Yang made it into a subsidiary called Yahoo China, but it only lasted a year.Īlibaba out-competed them, and then the Chinese government said they'd have to shut Yahoo China down as there were new foreign ownership restrictions for the "information" space. Meanwhile, Yang entered the Chinese market in 2004 when Yahoo acquired a Chinese firm called 3721, which made software for keyword searches and was run by Zhou Hongyi. Amazingly, Ma made such an impression on Jerry that they stayed in touch. He met Jack Ma in 1997 - as his tour guide during a visit to the Great Wall. The hosts credit Yang with the greatest American investment ever in the country: Yahoo's 2005 investment in Alibaba. The Alibaba investment only came after years of failure. Great success doesn't happen fast in China - and definitely not for outsiders. Doing business in China is all about relationships more than transactions. But he says they shouldn't expect to make money there - perhaps for a decade. Yang recommends to American entrepreneurs he backs that they expand their businesses to China. If you're an outsider in China, expect to invest for a decade. You put that together with the work ethic, and it's a formidable combination. Chinese tech companies are innovating just as much as Americans. However, Yang says this is not an accurate representation of what's happening today. (e.g., you'd hear about the Facebook / LinkedIn /Airbnb of China). They'd parrot whatever new concept originated in the U.S. Even 5 years ago, many Americans had the impression that Chinese tech companies were just copycats. He encourages all American entrepreneurs to travel there to see it firsthand. Yang discussed how he noticed this work ethic when he first visited China 20 years ago and it's the same today. Can you keep up? It reminded me of this Michael Moritz opinion piece, as well as this tweet that made the rounds last week: These are the companies you are competing with. I thought we worked hard over here in North America, but it was not even close to the pace there. That was one of the most surprising things I noticed when I first toured around China in 2009 visiting different tech companies. The name of this podcast - 996 - comes from a saying in China that describes the work ethic there: working hours are from 9 a.m. In Chinese tech, it's normal to work 72 hours a week. In case you don't have 90 minutes to devote to listening to the podcast in detail, here are my summary notes: This is a deep dive into Jerry's experience investing in China over the last 20 years.
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