guy called Colin
Speaker 1: Huang joined Google as a computer programmer. His timing couldn't
Speaker 1: have been better. He arrived at Google just a few
Speaker 1: months before it went public, which meant Colin was given
Speaker 1: stock in the company just as Google's value was about
Speaker 1: to surge. Three years later, colin stock was worth several
Speaker 1: million dollars. This young man from a Chinese family of
Speaker 1: very modest means was now a millionaire many times over.
Speaker 1: The thing is, if he had just stayed at Google,
Speaker 1: Colin would have been able to cash in on even
Speaker 1: more Google stock and gotten a lot richer. How does
Speaker 1: it feeled to leave that money on the day. It's
Speaker 1: not a very big decision for me. Actually, well it
Speaker 1: sounds like a big decision. But at least at that time,
Speaker 1: it was fairly easy for me. Not a lot of
Speaker 1: people would choose to walk away from so much money.
Speaker 1: I'm pretty sure I wouldn't. But Colin was confident that
Speaker 1: he was making the right choice because I think I
Speaker 1: will I will be rich, I think I will be well.
Speaker 1: I was fairly confident that I will be successful, So
Speaker 1: I think, um, the time is more priceless to me.
Speaker 1: Today we can tell you that Colin turned out to
Speaker 1: be right. He went on to create not just one,
Speaker 1: but four companies in China as the country's startup scene
Speaker 1: was taking off. He's become rich as a result, and
Speaker 1: he's just getting started. Hi am Akito, and I'm Peter
Speaker 1: Ahlstrong and I'm David Rambling. And this week on Decrypted,
Speaker 1: We're going to hear from Colin about his journey from
Speaker 1: the vegetable fields of rural Hanjo to the pinnacle of
Speaker 1: success in China's booming startup scene. China still has a
Speaker 1: reputation as a copycat. I Do is China's Google, Ali
Speaker 1: Baba is China's Amazon. Even the smartphone Mega show Me
Speaker 1: is mostly known as the local answer to Apple, but
Speaker 1: founders like Colin are shattering those old ideas. So far
Speaker 1: this year, China has created just as many billion dollar
Speaker 1: startups as the US. Will explore the role that Colin
Speaker 1: Huong and entrepreneurs like him could play in the next
Speaker 1: phase of the global tech industry. And with these new
Speaker 1: Chinese companies aspiring to global success, should Silicon Valley be
Speaker 1: worried about these upstart rivals? Stay with us? Okay set
Speaker 1: the scene for us here well, it was a beautiful
Speaker 1: sunny April day, perhaps the best time to visit. Shanghai
Speaker 1: is a population to more than twenty four million people,
Speaker 1: by some measures, the largest city in the world. It's
Speaker 1: a financial center and a transportation hub. Sitting at the
Speaker 1: mouth of the Yankee River. For centuries, it's been a
Speaker 1: critical port for trade between China and the rest of
Speaker 1: the world. Mm hmm. You know, like most Chinese cities
Speaker 1: these days, Shanghai is home to quite a few up
Speaker 1: and coming startups. And even though we still use this
Speaker 1: word start up to describe these companies, in reality, some
Speaker 1: of these are massive businesses, right, that's right. There's some
Speaker 1: enormous private companies in China. In fact, the seven most
Speaker 1: valuable startups according to the research firm CB Insights, four
Speaker 1: of those top seven are Chinese. Yeah, that's right. And
Speaker 1: you know some of them are gradually becoming household names
Speaker 1: outside of China. You know, Ali Babu is pretty well
Speaker 1: known um as the startup that succeeded, and you've also
Speaker 1: got the likes of Shami and you know, other companies
Speaker 1: like that, and you're seeing real innovations come out of
Speaker 1: China too. In particular, ten cent, which is probably a
Speaker 1: bit less well known outside of China than Ali Baba is.
Speaker 1: They've been able to pioneer their messaging service we Chat
Speaker 1: in a way that is beyond some of the things
Speaker 1: that we've seen in the West. It has payments included
Speaker 1: in it and all sorts of apps wrapped into the service.
