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Alibaba, Tencent, Baidu were all founded by Chinese and are based in China. The Chinese government welcomes foreign investment as long as ownership remains Chin

Alibaba, Tencent, Baidu were all founded by Chinese and are based in China. The Chinese government welcomes foreign investment as long as ownership remains Chinese. KFC, McDonalds and Starbucks have succeeded because the majority of their managers, owners and workers are Chinese.

fspeech 12y ago
Alibaba was at one time 40% owned by Yahoo and close to 40% by Softbank, with significant stakes by investors like Silver Lake and Digital Sky. Tencent was 46% owned by South African Naspers, which still owns 34%. Baidu was funded by Silicon Valley venture capital. Google actually contributed $5 million to Baidu's third round and offered to buy the whole for $1.6B (and allegedly could have cinched the deal if they had offered $2B). Google China was led by a Chinese American academic from Taiwan (though well liked by the Chinese) and staffed with managers recruited from Google's Chinese American employees, who had cushy US jobs to go back to and did not want to lose career opportunities in the US. The managers of their local competitors didn't have such luxuries.
- cromwellian 12y ago
  Come now, Google China had onerous censorship provisions placed on it that it did not want to adhere to, and Google simply can't be a den of piracy like Baidu was.
  - fspeech 12y ago
    Yes Google is a rather special case. It clearly has technological advantages and may have succeeded despite its clumsiness if Chinese regulations were different. However that does not explain how others failed, like EBay or Yahoo. I showed clearly ownership restriction wasn't the reason. Local operational control was, in my opinion. I don't even see how this could be controversial. Jack Ma is one of China's richest man. So are the other Ma (of Tencent) and Li (of Baidu). Does anyone think hypothetical resounding successes of EBay/Google/Amazon etc could have similarly minted local billionaires? Why would the same incentives work in the US to create successful entrepreneurs but not in China? Tactically it may be true that stricter ethics rules make things harder. But that didn't stop businesses like Starbucks from succeeding eventually, because their business model can be transplanted. Alibaba didn't have success handed to it. Its initial B2B model was ho hum. It had to or did recreate itself, multiple times. Its Taobao was initially a loss leader with free listings. TMall was also not given a high chance of success. It had ferocious competitors. It created its own business models and executed well to ensure their success.
    - seanmcdirmid 12y ago
      Out of all the companies you listed, NONE have American born founders: Ebay (Iranian), Yahoo (Taiwan), Google (Russia, ok Page is born in Michigan). How many people who aren't born in China have been minted as billionaires at Chinese companies? Starbucks had plenty of problems with their Chinese partners; they worked hard to get to the point where they were actually allowed to run stores by themselves without a parasitic local partners, and I think this is only true in second tier cities right now.
      - fspeech 12y ago
        US is a country of (relatively recent) immigrants and China isn't. How does this relate to the topic at hand? Many successful fast food companies use a franchise model. Starbucks is rather unique that it doesn't. I don't know enough to say whether their local partners are parasitic.
      - fspeech 12y ago
        "NONE have American born founders" Neither were they divisions of some foreign conglomerates. I think that is more relevant than the fact the founders were foreign born. Certainly you would think of Jerry Yang or Sergey Brin or Pierre Omidyar as American as any other. They are not foreigners just because they are foreign born.
        seanmcdirmid 12y ago
        Correct. China is mostly a closed countries for Chinese only. As a foreigner, the glass ceiling is clearly visible. America in contrast is a country of naturalized immigrants as well as natural borns; as a result, many understand what it means to be outside China because of their dual cultural backgrounds...the same not being true in China. So who has a better chance in operating outside in developing countries? Its funny how China really tries to get, but can't really get, Africa, for example.
        fspeech 12y ago
        "Correct. China is mostly a closed countries for Chinese only. As a foreigner, the glass ceiling is clearly visible." Hmm I am curious if you actually have nonzero interest in naturalizing into Chinese citizenship. I think it is not impossible to do so and at least in the past the locals would be rather proud if you do have such an interest. Not that I think citizenship should be prerequisite for business success but I do believe it reasonable that you need to demonstrate that your loyalty lies with the locals before you are considered one of them. Naturalization into US citizenship does require a loyalty oath in case you don't know. (Seems like we are running into the limit of the nesting levels so I replied to GP instead)
  - fspeech 12y ago
    By the way, Chinese government did create its own search engine company led by a former ping-pong world champion turned sports bureaucrat to compete against the likes of Baidu. It sank to the tune of 2B RMB into the company (probably more than the funds Baidu ever raised prior to its IPO). And needless to say the money just went to waste.
- xux 12y ago
  Funny you brought the 40% up. The Chinese government doesn't like foreign investors controlling financial companies in China. So Alibaba spun off its Alipay service into a separate company, without the approval of investors. Yahoo wasn't pleased and sole about 15% of their shares.
- fspeech 12y ago
  "Funny you brought the 40% up. The Chinese government doesn't like foreign investors controlling financial companies in China." In the US the threshold to become a "bank holding company" is 10% equity ownership. Becoming a BHC subjects you to the regulation by the FRB or state banking boards.

