VC, Innovation, Entrepreneurship in China Oct 2015

Venture Capital by the Numbers

China Venture Capital Investments

What is Venture Capital?

• Long term
• Active involvement
• High-tech and life sciences
• High Variance
• an Asset Class

Venture Capital

Capital Risque, Innovation, et Startup en Chine

Olivier Glauser

7 octobre, 2015

Excuse their "Chinglish..."

Excusez mon "franglais"

CONCLUSIONS

Innovation in China:

business model vs. technology

Opportunities :

Solving China's challenges

• Environment
• Healthcare

Ideas

What can Switerland offer:

- technology

- know-how

- Swiss brand equity

What can China offer:

- Market

- Capital

- Local partners

A Few Lessons for Startups

• China is a HYPER competitive market
• Pick favorable industry
• Laowai - play to your strength外
• Adjust quickly products & business model

• Raise money while you can - BULL Market

• Choose investors wisely

Entrepreneurship:

"the relentless pursuit of opportunities without regard to resources currently controlled"

ROLE MODELS

China = 1.3 Billion Entrepreneurs?

Lei Jun - Xiaomi, YY

Jack Ma - Alibaba

Just Blatant Copying?

Rampant piracy in console game

+

Internet cafe

Free to play, pay for virtual items

Incredibly successful and profitable model copied worldwide

Online Video Games

In Search of Technology Innovations

= Copy 2 China

Mindray Portable Ultrasound

Frugal Innovation

Less is MORE

Sir Ken Robinson

Business Model Innovation

Product Innovation

Urban mobility

$600 electrical scooter

Xiaomi mobile phone $80 USD

Not Just Simple Copies...

"the process of having original ideas that have value"

Product Innovation?

B2B

B2C

C2C

Creativity

Technology vs. Innovation

C2C + Adapting to China

Modern China: The Perfect Environment

• Thousands of new businesses in China
• Highly entrepreneurial culture
• World center for electronics & manufacturing

Chinese Success Stories of Technology Innovation?

to China...

In Search of Chinese Technologies

From Silicon Valley...

Chinese Ancient Technology Inventions

Irrigation systems

Movable type print

Iron plow

Paper money

Powder

Risks in new Ventures:

Thank You

Opportunity Cost of Technology Investment

• Execution Risk
• Market Risk
• Technology Risk

Why so few Technology Startups in China?

Why take high-tech risks when can get

same return in 1/2 the time

in traditional industries

Chinese Consumers

Characteristics:

Eager to try out new things

Lots of them

Facebook

Wechat

Product extensions...

Wechat Mobile Messaging

• e-commerce
• transfer person to person
• taxi ordering
• flights and travel ticket
• movie tickets
• utility bills
• "red envelopes"
• mutual funds and investment

2014 online payments:

$350 billion

Market reality check...

People

=

copycats

&

intense competition

fast product release

+

many eager consumers

+

lots of entrepreneurs

Battle of the Giants - BAT

$148 Billion

$46 Billion

Online video games

News portal

QQ Messaging

$157 Billion

$50+ Billion

Wechat

Mobile messaging

Pinguin Pictures

Movie Studio

E-commerce

successful US Group Buying

Internet service

Venture Capital, Entrepreneurship, and Innovation in China

Olivier Glauser

Sports Marketing & Rights

China comes out to the World

to connect China to the World

Ticketing

Product Licensing

SPORTS IN CHINA

Fast growing market

Favorable government policy

Previously protected now liberalizing

Access to unique and exclusive content, properties

Sponsorship

Media