Our new guest witnessed the so-called ‘golden years’ of mobile internet in China from 2010 to the 2020s as he was working on strategy investment and corporate development. With more than 10 years of experience in M&A and VC, working at tech giants like Meituan (then Dianping), Baidu, and Ericsson, and being a part of some of the biggest acquisitions in China, he shares with us in this episode his lessons and reflections on different topics.

Tune in to the episode to find out more about:

  • What were the key factors that paved the way for success during the transformative era of mobile internet?
  • What was the public response to the mobile revolution?
  • How did people decide which ventures to pursue at the time when so many opportunities emerged?
  • What were the decisive factors that determined whether the company would make it or break it? What part did leadership play in it?
  • Finally, as we are navigating another, now generative AI revolution, how should we approach it?

[AI-generated transcript]

Dalia 0:00
Hello, everyone, and welcome back to the Impulso Podcast. We’re continuing to bring more guests. Today apart from Jianggan, hello, we also invited Freeman. Freeman, this is your first time on the podcast. Could you please introduce yourself?

Freeman 0:15
Yeah, hello, everyone. This is Freeman. Shot self introduction. I did merger and acquisition and venture capital in China for the past year over 10 years. And right now I’m based in Singapore, and I’m working on my own and try to explore new tech chain.

Jianggan 0:37
So basically, Freeman has worked during the best years of the consumer internet or mobile internet in China, with a career spanning like a few large tech companies Baidu, Meituan and the incapacity of strategy, investment and corporate development. So he has seen or not. So so we thought it’d be useful for to bring Freeman here to talk about I mean, what happened was during those years, what we’re thinking behind people, and what kind of lessons can we learn from those Chinese tech giants, which became giants during those years and an entity we can take away to different parts of the world now, I mean, now, there’s like a lot of a lot of talk about tech and it will it will become something. So, so our moderators discussion, so I think, I think, since from may have introduced yourself, which just want to just talk a little bit more about your personal journey during during those years, okay.

Freeman 1:38
I’m happy to Yeah, and thanks for having me. My journey in Chinese tech industry started at roughly 10 years ago. So obviously, China tech involve the from, from telecoms, telecommunication sector, to PC that desktop internet sector, and then to mobile internet sector. So the mobile internet sector started around 2010, something like that. So let’s start from there. So I worked in BI to corporate development team for three years from 2011 to 2014. And I was lucky enough to be involved into several so called big deals at that time, including Baidu spent cash of us 1.9 Billion US dollar in 2013, to acquire a company called an 91 Wireless, so which was the largest acquisition case in China’s tech industry by them, then I moved to another company called a Dianping, which is based in Shanghai. Time, and, and damping under Meituan. Were the hand to hand a fierce competition and or a one year later in 2015. Meituan and Dianping emerged together to become the new combined Meituan Dianping group. And the final ater went to IPO in Hong Kong, in 2018. And nowadays, you know, it’s, it’s, it’s basically the third largest tech companies in China, with market cap, I think, only second to Tencent and Alibaba. So I was doing corporate development, mergers and acquisitions, then back then, at Dianping, and after that, I started to do venture capital investment with some of my previous boss and friends. And we started or are we a new VC fund in 2016, called the Shanghai Capital, and we lead and again, we are very lucky enough, we led the series B investment tool dollar move at that at that year, and, and you’ll probably notice a lot more, which has to fire the IPO prospectus this year to Hong Kong. And it is certainly one of the largest so-called unicorns in the logistics sector in China and also with footprints in Southeast Asia. So again, so I was very fortunate to go through the whole so called golden 10 years, roughly from 2010 to 2020. I will say so, yeah. And I moved to Singapore last year, and I began to to have more discussions with tech circles here, like a Jianggan and his firm. So yeah, I was very I’m very happy to share more to the audience.

