Jeff Xiong, the former co-CTO of Tencent talked about going ‘from building to investing in great companies’ at the Startup Nations Summit 2014, held in Seoul, South Korea. He is currently founding managing partner at Seven Seas Ventures, a venture capital firm focused on investing in cross border technology companies in the U.S. and China.
He shared his experience working with Microsoft for nine years, from 1996 to 2005. After this he joined Tencent, where he saw first hand the exponential growth it enjoyed for eight years, from 2005 to 2013. This period matched that of the movement in Internet development in China towards the mobile Internet.
As a senior program manager at Microsoft US, Jeff worked on a number of products which were the current darlings, including Internet Explorer,Windows 2000 and MSN Messenger. In 2003, Jeff led the setup of the Microsoft MSN Development Center in Shanghai. At that time, Microsoft’s MSN Messenger was the most popular chat service worldwide. When he chose to join Tencent at the end of 2005, it was seen as a big challenge for Xiong, since QQ had far fewer users among college students and white collar workers than MSN at that point. But seeing its vast potential, he chose to work for Tencent. Tencent’s market value was then US$1.5 billion, which now increased to US$152 billion, increasing by over 100 times. MSN Messenger has since closed, and people say Microsoft has suffered a lost decade.
He pointed out that Tencent’ s success is due to both internal and external factors. Externally, the Internet has developed rapidly and helped Tencent grow. Previously, people had to go to Internet cafes to access the Internet, but now they can access to the Internet directly from a PC at home or even from mobile phone. During the last three years, China’s mobile industry has shown extremely high growth rates. China now has 600 million Internet users and Tencent has grown tremendously from the 10 million daily simultaneous online active users in 2006 to 150 million daily simultaneous online active users in on its QQ platform. By January 2011, there were 647.6 million active Tencent QQ IM user accounts. In 2010, Tencent created a social mobile application, WeChat, which has now 900 million users.
Internally, skilled manpower has helped Tencent grow. They had 1,000 engineers in 2005 and had a lot of add hoc development process. Now that number stands at 30,000 engineers. For the first three years, Jeff helped Tencent recruit many seasonable managers from Microsoft, Yahoo, Google and Oracle to Tencent.
“There are main streams in the tech industry. The first decade was the era of internet companies. Yahoo was the pioneer, starting on January 1994, followed by Google. The second decade was the era of e-commerce, such as eBay, and social networks, such as Facebook and Twitter.”
Xiong assumes that the third stream will be IoT (the Internet-of-Things), which bring about convergence in internet and databases to impact other industries. Smart homes will be equipped with smart appliances in next three to five years. He summed up by telling entrepreneurs to take the chance on this stream. Just like the time he joined Tencent, seeing the prospects of the next 10 years.
Editing by Mike Cormack (@bucketoftongues)