The Top Challenges and Opportunities of Doing Business In China, With Andrew Pearson, President of Intelligencia Limited

I believe there’s nothing better than sharing one’s knowledge with receptive strangers — and it’s probably one of the best ways to attain new clients, as well as showcase a company’s expertise. Since I moved to Asia, I’ve taken the stage in such exotic places as Cape Town, South Africa, Hyderabad and Goa, India, Singapore, Cyprus, and Dubai. I even spoke in Moscow a week before the FIFA World Cup. Unfortunately, I had to return to Hong Kong for another event and couldn’t catch any matches, but it has been a fascinating series of trips and priceless in terms of my company’s marketing. I’d love to be able to help other people take the fear out of public speaking. Personally, I still get nervous before and during my talks, but I’ve found there are ways to reduce this nervousness and perhaps there is a way to share that information. A great, highly structured, and compelling presentation is the best first step.

I had the pleasure of interviewing Mr. Andrew Pearson, president of Intelligencia Limited, an AI, analytics, digital marketing, and social media company based in Hong Kong and Macau. Pearson oversees analytics, BI, data integration, and marketing work for clients like The Venetian Macao, Galaxy Macau, Resorts World in New York and Bimini, the Asian cruise line Star Cruises, Tatts, and Tabcorp, as well as the biggest casino group in Mexico. Pearson is also a published author, who as written several books about analytics and digital media and he often speaks at conferences on AI and the customer experience; this year his speaking engagements have taken him to India, Cyprus, Russia, and Dubai, with Singapore and India on the agenda for 2019.

Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?

It’s been a rather circuitous route to get to where I am today, but in some ways moving to Asia in 2012 was a sort of homecoming for me because I had spent much of my youth in Singapore. I was asked to head up a small operation in Macau because my former company had closed a limited training deal with the Venetian Macao. I arrived here, oversaw that project and then teamed up with SAS, our main software partner at the time, and helped close deals with other casinos in Macau, a cruise line in Hong Kong, the Resorts World group in the US, as well as a sports book in Australia. After about 18 months, I had overseen work in Macau, the Philippines, Australia, Malaysia, Hong Kong, and the US.

I managed BI, Customer experience, data integration, data visualization, analytics and marketing work throughout the region, as well as the US and Mexico. I went out on my own in 2015, starting my own company in both Hong Kong and Macau and have been adding clients ever since, some in completely new fields like social gaming and soon, possibly, aviation.

In 2012, I moved from LA, where I had been working in the entertainment industry. One wouldn’t think working in the entertainment industry would be a great background for analytics, but there is actually a lot of similarities between the entertainment industry and the analytics world, both tell a story and, if you can seduce the customer with the power of analytics, you can sell software to them, just like the film business. The power of stories is paramount.

Are you working on any new or exciting projects now?

Yes, several. We’re very interested in real-time stream processing technology, IoT, as well as AI and analytics, obviously, since we’re an analytics company. What’s happening right now with the explosion of open source tools like Hadoop, Kafka, Spark, Pig, Hive, along with all the complementary products is extremely interesting to us. The AI tools Tensorflow, Caffe 2, PyTorch, etc., are also things we are now looking at.

Analytics has been around for decades now, but it’s only been in the past seven to 10-years when it’s really grabbed the attention of the general business community. “Big Data” was the big buzzword about seven years ago, “social” was big 10–15 years ago, now it’s “AI”, “machine learning”, “Deep learning”, and “Neural networks”. Who knows what it will be tomorrow, but it will probably be something data-related.

At Intelligencia, we’ve been lucky because we’ve been working in this space for years now and I often get the opportunity to speak at conferences on many of these subjects. I’ve written 350+ page books on these subjects as well and they do, obviously, interest me, but it’s most rewarding to hear people make comments like, “You write things in ways that clarifies some pretty difficult and complicated subject matter”, which isn’t always an easy thing to do. That’s hugely rewarding.

Ironically, I think, we do a lot of work in the casino business, but casinos aren’t really an industry that requires complicated analytics; an RFM model here, a churn model there, and marketing models all around are important, but you don’t need complicated customer acquisition models, especially in China because it’s illegal to market casino products on the Mainland. One of my consultants joked that, in Macau, you just need to throw open the doors and you’ll have all the customers you need and in some ways that’s true.

