Find here the China paradigm episode 88. Learn more about John Artman, TechNode – a tech media in China for westerners – story and Chinese tech companies. Find all the details and additional links below.
Full transcript below
Hello everyone, this is China Paradigm where we, Daxue Consulting, interview seasoned entrepreneurs in China.
Matthieu David: Hello everyone, I’m Matthieu David the founder of Daxue Consulting and its China paradigm podcast. Today, I am with another podcaster and the editor in chief of TechNode – John Artman. You’ve been in China for 12 years now and you have been with TechNode for more than three years – correct me if I’m wrong about the timing but that’s what I got from your LinkedIn. You are also managing two podcasts on the tech industry in China, maybe three if you have hidden one, but the two that I know are China Tech Talk and China Tech Investor. I’m a listener of them, I think they’re a great resource to understand the Tech scene in China and I’d like to talk about those two activities you have, being editor in chief of TechNode a tech media in China for westerners, and covering China tech through TechNode, but also through Chinese podcasts. Thanks for being with us today, and my first question is going to be a question you ask every person – what’s your China story?
John Artman: Yeah, so it’s a bit of a long one. So, I moved to China in 2008, previously I had visited here twice, so once in 2004 and once in 2006 with my university. I started studying Chinese in 2003. I went to a small public university in North Carolina called Appalachian State and we had a small Chinese department, but I was very lucky to have a great Chinese teacher who was visiting from Sojo University. She gave me my Chinese name and really inspired me to keep studying. So, anyway I graduated in 2006 with a degree in psychology and philosophy and a minor in Chinese language and then I worked for about 9 to 10 months at a mental health facility for children, which was very, very stressful and then –
Matthieu David: In China?
John Artman: No, no in the US, near my university. And then didn’t know what I wanted to do, I guess I was trying to figure something else out. A bunch of my friends has moved to Nashville, Tennessee. They were artists, musicians and, writers so I was planning on moving there as well, but before I actually moved I had Christmas with my father’s side of the family, and my uncle used to live in Beijing, and he was like: “John, you could go and mess around with your friends whenever you want, or you could go to China, you already have the language skills. You can go to China and you can figure, and you can ride the wave”. I thought that it was a really good idea. So, he put me in touch with an English teaching school, like a private training center for adults. I was able to get a job there, came to China in 2008. I had a one-year contract to teach English and that was basically going to be it. Come here, teach English for a year and then probably come back and do something else.
It ended up that I met my now wife. We dated for a while, we have two kids now and I ended up working at China Radio International for about five and a half years, started off doing research and guest booking, then I worked in pre-recorded weekend shows lifestyle kind of silly stuff mostly, but then the last couple of years that I was there, I was very fortunate to help design and host a program called Round Table, and if you listen to China Radio International – Easy FM is the name of the station – in Beijing, it’s 91.5, that show is actually still going, more than 4 years after I’ve left. It’s a very popular format, but basically, it was a one-hour show where we discussed Chinese social issues, and so we used mostly Weibo as well as public forums for inspiration, news and things like that. Funny enough, TechNode and its discussions on Chinese tech company, both for that show as well for some technology reporting that I was doing, was actually a pretty big resource for understanding what was happening.
So, I was there for about five and a half years, reached the bamboo ceiling as it was – it’s a state-run media so there’s not much room for a foreigner to grow. Also, this was a few years after the present leadership gained power, so everything was becoming a bit more politically correct. And so, I worked in localization for a year and a half, mostly servicing Huawei and their translation services center. I helped to build a team of English native writers and editors to help Huawei – a Chinese tech company – with their technical documentation and then I saw that TechNode –this was maybe early 2016 – was looking for a managing editor. I had been out of tech and media for 2 years at that point and I was really kind of missing it. Being part of a public discussion, having impacts, helping people understand certain issues were really important for me and so I applied. My now-boss and CEO Lu Gang and I had conversations over the next few months, trying to feel each other out, get a sense of what we wanted and what the organization needed. So, I joined in November 2016. When I joined there was me and there were two other reporters, and now fast forward to almost the end of 2019, we’re 15 writers and editors, we launched a membership program called TechNode Squared, in May earlier this year. We’ve got about 250 members that want to understand the Tech scene in China right now and we’re just building up momentum and pushing forward. Really focusing on unbiased factual reporting about Chinese tech companies and Western tech companies in China and then also offering analysis and insights into what’s happening on the ground.
