TechNodeTechNode | TechNode

Chinese Twitter Clone Zuosa to Stop Operating in June

Ben Chiang — Mon, 21 May 2012 11:00:35 +0000

Zuosa.com, one of the first Chinese Twitter clones announced on its website to stop operating in next month citing inadequate resources to sustain the service. Zuosa translates to “what are you doing”.

zuosa announcement on homepage

Founded in 2007, two years before Sina Weibo’s inception in late 2009, Zuosa is among the first batch of Chinese Twitter clones along with Fanfou, Digu and Jiwai. Now after nearly six year of – let’s just say – developing, Fanfou is still there, struggling; jiwai.de appears to be out of service; digu doesn’t sound right after a big downsizing and pivoting; Zuosa is to shutter soon.

It’s true that independent weibo produced by startups aren’t able to pull through under intensive competition raised by rivals like Sina Weibo and Tencent Weibo, which are backed with deep money and sufficient resources.

We once wrote that Follow5, a weibo synching tool discontinued its service in late last year, now you may know why, there just aren’t enough independent weibos for Follow5 to serve.

Vacation Rental Service Tujia.com Raising from LightSpeed

Guest Editor — Mon, 21 May 2012 07:36:35 +0000

Tujia.com an online vacation rental service in China targeting middle to high-end Chinese travelers has just raised a new round of funding from investors including LightSpeed Venture Partners, CDH Investments, Ctrip and HomeAway, the largest vacation rental in the world.

Luo Jun, CEO of Tujia.com, said the funding will be used to expand its operations and service capabilities to meet the increasing demand in the emerging online vacation rental market within China, and the funding gives Tujia.com the ability to invest in strategic business development.

Screenshot of Tujia.com

Tujia was founded by former CRIC co-president Luo Jun and Escapia CTO Melissa Yang. The company provides three types of services: 1) online booking for middle and high-end holiday aprtments; 2) housekeeping service for properties; 3) open trusteeship. Tujia has been seeing decent growth in its business and customers since its founding in December 2011.

Brian Sharpies, CEO of HomeAway said “HomeAway seeks to make every vacation property in the world available to every traveler and so we are excited to make this long term investment in Tujia.com as we believe they are best positioned to bring vacation rentals to China.”

Ctrip.com, which understands the opportunities in China’s ever growing vacation rental market, highlighted the vacation rental properties of Tujia.com on its homepage, signaling it’s seeking partners to enhance its competitive edge in the competition with eLong.com and Qunar.com. Qunar received a major investment from Chinese search leader Baidu.

With the increasingly fierce competition and the diversified needs among customers, working together sounds like a better choice than working alone. Ctrip.com made a nice move to form a partnership with Tujia, through which the two are entitled to mutual benefits.

NetEase to Make Smartphones Pricing under RMB 1,000

Guest Editor — Mon, 21 May 2012 04:23:03 +0000

NetEase reportedly will be marching into the Smartphone market to launch a joint-force smartphone characterized by 4.3 inch display, 1.5 GHz dual-core processor and most importantly Android 4.0 system and a price tag under RMB 1,000. If this turns out to be true, then it’ll make NetEase the sixth Chinese Internet company which shows interests in developing a proprietary phone after Xiaomi, Alibaba.com, Baidu.com, Shanda Interactive and Qihoo 360.

Ding Lei, CEO of NetEase told Wall Street in the conference call for its latest earnings report that they paid much attention to the popularization of smartphones in China. Ding acknowledged that a NetEase-branded smartphone focusing on its core users would be beneficial to its business. The company itself has a lot of popular apps, such as NetEase News, NetEase Reading and Youdao dictionary.

However, Kaifu Lee earlier commented on the frenzy of “making your own phone”, claiming he’s not that into this idea that Internet companies struggles to make hardware instead of developing their core business. At the end of the day, Internet and smartphones are two totally different industries, and internet companies hardly can be successful, take a look at the company behind Android, Google.

photo credit: BigStockPhoto

A New round of EComm War: Tencent and 51Buy Show Confidence

Charlie Sheng — Mon, 21 May 2012 03:52:09 +0000

Yesterday we reported that Tencent was restructured into six groups, through which the Penguin Emperor set up a wholly owned subsidiary called Tencent E-Commerce Holding Company. It seems that Tencent’s grander plan of intensifying the Chinese e-commerce competition just surfaces.