Right now, we’re turning our attention to the travel industry and this is exciting because I believe the travel and aviation industry is one of the most enticing industries for analytics. It’s the industry that started the revenue optimization modeling process, i.e., for airline seat ticket prices. It’s an industry that needs predictive asset maintenance more than any other (you don’t want a plane dropping out of the sky because a part fails, do you?).

We are also doing work for a couple of sports book and, a few years ago, we created a product called BetWatch with the SAP Startup Focus Group. it was a risk management engine that utilized SAP’s HANA in-memory capabilities. The solution empowered sports book to understand their customers on a very deep level and it catalogued the sports book’s most dangerous bettors, i.e., the ones who consistently beat them. We’re now looking at how the open source tools can do something similar. We also want to add a social marketing element to the product so that the software, which was designed for the sports betting industry, can cull through a customer’s records, see which bet he most consistently loses on and then offer those kinds of bets to the client, well aware that those are the kind of bets that the client normally loses so that bonus money, more than likely, is headed straight back to the house.

On a completely different note, we’re exploring Esports and marketing through esports. Several of my clients have expressed interest in esports and we see it as a huge opportunity to tap into the massive — and still growing — audience in China.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are?

Yes, my second hire and lead consultant, Shinley Uy. He’s been with me from the very beginning and, without his loyalty and efforts on behalf of our clients, we might not be around.

Can you share a story about that?

When I decided to leave my old company and start my new one, I gave several consultants who had been working with me the opportunity to stick around with me or go with the old company, a company that was much more financially solid. Several consultants chose to leave, but Shinley showed immense loyalty and stuck with me, saying we made a “good team.” I believe I have rewarded his loyalty and will continue to for as long as he remains with me, and probably well after as well.

We’ve been through some difficult times together, one client in particular didn’t pay us for some work we did, but Shinley kept the faith and we’ve parlayed our early successes into a lot of repeat business. I believe loyalty is the most important quality in a person and I was pleasantly surprised to find someone who embodied that quality on my team. In the course of three years, we’ve gone from having one client to about eight and counting and most of these clients are well-known, publicly traded companies, i.e., impressive companies to have on a client list. We’re at a point right now where we are actively hiring as we have signed a few new contracts. The company would be where it is had Shinley not stuck around.

What do you think are the new untapped markets in China that may become the next “big thing”?

The writer Joseph Krutch once said, “Technology made large populations possible; large populations now make technology indispensable. And so it is with China. Helping China wrangle and contain its “bigness” will be one of the next “big things”. I recently read that of the 33 megacities in the world, 26 of them are located in developing countries. The Asia Pacific region accounted for the largest number of megacities, China has six and India has four. China’s massiveness is creating opportunities for companies that can help them take what is big and make it small and thereby understandable and, as we like to say in the analytics business, actionable.

One of the beauties of analytics is that it can reduce massive amounts of data into sizable chunks and the tools we are working with can help companies wrangle their data, visualize it, and then make strong predictions on it — and that’s where the strong ROI tends to be. We can help companies navigate through the many software vendor offerings and, in some cases, help a client augment their IT systems with open source solutions. Chinese companies, in particular, don’t like to pay for non-perpetual licenses, which means open source products can be a good option. With the explosion of products like Hadoop, Spark, Kafka, there are a lot of interesting things going on out there.

What challenges does that new market face? How would you address it?

There’s a quote that opens my latest book, The Predictive Airliner, from Eddie Rickenbacker — “Aviation is proof that — given the will — we can do the impossible” — and I think it’s a good quote for work that is also being done in the analytics field, especially in AI right now, which is an area we are working in.

The volume of this data is going to be daunting. One of my newest partners is Alicloud and the cloud is going to be instrumental in marketing going forward, especially social marketing, which, I believe, could be one of the best and most important marketing avenues around.

The bulk of my clients and my company’s earnings are from companies located outside of Macau and China, so I have diversified quite well. Even when I first moved out here, I always saw Macau and China as a good gateway to the rest of Asia. Macau is a very difficult place to find employees and China’s skilled technicians are getting pricey. I still like the Philippines and I recently visited India and was thoroughly impressed with the tech scene there.