Matthieu David: How do you organize the editorial line of TechNode, as an editor in chief? I feel for tech media in China for westerners there’s a lot of hot news, breaking news, so I think it’s all the more difficult actually to have an editorial line. So, how do you combine those two aspects of getting a lot of breaking news, some companies need to raise money, some changes in technology and so on, on the other hand, to have an editorial line?
John Artman: Yeah so, I mean, I think that first of all, we have a very strong team of editors. So, we have a news editor, we have our senior editor who does a lot of different things and then we have our commentary editor. We have specific people in management and editing roles to make sure that things are getting done in kind of the way that we want them to. At the end of the day, reporters are responsible for not only covering news but then also making sure that they’re working on their feature stories. Then you know, we have three different newsletters right now as well, so we are all quite busy I would say, but at the end of the day, it’s really all about passion. We’re a team of I would say 60% local, 40% international and we’re all just very passionate about what we do. I think that TechNode is a very unique tech media in China for westerners. Where it is a media company, it’s more than a media company and we get a lot of opportunities to talk with executives and people on the ground to really figure out what’s going on, and I think that’s really what it’s about, it’s about figuring out what’s going on and then writing a story to explain that to our readers.
Matthieu David: How do you pick the topics? When I listen to your tech industry podcasts in China – another part we’re going to talk about – I feel there are topics coming from time to time, more recurrent than others like the mention of ByteDance for instance, as a third player compared to Tencent and Alibaba. It seems that it is a topic you went into deeper than other topics. So how do you pick a topic? How do you assess that this is going to be the topic which is going to become important, the topic you want to go in-depth? How do you do that in an environment where you have so much news which can actually be weak signals and change actually the environment and also the noise, and that’s a difficulty?
John Artman: So yeah, that’s a very good question. I think that at the end of the day it’s really just about us – because a large part of our job is talking with people on the ground, talking with people who work with these Chinese tech companies or Western tech companies in China, talking with people who run their successful business in China on these companies platforms, analysts, investors. So, I think, it’s really just kind of about sounding things out. So, getting a sense of what’s going on and then kind of making some guesses about what we think is important. Also, we get a lot of signals as well from our readers as well as from our members, so we get direct feedback from both groups, but then also we have a very clear page view metrics, so a lot of it is like: “okay, so this story got a lot of page views, so this is something that we should follow up on”. I think that one good example of that actually is our coverage of automated vehicles and electric vehicles. We started reporting on that specific sector of the Chinese tech companies earlier this year, or should I say taking that sector seriously earlier this year. We just saw a lot of great feedback, people wanted more. There was a lot of demand for more interest, for more content about this industry and so, we went the whole hog. So, now we have two reporters. One reporter who covers it full time, one reporter who covers it part-time and then we have a whole newsletter dedicated to that industry. So, I think, as a product manager for a tech media in China for westerners, I’m looking at the following: who are our users? what do they need? Then trying to create products to fill that needs, but our product is of course content and different kinds of content.
Matthieu David: Okay yeah. I know you have a link with TechCrunch and I know it certainly has been a source of inspiration, certainly also a comparison. How do you compare them with their work? How do you compare with managing a tech blog, a tech media now, a big one in the US, an influential one as well in China? How do you compare them? How different it is and how similar it is?
John Artman: Yeah so, I missed part of the introduction to that question but just to clarify, TechNode and TechCrunch are two separate companies. TechNode is the exclusive China partner of TechCrunch. We’ve been friends with them since 2011. We helped them to bring the first TechCrunch to disrupt if I remember correctly in 2012 to Beijing. Actually, I was working at CRI then and I went and that was very exciting. And we’ve been helping them to do TechCrunch events in China ever since then and we also manage TechCrunch.cn which is Chinese translations of their English content.