Jianggan 4:59
So as I plus have discussions with the Freeman And I personally learned a lot from these discussions, because because he really, really experienced a lot of events, a lot of like one big strategy moves himself. And obviously now we look at tech companies in China, you have the big ones, and what for elimination Meituan and Tencent, etcetera. So, so let’s take the time back to 2011 or 2010. So, so at that time, I mean, Tech was not new in China, right? It was, I mean, lots of companies. I mean, Alibaba and Tencent have been around for more than 10 years. But but but back then there was there was a shift there, right? I mean, which, which caused lots of new opportunities to be unleashed. That was the mobile revolution, and can walk us back to that higher time to I mean, what exactly was happening? And how did you guys I mean, look at this, saying that some major shift is coming. What should we do about?

Freeman 6:00
Yeah, let’s, yeah, let’s go back to the time machine back to the year of 2010. No, I think to be honest, we should have back to the 2007 when Steve Jobs relieves the first generation of iPhone, which really kick off the so called smartphone era. And then in the next year, 2008, Google and HTC released the first Android phone, which is an HTC, G one in 2008. At that time, so basically, you can see the tech giants from so called a PC era PC, desktop internet era in China. There are a lot of already a lot of giants there. I mean, so called a bat, Baidu, Tencent, Alibaba, and even jd.com. All of them were established in the year around 2000. So, so by 2010, they are already operating in China for 10 years. And at that time, all the Western internet companies actually all already failed in China. I mean, eBay, China failed to was defeated by Powerball, Yahoo, China, you know, was absorbed into Alibaba. And even Google, China actually officially exited from China in 2010. So you can imagine, but basically, at that time in 2018, China, there are a lot of large number of local Chinese entrepreneurs are emerging. And as some of them are already I mean, already experiences the first 10 years fast development. So that’s for the industry side, I think another perspective is also from the macro economics side. If we will look at GDP our GDP per capita data for China in 2010. Time is roughly a synergy. GDP per capita was about US dollars 3000 4000 Something Indonesians levels now, yes, yes. That’s why people say Indonesia now is like 10 or 15 years in China. I mean, from the GDP per capita perspective. Yeah, that’s true. But from the other perspective, they’re might not be true. If we take also from the infrastructure perspective, by infrastructure, I mean, not only the so called physical infrastructure, infrastructure like highway port airport, but also software level infrastructure, I will elaborate at this later, but even from the infrastructure level, in China in 2010, first, the telecommunication network, such as the 3g and 4g network and the fixed line, broadband network are, are also in very rapid development movement and also very widely available. I think that’s something also true now for Southeast Asia, right? I mean, more in the year right. But for the as we mentioned, for example, highway, high speed train, those last scenes in China are also already there in 2010. This is actually very important for ecommerce later on, because we all know ecommerce rely on two things. Electronic Payment and logistics and logistics rely on basically rely on Highway roads. Trucks drivers, right? So if our if a country doesn’t have have like a modern highway infrastructure, so how can you develop a logistic industry? Right. So again, back to 2010. Highway, already widely available in China, and even high speed train, we’re just a started, I think, in 2010. Another infrastructure I want to mention is about the national ID system, and the personal credit and the banking system. Again, back in 2010, those are already they’re already available in China. I mean, every Chinese citizen has their own has their like legal ID, National ID system, and Chinese domestic banking banks are already very strong there. And the our electronic banking system, personal credit Assist system are already there. That’s also very important for later development, for like online payment, such as Alipay and Wechat pay, because you know, that is at the end of, at the end of the day, if you want to do anything regarding payment, you have to do KYC like know your customer, if you don’t have a like, or reliable national ID system, how can you do do the KYC system? Right. So, again, so I want to emphasize basically, back to 2010, those infrastructure level staff were already widely available in China, which may not that met, which may not exist, even today for many developing countries. Okay, yeah. So let’s back again to the historical background. So I think another last but definitely not least to Pacific is about the talent pool in China. And we all know what I mean. China has a has a huge population, so which means there. So the engineering or science related a major so called STEM related major college graduates. The number in China is, is it’s very, very large. So basically, you have a very large talent pool from the engineering and sciences related college graduates. And also remember me tech industry just evolved. So before mobile before, even before the PC, desktop internet, there was PC era, tech giants are Telecom, telecommunication, related a tech giants. Remember, Huawei, Huawei, and ZTE. Both of them are even the PC computer giant, the legend legend, the rise of this Chinese tech company were founded in 1980s. So even 20 years, another 20 years before 20. So basically, so again, those those previous generations of tech giants, they, they produced a lot of tech talents, tech entrepreneurs, for for the mobile internet era.

