Through its representative offices in Shanghai and Beijing, SVB Financial Group brings the full scope of its knowledge and networks to entrepreneurs in China. SVB has been building relationships with entrepreneurs and investors in China for more than a decade and opened its first office in Shanghai in 2005. Today, the local team assists with access to venture debt financings and offshore banking needs as well as client support services for banking products such as loans, deposits and cash management services to the offshore entities of various Chinese venture-backed enterprises. SVB is actively working toward the establishment of a banking platform in China. Lilly Huang is our dedicated entrepreneur contact based in Shanghai and she interviewed Douglas Raymond of Julu Mobile to find out what it’s like for an entrepreneur in China.
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About Douglas Raymond
Douglas
started Julu Mobile after working at Google for more than five years, where he
was the founding product manager of AdSense for Mobile Applications and the
product manager for over a dozen product launches in AdWords, AdSense, and
mobile advertising. He is a three-time winner of Google's Operating
Committee award for Impact and Innovation.
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About Julu Mobile
Julu Mobile has a simple goal: to
make Chinese mobile developers the most revenue for their mobile content in
China and the rest of the world. Julu Mobile does this with technology — it is
the first company to build targeting and ad formats native to the Chinese
high-end mobile market. The team comes from Google, Microsoft, and eBay and is
based in Shanghai.
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Business Overview and Market Potential
L:
Can you tell us about your company?
D: In terms of opportunity in China, the specific area I'm
interested in is mobile technology, which means not only the cell phones we carry
around today, but also tablets and the basic mobility of technology that gives
us the instant access to computing power.
There is a platforms shift every 10 years. We used to have PCs
on our desks; now we have laptops, and we are moving to a mobile platform,
which means we are carrying more computing power in our pockets than that of an
entire room in the '70s. This is creating opportunities and also creating
disruption — no one really knows how to make success out of this platform shift.
In China, it's happening very fast. The old generation of
mobile devices — smart phones like Nokia and Ericsson —are replaced by iPhones
and Android. This is a big opportunity for the developers because these phones
are so much more powerful in the way they interact with users. And smart phones
are much more sophisticated in terms of their features (camera, touch screen, GPS
signal) and are able to remember your past decisions and communicate with the
world with higher date exchange rate through 3G network (with 4G is coming in a
couple years). All these changes mean that we can do new things.
What Julu is trying to do is take this shift in technology
and give the mobile developers the ability to serve up advertising on their
phones using all those powerful signals. Developers today in China don't have
good ways to make money. It's difficult for them to sell their applications and
most of their users tend to be overseas. What we want to do is to use the
technology in mobile platforms to give them the access to a world of advertisers
that want to reach users on their mobile platforms. This would allow the
developers to make a living and to monetize.
The compelling aspect of the mobile platform is that it has
the potential to be better than desktops and better than any other types of
advertising. There are two reasons for that. One reason is that the device
itself has more signals to tell what the user wants. The other reason is that
you always have the mobile phone with you. Think about TV, you only have TV at
home and watch it at night. On the other hand, most people are never more than
one meter from their mobile device. The opportunity exists to make this highly
targeted, useful platform the most valuable advertising platform ever. That's
our dream. If we can do that, we give our key clients — the developers in China
making applications and web content for mobile — the way to make money. In addition, we give the advertisers the way
to reach important clients such as growing, successful Chinese businesses,
students and retirees.
L: The number of Chinese mobile users exceeds the
number in the U.S. What do you think about the market potential for Julu Mobile
in China?
D: It's certainly a good reason to be in China. I would say
that the exciting thing about China is the timing of the market. At the
beginning of the year, there were about 5 million high-end mobile devices. In
the prior year, the number was 1 million. It's growing at about 400 percent to
500 percent per year. The replacement rate for smart phones is about once every
21 months - this means that the average Chinese user uses their phone for 21
months before replacing it. The cost of the high-end phones, such as iPhones
and Android phones, is coming down to a point at which most people are
switching to Android or iPhones. That's driving a growth rate about 400 percent
which is one of the highest in the world. The growth rate, combined with the
overall size of the market, makes China a very attractive market for us to
introduce a new technology platform.