Speaker 1: And on this particular trip, you guys went out to
Speaker 1: Shanghai to go visit Collin's latest company called pinn Dwo Dwell,
Speaker 1: that's right, it's PDD for short, as he likes to
Speaker 1: call it. This company is two years old and it's
Speaker 1: grown so fast that it's now the largest private e
Speaker 1: commerce company in China based on revenue volume. And David,
Speaker 1: what was it like inside their offices, Well, it's an
Speaker 1: interesting mix. Actually, you've got a lot of waterways to
Speaker 1: boost the fung sway of the place, but it's also
Speaker 1: head dick. You walk down corridor is filled with desks
Speaker 1: and on them up engineers typing away or sleeping on.
Speaker 1: Like most of the countries, engineers in China are not
Speaker 1: only demitted, but actually encouraged to take naps whenever they tie.
Speaker 1: Having a sum of cots inside rooms. Wow, and PDD
Speaker 1: must have a pretty impressive valuation at this point. Well,
Speaker 1: it's still a private company, so this is a valuation
Speaker 1: on paper. But investors valued the company at about one
Speaker 1: point five billion dollars after a recent fundraising round. That's
Speaker 1: more than ten million R and B. Yeah, and Colin
Speaker 1: says that gross merchandise volume, or g m V as
Speaker 1: it's called in the e commerce industry, has now reached
Speaker 1: about four billion rooming b per month. Rooming b is
Speaker 1: the Chinese currency. We want it to be something like
Speaker 1: an e commerce visual Facebook and Peter, what does he
Speaker 1: mean by that? PDD is sort of like a mash
Speaker 1: up between a social network and an online shopping app.
Speaker 1: A few companies have tried this before, mostly without very
Speaker 1: much success, And now pd D is really unlike any
Speaker 1: other company out there. Compared editors are either just doing
Speaker 1: e commerce, so for Ali Baba, for Taba, or for Amazon.
Speaker 1: There they're just like a search engine, right. The search
Speaker 1: engine serve as a scenario where I user has a
Speaker 1: specific purpose or they're just in social networking. When you
Speaker 1: go to Facebook, a lot of times you're just brows
Speaker 1: You have nothing to do, You're just trying to waste
Speaker 1: your time. But Colin didn't get here overnight, and his
Speaker 1: journey to this point is so unlikely, it's pretty incredible
Speaker 1: that it happened at all. So I was born in Hanzo,
Speaker 1: but not in the in the center of the city.
Speaker 1: I was born on the moor of the city. And
Speaker 1: my parents are very normal people. They are both of
Speaker 1: the man factory workers. None of them finished junior high.
Speaker 1: I was pretty good at the math and I got
Speaker 1: a meadow from one of the Olympic competitions in mathematics.
Speaker 1: So I got a entrance to exam ticket to apply
Speaker 1: to the high school I eventually went to, which is
Speaker 1: Contro Foreign Language School, Hanto Foreign Language School. It's one
Speaker 1: of the most selective high schools in the whole province.
Speaker 1: At first, Colin didn't even want to go because the
Speaker 1: name of the school is says foreign language school, right.