Jianggan 13:45
So basically, we’re saying that there are different factors, the infrastructure, the KYC, framework, ID system, the talent pool, the information about entrepreneurs, right, you have people who have been working in, in tech companies who are not, I mean, now, back into the last 10 to 11. They wanted to become entrepreneurs, and all these factors come together, created a wave of entrepreneurship opportunities. And we just said that, if any of this was missing, things will not happen or things will happen differently.

Freeman 14:22
Our assessments, we will happen differently. omit any of this elements, our factor, our hours are very critical. It’s hard to say which one is more important than another one, by the way, you have all this sense happens. At that time in China, you probably can say Chinese entrepreneur, do the right things at the right time, but with all this available resources, as a time, so that’s why also it’s hard to really kind of read Piquet that success through elsewhere outside of China.

Jianggan 15:06
So obviously, many companies became giant companies and some companies visual previous successful. I mean, there were still like profitable, whatever, but they didn’t really catch the wave to become, I mean, as the same size as Tencent or Alibaba or pythons now. So what was the thinking that people had back then? I mean, when I see okay, now with the smartphones, maybe more people have smartphones and what Excel should do facing this change?

Freeman 15:37
Yeah, that’s a very good question. Actually, that also, the key question, the whole industry, were thinking about backing in 2010. Again, because at that time, they’re they’re already 10 years of development on PC, internet era. So a lot of entrepreneur what were already went through that, right, so, so many people were asking, What exactly means, I mean, if you have a smartphone, so basically, the question goes down to what are the key difference between a smartphone like iPhone, an Android phone versus or PC computer, no matter it’s a Windows computer or a Mac computer. So so this three difference part of all during camp camera and building GPS, they have very important consequences. For example, if you combine potable and building camera, you will realize all the messenger and the social network apps we have today, like a WeChat, WhatsApp, Instagram, or even Tik Tok. They are all based on picture or video message. Right? And but picture and a video messenger and not possible if you don’t have a portable camera.

Jianggan 17:16
So basically, people were saying that this is how people would analyze deals right to see what kind of opportunities are possible. Yeah. The things turned out that way, or did things turn out that way? So the people like no managed to I mean, when they analyze this, and does that impact? Yeah, sure.

Freeman 17:33
Yeah, I clearly remember in 2000, the 10 Several hottest startups in China. Were all around picture or even voice-based social network. There is an for example, there’s an app called Chang Ba. In the era in 2010 It’s best the best way you use your smartphone tools to basically do karaoke things

Mobile Karaoke App Changba Announced 100 million Users,Will Launch A Version for TV · TechNode

Yeah. Yeah, so again, so so these are super powerful. So so so yeah, so about I want to elaborate on another difference I just mentioned that smartphone is a portable device with built in GPS so that’s why that’s why all these food delivery or this taxi hailing apps like a grab here are like Meituan, DiDi food delivery techs hiring or even logistic I just just mentioned such as Lalamove, all this sector, all this mobile apps in this sector are not possible at all man before smartphone era because computer just doesn’t have a built in GPS

Jianggan 19:02
if you think about the logistics right in the past we don’t have a smartphone we have to like customize the device which that limit function and you couldn’t like I mean it was just wasn’t hassle you have to have devices which means naturally come cool.

Freeman 19:18
So again, all this location so called lbs location, location based services, especially for the delivery techs, the hailing and logistics are these are become available or become possible only after we came to the smartphone era, which is after 2010.

Jianggan 19:39
And obviously, people are looking at me how to seize this opportunity, right? And read exactly what to emerge and acquisition and strategy. So so there were obvious different possibilities. You could buy companies you could invest in new business units, you could transform your existing businesses. Now people reconcile with all this stuff. One possibility is how to decide okay what we should do or we should just do everything and see what what works out?

