How to Cross the Street in China (and other Lessons to Building an Enduring Company)
I have been living in China for the past year. Crossing the street can be a daring feat in China, just like building a lasting company. Here are some tips on getting across the street alive, along with some business lessons for building an enduring company.
Never be the first or the last, be in the middle of the pack
When crossing the street, the best thing to do is to stay in the pack. If you are in the pack, you will be protected by the people around out. If you are first or last, you are left unprotected. Regardless of what the light says if the pack moves, the best is if you move as well.
When it comes to building a business, being too early to the market is the same result as being too late to a market — business failure. Regardless of what is out there, watch where the market is and be a part of it.
Never be too early or too late to market — just be on time.
Cars, bikes, and then people
Rule #1: You are not a car. In the land of 1.2 billion people, there are far more people than cars, making cars a more scarce resource. Scarcity usually is correlated with higher value.
Rule #2: Cars are bigger than people. This is the law of physics — if you get in front of a moving object larger than you — the lesser object has a higher likelyhood of being impacted. Therefore China common sense law would be to allow cars to have the right of way.
You need to allow the cars to go first, and then really watch out for those bikes because they don’t follow the traffic lights and are fighting with the others on the road. Let the bikes and cars fight for the road, while you pay attention to when the people move.
Like in business when new technology and markets come to play often because the incumbents are larger they will move slowly into new markets. Many times you will see the incumbents at odds with each other in their current market and not pay attention to new markets. Our company has witnessed this— twice.
The first was Facebook. In 2007, we were one of the first to Facebook. In those days, companies were born over the weekend. Literally. Companies like Slide, RockYou and Zynga enjoyed the ability of first mover advantage. Including Kabam (well, Watercooler back then). While new unknown companies were dominating on Facebook none of the larger companies were seen on Facebook.
When CBS tried to do their Bracket App for NCAA College Championships (aka March Madness), it was already year 2 for our bracket application. We were David and CBS was Goliath. Facebook was partnering with CBS and CBS had access to as many of the native channels as developers plus the added benefit of an official relationship with the platform. However, we still beat out CBS’s application. Part of it had to do with big brands coming onto a new platform and not adjusting.
The big brands, if done incorrectly, were seen as irrelevant and too late. In fact when ABC wanted to distribute their video on Facebook, they didn’t go to Facebook, they came to us to distribute. For CBS and ABC, they were busy competing with each other outside of Facebook that newcomers were able to grab market share.
We saw this again when we pivoted into mobile games. EA and Blizzard were slow to adopt which allowed a new comer like Kabam to come in and dominate the new market. In fact in 2012 we were the Top Grossing App on iOS.
Let the incumbents fight it out in their existing markets, while you capture new markets.
Don’t fight the current, go with it
The craziest driving I have seen is in China. The other day our cab driver drove between two buses going the opposite direction. It was not only because the driver was incredibly impatient but he also felt if he did not go, someone else would go. So, he fought traffic the opposite way within an intersection. Sadly, since this a common occurrence, we notice that each time it would have been more efficient if the drivers had gone with the current.
When starting a company it is much easier to go where the users are than to have users come to you. When we started Watercooler (now known as Kabam), we started as a corporate social networking site. After we built and launched it, we thought everyone would come running. We loved it and so would everyone else. After we begged our friends and family, old colleagues and sent cold emails, we learned how hard it was to grow and gain traction. After several months we had only about 2,000 users — if you could call them that. We were deciding whether or not to shut down the company and find day jobs. And then around the same time, Facebook opened their platform to where any developer can create an application. Now instead of spending months to get 2,000 users, we get that many within the hour.
I remember when we told our Board Member that we were thinking about going onto Facebook, she emphatically said, “Yes! Go where the users are!”
Go where the users are.
Social rules often trump legal rules
The first rule about crossing the street in China is “Don’t get killed.” As long you achieve that you will be successful. This means you follow the rules that will not get you killed. And oftentimes following the rules can get you killed. I have jay walked many times, but the situation looks like this:
Even if the light is green, it doesn’t matter in this situation to cross. In fact I wouldn’t cross unless there was a pack of people near by to keep me safe ;).
In building your company, your day and your marketplace can look and feel like the picture above. However, in Chinese the word for crisis is 危机， which has the word “opportunity” in it. The way the market place moves so quickly there is opportunity to build amazing products and companies by focusing first on building what people want first — that is one way to keep the law on it’s toes. In fact there are large amazing companies that were built by following the social rules first and then worrying about the legal rules: Uber, Airbnb, Apple — just to name a few. If they had worried about the legal rules first and then the social rules, they would have never have gotten as big or even started.
Build what people want.
Fight for your right to exist
As you cross the street, you are in charge of your life. You control your destiny as you take those steps to cross the street. Many cars will see you and come right up to and inch slowly their car towards you to intimidate you out of your way, so you must must not be scared of them and act like you belong there.
Building an enduring company is a marathon. It is the most raw marathon on a course that has every single obstacle that could happen to you. In a marathon it is you versus yourself. You must fight for every step that is taken. And after awhile, all you need to do is just take that step. Similar in building a company just continuing to take the next step and just showing up you will survive and by essence, thrive.
Sometimes the best thing a startup can do is — don’t die.
While crossing the street in China can be a daunting task, like building a lasting company, following these five rules can help get your business cross the chasm of success:
1) Never be too early or too late to market — just be on time.
2) Let the incumbents fight it out in their existing markets, while you capture new markets.
3) Go where the users are.
4) Build what people want.
5) Sometimes the best thing a startup can do is — don’t die.
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I am the co-founder and Chief Development Officer of Kabam, these perspectives are my own and do not necessarily represent Kabam.
