I was chatting with a founder of an internet startup recently. And the person mentioned, Netease’s CEO William Ding started a pig farm. What?! The king of online game becomes a pig farmer – you are not kidding me ??
But, here is an article in the local media about it: http://tech.sina.com.cn/chuangye/r/2011-01-27/18085140228.shtml. The project started 2-3 years ago and by June this year, Willam Ding brand of pork should be ready for market.
“Why not?” said my friend, “Many people care about the quality of their food nowadays. Selling pork can be a lucrative business, if the quality is good. Also, pork is staple of our diet. This can be making more than online game.” (I doubted it. But … kept my silent.)
Giving the prosperity we’ve seen in cities like Beijing and Shanghai, many of us (foreigners) have forgotten China is in fact a developing country. A lot of its industries are underdeveloped, including farming. It is carried out by millions and billions of small farmers, each working on their fields individually. It is not to say quality-control is not in their dictionary. But, there have been many and many cases of problematic food incidents in China. For example, the contaminated milk powder will cause tens of thousand of children in China to fell ill in 2008 (http://news.bbc.co.uk/2/hi/asia-pacific/7628622.stm)
Others less well-known but equally horrified cases include using hair to make soya source, using last year moon cake filling to make this year ones, and so on and so for. Many of my friends, who are in the so-called “high-end” category, also worry about their foods and believe a line of good-quality food can have a market. In fact, a VC friend of mine is thinking of selling beef stew online. (Again, I doubted it. But … kept my silent when he told me.)
For the last few years, we have seen many VC investors branched out from technology and internet sector to tradictional industries. For example, GGVC, which has invested in Alibaba and Tudou, put their bet in Chamate (www.chamate.cn), a restaurant chain. Some internet entrepreneurs also tried their hands in tradictional industries. The most famous example is the founders of Ctrip. After their success with online booking of hotels and airlines, they actually tried running hotel chains themselves. The first is Home Inns, and then Hanting. Both are listed in the Nasdaq.
“Many of internet business are run by colleague graduates, if not PhD. Most of the managers in the tradictional industries are less educated,” said my startup friend, “Also, running an internet business, you rely on operation data and information. You used to make decision from user behavior. Very few companies in the tradictional industries in China run their companies with modern management practices in mind. Most of the decisions are made based on experience or guesswork – some can be good, and some can bad.”
Overall, he thinks there is an advantage for internet entrepreneurs to do tradictional business. “Running an Internet business in China, you are used to cut-throat competition. Unless the industry is government controlled, I believe internet entrepreneurs can have a good chance of success.”
I wonder what will be his next startup…