Freeman 20:07
No, I generally do not agree with the philosophy like throw everything on the wall to see which sticks. I still think that no matter as an entrepreneur or as a investor in tech society, you, you, you should have a so called a strategy, you should have a perspective, what do you want to do? And what do you want to achieve in the future. And regarding to me financing no matter you are raising funds from investor or you’re considering merger and acquisitions, no matter you are considered to be acquired or to try to acquire some other companies, I think all this financing related are our says they are gesture approach, they are just they are not your goal. I mean, they are approach to growth your company, no matter, you know, most likely in a stockholder in organic growth, right. So, so, all this financing or capital related approach are something to help you grow your company through through capital, as I would say, as a link or as a something accelerator. But it’s not it’s not your, your, I mean, it’s not the foundation of your business, I will say only investment, only investment bankers probably progresses see those are as their business foundations. But as builders, entrepreneurs, you’ll always shoot Think, think this are something something approach that you want to leverage to reach your own business goal.

Jianggan 22:13
So obviously, that bring us to the issue of that entrepreneurs, the people making a decision. And of course, we know that back then, because of the opportunity. Everyone light, I mean, because I think you mentioned about what people were seeing as potential opportunity blossom, people saw the same thing. Lots of businesses were built, I mean, some of the new businesses, so were more interested in businesses trying new products and new divisions are eventually succeeded. Other students succeed. And for the ones which you think succeeded versus the ones which didn’t succeed. Aside from luck, aside from timing, I mean, how much the role that the leadership played and and what did you see as the success factor?

Freeman 23:03
The job of leadership, definitely, plays are a very important part. Because after all, everything has to be done by human right. It’s, it’s it’s not even with the with ai ai in the future in our say in the short term, you basically you cannot grow business through through robots right. So, again, humans are definitely a human factor are one of the most important factors. So, so, so called the leadership I will say, Okay, let’s take two let’s put it this way. So, if you company as I said, if we have come we are considering any capital related activities, as I said, reading fond or merged or another company are being acquired by another company, I think this those activities has to be has to be directly associated with the top top CEO on the number one guy, okay. So always CEO should spend his or her significant portion of time in, in the human side in the human factors such as recruiting, retention, or even fire people. It’s, yeah, interesting.

Jianggan 24:36
So So you think that the successful CEO CEO should spend some time on that?

Freeman 24:41
Yeah. He should not rely on so called VP HR or CHRO. Of course, you should have or a HR head to help you to build as a I would say more modern A human hierarchy or organization chart, but still he or herself should spend a lot of time in understanding the human factor. Is

Jianggan 25:14
that because the industry that these companies are in is very fast changing? So of course, we would I mean, the CEO presumably has the best information about the whole segment, right, the market sentiment, investor sentiment, and the timing, etc. So we’ll have like, like, when it comes to people with delegated decision, sometimes it becomes a bit it becomes a bit more challenging for for information to flow consistently. Yeah.

Freeman 25:47
Interesting. Yes. Great.

Jianggan 25:50
Yeah. So so so obviously, there are lots of lots of stories which we can talk about a long episode, I think you have experienced a few mergers and acquisitions. And sometimes that, you know, when things happen, that you get different perspectives, where some people say, Hey, how come you’re so stupid, make this decision? And some people said, Oh, this is amazing. But a few years down the road, I mean, people sometimes would have a different conclusion. Right. So that okay, oh, I’m very glad I did that, I think, or, or hindsight, okay, maybe we should not have done that. But it’s also very difficult to

Which brings us to like now, right, in the mobile penetration in poorer countries are pretty high. And of course, some infrastructure problems that we see, for instance, I mean, in, in, in Indonesia, how many people how many percentage of the people have the KYC depends on how many do not have I mean, all this there would not have like rapid growth for the next few years, and ecommerce, whatever sector will have some growth, but not like the growth that you saw in China a couple years ago. But at the same time, there are things which are changing, right. I mean, now there’s generative AI, where everyone talks about now is VR, which I mean, I’m not sure how soon that will translate into the emerging markets, but but that should open up something was different from smartphones. At this juncture, we’ve seen all these possibilities. And what’s the sentiment? And how do we think as industry practitioners, as investors as entrepreneurs, we should look at it culture?