Since I write considerably on these tech topics, I need to keep up with the latest developments in technology and there are a lot of places to go to keep oneself informed. I also have good relationships with my vendor partners and we sometimes team up to do some R&D together.

Can you share the top challenges of doing business in China and how you overcame them?

Analytics can be very ethereal, and the ROI isn’t always readily apparent, so you really have to understand the journey and be honest about what is going to come out of it and how things can be benchmarked. In my last talk, I mentioned an interesting fact about AI projects — only one-in-three are successful — and this is something that expectant clients must be told about before the projects kick off.

China and Chinese companies severely lack the Western world’s legal environment, which is going to be problematic in the long run, if they don’t address it. Going back to India for a second, I visited Hyderabad and, although the city has its social problems, it was surprising to see all of the software companies with huge offices located there — and that’s not even the top city for outsourcing and IT in India. As I drove through the tech hub in Hyderabad, I realized that these American and European software companies would be much more interested in locating there because the court system in India is must more like the legal system in the west and the Indian government isn’t as difficult to work with as the Chinese government is.

We keep hearing about the “Trade War”. What are your thoughts about it? Given the unknowns, how do you plan to pivot?

I read an article recently entitled “China’s Free Ride Could Be Coming to An End” and it made a lot of good points about how China has been getting a free ride in terms of rules and regulations and the salad days of economic prosperity might be coming to a close. The article quoted Harvard’s Graham Allison, who called China the “most protectionist, mercantilist, and predatory major economy in the world.”

Many feel that China has been given a free ride for decades because the world loved the cheap goods it produced and the Western nations didn’t want all the environmental problems that can come with those cheap goods. I know I might be simplifying the process, but the article makes some very good points. China is no longer seen as the benevolent behemoth, but rather a potential hegemonic force to be watched cautiously. China may have overextended its hand and, from what I’m hearing inside China, people are very worried that the trade war could lead to social trouble.

Intellectual property rights are also something China can no longer ignore. Much of what we hear about the “Trade War” is political junk, but it was interesting to see the new NAFTA agreement in the US has apparently taken many things from the defunct TPP agreement, updating things like intellectual property rights and protections. This means China might find itself in a position where it can no longer waffle on these issues and it will have to take substantial steps to fix them.

The Chinese dream is alive and well, but China is now facing the troubling prospect that it was only a dream partially aided by beneficial policies and the flood of money from exports to American and Europe. These taps might run dry and there are a lot of American and European companies who are looking for friendlier governments to turn to within this region. Of course, Vietnam, Cambodia, Myanmar, and Bangladesh have their own unique political problems and some even have Communist governments, but the labor costs are similar, if not lower, than China’s right now. I have associates from Singapore setting up shop in countries like Vietnam and the Philippines. The latter is one of my favorite countries because they have a large, highly educated population, which speaks English almost as well as many Americans do.

My company is actually in a pretty strong position because we only have one client in the US and the trade war doesn’t really affect us. As an IT company, we have the luxury of working from anywhere.

My lead data architect actually lives in Bacolod, the Philippines, which is about a 45-minute flight from Manila. He’s the perfect example of how the software consulting world has changed. There are days when he might VPN into three different client servers, which are located as far away as Monterrey, Mexico, Brisbane, Australia, and New York in the United States. This shows how you can basically work from anywhere. As long as you have the technology and the knowledge, the world is your oyster.

Also, we are now talking to clients about doing what we call “Managed Analytics as a Service” and this could be particularly appealing to Chinese companies because you’re basically hiring a service rather than buying software outright. We team up with a software vendor and add services atop their software and then sell it as a package, i.e., you want marketing automation software, you can purchase it outright and then hire the staff needed to run it, or you could purchase an all-in-one solution and not have to worry about hiring additional staff or doing all the hard, technical stuff. It could be software that sends out and track hundreds of thousands of emails per week, keeping track of the cost of the mailings and the value of the products purchased from those mailings across hundreds of thousands of clients, so it’s very complex, especially when you add analytics into the mix. The fact that this cost becomes OPEX instead of CAPEX makes it all the more interesting to companies as the cost becomes an immediate and full tax deduction.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I’m a big fan of the Victorian England authors, and I love the George Bernard Shaw quote, “Life isn’t about finding yourself. Life is about creating yourself.”

