?
Zhou Yahui: Nothing, he let me explore it myself. The first project was to print T-shirts overseas. After placing an order on a foreign website, let us print it and mail it, because the cost of doing it there is very high, and it is very cheap in China. Later, I found that the mailing fee was too expensive and the products were all online. Later, I found that the cost was not enough, and then I stopped.
The Zhixiang.com: Later did Renren do other overseas projects?
Zhou Yahui: I have done a lot. After that, I started to do overseas video sites, overseas lyrics stations, and overseas tool stations. We did a lot of them, and then we looked at which direction we could do in the end. What we did was OK, and the execution was good. Not many, probably just over 20 people.
The Passage: Do you benchmark YouTube?
Zhou Yahui: At that time YouTube was just getting up, and we were doing quite well, and the traffic quickly ranked first. Later, the founder of MySpace also sent an email saying that he wanted to buy our website. But after signing it, Thousand Oaks started to lay off employees. All costs should be controlled and all the remaining money was used to acquire the school. It was planned to only do the two communities in the school and Maopu. If only the SNS business is done, other businesses Kill them all. Our department was finally killed.
The Passage: Did you make money at that time?
Zhou Yahui: No. But I did a job at the time, which helped me to start my own business. I found out all the overseas websites that made money in China and the websites with the highest Google advertising revenue, and contacted them one by one.
The Passage: How does this help future entrepreneurs?
Zhou Yahui: Wasn’t our department killed later, I just talked to Chen Yizhou and said that I would take the whole department out to start a business, and he agreed.
Financing was particularly difficult at that time. We took 5 million dollars and started doing it. One thing I did was right at the time. I bought an overseas software site for 5 million yuan. I took some cash and exchanged some shares, and then merged with others. Because when I was in Thousand Oaks, I found that overseas software websites are very profitable.
“The Passage”: This is an earlier project.
Zhou Yahui: Yes, this is really an earlier project in China that was commercialized. At that time, many people were making money by doing overseas websites. I met with the top 20 people, including Wuhan and Shenyang.
The Passage: What year was it?
Zhou Yahui: At the end of 2006. At that time, I thought, it was pretty good at the time, and I just paid dividends every year. Later, I felt that this thing could not be marketed, so we stopped doing it, so we planned to start a new company and aimed to go public. Then we thought about what we could do to go public, and we studied and found that web games are ok, so we decided to do it. Online games. That’s itWell, it’s too early to make money.
The Zhixiang.com: Is this an overseas online game?
Zhou Yahui: Domestic. But we thought about going overseas from the beginning. So we are the first company in China to bring domestic games to global distribution.
The Zhixiang.com: In 2018, or 2019, at your meeting in the entrepreneurial state, you said that the only place where Chinese entrepreneurs have a chance is Africa. How much of this statement is actually telling stories in PR, and how much is a true recognition of doing business in Africa.
Zhou Yahui: There is no PR component in this. However, what I said at the time was that I had to go to Africa and I had to reflect on myself. My cognition at the time was this: The opportunity for you to be a big Internet platform, South Asia, Southeast Asia, in the long run, is actually useless. With big platforms, such as social platforms, e-commerce platforms, and video platforms, you are definitely not an opponent of local elites. Because India and Jakarta both have strong local elites, they will definitely beat the Chinese company back.
Africa is the only one who can engage in the big market, which is very scattered, and the government is not that strong. India and Indonesia do not necessarily recognize China as the boss, but Africa definitely recognizes China as the boss and the United States as the boss. Therefore, only in Africa, you can make large-platform Internet products.
This angle is correct. However, I later reflected that another angle was wrong. It’s because I didn’t find the second wave of opportunities after the big platform: brand (e-commerce) opportunities. With the rise of e-commerce in these countries, all brands in these regions are undergoing changes, not only the upgrading of Chinese consumption, but also the emergence of new brands.
In all these places, Indonesia, India, Latin America, and Europe, this DTC brand (Direct to Consumer) appears. I didn’t really understand this wave of opportunities.
The Passage: But, you also voted for Club Factory in India?
Zhou Yahui: The opportunity for the DTC brand, as I thought at the time, might not be that big. Looking back, an entrepreneur needs to be a big platform. This kind of entrepreneurial threshold is too high, one in ten thousand, a more rational choice. You have the advantage of China’s supply chain. Go to South Asia, Southeast Asia, Latin America, and Europe to do it. A DTC brand, to be a $1 billion company, this is a good entrepreneurial opportunity.
The Zhixiang.com: But your browser business is quite different from the later Opay and ORide. When you enter a new market, how do you do a more in-depth understanding, especially considering When you are going to invest 100 million dollars. Will you stay for a while or what?
Zhou Yahui: First of all, we have been to these markets. The second point I think is very important. It is necessary to have some macro research capabilities.
“The Passage”: Yes, how do you get the macroWhat about research capabilities?
Zhou Yahui: We are relatively simple, we cooperate with consulting agencies like McKinsey, we make propositions and do research with them. Because we are investing, we will estimate the current situation of the market, what is the growth rate in the next 5 years, and what is the government’s attitude? What is the ultimate market space? What is the growth rate in the next 10 years? We did a special study, and after doing it, we determined that it is a very good thing to do payment in Africa.
The Passage: I am quite interested in Grindr. This year (2020) Byte encountered such a thing, in fact, you encountered it earlier, right? Have you ever negotiated with the US government?
Zhou Yahui: Yes. Talk about it. Just say how long the United States gives us to withdraw.
The Passage: Didn’t you try to win hands with the United States? For example, hire a lawyer and say that it is illegal to sell it.
Zhou Yahui: No. I feel that our interests are not big enough to have this idea. Grindr is not good enough for any of us. It is a small thing, and the small thing does not change the rules, right.
The Passage: But does this matter touch you? That happened so frequently last year (2019).
Zhou Yahui: It’s not touched, because the market law is very clear. Indeed, we didn’t apply at that time. He asked us to apply again, but it didn’t happen. Other countries have this power, but the country is a power machine.
The Passage: Did Zhang Yiming ask you about this?
Zhou Yahui: Then this is not convenient. But I think he coped very well.
The Passage: This year (2020), indeed, this result may have exceeded their expectations, right?
Zhou Yahui: I’m really hard to say about this, but I really think he handled it very well.
The Zhixiang.com: They are following Facebook.
Zhou Yahui: Yes. definitely.
The Zhixiang.com: Looking at it comprehensively, TikTok’s situation reflects the risks of going to sea, especially the political aspect. After these things happen, do you think there are still big opportunities for Chinese companies going overseas?
Zhou Yahui: Yes. It depends on how big the business is. TikTok is valued at hundreds of billions of dollars, is it big enough? Compared with the companies that went overseas before, they were valued at 1 billion or 2 billion US dollars. Now TikTok has opened this window. The risk is uncertain now. There may not be companies with a valuation of hundreds of billions of dollars, but I estimate that there will be dozens of companies with a value of 10 billion dollars. Now I am concerned about the clothing brand SHEIN and the brand e-commerce field Anker Innovation, to Europe, and music community StarGroup, etc.