Freeman 27:42
Yeah, that’s a very good question. That’s also something I always think about that for myself. So, yeah, as you as you mentioned, right. Now, the hot topics in tech word are probably generated a generative AI and also Apple is going to release its vision pro product. So it was first draft, we are an AR product next spring, I think. So, all this, I think, I will look at this since by the historical essence, actually, I just mentioned way back to 10 years ago, when people are looking at the transition from PC, internet to mobile internet, people are discussing about what are the real nuisance brought by smartphones? So I guess we can ask her similar questions. Now, for example, to to to AI. So that’s why people are talking about what are the AI so called AI native? What are the AI native apps? My personal understanding is that AI native app means some seen some application, which is which had become possible only with a big which becomes a possible only after AI is available. In other words, those AI native apps should not exist at all.

Jianggan 29:21
So how do I before I say that we should not how do we do this right. And we look at a capabilities that he brings

Freeman 29:33
up okay. Let me let me put it into this way, I think, at least in my personal opinion, as as of now, for AI, because all the giants are still competing with so-called the large language models, right. There are no real mass adoption I have the consumer facing application as of now. So it’s it’s actually quite a similar to if you back to 10 years I said in 2010 when smartphone error adjuster just started all the tech giants at that time, were talking about App Stores, because they saw app stores on iPhone at the time. And they saw Google Play actually just emerged on Android phone. So that’s, that’s also why back to back in 10 years ago, Baidu spent so so much money to acquire 91 Wireless app store in China, because that company was the largest Android App Store at that time.

Jianggan 30:49
So Google was already not available in China. Now.

Freeman 30:53
Google already as Google official exited to China market in January of 2010.

Jianggan 30:59
Yeah, so because of reasons which we should not speculate.

Freeman 31:02
Yeah. So okay, so my point back to the is that AI, I think, as of now, it’s still in that stage. So basically, giants are so the larger language model, our infrastructure, infrastructure level, they are further so the for the so called AI native apps. Still not on the horizon yet. So we probably can still wait and see, to see what will happen, maybe. But again, tech involve fast. Maybe not now, but maybe in the next after several months is something we’ll come up,

Jianggan 31:46
especially last question related to this. And obviously, lots of people in our community are looking at AI and they talk about AI all the time. In your opinion, if you take the experience back into the mobile days, right? What’s mean, of course, here, lots of news headlines, you read articles, you talk to people, but how do you how to keep yourself free informed, because I do see that I mean, the challenge with news headlines is that lots of people will get too much influenced by news headlines. First, it gives them information everybody else is getting. And that information might not be accurate.

Freeman 32:22
Okay. I actually agree with something someone said like this, you have to be aware, there is a difference to learn AI versus learn AI news. Many people actually just a learning AI news or AI news report, they are not really learning AI. So by learning, I think at least you should have to learn some very even some technical foundations. So like how the large language model really works. Something else? Those are something not really, I mean, appeared in the news headline, those are probably something you should look into, you know, from academia, or some online learning cars, I think, again, I would encourage people to, to, basically to to, to to start our best way to read a less about all this password news. I mean, password news appears every day. If you just keep chasing this news, you are not really try to graphs, the really fundamental concept of a new tech with

Jianggan 33:57
absolutely, and I should I mean, this book, if you totally get a few understand, I mean, how the underlying technology really works. And then they everything comes thinking you can follow your judgment, right? Because I mean, news tells you the what’s happening, but what’s underneath that, what opportunities get unleashed, etc. So this you need to have to understand which is the same as what we talk about all the time. And we’ll explore new markets, right new countries, you need to have a feel about them. So for instance, we put up with the stock ban, which talks about in the previous episodes, and many people are speculating based on news, but you will never get the underlying why why such decisions made? What’s interesting behind me, why would people I mean, what are the considerations there you can form a judgment of what might happen next. Right and what might be impacted decisions for all the stakeholders moving forwards. So this comes to fairness conclusion of this, this episode, thank you for your time. I know you have a lot of stories, which will which we’ll get To back frequently and to talk about it, I think I think lots of lessons will be very relevant, very relevant for people who are looking to invest or looking to build and follow up

Freeman 35:09
Thanks again for having me. Thank you

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