When I moved to Macau to oversee a company, I had no experience in running a software company before. I guess I was just heading up a branch, but it soon became apparent that I was out here on my own. I had produced and coordinated a few films and shorts, but I had no IT experience whatsoever. I had been the director of marketing for the company back in the states, but I didn’t know how to code, I didn’t know how to manage IT projects, and suddenly I was thrust into an environment where people were speaking languages I couldn’t understand and I’m talking about computer code language, not standard languages like Mandarin and Cantonese, which were also foreign.

Once I got to Macau, I was suddenly thrust into a situation in which we had unhappy clients, an unhappy vendor partner and a dearth of new opportunities. I had given up my life in Los Angeles to move out here and I was faced with the option of packing it all in and heading back to the US in defeat or digging in, taking the reins of the company, fixing the problems, finding new clients, and charting a new course for both myself and the company. So, I dug in, getting deep into the nitty-gritty of BI, CI, CX (customer experience), data integration, digital marketing, social media and, above all, analytics. Even though this was not what I had been trained or educated in, I embraced it with the passion I had once had for my screenwriting.

At first, the road was incredibly bumpy, but I buckled down, wrote several books on predictive analytics technology and I immersed myself in the technology. I skilled up several new consultants and spent some time learning about all of the software products available to our clients, not just the ones we sold. I tried to understand what separated our company from our competitors. One book I wrote actually netted a casino client in North America, while the other books helped me get speaking engagements all over the world and those have been great lead generators. Clients now call us “trusted advisors” and request our presence when software vendors pitch their products to them, which is an excellent position to be in.

I’m happy to say that our clients continue to work with us and rave about us (I have the quotes), so we must be doing something right.

The Shaw quote really speaks about how we need to reinvent ourselves and I think that’s truer today than it has ever been. You never know what you can make of the life you’ve been given, we can all evolve and learn new things. Another quote from that time is also something to keep in mind. Oscar Wilde, in his irreverent wisdom, reminds us all that, “Life is too important to be taken seriously.” Something to always keep in mind…

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

When I first moved out to Hong Kong, I was terrified of public speaking, which is unquestionably something relatable to most people. It’s probably one of the most common fears. Before moving out here, I worked in the entertainment industry for a decade-and-a-half, but I was a writer/producer, not an actor, so I wasn’t comfortable speaking before crowds. However, since I became the managing director of the company, I was not only the face of the company, but also the voice and the job entailed not only speaking publicly to large groups of people but speaking publicly and persuasively. I had no problem talking to clients and potential clients in one-on-one meetings, but lecturing to an audience of over a hundred was a little daunting.

Once I arrived in Macau, I was invited to speak at events about analytics technology and, since I had written a book about casino analytics before moving out here, I was able to talk intelligently on the subject. After that event, I was asked to be a panelist on an event in Hong Kong, which turned out to be a lot of fun and quite invigorating.

As my speaking engagements continued, I realized that I had become a real-time storyteller. Rather than being a screenwriter who hammers out scripts that might or might not ever make the screen, I was laying out stories of how technology could change a company or a culture, which was satisfying for completely different reasons. There really is nothing to compare to the direct interaction a speaker has with his audience and I soon came to understand what actors talk about when they refer to the energy and invigoration of live shows.

When you are commanding a stage on your own, you can’t hide behind anyone. You have to know your stuff implicitly and you have to make an emotional connection with the audience. I was actually pleasantly surprised to see how similar analytics and storytelling was and there’s no question that if you can wrap analytics into a story, it’s a lot easier to make a sale.

In terms of sharing something, I believe there’s nothing better than sharing one’s knowledge with receptive strangers — and it’s probably one of the best ways to attain new clients, as well as showcase a company’s expertise.

Since I moved to Asia, I’ve taken the stage in such exotic places as Cape Town, South Africa, Hyderabad and Goa, India, Singapore, Cyprus, and Dubai. I even spoke in Moscow a week before the FIFA World Cup. Unfortunately, I had to return to Hong Kong for another event and couldn’t catch any matches, but it has been a fascinating series of trips and priceless in terms of my company’s marketing. I’d love to be able to help other people take the fear out of public speaking. Personally, I still get nervous before and during my talks, but I’ve found there are ways to reduce this nervousness and perhaps there is a way to share that information. A great, highly structured, and compelling presentation is the best first step.