The other reason I choose China is that no one is really trying
to build a technology platform for mobile in China. There are companies building
ad networks, but they don't really have technology behind them to target and
match the users. In the U.S., I built this technology in Google to match users
and advertisers in the mobile platform for mobile applications. But this
technology is not really localized to China. No one has ever tried to build a
model that works specifically for Chinese users — technology to install in
Chinese phones and interact with the environment. We'll be the first company to
build the technology platform for this market that is growing at 400 percent.
When we build the technology, it will be very difficult to copy. You can't see
it; it's invisible but it allows us to connect users with the content that they
are interested in better than any other technology in the market.
L: Historically, most innovations are created by small and
medium companies. What do you think about the competitor landscape in the
mobile advertising industry? Are you concerned about big companies like Google
or China Mobile?
D: I think there are a lot of innovations in the U.S. There
will be an increasing number of companies entering the mobile market because it
is growing so fast. So, we expect more competition, not less. There will be all
kinds of small companies created. In China there are a lot of mobile application
distribution platforms such as GOAPK. The market is different from that in the U.S.
I think the market in China will be more crowded and there will be more
competition. But Julu's strategy is building a technology that differentiates
itself by power and quality. We think that in respect to all the competitors,
we are able to offer unique value to developers and the best experience and
revenue to help them survive.
L:
How did you come up with the name of Julu?
D: Julu is actually the name of the battle in the Qin
Dynasty. In the battle the smaller force managed to defeat the larger force through
a series of military actions and confidence. These were the Qin people, who were
later called Chinese by westerners. So I think it's a very inspirational story.
Although I'm a foreigner I wanted the company to be a company
that focuses on making Chinese developers successful. But it's a tough market,
so I think of the Qin and the great odds they were fighting against and the
competition they faced. The time was a turbulent period in China's history as
it is now in the mobile market. That's an appropriate story and I love that. I
also like the name Julu because it's the great deer in Chinese. So we adopted
the great deer as our mascot. I like the idea of the energy of the great deer
to support the developers in China.
J:
The online/mobile advertising industry is facing challenge in the issue of
privacy violation. How will it impact Julu. Do you have a solution?
D: Privacy is always one of the core issues in this area of
technology. Since a phone has a lot of signals there is the possibility that
the user's information will be misused. Our philosophy is that we don't use any
personal information and we use information from the phone to provide content
that is relevant.
We have two principles. One is transparency: you need to be
transparent to users about what information you are collecting. The other one
is choice: if the users don't like the offers you provide, you should give them
the way to opt out of them. The only way you can make developers successful is
that their users like them. The developers want to make more money, but they
also want more users. We design our ads so that the technology works, in the
way that the users like the offers better than other alternatives and are able
to choose whether they see these ads.
L:
What's your goal in the next three years?
D: Our goal is to build the best partner for mobile
developers in China. We want Chinese developers to think of Julu as the most
powerful and useful technology and the highest paying partner. There is a lot
of competition, but Julu's technology differentiates itself by power and
quality. We deliver better user experience and the developers solve their
problems not only in China but globally. The thing that I emphasized before is
that Chinese developers don't want to be successful only in China; they want to
be successful all over the world. Some of the best applications are made by
Chinese developers. We have the ability to talk about the technology that will
make them more successful globally.
Entrepreneur Perspective
J:
As a foreign entrepreneur, what challenges do you have when starting your
business in China?
D: Less than I expected actually. I thought being a foreigner
would be a big problem. Actually, it would be better if my Chinese were fluent.
