Hugo Shong, Executive Vice President of IDG, Chairman of IDG Greater China and Founding General Partner of IDG Capital Partners, is one of the most influential and experienced venture capitalists. At Macworld Asia conference, I had the chance to do an on-stage interview with Hugo Shong. The conversation covers many topics, including venture capital, angel investment, mobile internet, doing startups, and innovation in China.

IDG China has invested ~20 mobile internet companies. I questioned about the business models in mobile service as the hottest startups like Instagram, Path etc did not make money with millions of users. Hugo said, We (VCs) invested companies like Tencent, Baidu etc 12 years ago, at the beginning (probably during the first 5 years), no one knew how they could make money because at that time China only had 20millions internet users, but now they are hugely successful. We are now betting on mobile internet and we must be patient.

China now had around 100millions 3G subscribers last year, now the figure is about 170millions. I think the mobile market will be booming and getting more mature when we reach 300-400millions 3G subscribers, which may take another 2 years.

“What are the most important criteria for you to pick up the startup to invest? ” I asked Hugo. “For us, the team is always important, ” he said, “but even more important is the market they are working on. Picking the market is like picking a river for a journey. If you pick up the one running towards the right direction, then no matter how long it may take for the boats (startups) to arrive at their destination, you will be fine because the water flow will eventually take you there.”

Hugo also criticised a bit on the angel investment in China,

Angel investor is a very respectable title. China needs more qualified angle investors, but now it seems we got too many un-qualified ones.

To drive the true innovation from China, we need not only good angel investors, but also high-quality venture capital firms.

High-quality does not stand for how many successful companies the VC firm has invested. Instead, what matters is how many investment cases the VC firm fails so it can share with other startups and make sure they will not make the same mistakes again.

More and more startups are seen nowadays in China. Talking about the difference, Hugo thought in last decade, we see most of the successful entrepreneurs were graduated from universities oversea. But now, especially in the mobile internet industry, we see more and more ‘local-educated’ young men who are doing startups. Mobile internet market is young, so being young is the most important advantage for young entrepreneurs. If they failed, they can restart it again.

Hugo does not believe mobile advertisement can be the key revenue source for mobile services. “I think the content will be the key. Startups and ‘traditional internet service provider’ should think over how to generate/present good content in mobile and convince users to pay for it. And Big Data is something I am really interested in too.”

Hugo was a reporter for the Xinhua News Agency. “Just curious, will you consider to do a startup if one day you restart your career?”, I asked, and Hugo gave me a definitely ‘No’. I was laughing and told him that answer might disappoint many young entrepreneurs. Hugo explains, he still love to be a journalist.

I did not see much difference between a journalist and a VC. The only difference might be, journalists love to share the best and most exciting stories to the public at the first place, while VCs always keep the best as secrets and tell people the bad things.

Make sense, isn’t?!