Speaker 1: Because I was very u into mathematics and the physics
Speaker 1: and all those and so I was talent. My teachers say,
Speaker 1: and then my parents, I don't want to go to
Speaker 1: that school because I don't want to study English. Colin
Speaker 1: was only twelve at the time, and the president of
Speaker 1: the school persuaded him to go, so he went and
Speaker 1: it changed life, could open my eyes, right, a very
Speaker 1: different kind of um, different kind of families. And for instance,
Speaker 1: at that time, as I remember, the daughter of the
Speaker 1: mayor of the city at that time was in my class. Um,
Speaker 1: well for kids like Milly, but the mayor of city
Speaker 1: is a very big, big boss. Right. Changing schools was
Speaker 1: one of the early experiences that helped Colin grow more
Speaker 1: confident and evolved from the country kid to feeling more
Speaker 1: comfortable with the best, the brightest, and more importantly, the
Speaker 1: most powerful people in China. Colin went on to Zichang
Speaker 1: University and studied computer science. Then he made another move
Speaker 1: that changed his life. He applied to graduate school in
Speaker 1: the United States. And what were your first impressions when
Speaker 1: you went to you ask Wisconsin? You, Um, it was
Speaker 1: very cold. It's really cold, um, and the food is
Speaker 1: not so delicious. Other than that, it's pretty good. So
Speaker 1: now Colin is in his early twenties and he's at
Speaker 1: the University Wisconsin and Madison. At that time, Wisconsin ran
Speaker 1: one of the most well recognized computer science programs in
Speaker 1: the country. It was a prestigious place for Colin to
Speaker 1: study and it had the potential to open up a
Speaker 1: lot of doors for him. But Colin's biggest issue, at
Speaker 1: least at the beginning, was homesickness. Um, but the food
Speaker 1: was so you know, it's a big problem for me.
Speaker 1: I just cannot I missed the Chinese food at that moment.
Speaker 1: So I a half t a UM out of school
Speaker 1: so that I have extra money to go to the
Speaker 1: Chinas restaurant. Almost the average for every meal for anyone
Speaker 1: who didn't go to college in the US at T
Speaker 1: A short for teaching assistant. It's a way for students
Speaker 1: to earn a little extra money. Colin did internships and
Speaker 1: got to know perspective employers here. Turned at Microsoft in
Speaker 1: China and then at the company's headquarters in Redmond, Washington.
Speaker 1: He found out one important thing about the economics of
Speaker 1: working in the two countries. I think in my last
Speaker 1: year UM off my undergraduate UM, I went to Paging
Speaker 1: to be a visiting student or intern of Microsoft Research Asia.
Speaker 1: So yeah, so I did an interne there for like
Speaker 1: three years four months in Beijing. UM. At that time
Speaker 1: I think I got six thousand I m B a month,
Speaker 1: which is which is already more than the salary of
Speaker 1: my my mom um much more actually, UM. Then I
Speaker 1: went to Universal Wisconsin, and in the first summer in US,
Speaker 1: I went to Microsoft to Redmond, h and the salary
Speaker 1: was six thousand of U s STRs and the same person.
Speaker 1: You know, it's roughly seven times as much. Seven times yeah,
Speaker 1: seven times as much. At the time, it's actually eight
Speaker 1: times eight times as much. When he was getting ready
Speaker 1: to grab wait, Microsoft wanted to hire him, and so
Speaker 1: did a bunch of other top US tech companies. So
Speaker 1: my professor wrote me, I think like several letters too,
Speaker 1: like Oracle, Microsoft, im UM. So I got acceptance from
Speaker 1: from both three. So at this point, most people in
Speaker 1: colin situation would be over the moon. Choosing between three
Speaker 1: of the world's biggest, best tech companies. That's something that
Speaker 1: most engineers like him can only wish for. Colin did
Speaker 1: something that was really unexpected. He actually went to Google's
Speaker 1: website and he applied for a job. Remember at this
Speaker 1: time Google was just to start up with a few
Speaker 1: thousand employees. It had a promising product, and there was
Speaker 1: a lot of buzz around the company, but it was
Speaker 1: certainly no Microsoft. Microsoft was really famous at the time,
Speaker 1: right and um, and it's very established and if you
Speaker 1: want to get a green card, it's probably the best
Speaker 1: place to go. Um And but the thing is that
Speaker 1: after internal twice and like I spend more than half
Speaker 1: a year at the Microsoft right both both in China
Speaker 1: and US, I found that the company, it's a very
Speaker 1: good company. But it's just that I was a very
Speaker 1: too small part of that. Right, I had very little
Speaker 1: influenced on what's going on in Microsoft. And I can
Speaker 1: imagine who I will be like six years down the road.