So, what’s the difference? I think one of the biggest differences is that we’re a lot less bloggy than they are. You have to remember that both TechCrunch and TechNode have been through a lot of changes over the years. TechCrunch got started with Michael Arrington back in the early 2000s and he was just an investor, a guy in Silicon Valley, as you know there’s a lot of bullshit – excuse me my bad words – but there’s a lot of nonsense going on in Silicon Valley. No one’s writing about it. I am going to write about it and Arrington was never shied away from controversy. So, doing something like TechCrunch was a good way for him to amplify his own voice as well as agitate for change. Journalism is activism to a certain degree, but then you know, TechCrunch was eventually bought by AOL, now its owned by Verizon and so I think that really kind of what we’re seeing is different generations of writers. So, even TechCrunch started off as very bloggy, very personal, a lot of personal opinions and now you have a lot of young and intelligent writers, so they still insert some of their opinions but at the end of the day, it is in general much more professional than it used to be. For TechNode we had very similar beginnings as well. Lu Gang started writing actually. It was called Moby Node at the time; he was in the UK getting his Ph.D. in telecommunications engineering and he started writing just a personal blog about kind of whatever. A little bit of tech and then came back to China and saw that there were not really tech media in China for westerners. So, he started doing that as well, following the Michael Arrington TechCrunch model.
Now when I came on board, I had been out of media for a little while and part of my onboarding process was kind of taking the measurement of the landscape and you look at the kind of where we are now with media and where we were then when both TechCrunch and TechNode got started. I mean – when TechNode and TechCrunch got started, like the New York Times, Bloomberg, Reuters, they didn’t do a good job of having that content on the web. At the end of the day, people getting content from the internet wasn’t quite mainstream.
I think that looking at now, everyone’s online, everyone’s getting their news from everywhere, so I was kind of looking at that and say ok, number one, what’s our unique advantage? And how can we stay niche? I think that at the time only doing tech in China, it felt like it was going to be a bit of a challenge, that there wasn’t going to be that much interest, that it was too niche, but at the same time, when I was working in the radio, TechNode was an amazing resource. So, I wanted TechNode to stay as a great resource for people inside of China and outside of China who really wanted to understand the country and, of course, understand the tech scene in China. So, these days we are a type of content that’s competing with all other types of content and it’s not just we’re competing with other blogs or other websites who cover tech in China, but we’re also competing with Bloomberg and Reuters in the information. And so, ever since I’ve joined, my main focus has been on making sure that we are unique, that we are offering something that you really can’t find anywhere else, and if the content is similar well the formats going to be different, or the level of professionalism is going to be higher. So, that’s really kind of where our commitment to neutrality comes in.
It’s always very disappointing to see tech media in China for westerners that I respect publishing exaggerated stories about tech in China or maybe too simple stories is another way to put it. So, what we really strive to do is to stay neutral. We’re a Chinese company, I’m an American like I said – our team is 40% international, 60% local but at the end of the day we’re all committed to China in some way shape or form. I would say in terms of foreign staff, the shortest that any of our foreign staff has been here maybe like 4 or 5 years and all of our foreign staff, they’ve lived in China before they joined TechNode. So, we’re all very interested in telling the China story so that people can understand the tech scene in China, but we’re interested in telling it in a balanced way because we recognize that it’s a very complex country. The politics, the economics, the technology landscape is extremely complicated and so, rather than taking a side or aiming for what we call clickbait, we want to be neutral and just give you the facts and help you understand what’s actually happening for Western tech companies in China and Chinese tech companies. And so, we’ve kind of evolved from the bloggy style into something that’s much more professional.
Matthieu David: 50 people work in the company and this requires financing it. So, what’s your business model now? Recently, you started to adopt a subscription business model, but what are the different streams of revenue you have now?
John Artman: Yeah, so TechNode is a lot more than just our English media. So, we started off as English media but now we do events. For example, I was just in Shenzhen last week for the TechCrunch event down there. We do one of every single year. We also do the Asia Hardware Battle, which is, I think, pretty self-explanatory. We gather hardware start-ups from around the Asia region, all the way to the Middle East, in fact, so the Middle East all the way to Japan in terms of geography and then we find experts and judges to choose the best ones. So, we do the TechCrunch Asia hardware battle. We do something called China Bond, which is like an awards ceremony, kind of recognizing the best start-ups and the best innovations of the year. And then we also have our services teams. We have two teams focused on financial advisory, so one team based in Singapore, which does cross border financial advisory like helping Indian and southeast Asian start-ups get in touch with Chinese investors and then we have a domestic financial advisory service as well, that focuses on something very similar, matchmaking basically within the China market. So, all of this is to say that the English content isn’t very well monetized. We’re very much supported by the rest of the company and our membership as well as our annual Emerge event series is part of that monetization process and so ever since I’ve joined. I mean I’m pretty entrepreneurial so one of my main goals is to make TechNode English sustainable. Maybe not profitable but at least breaking even.