On May 16th, B2C site 51buy.com (Yixun in Chinese) announced that Tencent had taken major stakes in it and it will be an independent operation. The two have the same ambition of reaching a 10-billion sales volume. According to an analyst from Zero2IPO the Bejing-based think tank, since the average price of 3C products in China remains high and all the etailers are trying to increase their turnover, a price war on 3C products is just around the corner. How will the Tencent/51buy alliance survive the battle?

500M Investment and 51buy’s up trend

Data form iResearch showed 51buy’s turnover of last year reached RMB 2.37 billion, ranking No.3 after 360buy and Suning in the domain of 3C products. 51buy last week initiated a big SALE for its 6th anniversary in which it claims to put over RMB 500 million for sales incentives and marketing together with Tencent. All home appliances are sold 50%. And the sales seemed well received, 51buy generated more than 80,000 orders and a sales of over RMB 50 million in the first day.

51buy now has been integrated into Tencent’s QQ Wanggou (buy.qq.com) platform with OKBuy, Kela.cn among other Chinese B2C services that Tencent has stake in.

More to Expect

Bu Guangqi, CEO of 51buy said that the company’s extensive experience in supply chain management, logistics and warehousing plus Tencent’s development power and abundant data would help the company grow at fast pace this year.

He also revealed that in the near future Tencent’s ecommerce effort will be consisted of self-operated and open-platform business. 51buy falls under the first category while Okay comes under the latter.

Currently, over 60% of 51buy’s inventory are directly supplied by manufacturers, the number will keep on growing.

3C products have definitely become a battleground for etailers this year with so many price wars declared by X on Y. However, 51buy seems to be confident and determined when it comes to price war. “In the short term, we won’t set any target for profit, we just want to ensure our price advantage. Mostly the cost of marketing will account for 10 – 20% of the gross margin, we’re saving that part to offer a more competitive price.”

screenshot of 51buy homepage

Dual Strategy

Tencent’s input into e-commerce has never stopped, but it still hasn’t found a unique and feasible mode for itself.

For now, this new combination brings more opportunities to 51buy with the new investment and Tencent’s huge traffic. It understands that price war can never be a long-term choice; the key to success is service.

The company now has built warehouses and distribution centers in Shanghai, Beijing and Shenzhen and logistics and distribution teams in over 10 cities including Hangzhou, Suzhou, Nanjing and so on. Yixun aims to set up an operation center of 800,000 square meters in the next three years.

It seems that 51buy is determined to win the escalated ecomm war with Tencent’s deep pocket and big traffic as well as its price edge and excellent customer.

‘The Founder’s Dilemmas’ Book Reveals What Founders Should Know Before Doing a Startup

Jason Lim — Sun, 20 May 2012 18:00:39 +0000

There are many resources on the market to help founders navigate through some of the most difficult life and business decisions they will ever make. However, there are not many that are based on a decade worth of research and learning. Harvard Business School Professor, Noam Wasserman’s new book, ‘The Founder’s Dilemmas’ has studied the experiences of nearly ten thousand founders and performed in-depth case studies of founders like Evan Williams of Twitter and Tim Westergren of Pandora to show founders the key pitfalls of doing a start-up and give them advice to avoid them.

For first time entrepreneurs, doing a start-up can really be a daunting experience. Some of the decisions you have to make are so critical they will impact the future and success of your business and will definitely keep you awake at night. Rather than sweat it out by yourself or spend many hours trying to find the answers, this book can give you comfort and reassurance that there are many founders who have gone before you and you can learn from them.

The book covers the whole gamut of decisions a founder must make. Topics include career dilemmas of when you should start a company; founding team dilemmas of who you should start with including who should take what roles and how much equity to split; after founding team dilemmas of how to hire people, which investors to take on and Founder-CEO succession scenarios.