Speaker 1: Collins says he always knew he eventually wanted to start
Speaker 1: his own company. I would have about to choose something unknown,
Speaker 1: although it may become something worse, but it could be
Speaker 1: better because it's something else, all right. And right there
Speaker 1: that day collins decision in two thousand and four may
Speaker 1: have been the first time that Colin really showed that
Speaker 1: he was different. He didn't want security, he didn't chase
Speaker 1: after the green card in the high salary. He went
Speaker 1: after uncertainty. He went after risk. And it paid off. Oh,
Speaker 1: it paid off big. In the three years Colin was
Speaker 1: at Google, its share price went from about eighty five
Speaker 1: bucks a shared to more than five hundred dollars. His
Speaker 1: options were worth a fortune, so seven he was ready
Speaker 1: to strike out on his own. It's probably worth noting
Speaker 1: here for our listeners that China's had an uneven history
Speaker 1: with private enterprise. The Communist Party won control of the
Speaker 1: country after World War Two, and it socialized much of
Speaker 1: the economy. It wasn't until the economic reforms of Dum
Speaker 1: Shopping in the late nineies and the early nineties the
Speaker 1: entrepreneurs were finally encouraged to start businesses. He opened the
Speaker 1: door to a new era. The quote to get riches glorious.
Speaker 1: So it's really only one generation after China deregulated its
Speaker 1: economy that Colin Huong, at the age of seven, decides
Speaker 1: he's going to leave Google in the chance to make
Speaker 1: millions more if he stays to start his first company.
Speaker 1: We asked him why because of my father, I think um,
Speaker 1: although he's a he only probably spent two to three
Speaker 1: years in the primary school, but and he himself is
Speaker 1: not a successful business man, right, but he always wanted
Speaker 1: me to be a successful business man. Colin sold his
Speaker 1: first company after about three years. He went on to
Speaker 1: start two more companies with his partners, and those ventures
Speaker 1: did so well that he had enough money to stop working.
Speaker 1: At the time, I was not that old yet, right,
Speaker 1: So I was thinking what should I do? Right? Um,
Speaker 1: should I just go back to us and do a
Speaker 1: hedge found and um trying to be smart in the
Speaker 1: sevendary market, or or try to do something different or
Speaker 1: to wrong business which is more inferential or a different
Speaker 1: business model. The idea he eventually came up with is
Speaker 1: a combination of social networking and online commerce. A few
Speaker 1: companies have tried social e commerce, including Facebook and Twitter,
Speaker 1: but none of those experiments have really worked out very well. Well.
Speaker 1: I didn't know exactly how to do a social e commerce,
Speaker 1: but I just have a very strong feeling that with
Speaker 1: the booming of the social media, there got to be
Speaker 1: a commercial model, commercial model that can monday tize there's
Speaker 1: the social traffic. That's one kind of belief I had
Speaker 1: that at a time, and the set I'm thinking that, Um,
Speaker 1: I think if there is a social commerce or it
Speaker 1: comes model, that it comes model that leverage is the
Speaker 1: social media, then the team we had at the time
Speaker 1: is probably the one that is most competitive in that area.
Speaker 1: That's because Companies number two and three that Colin founded
Speaker 1: were a back end services company for retailers wanting to
Speaker 1: sell online and a gaming company. This new venture drew
Speaker 1: on the experience Colin had gained in both of those industries.
