Interview with the Co-Founder of Zhaopin, Steven Chiu
I’ve met quite a few founders who are in start-up mode but not too many that have come out the other end of a successful one. That’s why I took the opportunity to talk to Steven about his story of creating and building a start-up.
Zhaopin.com is one of China’s largest online job recruitment companies. It is now 56.1% owned by Australia’s largest online job site, Seek.com which I’ve used before. It is such an established brand name and I’m reminded of that when I catch the subway and see the Zhaopin posters on the wall and handles dangling in front of my face.
On Coming to China
As a half Chinese and half Canadian that grew up in Canada, Steven was allured to China to rediscover his Chinese heritage, so came to study Chinese in 1993 at BLCU. “I came to China to study Chinese in 1993 and my plan was only to stay here for a year but I really liked it so tried to find a way to stay but back then it was difficult. You either had to be a student or have a proper working visa. Also you had to live in approved housing.”
On starting Zhaopin
Interestingly like many successful entrepreneurs, Steven has no educational background in software engineering but instead a BA in English literature. “We (liberal arts majors) were lucky the internet came around otherwise we’d be working at McDonald’s.” Steven joked.
Steven teamed up with an English friend, Mark Baldwin, who he studied Chinese with at BLCU. Steven joined Mark at a head-hunting business that catered towards the first multi-nationals that came to China including Shell and Nokia. “They came to us asking for secretaries and low-mid level managers and we said we’re a head hunting company and our minimum fee was way too much for these positions. So we recognized a market need and decided to do a classified recruitment vehicle because at that time South China Morning Post was one of the most profitable newspapers in the world based on job ads. The internet just started to get going in China and I had one of the first BTA user accounts so we thought ‘hey, why don’t we put these jobs online?’ so we started doing a basic HTML listings site.
The tipping point to Zhaopin’s success
“One day I was on my way to work and I passed the newsstands and there was a story about some Chinese guy who studied and MIT and was coming back to start the Yahoo of China (Charles Zhang of Sohu). I thought that was cool and decided to go see him. Their site wasn’t even launched and I asked Charles if I could buy advertising. I said I wanted a homepage link directly to my site and I paid US$200 a month for a 6 month deal. The day after they launched we looked at the traffic numbers and they went through the roof, it was unbelievable! A week after we launched that link, clients started to call wanting to buy more job ads.
A few weeks later Charles called me and said they had to change the link because people thought he was advertising for jobs at Sohu. But since traffic was going so well we delayed changing the link by giving them free job ads.
We were lucky that at that time – we were early and we were delivering the service that was needed at the right price.”
The most stressful times
“We were operating in a grey market and worried about the threat of somebody coming in and shutting us down. There was no regulation about how to do things because it was so new so we had relationships with people who said they could cover us and make sure everything was okay. It was stressful when people who said they could help us when things went bad didn’t or couldn’t help us – it’s actually kind of similar to that list of lies that venture capitalists tell entrepreneurs – “we’re here to add value!”.
Also some of our Chinese partners did not share our long-term vision for the company and positioned themselves for early exits. But this was understandable in China at that time. Few people had confidence in China’s growth, much less the growth of the internet.
The most exciting times
“I think building a team and expanding to different cities was exciting. Also being part of the first wave of dot com companies in China.”
Steven said that back then, a small group of about 20 people gathered near Sanlitun to talk about internet start-ups, including Fritz Demopoulos who went on to create Qunar, Duncan Clark, who formed BDA (a leading investment advisory and strategy consultancy), and Kirstie Lu Stout, who is now CNN’s news anchor in Hong Kong.
Reason for leaving Zhaopin
“We were meant to go out and raise pre-IPO but that’s when the dot com bubble burst. I was able to get a term sheet for an acquisition but the investors didn’t think the return was high enough which left all parties disappointed.
It was hard to leave. And it was hard to say goodbye to a lot of the people we hired although it pleases me to know many of them are still there today.”
China compared to Canada
“When I go back to Canada, I think they are actually behind in the way in which they use technology in many respects. It seems that people in China are always on their phone doing stuff (like driving – joke). For example, when I went to the Bob Dylan concert, it seemed like half the audience were taking pictures and posting on Sina Weibo.”
Lessons learnt as a foreigner in China
“I think you need to use common sense. You can’t forget the basics of doing business. Often things get done for the wrong reasons in China, so if you can understand what the wrong reasons are, you can understand how things get done. It’s then up to each individual how they want to proceed in this market.
The difference between building a start-up then and now
“There are so many tools available on the market. For example, you can get an off-the-shelf white label job board these days for free when you buy a case of beer. You can layer products on top of another, you can use api’s. Also the economics are vastly different. With $100,000 back then you’d be lucky to launch a decent brochure site but now you can launch 10 different Facebook games.”
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Steven is now an advisor, mentor and consultant but currently spends much of his time acting as COO for Climate Action, a Beijing-based carbon credit retailer.