Here are some very valuable examples of analysis from the book:

All other things being equal, idea people receive 10-15% more equity than non-idea people
94% of start-ups name their CEO by the time they raise their first round of financing
Boards typically give founders an average of 6 months less vesting than they give hires
Start-ups are willing to accept 10% less valuation to secure a ‘well known’ VC compared to a less well known and experienced VC

To get more insight into Noam’s thinking and experience I interviewed him:

What do you believe most successful entrepreneurs would do differently if they could go back in time and do it again?

It depends on whether they were successful from the beginning (in which case they almost always say, “I wouldn’t change a thing!”) or whether they had to go through the bottom of the entrepreneurial roller coaster before becoming ‘successful entrepreneurs’. Regarding the latter type, research shows that 65% of the causes of failure within high-potential start-ups are people problems – early decisions about co-founders, hires, etc., that lead to destructive tensions within the founding team and then between founders and the non-founders who are involved in the start-up. Avoiding the early decisions that led to those tensions and failures is definitely high on – and often at the top of – the list.

What is the biggest myth about entrepreneurship and start-ups by first time entrepreneurs?

My favourite Steve Jobs quote is, “Follow your heart but check it with your head.” To me, the biggest myth is that it’s a virtue to follow your gut or ‘heart’ without thinking ahead and trying to anticipate which pitfalls could get in the way of having an impact on the world and realizing your dreams. In my research, I have seen time after time that the heart without the head is a recipe for trouble.

What surprised you most in your research?

Overall, I have been most surprised by the recurring pattern of the most common decisions (e.g., founding with friends or family; splitting equity early, quickly and equally) being the most fraught with peril. Regarding a specific event, I have been most surprised to find that the most successful founders are often fired even sooner than founders who have achieved middling success, what I call the ‘paradox of entrepreneurial success.’

Is emotional attachment to a start-up detrimental to practical decisions?

There are a lot of psychological elements – early strengths and foundations of the early magic – that become detrimental down the road. One of those is indeed the emotional attachment to the start-up and to the original idea. It’s a broader issue than just who will become CEO, but it can indeed affect whether the idea person becomes the CEO despite having someone on the team who might be a better choice.

In founder equity splits, how much weighting should capital contribution play into how much a founder gets?

When founders are negotiating equity splits, past contributions to the start-up should indeed be part (though not all) of the equation, and early capital contributions would definitely fit into that bucket. They are a tangible contribution to the start-up’s resources, so a founder who contributes more capital deserves something for that contribution. At the same time, capital contributions are often also a deeper signal of commitment to the start-up and other important intangibles, so to the extent that one founder is putting his net worth on the line, even if it’s a lesser amount of money than the other founder is contributing, that should also be considered.

What is the most dangerous thing a start-up can do to jeopardize their survival and how can they mitigate that risk?

Not having a roadmap of the most likely pitfalls they will face, so they can anticipate and avoid those pitfalls. Another danger is not having the self-knowledge that will be critical to shaping their decisions at each fork in the road. To mitigate the risk, get that roadmap and be pushed hard to think about which fork in the road you will take when you are faced with a trade-off between your highest priorities. For instance, if the left fork will enable you to attract key resources but at the expense of losing control of the start-up – i.e., it might increase your chances of becoming Rich but imperil your remaining King – would you prefer to take that option or to take the right fork, where you can remain King but end up less Rich? It takes that kind of self-knowledge to understand what your true motivations are and then take actions that are consistent with them.

When taking outside investment, is there an optimal number of investors? How many at the Angel round and series A round? How does this effect ability to make quick and vital decisions?

This is extremely start-up and founder dependent. Investors can play a key role in filling in a team’s holes and negating its weaknesses, depending on those specific holes and weaknesses. A variety of holes calls for considering a variety of investors; one clear hole you need to fill can be filled by a single investor. Each new investor can add new value to the start-up but also introduces new risks, including coordination issues and the potential for more divergences in interests, and founders who make decisions without understanding each side of that trade-off are heightening their chances of getting burned.

Are your lessons specific to America or can be applied elsewhere?

All of my quantitative data comes from North America and almost all of the three dozen deep-dive case studies in the book do too. From everything I’ve seen so far, though, most of the pitfalls I study are relatively universal – e.g., no matter what industry or time frame, a core founder has to figure out if and when to leap into founding, whether to attract co-founders, with whom to co-found and how to divide the roles and equity, etc.