fspeech 12y ago

Alibaba was at one time 40% owned by Yahoo and close to 40% by Softbank, with significant stakes by investors like Silver Lake and Digital Sky. Tencent was 46% owned by South African Naspers, which still owns 34%. Baidu was funded by Silicon Valley venture capital. Google actually contributed $5 million to Baidu's third round and offered to buy the whole for $1.6B (and allegedly could have cinched the deal if they had offered $2B). Google China was led by a Chinese American academic from Taiwan (though well liked by the Chinese) and staffed with managers recruited from Google's Chinese American employees, who had cushy US jobs to go back to and did not want to lose career opportunities in the US. The managers of their local competitors didn't have such luxuries.

cromwellian 12y ago
Come now, Google China had onerous censorship provisions placed on it that it did not want to adhere to, and Google simply can't be a den of piracy like Baidu was.
- fspeech 12y ago
  Yes Google is a rather special case. It clearly has technological advantages and may have succeeded despite its clumsiness if Chinese regulations were different. However that does not explain how others failed, like EBay or Yahoo. I showed clearly ownership restriction wasn't the reason. Local operational control was, in my opinion. I don't even see how this could be controversial. Jack Ma is one of China's richest man. So are the other Ma (of Tencent) and Li (of Baidu). Does anyone think hypothetical resounding successes of EBay/Google/Amazon etc could have similarly minted local billionaires? Why would the same incentives work in the US to create successful entrepreneurs but not in China? Tactically it may be true that stricter ethics rules make things harder. But that didn't stop businesses like Starbucks from succeeding eventually, because their business model can be transplanted. Alibaba didn't have success handed to it. Its initial B2B model was ho hum. It had to or did recreate itself, multiple times. Its Taobao was initially a loss leader with free listings. TMall was also not given a high chance of success. It had ferocious competitors. It created its own business models and executed well to ensure their success.
  - seanmcdirmid 12y ago
    Out of all the companies you listed, NONE have American born founders: Ebay (Iranian), Yahoo (Taiwan), Google (Russia, ok Page is born in Michigan). How many people who aren't born in China have been minted as billionaires at Chinese companies? Starbucks had plenty of problems with their Chinese partners; they worked hard to get to the point where they were actually allowed to run stores by themselves without a parasitic local partners, and I think this is only true in second tier cities right now.
    - fspeech 12y ago
      US is a country of (relatively recent) immigrants and China isn't. How does this relate to the topic at hand? Many successful fast food companies use a franchise model. Starbucks is rather unique that it doesn't. I don't know enough to say whether their local partners are parasitic.
    - fspeech 12y ago
      "NONE have American born founders" Neither were they divisions of some foreign conglomerates. I think that is more relevant than the fact the founders were foreign born. Certainly you would think of Jerry Yang or Sergey Brin or Pierre Omidyar as American as any other. They are not foreigners just because they are foreign born.
      - seanmcdirmid 12y ago
        Correct. China is mostly a closed countries for Chinese only. As a foreigner, the glass ceiling is clearly visible. America in contrast is a country of naturalized immigrants as well as natural borns; as a result, many understand what it means to be outside China because of their dual cultural backgrounds...the same not being true in China. So who has a better chance in operating outside in developing countries? Its funny how China really tries to get, but can't really get, Africa, for example.
      - fspeech 12y ago
        "Correct. China is mostly a closed countries for Chinese only. As a foreigner, the glass ceiling is clearly visible." Hmm I am curious if you actually have nonzero interest in naturalizing into Chinese citizenship. I think it is not impossible to do so and at least in the past the locals would be rather proud if you do have such an interest. Not that I think citizenship should be prerequisite for business success but I do believe it reasonable that you need to demonstrate that your loyalty lies with the locals before you are considered one of them. Naturalization into US citizenship does require a loyalty oath in case you don't know. (Seems like we are running into the limit of the nesting levels so I replied to GP instead)
- fspeech 12y ago
  By the way, Chinese government did create its own search engine company led by a former ping-pong world champion turned sports bureaucrat to compete against the likes of Baidu. It sank to the tune of 2B RMB into the company (probably more than the funds Baidu ever raised prior to its IPO). And needless to say the money just went to waste.
xux 12y ago
Funny you brought the 40% up. The Chinese government doesn't like foreign investors controlling financial companies in China. So Alibaba spun off its Alipay service into a separate company, without the approval of investors. Yahoo wasn't pleased and sole about 15% of their shares.
fspeech 12y ago
"Funny you brought the 40% up. The Chinese government doesn't like foreign investors controlling financial companies in China." In the US the threshold to become a "bank holding company" is 10% equity ownership. Becoming a BHC subjects you to the regulation by the FRB or state banking boards.