Speaker 1: He reads Try Capital in May of and launched the
Speaker 1: app a few months later. The pinj or Door app
Speaker 1: quickly proved pretty addictive. So David, how do people use
Speaker 1: the app? Most people use it within we Chat, which
Speaker 1: is the ubiquitous messaging service in China. You open up
Speaker 1: we Chat and you search for PDDs micro store and
Speaker 1: the home screen comes up. It's got tabs like food, clothes,
Speaker 1: and bedding. Once you pick a category, you get a
Speaker 1: vertical list of products that you can scroll through, say
Speaker 1: light cheese or apples in the fruit section. I'm looking
Speaker 1: at it now and I can see a whole bunch
Speaker 1: of weird looking tops and what looks to be some
Speaker 1: rip off Dora the Explorer slippers. The app has the
Speaker 1: feel of a game, colorful photos and hidden bargains. Deals
Speaker 1: change every day, and as you scroll through a category,
Speaker 1: the discount of prices shown below the image. For example,
Speaker 1: you click on an image of eight mangoes with the
Speaker 1: price tag of thirty four point eight. Then, but when
Speaker 1: you actually go through to it, if on the price
Speaker 1: is actually thirty nine u N If you buy it
Speaker 1: alone to get the discount, you actually have to find
Speaker 1: a friend to join in the purchase. But because you're
Speaker 1: already on we Chat, it's pretty quick to instantly pitch
Speaker 1: to others. The most successful result of there's a Design
Speaker 1: is that, um, a lot of people are sprouting words
Speaker 1: of PDD by themselves, right without to add a TV commercial. Oh,
Speaker 1: that's really something hard to achieve. PDD went from gross
Speaker 1: merchandise volume of about a hundred million reming B a
Speaker 1: month in early six to three billion by December. The
Speaker 1: company has now got over four billion RMB per month,
Speaker 1: or more than half a billion dollars in gm V.
Speaker 1: One of Colin's top priorities now is dealing with counterfeit products. China,
Speaker 1: of course, has a long history of fake goods being
Speaker 1: sold both online and offline, and about two hundred of
Speaker 1: Collins seven employees at PDD are working on quality control.
Speaker 1: These are workers dealing with customer complaints about fake and
Speaker 1: damage goods. But then PDD has to go to its
Speaker 1: merchants and persuade them to actually compensate customers. More difficult,
Speaker 1: it has to convince them to stop selling these goods
Speaker 1: all together. And what was the reaction, Like, oh, here's
Speaker 1: what Colin told us. And they even set people to
Speaker 1: the office just to like throughout our employees right like
Speaker 1: in the middle night and here the offices and you
Speaker 1: know all the building. Yeah. Um, and that's why you
Speaker 1: have the security guys. Yes, yes, yes, even like a
Speaker 1: slash and into the face itself some Mafar employees. So
Speaker 1: that's that's the things already happened. Um. Not only that
Speaker 1: they even um chase um our employees back to their homes,
Speaker 1: like even your hamjo and like when kind of threatened
Speaker 1: their their wife their wives and a kiss. Colin Huang
Speaker 1: and PDD are an example of how China's technology industry
Speaker 1: is changing. There's more venture capital money, more entrepreneurs, and
Speaker 1: more startups that work on real innovations. Ten years ago,
Speaker 1: when I started my first company, I think, ah, almost
Speaker 1: all the people are focusing on commercial success. H they
Speaker 1: don't really care. I do exactly the same thing. But
Speaker 1: now I think a small group of China's entrepreneurs are gradually, um,
Speaker 1: sort of care more about the things the Silicon Valley cares,
Speaker 1: which is the novelty of your idea, right, Um, the
Speaker 1: the creativeness and whether there's something cool or not right
Speaker 1: people will look at you, um, whether you're doing novel things,
Speaker 1: whether you're really contributing value to the society. Um, these
Speaker 1: things that gradually kind of uh growing. So, Peter, that's
Speaker 1: an amazing quote from Colin because he sounds just like
Speaker 1: everyone else and Silicon Valley here. What's your take on
Speaker 1: where China's tech industry is right now, where the ecosystem
Speaker 1: is for startups? Well, just the past few years, you've
Speaker 1: seen a real increase in the amount of venture capital
Speaker 1: money moving into these startups. Uh, And you've seen a
Speaker 1: lot of very big companies coming out of China. Some
Speaker 1: of the best known are d d for example, the
Speaker 1: ride hailing app, but there's also a whole series of
Speaker 1: other ones that are not as well known outside of China, David.
Speaker 1: For you, as a reporter covering the tech industry in Beijing,
Speaker 1: it must be a pretty exciting time. No, it is.
Speaker 1: Every single time I go out to me to start up.
