At Macworld Asia Conference this year, Lu Gang, founder of TechNode, had on-stage interview with Hugo Shong (Xiong Xiaoge), founding partner of IDG Ventures, for the third year in a roll. The conversation covers a variety of topics, raging from the rise of post-90s gen entrepreneurs to venture capital in the U.S. and China.
According to Hugo, his happiest moment last year is when IDG successful took exit from 91 Wireless after Baidu acquired the company with US$1.85 billion. In 2006, IDG raised around US$300 million funding together with Accel Partners and they invested in around 20+ mobile Internet startups. Back then the business model of mobile Internet services was not formed and most of the other VCs held a wait-and-see attitude towards this sector.
As young entrepreneurs are becoming an unneglectable force in Chinese tech industry, IDG is putting more emphasis on startups founded by post-90s gen teams. The venture capital has invested 14 such projects as of present and held campus startup competitions in 18 universities all over the country. Last week, IDG set up a US$ 100 million fund which is dedicated to help these young entrepreneurs.
Hugo said he is now engaged in studying the social community, interests and lifestyles of post-90s gen so as to better guide the investments in mobile Internet industry. As a company founded in 1993, IDG is also a member of the post-90s gen and we are investing with the mentality of this young and innovative group, he said jokingly.
Of course, there are generation gaps between the elder investors and the young teams, but we still trying to understand them because mobile technology and modern life are closely connected. The user experiences of post-90s, who are born to the digital age, are very precious. He believed there will be excellent teams to stand out from the these projects. He added that IDG is also trying to recruit more young fund mangers.
Hugo pointed out post-90s gen is a broad concept. For example, Guo Lie, founder of the hit cartoon image collage app MOYTee, is born in 1989, but he is generally considered as one of most prominent figures in the post-90s entrepreneur boom.
Most of the post-90s gen entrepreneurs just left campus and do not have rich working experiences. When being asked whether he has concerns that the lack of working experiences will harm the development of startups, Hugo argued experience doesn’t matter, because none of us have experiences for mobile Internet. “In the exploration of this sector, we value the future and innovation courage more.”
In addition to provide funding, qualified venture capital is also an expert in relation management, noted Hugo. 1). VCs have to guide the entrepreneurs as their tutors, helping them to figure out future development paths. 2). VCs have to coordinate with governmental departments and guide application procedures since most of post-90s do not have such experiences. 3). Coordination with related departments, investors, partners, etc.
At TechCrunch Beijing held mid-August this year, general partner of CrunchFund Pat Gallagher mentioned that venture capital companies in Silicon Valley are becoming smaller and industry-oriented in recent years. As for the reasons of this trend, Hugo thinks the VCs and PEs in the U.S. are operating in a quite matured and fixed model. They are trying to find a sweet spot to balance the investments and it is easier for VCs to form a preference for a certain industry that they are familiar, has more professional knowledge and more social connections.
But the case is completely different in China, China’s VC industry has a much shorter history than the U.S. IDG only operates for 20 years. With more money flow to startups, Chinese venture capital firms are bigger in capital size, because capital strength is one of the most important factors for VCs to compete with peers in investing in promising startups.