I’m actually in the process of extending my data collection to more countries outside the U.S. – including China, India, Israel, and the United Kingdom – and will hopefully soon be able to give a quantitative answer to your question. However, I think the biggest differences will be regarding investor issues. For instance, a founder elsewhere might have a different set of financing options – different forks in the investor road – than founders have here in the U.S.

If you had all this learning when you were younger, would you do a start-up yourself and if so, what would you do?

I actually did work for five years before coming back to school, during which I founded and grew a high-tech practice within the firm at which I became a Principal. When I left to come to H.B.S. for my M.B.A. and then PhD, we had grown to nineteen people and although I hadn’t realized it at the time, I had seen a lot of founding and growth challenges that have deeply informed my research since then. Right now, I get to scratch my entrepreneurial itch by helping my current students, alumni and other founders maximize their chances that they’ll bring their dreams to fruition.

—

Noam’s book, ‘The Founder’s Dilemmas – Anticipating and avoiding the pitfalls that can sink a start-up’ is available on Amazon.com.

The Most Unusual Tech Startup: Bury Your Deceased Loved Ones in Space and Get a SMS Every Time They Pass Over You

Jason Lim — Sat, 19 May 2012 04:32:48 +0000

When I was in Seoul recently I met a tall French man named Thomas Civeit. The usual chatter popped up, “What are you doing?” I asked. “A start-up.” He replied. But he proceeded to tell me about his idea which is definitely the most unusual one I’ve ever heard. Rather than bury your deceased family in the ground, Thomas wants to launch them into space and allow you to track them with your smartphone. His start-up Elysium Spaceflights is an early stage start-up that plans to have a detailed flyer for funeral homes and customers this summer. Sound crazy? Oscar Wilde once said “An idea that is not dangerous is unworthy of being called an idea at all.”

I interviewed Thomas to get more insight into this intriguing idea.

What is your background?

I am a former space systems engineer. I have been working for several space missions over the last 9 years: the Huygens interplanetary probe at the European Space Agency, then I moved to the US and worked for NASA’s FUSE (Far Ultraviolet Spectroscopic Explorer), Hubble Space Telescope, and James Webb Space Telescope. I’m currently working for the SOFIA mission (Stratospheric Observatory for Infrared Astronomy) at NASA Ames in the Silicon Valley. My small consulting company Deneb Aerospace provides engineering services to design and operate space systems.

What is the idea?

Elysium’s goal is to make Space Burial a reality by launching the cremated remains of a loved one into Earth orbit. Only *symbolic* space burial has been done so far by launching a few grams into orbit. We want to create a new experience to celebrate people’s lives, by having funerary urns orbiting the Earth.

Why are you doing it?

People think that space is out of reach and it would be too expensive to perform a genuine space burial. I thought about the experience using the current technology and cost and realized humanity could do it right now if someone could be brave enough to make it happen. Space is an exceptional place not only for science, space tourism is growing (see SpaceX/Bigelow recent deal) and I believe space is a unique and meaningful place for memorial services.

How did you come up with the idea?

Initially nothing related to funeral actually. I was working on nano-satellite (1-10 kg) operations and I realized that teams often had a hard time finding a launch vehicle because the payload is too light and launchers are mostly interested in heavy payloads (i.e. several tons). There are also constraints related to radio-frequencies and chemicals for instance. While I was thinking about these issues, the space burial idea came to my mind. A funerary urn is the simplest “space system” I can imagine and having many of them can make an interesting payload for launchers.

How does it work?

We will collect the entire cremated remains of the participants and place them into a specially designed memorial spacecraft. A rocket will launch the memorial spacecraft into orbit, where it will remain for decades (the exact duration will depend on the launch parameters). Eventually the spacecraft will re-enter the Earth atmosphere, vaporizing and blazing as a shooting star.