Our membership and our Emerge events series are a large part of that and so right now, you go to our website and you sign up for our membership, it’s a $100 a year if you want to understand the tech scene in China. I think we give you three newsletters; we give you access to our community as well as access to some of the reports that we produce as well. That’s great value for money and it’s not always going to be a $100 per year. Then, with our Emerge events, we charge a relatively high-ticket price compared to a lot of tech events in China organized by other tech media in China for westerners for instance. We are pretty expensive, I mean not like super expensive but definitely higher than most people are used to paying, and that’s for a reason because, for a lot of companies, events are a marketing tool, it’s a way to raise awareness and kind of create an offline community. For us, it’s definitely about the offline community but the content is the producer and so we charge for that. So for example – in May we did panels on AI ethics in China, we did look at China to southeast Asia, blockchain regulation, corporate innovation and we had some pretty big names – from Walmart to WePay the thing is again, for the content offline you know, we take it very, very seriously and we just did a side stage at TechCrunch in Shenzhen. We did cloud gaming, mass customization so and we had some really great speakers there as well. We give time for the speakers to go in-depth, so a lot of times you’ll see panels or fireside chats, maybe 15 to 20 minutes and we aim for about 45 minutes for each panel. So, really kind of going in-depth and making sure that we’re covering the entire topic rather than just a small slice of it.
Matthieu David: You have not mentioned advertising which is the usual model of monetizing content. Is it because you don’t monetize through advertising or because it is too small, and you don’t worry about it?
John Artman: Yeah, so, on the one hand, compared to TechCrunch for example, our traffic is much lower than theirs. We’re very, very niche but at the same time, we have some really amazing SEO. We get some pretty decent engagement on social media, so our traffic is pretty good I think for our size. That being said, that is one of the big things that we’re going to be focusing on going into 2020 is increasing traffic.
So, on the one hand, it is a traffic problem, I mean like we don’t have millions and millions of people visiting us every month but at the same time it’s also my own kind of philosophy as well, I want the customer to be the end-user, so the reader is the customer, not a sponsor, or an ad network. Now, we do sponsored-content on our Tech media in China for westerners. That’s something that we’ve offered for quite a while. In that, we do projects with companies on a regular basis but it’s not something that we really enjoy doing or like really are very active in pursuing. My boss might not like me saying that but at the end of the day, I don’t like advertising. I have always been philosophically opposed to it. I think again that the people paying for a service or a product should be the ones actually using it and that’s why we launched our membership because this way we have a direct link to our readers and to our fans. $100 is not a lot of money if you want to understand the tech scene in China but it is a barrier, it’s a psychological barrier. So, people who choose to cross that barrier, they’re doing it because they want to invest, they want to invest in the production of news and information that’s relevant to them. We do have an ad network on our website that is a Carbon ad. So, it’s a very small network, they only have a selected group of advertisers that are on there and you’re not going to see random advertisements for your Kim Kardashian or alien babies and things like that on our website. Instead, you’ll see advertisements for things that are relevant to you, so for example, discounts on Adobe Creative Suite, discounts on Slack memberships and things like that. We’re very happy with Carbon. Carbon has been really, really good for us because again, it’s very relevant, highly targeted ads for our specific leadership.
Matthieu David: The other format you have is a China podcast. You don’t monetize the podcast if I understand because I’m not listening to any sponsor of the podcast when I listen to you. Could you share about why you started a China podcast and again, what’s the difference? I know you had actually an episode on that. What’s the difference between the West and China on podcasting, or podcasting from China to the West? You had an episode where you were mentioning that podcast is very different in China than to the West because China goes through platforms like Ximalaya and all those which wants to monetize and sell the courses whereas in the West it’s free. Would you mind sharing a bit of the reason why you started a China podcast and the differences you see with podcasting between the West and China?
