Conversation with Pony Ma, CEO of Tencent.

Hello from Beijing! We’re live at National Convention Center live blogging.

Pony Ma – Founder of Tencent is the first one up.

Background – Tencent, or better yet known as QQ, is the 4th largest internet company in the world. Since its IPO, it’s increased 5000% over its debut price.

QQ is a transformational IM product that is highly customized for Chinese netizens.

Q&A

Techcrunch Staff (Sarah Lacy):

Life, Death or “Tencent”. This means startups’ fate is either acquired by Tencent or destroyed by Tencent.  You are also commonly known as the Microsoft of China.  How do you view yourself?

CEO of Tencent (Pony Ma):

Not sure if calling Tencent is the Microsoft of China is a good thing or a bad thing.  Tencent is primarily focused on Entertainment and Games and is becoming an open platform for all developers to create value for China like what Facebook is doing in the U.S..  Tencent can be viewed as more of an entertainment SNS is than it is creating software like Microsoft.

Sarah Lacy:

Tencent has been accused of stifling competition because it can leverage its massive platform of users and copy whatever new idea that’s our there.

Pony Ma:

Web is a very open space, there will always be opportunities and industries verticals that we will not be able to develop respective expertise in.

For example, ecommerce, there are many verticals that are highly specialized like in diamond and luxury items, it’s an O2O (online to offline) business that we’re not involved in.

Sarah:

Silicon Valley companies traditionally have not done well in China, they are stumbling quiet a bit actually.  What is going on?  One specific example is Groupon.

Pony:

Groupon is a partner of ours so we cannot discuss detailed information in public.

(Audience laughs)

Simply put, the primary and most common mistake is not understanding the dynamics and the fast paced culture of internet business in China.  Having great ideas just doesn’t cut it here.  Continue with Group buying as an example, it has tremendous market potential but there are so many competitors and these competitors are aggressive and we’re talking about competitors in the hundreds and thousands when the barrier to entry is low.

Sarah:

Let’s talk about your entrepreneur experience.

Pony:

A few of our early founding members and I had strong telecom expertise and we were working as outsourcer to do some telecom projects from overseas.  We didn’t have very much at the beginning but we wanted to leverage these expertise and work for ourselves.  We started off creating email software but we quickly moved on to instant messenger because that was harder to replace and it had continual service value.

One thing we were very lucky in our early days was early employees and founding members work peacefully and minimize conflict.  To stress the point, I knew of a Shenzhen company that build software for brokerage stock trades – there were 19 members at this company initially and later on became 19 companies because of internal disagreements.

How to divvy up and share profits is major headache for every entrepreneur in any industry.  We work very hard to keep every employee on the same page and have them execute on the same rhythm while keeping a clear vision and goal.  We also develop a solid foundation of trust such as knowing their parents, their friends, where they live, etc.

Sarah:

Regional Differences.  When do we get pass that and become truly global

Pony:

There’s 3 main things, culture, population and politics which makes this question very complicated to answer.

Techcrunch:

What keeps you up at night?

Pony:

A lot of things (said with coy) but give you 2 broad ones.

(Audience laughs)

1. In traditional business, a small change is hard to impact your entire business but for web companies, one small thing can really shake your foundations.  (i.e. web outages)

2. Strategy and trends and always stick to your vision.  Company size is independent of it continual success, one bad decision can cause serious disruption in your service.  We will always be alert and focus on delivering the best product and service to all of our users.