An essential feature is that people will be connected to the memorial spacecraft at any time using augmented reality. Nowadays it is possible to visualize spacecrafts orbiting the Earth by pointing your phone’s camera to the sky. AGI (a leader in space and defense software applications) provides the “Satellite AR” application for instance. Moreover, we will optionally send SMS notifications to people when the spacecraft will be visible from Earth. The best time to spot satellites is in general just after dusk or just before dawn.

How much will it cost to build?

The most significant expense is the launch. The cost will depend on the number of participants and the selected launcher. There is therefore no final answer but to give an order of magnitude it can easily cost $50-100M, as we plan to use the most reliable launch vehicles.

How much will you charge people?

We plan to charge around $200,000 per participant.

Who are you targeting?

Japan and North America are good places to start, although the service will not be limited to these countries. The cremation rate is about 99% in Japan and 40% in USA. It corresponds to about 2 millions of cremated people per year overall, and much more by considering cremations over the last 10-20 years. We need to reach a few hundreds of families, who are willing to have an exceptional and unique celebration and be part of human history.

When will you launch?

Once we will have enough participants. Companies offering launch services typically have a lead time of about a year or more once the payload is ready. If it goes really fast, the launch may happen by the end of 2013.

—

For people wanting a really unique way of burying their family or friends, it is hard to beat a space burial.

Sina Debuts Social Magazine Sina View

Charlie Sheng — Sat, 19 May 2012 03:32:53 +0000

Sometimes I am such a fossil, when I want to read news I’ll only refer to news sites, and when I feel like interacting with friends I’ll use SNS apps. And if I incidentally have access to too much irrelevant information while I’m reading news or communicating with friends, I could have been annoyed, just like anyone else will. To make that worse, the current Internet products are all focusing on versatility and multifunction instead of minimalist or simple is beautiful.

screenshot of Web-based Sina View

Recently Sina’s social magazine Sina View (Sina Shiye) just released a new version to ramp up its social features. Launched earlier this year it only runs on iPad and looks similar to the Sina News mobile app. Now it’s also available for mobiles and PCs.

Logging in with you Sina Weibo account, you can subscribe to channels you take a like to. Then you’ll see those channels on the right column, the news feeds appear in the middle and the left colum is saved for friends you followed on Weibo. Here in the right column you can also browse your Weibo content. Since the content I followed on Weibo is quite similar to the channels I subscribed to on the View, it feels like much the same. You can also repost articles to Weibo.

Sina View also launched a new HTML5-powered web version which is visually impressive with animation and simple design. Besides the choice of channels, a fresh function is allowing users to provide their own RSS and it’s also integrated with the Weibo account. It is a good way to engage Weibo users.

According to Sina View team, the new version for iPad will come soon and will still focus on Weibo users’ social connections.

How do you like it?

Infographic: Tencent Restructure 2012′

Ben Chiang — Fri, 18 May 2012 13:55:50 +0000

Tencent today officially announced its restructure plan to reorganized the heavy-weighted company into six business groups, including TEG (Technical Engineering Group), SNG (Social Networking Group), CDG (Corporate Development Group), IEG (Interactive Entertainment Group), MIG (Mobile Internet Group), and OMG (Online Media Group), which again are consisted of numerous departments and offices, the infographic pictured below could help you better understand what is going on with the move and what the Shenzhen-based Internet juggernaut is up to after this.

China’s UC Browser to Branch out into U.S.

Ben Chiang — Fri, 18 May 2012 05:08:55 +0000

UC Browser, the largest mobile browser in China by adoption will be opening an office in the U.S. in the second half of this year, according to Yu Yongfu, founder and CEO of the company.

Not only UCWeb will compete with those homegrown rivals in the U.S. market like Apple’s Safari for mobile, the company will also meet intensive competition from another Chinese mobile browser which has established its name in overseas market, namely the Dolphin browser.

Dolphin is among those Chinese technology companies that earned their fame and user from aboard firstly and then made a foray into their home turf.

Dolphin which claimed to be the first dual-core mobile browser to date hits north of 10 million users in last November while UCWeb claims more than 300 million users globally. Dolphin has set up its branch office in the Valley, and UCWeb has got a solid foothold in India with a market share of over 20%. Both companies are gallantly venturing into overseas market.