John Artman: So, yeah, I’ve been podcasting for a long time. I did radio as I mentioned before and working at a radio station, I think there’s a lot of creativity left on the table. So, Charlie Custer, a long time China watcher – I think he might still have his website Chinageeks.com – and I started a podcast called China Punks and it was just us kind of going through the news in China and giving our own young and let’s say “curmudgeon” kind of opinions on stuff. We never really promoted it and never really got huge, but it was a lot of fun to do. So, when I joined TechNode, I knew that I wanted to do a podcast, I knew that I wanted to do something in audio, because audio and conversations are just fun and I think that, for me at least, I learn through writing, I learn through talking. When you think in your head, you have the kind of swirling around, but it doesn’t really kind of come out until you’re actually trying to communicate them and having people ask you questions and getting feedback, I think, is extremely important for the creative process.
So, yeah when I joined TechNode I knew that I wanted to do a podcast on Chinese tech companies and Western tech companies in China but the talent that we had internally at the time was not quite appropriate for what I wanted to do. I was just kind of on the lookout for an appropriate co-host and I noticed that Matthew Brennon was very active on WeChat. He clearly was an influencer of sorts and also really knew his stuff, and so I reached out to him and I was like: “hey, I’m John, just joined TechNode, do you want to do a podcast?”, and funny enough, we didn’t actually meet face to face probably until about six months or even longer than that of doing the podcast. I originally pitched him to do a podcast only about WeChat, and so, every week we would do a podcast about what’s happening with WeChat, and funnily enough, he was like “no I don’t really want to do that, I don’t want to only focus on WeChat”. So, it evolved really and now we discuss many topics to help people understand the tech scene in China. So, we do some WeChat every once in a while, but we’re actually very broad when it comes to the topics that we cover. So, for example, recently we looked at the social credit system before that was private traffic, we’ve done asymmetry’s between US and China in AI, we’ve covered blockchain quite extensively although not recently and basically anything that we find to be interesting. And then, Elliot Zaagman who also is a contributor invited his friend James Hull with whom he is just having some really great conversations. So, Elliot is a writer and he also does some consulting in China and then James is a professional investor, he used to work for a state-run investment company and now he works for himself managing money for other clients. So, Elliot at one point pitched me: “hey, let’s do a podcast, James and I are having these great conversations, I want to make this a recording” and so we did and actually just the other day, it was their one-year anniversary. So, they’ve been going for about one year. Matt and I, it’s about 2.5 years now, I think.
Your other question was: “what’s the difference between podcasting in the West and in China?”. Well, the biggest difference is that podcasting in China isn’t really podcasting. Or at least the way that we think about it. So, podcasting in the West is very similar to talk radio, where you have one person talking for a long time. Dan Carlin is a great example, hardcore history or common sense, it’s just one guy talking for hours at a time. Or you have podcasts like this one, or the one that Matt and I do, which are one on one interviews or a three-person conversation about a topic, whereas podcasting in China is just audio content. So, you take a lot of the content that’s kind of popular in other formats. It’s only audio, so it could be storytelling, it could be in some case discussions but in most cases, it’s actually educational. People will pay money to basically take an audio course or to gain access to an audiobook, or something like that. It’s much less to do with talk radio, I mean again, there are some shows that are quite popular that are very similar to talk radio, but the bulk of the content that you find on platforms like Lizhi and Ximalaya are in fact more educational or can be storybooks or things like that. A lot of the audio content produced by Chinese people, you’re not going to find on the open web, so you’re not going to find it on Spotify, you’re not going to find it on Apple Podcasts, because you can’t monetize on Apple Podcasts or Spotify.
I mean you can have an advertiser, but advertising in the podcast space is quite difficult and for advertisers, the metrics are still very grey because there’s really no good platform that can give you a 100% saying: “okay; this is how many people actually listened this is how much they actually listened, this is how many people were actually exposed to your message”. In general, that kind of stuff is very difficult on the open podcasting, whereas in China, users will pay directly for the content, whether it’s a 100 RMB for a course, whether it’s like 1 RMB per audio file or something like that and so, it’s actually a lot easier to monetize and to make a business of Ximalaya and Lizhi.