Speaker 1: It's really interesting to see the little things of what
Speaker 1: they're doing. You know, if they're not if they're not
Speaker 1: sleeping on couches or you know, at their own desks.
Speaker 1: Then frankly by the Chinese standard. They're just not working
Speaker 1: hard enough. I went to one place, which actually the
Speaker 1: startup that does hot time job searches, and they actually
Speaker 1: had a small room right next to the CEO's office
Speaker 1: when they had three bunk bits for sales, stuff to sleep,
Speaker 1: and they worked too hard into the night. Earlier on
Speaker 1: in the show, we talked about how Colin isn't the
Speaker 1: only serial entrepreneur out there, that there now quite a
Speaker 1: few people in China who are on their second, third, fourth,
Speaker 1: maybe even fifth start up, like a lot of the
Speaker 1: famous founders here in Silicon Valley, UM, Peter and David,
Speaker 1: Can you talk about some of the other people who
Speaker 1: are like this in China. One of the other serial
Speaker 1: entrepreneurs is Late June. He's been involved in a number
Speaker 1: of startups, most recently uh show Me, the smartphone maker. Uh.
Speaker 1: It's been giving Apple and Samsung challenges within the country.
Speaker 1: It's been expanding outside of China, particularly in India, and
Speaker 1: now show Me is diversifying beyond smartphones into all sorts
Speaker 1: of other products. And you've also got ten Cents pony Ma.
Speaker 1: I mean, his main company is listed now, but it
Speaker 1: continues to be a factory of startups churning out new
Speaker 1: products and new services, some of them that copy each
Speaker 1: other every single day. With China's new push to innovate,
Speaker 1: I asked whether this is a threat to the US
Speaker 1: dominance of the technology industry. I want to say it's
Speaker 1: a threat. I wouldn't say it's a complimentary. It's just
Speaker 1: that like people are doing different things, and like we're
Speaker 1: trying to find the areas that we can do better.
Speaker 1: But Colin doesn't think there is an equivalent to PDD
Speaker 1: in either Shanghai or Silicon Valley. He's told some investors
Speaker 1: it's got the potential of drawing to become one of
Speaker 1: the biggest e commerce giants in China. Well, if it's
Speaker 1: as if it's only, um, hey, little dog, I shouldn't
Speaker 1: I shouldn't want him to be an elephant. Right, If
Speaker 1: by nature it's an elephant, then I shouldn't be satisfied
Speaker 1: or I shouldn't kind of trying to controuse the elephant
Speaker 1: to be a dog. Right. So if it's an all phant,
Speaker 1: then it has to grow to be elephant to be healthy. Right.
Speaker 1: So it's really a question of whether that e comments
Speaker 1: a very shop Facebook, how big it is, whoa I
Speaker 1: thought it was a mouse. Now Dan, I think it's
Speaker 1: a dog. Now I think it probably maybe it's an elephant,
Speaker 1: but I'm not sure. And that's it for this week's Decrypted.
Speaker 1: Thanks for listening. We'd love to hear what you thought
Speaker 1: of this episode. Record a voice message and send it
Speaker 1: to us at Decrypted at Bloomberg dot net or I'm
Speaker 1: on Twitter, it's at p Lstrom and you can reach
Speaker 1: me at David Ranting and I'm at Akita seven. If
Speaker 1: you haven't already, please subscribe right to our show on
Speaker 1: Apple Podcasts or your favorite app. While you're there, please
Speaker 1: leave us a rating and a review. It really helps
Speaker 1: more listeners find this show. This episode was produced by
Speaker 1: Pia gut Cary, Liz Smith, and Magnus Hendrickson. A big
Speaker 1: thanks to Robin and Jello, who edited the Prince story,
Speaker 1: David Ramilly and I wrote about Colin Wong and PDD.
Speaker 1: You can find it at Bloomberg dot com slash Tech.
Speaker 1: Alec McCabe is head of Bloomberg Podcast. We'll see you
Speaker 1: next week,