Yu said in an interview that America is a very important target for the company in its aim to transform UCWeb into an internationalized firm.

It already offered an English language version of UC browser for American consumers, and will launch a U.S.-tailored edition of the browser with partnerships with some of the local services like Evernote.

Tencent to Restructure into Six Groups

Ben Chiang — Fri, 18 May 2012 02:00:45 +0000

Tencent, the Chinese Internet juggernaut was rumored to undergo a major overhaul of its businesses through which the company would be reorganized into six groups, local portal site Sohu reported citing sources.

The six groups include: TEG (Technical Engineering Group, consisted of Tencent Research and operating divisions), SNG (Social Networking Group, consisted by its Internet business lines and some divisions from Tencent Research), CDG (Corp. Development Group, formed by Tencent Guangdong R&D Center and its corporate development arm), IEG (Interactive Entertainment Group, original Interactive Entertainment service), MIG (Mobile Internet Group, consisted of wireless services and some divisions from Tencent Research), and OMG (Online Media Group, namely its portal business).

Local media once cited sources claiming that Tencent has categorized all its services and operations into four business lines which take care of everything ranging from corporate functions, services, security, architectures to operations whilst Line B, or the Line of operations will again be subcategorized into five arms include corporate development, wireless services, Internet services, interactive entertainment and online media.

In a nutshell, Tencent is making efforts to streamline and probably lose some weight.

The most profitable Chinese Internet company which uses a penguin with the red scarf as the mascot, has been growing into a stout beast with its toes stepped into a disparate set of territories to compete with Chinese Internet companies on many fronts like portal business (rival with Sina, Sohu and NetEase), online games (compete with Sohu, NetEase and Shanda), social networking service (with Sina, Renren), software and anti-virus services (with Qihoo 360), online video (with Qiyi, Sohu Video), ecommerce (with Taobao), travel booking (with Ctrip), online payment (with Alipay) and search (with Baidu and Sogou), just to name a few.

In the firm’s freshly released Q1 2012 financial results, it munched in a profit of US$ 470.6 million on revenue of 1.53 billion, up 2.8% from a year earlier.

screenshot of Tencent’s portal business QQ.com

All its major offerings are still seeing big growth, for example, its instant messaging system QQ now boasts 751.9 million accounts, up 11.5% yoy, QZone and Pengyou.com, both are Tencent’s approach to social networking to date claims 576.7 million and 214.5 million users respectively, up 9.7% and a stunning 30.2% yoy. And the Shenzhen-based company’s profit-making businesses including QQ Game Open Platform, Internet value-added service, wireless Internet value-added service as well as online advertising business all pulled off decent growth in the past quarter.

However, there’s always more than meets the eye.

Firstly, Tencent’s investment spree in last year hasn’t brought on too much revenue, for example, it still lags behind Alibaba/Taobao on ecommerce front in spite of a flurry of stake shopping, probably one of the major causes why Tencent strived to restructure and streamline its online selling effort lately.

Starting last year, Tencent invested into a bunch of ecommerce services such as Gaopeng the JV with Groupon, China’s Zappos OKBuy.com, the Chinese OTA elong.com, diamond etailer, kela.cn, 3C etailer 51buy.com and so forth while eLong is the only one which is making money.

Secondly, Sina Weibo the sensational successful Chinese social media has posed some sort of material threat to Tencent. Just like Tencent built its empire on QQ, Sina has been working relentlessly on Weibo to reinvent itself from the traditional online media company to the leading social media outlet by adding a swath of innovations to the platform like Weibo Open Platform, Enterprise Weibo, Weibo gaming center and so on. For Tencent Weibo? Try ramping up the daily active users before thinking of anything else.

At the same time, Tencent’s search effort Soso was long-rumored to be facing serious downsizing, underscoring that someone as strong as Tencent still has its achilles’ heel. Soso never made any breakthrough since its inception from six years ago. It currently accounts for 1.5% of China’s search market in the first quarter of this year, according a report by Beijing-based market researcher iResearch.

Tencent had, and still has its glories, but the rise of its peers and the change in the market raised some unanswered questions for it, a organizational restructure might help it be more responsive to market change and be nimble in execution.