That being said, we interviewed someone who is an early-stage VC based in Shenzhen a couple of months ago and he does three podcasts and all three of those are on Apple Podcast and Spotify, all in Chinese, which is interesting. I don’t think he’s making that much money from it, but then there is another podcast, a friend of mine runs a podcast called BBPark, it’s all in Chinese, it’s all for Chinese listeners, it’s available on the open web but they monetize in kind of KOL method where they actually engage in e-commerce. They have meetups that they’re able to monetize on, and they have a few other things that they do as well to monetize, but they’re very unique because they’ve been podcasting since 2011-2012 I think, so really kind of first-mover advantage, been around for a long time and it’s very, very talks radio-ish I would say. A lot of younger people who kind of grew up listening to the radio, they enjoy listening to it and its young people who host it, so they have a lot of really interesting personality, they’re able to connect directly with their listeners and create that community, but as I said, it’s very unique what they’re doing, whereas in most cases if you want to monetize it has to be on Ximalaya and Lizhi.
Matthieu David: That’s the thing actually, in China I feel that – I don’t know if you feel the same – the words are similar since we use the word blog in China and in the West we use the word podcast in the West and in China, but actually the real product today is very different. Let’s say blog for instance. I had a very hard time explaining to a Chinese CEO of a big firm that we are getting a lot of attraction on our own blog at Daxue Consulting. He was thinking of a microblog like Weibo or twitter, right? He was not thinking about the long content or the long piece of article, where we were going in-depth, it was not in his mindset, and the ICP regulation, to get to the compulsory ICP you need to have your own website. It certainly slows down or even kills this other guide for a very long article on your own platform and you go on platforms, you don’t have your own website in China. That’s the same I believe for podcasts.
I’d like to talk about Chinese media censorship. Basically, there is Chinese media censorship when you publish content. You are publishing for the West, so, in some way, you are a bit outside of the radar, because you’re publishing in English, but on the other hand, you are in China. Is it a concern for you? Is it a concern to comply with Chinese media censorship regulations?
John Artman: Well, it’s funny because actually, I just learned a new metaphor for something like this. A Chinese tech investor did an interview about the blockchain and I think the interviewee Matthew Graham made a really interesting metaphor. Basically, the anaconda in the chandelier where there’s an anaconda in the chandelier and it’s not really doing much but you’re in a room full of other people and you don’t want to be the loudest person, right? You don’t want to be the one to draw a lot of attention to yourself, because you never know when the anaconda might strike, choosing you because you’re so obvious. So, I guess that’s a really interesting way of thinking about it. I mean, in general, we don’t touch on sensitive issues, in part because sensitive issues are actually outside of our editorial purview. We focus on technology in China, we focus on telling people what’s happening with Chinese companies and certainly, we do ruffle the feathers of the companies themselves, there have been many conversations with companies of various types, about our coverage of them, because that’s journalism.
We tell the truth as we see it or as best as we can about what’s happening inside these companies, why they’re making certain decisions and what their prospects are and so on and so forth. So, we definitely get a lot of pushback from the companies themselves, but I think to your point, we are trying to baste, we are in English, so we are I think to a certain degree under the radar, but at the same time we don’t touch on sensitive issues. I have worked at state media for five years and I think my sixth sense is pretty well developed when it comes to this kind of stuff. We basically stay away from all that stuff, and at the end of the day, it’s not to our detriment either, because again we just want to understand what’s happening, why it’s happening, so we just want to tell people the way it is, and I do think there are sometimes, like especially with my weekly column, that I write when I do have a bit more freedom to go in-depth and have my opinion, there are sometimes, I think, where it does get a bit close to some line, but at the end of the day, it’s still factual.
I’m not here to smear China, I’m not here to create fear mongering or anything like that. At the end of the day, it’s how can we best explain China to westerners through an appropriate Tech media in China for westerners, and I think that there is actually a middle ground to all of this. A lot of people in the West, they want to see China as a boogieman, as an enemy, but I don’t think that China is, and I think that if you want to understand the world, you have to take a dispassionate point of view and that’s certainly what we try to do. So, the short answer to your question is that we cover Chinese Tech companies as well as Western Tech companies in China. Tech is pretty neutral in general and then when it does come to potentially sensitive issues, we try our best to avoid those.
Matthieu David: I’d like to know a bit more about numbers, about how many – metrics about TechNode and your podcast, would you mind sharing a little bit of the audience you have? Who is reading to you? Who is listening to you? Which countries? How many people, if you can share some?