But my business focuses on technology and helping Chinese developers to be
successful, the market they are interested in, the problems they have, the
opportunity in technology we can use to help them to address their problems —
all are fairly global issues. To be successful, I need to have strong Chinese
partners and colleagues, but in general, being a foreigner has not hurt me any
more than it helped me. The perspective that I have to build this technology in
the U.S. and make it successful in the other parts of the world helps me. All in
all, I have the same chances as anyone.
L:
You have lived in Silicon Valley for a long time, what do you think of the
difference between the innovation environment in China versus the U.S.?
D: It's hard to say, in China there are several innovation
parks. In Guangzhou and Beijing, there are more start up activities. Shanghai
is a little different; it's like New York in the sense of financing and capital
driven market. I would say that the idea of doing a start up as an early career
experience isn't common in Shanghai. I can only talk about Shanghai because I
don't have any other experience elsewhere.
When you are recruiting engineers and other employers it
tends to be difficult. People will ask why you are going to a company that has
only existed a couple months, that is not well-known, that may not pay you and
doesn't have the benefits of the big corporations. That may be a difference.
It's certainly the same situation in the U.S., because in different parts of the U.S.,
there is less the understanding of entrepreneurship than in the Silicon Valley.
For many entrepreneurs, it might not be
the right decision to commit to a start up now, but that doesn't mean it won't
be the right decision later. You reach some point of your life when you want to
try something exciting and riskier. If you are a good engineer, you should
think about working at Julu.
L:
What advice do you have for people who want to start a business?
D: I don't consider myself an expert. I have been doing it
for less than a year. What surprised me is how much better the experience was
once I started it. Getting up the courage to start something new is always
difficult; believing and understanding something that is unknown is always
hard. But that is the hardest part. Once you decide to do it the rest is easy.
You may not know what the end result will be, but your path every day is clear
and you know what is important to work on at that moment. You often surprise
yourself with your ability to overcome problems you've never dealt with before.
I think I learned a lot more in the last couple months than I have in most of
the points of my career because I am always dealing with new problems and
trying to figure out what is important. The other thing is that there are a lot
of ups and downs in an entrepreneur's life. Life is amplified in that when
something good happens, it's really great and when something bad happens it's
really bad. So one of the things I had to learn is how to stay on an even keel
and not get too upset when things go badly. Perseverance is important.
Personal Viewpoint
J:
You have described yourself as a general manager at heart with a great love for
technology and product development. When did you find yourself starting to
enjoy the world of technology?
D: I think it's probably when I was seven years old. When I
was young, it was the time that the first personal computers were coming out
like Commodore 64, Apple II and the Amiga. My parents wouldn't spend money on
those things. So I would always have to go to friends' houses or go to schools
to find computers to play with and I would teach myself how to use them and
write programs. I was fascinated with how they work and what I could do with them.
So I think I have been always interested in technology and computer science. I
was trying to find different ways to participate in it over the years.
L:
You lived in different places in the world. How does it impact you as a manager
and a human being?
D: I think acceptance of other ways of thinking is one of the
key skills of being a good manager and also a good human being. If you look at
what is happening in the world, so many of our problems are global problems.
For example, here in Shanghai a huge problem is that we have to find enough
coal and oil to keep the city running. The environment is a global problem. Global capital
flows are inter-related. Even for Silicon Valley Bank over here in Shanghai, a
financial crisis that's happening in Greece can affect it. These problems have
a common threat — in order to solve them people with different backgrounds will
have to work together. In order to be successful in any leadership role you
have to be able to work and try to understand people with different backgrounds.
There is no better way of doing that than live in another country or going to
school with another language and culture. Not only was I interested in doing
that, but I think it's going to be an increasingly important skill. Luckily for
me, when I was 13 years old, I got to go to Australia to attend a global Boy
Scout jamboree. People from 40 or 50 different countries were there and I saw
how many different ways of thinking there are.
It doesn't mean you have to agree with all those different ways of
thinking, but if you are aware of them and try to understand them, I think it
gives you the unique perspective you need to be effective.