John Artman: Yeah so in 2018 we had about 4 million visitors to our website, 2019 is going to be more than that. When it comes to our podcast, we get about 7000–8000 downloads per episode for the talk. China tech investors are much more niche and so we get a little bit less than that, but in terms of audience, the largest group of people that consume our content is from the United States. So, consistently we see the largest group is from the US, and then the second largest group is from mainland China actually. Looking at kind of our analytics back end we can see that most of the people coming from China are actually English speakers, so maybe they’re European, maybe they’re from the UK, or from some other English speaking country and so when I say mainland China, I don’t mean Chinese readers. Most of them are going to be English speakers. And then I would say, so number 1 in the US, number 2 in mainland China, 3 and 4 are Singapore and Hong Kong. That kind of switch positions and then number 5 in India. We’re very international in terms of our audience but at the same time, the largest by far, I mean our website, for example, around 30% of our traffic comes from the United States, and that’s the largest of any other demographic. So definitely we can see there’s a huge amount of interest in Chinese tech companies from specifically the United States, but then at the same time, there’s also a pretty decent number from elsewhere around the world.
Matthieu David: We’re coming to the last 10 – 15 minutes and I’d like to have your view on some topics which are coming over and over in China about tech. The first one is, why are there so many failures with Western Tech companies in China? It could be a one-hour talk but I’d like your opinion and some ideas, Microsoft has been successful, but it seems to be a bit of an exception when you look deeper. Uber failed, Google for some reason failed in some way, even if they do export advertising, they’re selling ads for the Chinese companies, but they don’t operate anymore in China. So, one can see a lot of players failing in China for various reasons. Some are more political and licenses, others are purely business issues like Uber. So, what’s your take on it?
John Artman: Well, I think that first of all the Chinese market is extremely difficult. I think that even you talk to domestic entrepreneurs and most of the Chinese market is extremely difficult. It’s highly competitive and you have to move fast, extremely fast. If you’ve thought about it for more than a day, you’re probably moving too slowly. Also, for Western Tech companies in China, there is a lot of issues around localization. So, there’s the localization of the product and there’s the localization of the team. So, for example, I think Groupon is actually a really interesting example for Western Tech companies in China. So, I’m not sure if you remember, Groupon came in around 2010-2011 and all of the management in China was done by Americans. So, they flew Americans in and then tried to figure it out and it’s one of those things where the working culture is so different in China than it is in the West. China kind of lacks professional culture, and I don’t mean that in a pejorative sense. I don’t mean that there’s something wrong with it necessarily, but Chinese people don’t think of their jobs in kind of a professional way right, whereas I think that, at least in America, parents kind of trained their children to think this way.
My early bosses really kind of trained me to be this way, being conscientious, scheduling everything, making sure that everything is delivered on time, that quality issues are raised before delivery and things like that. Whereas in China, there’s a very different relationship between managers and employees. The manager is expected to be very hands-on, to kind of tell the employee exactly what to do and to give very extremely specific feedback. And so, I think as a Western manager it has been a bit difficult for me. If you’re a Western Tech companies in China trying to come into the market and you don’t find managers who know how to manage Chinese people, you’re never going to get off the ground. So, yeah, it’s the market, its company culture, and then yeah, localization of the product as well. Localization of the product, localization of the marketing and advertising in China, I think that if you look at the consumption landscape of China, people like games, they love discounts and they love their celebrities. So, these days, of course, it’s moving a lot more to online celebrities, but also it used to be traditional celebrities. I think that there’s a whole suite of different things, but then also it’s also government policy where it has been. I think they’re trying to make it easier actually, in the past couple of years where it’s easier to get a wholly foreign-owned enterprise license, but at the same time you have to know the right people, you have to know the right people to get the license, you have to know the right people to help you open markets, so finding the right managers, finding the right partners, finding the right team on the ground I think is what makes it so difficult for Western Tech companies in China.
Matthieu David: You already answered partly the question I want to ask next, which is: what are the common misconceptions about tech in China? From an observer’s point of view, when you talk to people from overseas and foreign tech. Actually, in the West and in China, what do you feel are the main misconceptions about what’s happening in China in the tech industry? Do you find some – I’m sure there are many –, of them being podcasting, same way but it’s different, the way it’s practiced, blogging is the same but actually a very different way of doing it. Generally speaking, have you found some parts where there is a misconception on how to analyze the tech scene in China?
John Artman: Yeah, I mean I think that probably the biggest one is related to a podcast episode that we did recently on the social credit system. I think one of the biggest misconceptions is that the government wants to be involved in everyone’s life.
I think that, historically, if we look back to the founding of the people’s republic of china and kind of the evolution of the communist system here, the government used to want to be very involved. The success of the state-led capitalist system that we see now has been in fact a part of that story. It’s been the story of the government slowly kind of receding from everyone’s personal life. It used to be that the people that you worked with are the people that you married, the people that you lived with and everything was very, very controlled on a business unit basis.
These days it doesn’t happen anymore, and so if we take a look at the social credit system, for example, number one – that system was more designed for a private company or companies, the state-owned and non-state owned. And then, over the last few years, there has been some more exploration of applying it to individuals, but a lot of it is still applying it to individuals in the context of business malpractice, of not repaying your debts. Not replying or complying with court orders and things related to business malpractice. So, if your company kills people because you created a low-quality product, then, well, your social credit score is going to be affected. So, no, the government doesn’t want to be involved in your life, I think that we are going to see probably more tracking of behavior, more analysis of behavior, but I think it’s going to be very similar to tech companies where at the end of the day the government is much more interested in aggregate behavior.
So, how are we enforcing those traffic laws? Are people following commercial laws? How are we enforcing those commercial laws and so it has much less to do with today this person bought oatmeal? Why does the government care about that? They really don’t. It’s much more about broader social management questions as well as broader economic management questions. I think for a westerner, for an American, who is raised to be very individualistic and to treasure freedom of speech and freedom of behavior, whatever that means, it’s very difficult to wrap your head around and ultimately accept. I’m not sure I’m comfortable with it. I can kind of explain it a little bit as I did before, but it still feels weird. Just because it feels weird to me doesn’t mean that it’s necessarily bad. I think that any technology is open to abuse, but at the same time what china is trying to do with a lot of their technological governance systems is really trying to solve age-old problems. There’s a phrase in Chinese that says: “the mountain is high, and the emperor is far away”. China has historically had amazing amounts of problems enforcing central government policies and even on a provincial level, and so this is just one way to leverage technology to actually implement real enforcement mechanisms and to actually create more trust in society as well as trust between individuals, trust between customer and a company. Then, also trust in the government that the government is actually going to be enforcing laws and regulations.
Matthieu David: True, social credit I think is the example of misconception from the West in China and portraying something very new, and it’s not that new actually. My last question is concerning your industry and yourself, towards your peers. How do you stay up to date about China? How do you stay up to date about the news? You mentioned Weibo as a source of inspiration for a round table, I think. Now, what are the best sources you would recommend using, of course, TechNode and your podcast, but beyond that, what would you suggest using to be up to date on China?
John Artman: Well, I would say in the English language there are two main resources; one is Sinocism by Bill Bishop. So, Bill Bishop has been a China watcher for many, many years. He used to live in Beijing, so he does a daily newsletter. Well basically he aggregates and curates news stories about China and that’s one of the main ones that I read. Then there’s another one called SupChina. SupChina is much more focused on culture, whereas Bill Bishop is much more focused on politics and business I would say. SupChina is very focused on culture, but both are very, very good resources for keeping up to date. You spend 15-20 minutes reading these newsletters every morning and you’ll pretty much know what the big trends are, what are the big discussions going on and things like that. In Chinese, I would say there are a few resources when it comes to understanding the tech scene in China.
One is – I kind of hate saying it because it’s also our competitors in the tech media in China for Westerners industry– cn.technode.com. That’s obviously a resource, but then apart from that there’s 36Kr, so 36Kr.com – so that’s a technology media. PingWest is also one, their website is really kind of my main sources when it comes to tech news in Chinese. Hushio is a good one for kind of longer-form essays and it’s usually not just tech but it’s also business, and then, of course, there’s Tencent and others, and kind of like the news aggregators where they have huge teams, but they don’t actually do much original reporting. So, I would say those are my main sources of information about China.
Matthieu David: Thanks. Thanks very much for your time John. It was very, very interesting, and I hope you enjoyed it and hope everyone enjoyed it. Thanks for listening and thanks for participating.
China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.
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