My sleep improved a lot, I managed to stay up until about 11p and didn’t wake until after 5a. In the morning I went over to the mall near the hotel to buy a transformer, but it turned out that they didn’t have one. They did, however have wifi! It was great to get my email on my iPhone, even if I couldn’t reply. Then I took a taxi to the Forbidden City.

The Forbidden City was built in the 1400s and was home to 24 Emperors, ending with the Last Emperor in 1912. It is enormous, with almost 1,000 rooms and housed almost 10,000 people.

The Forbidden City, viewed from Jingshan Hill (Wikipedia photo)

Today, it was mobbed with thousands of almost exclusively Chinese tourists. The Forbidden City definitely doesn’t show China at its best. The entire area was filthy – dirty and with trash everywhere. I had read in my guidebook that Chinese from the provinces might stare at me; not only did they stare, they also took photos.

While making my way toward the very long ticket line, I was stopped constantly by people hawking things or wanting to act as a guide. I had no intention of buying anything or hiring anyone so I just kept walking. For some reason though, one guide cut through the clutter and I agreed to hire him for the equivalent of about $10. He skipped the line somehow and got me a ticket and off we went. It turned out that he was a Ph.D. student at Beijing University and had just given a dozen visiting professors from Boston University a tour. He was good, although I didn’t get much out of the city – the buildings are there, but there’s almost nothing in them. And the Southern parts have been restored without much sensitivity. At the end of the tour I was funneled into the high-end gift shop where the supposed nephew of the Last Emperor does calligraphy. I hate that stuff. Nonetheless, it was interesting to see and stand in the place where so much history happened.  The only furnished room is the Emperor’s honeymoon suite, where he and his bride met, with the Double Happiness theme.

Double-Happiness, Worn from Vistors' Touching It

Across the avenue from the main entrance to the Forbidden City is Tiananmen Square – which is enormous. Again, there’s not much to see there. As someone said to me in Shanghai, the Chinese could teach Texans something about big.

China Today: Bicycle, Rolls Royce, and Tiananmen Square

At the end of the tour, I met my new translator (Charles had a family commitment to attend to) met me at the North entrance. We walked forever until we were able to get a taxi – they’re not allowed to stop near the Forbidden City entrance to prevent traffic jams. I mentioned, as we were walking the third long block to where they’re permitted to stop, that there should be a taxi stand or special lane so that people could get taxis. She said, in a puzzled sort of way, that then there would be traffic jams. Looking inside her reaction, you can see a couple of the differences in the typical Chinese vs. American way of thinking. First, she sees the collective benefit of no traffic jam as outweighing the individual cost. Second, she assumes that the authorities have it right whereas I assume that I do. We did finally get a taxi and headed to a banquet lunch with people from CEAIE, the organization related to the Ministry of Education that is Eisenhower’s partner in China and responsible for my scheduling.

Hongwei Li, Liang Gui, Jiang Bo, Me, Feng Hongjuan

These meals take place in private rooms around a big round table with a lazy susan overflowing with every kind of dish – just like in Chinese restaurants in the U.S. The food was very similar too. There is a very specific seating arrangement for these events, which is one of the formalities that are the ying to the more typical causal yang in Chinese manners. It wasn’t managed well this time, as my interpreter was seated far from me – I think that Charles would have asked to be seated next to me. The lunch was hosted by Jiang Bo, Secretary General of CEAIE, and attended by Fellows Liang Gui (Director General of the Ministry of Science & Technology’s Torch High-Tech Industry Development Center) and Feng Hongjuan (Research Fellow at the China Reinsurance Corporation). I was happy that 2010 China Fellow Li Hongwei, a professor of Marxism Theory at, CCPS, joined us too. Particularly because almost all of the conversation turned out to be in Chinese, and she was the one who would let me know every know and then what the topic was. Despite not understanding most of what happened, it was a very worthwhile as both  Jiang and Liang made generous offers to use their networks for introductions for me when I return in November.

After lunch, we took the subway to my first meeting of the day. It’s a great system, with about 7 lines, air conditioned stations and trains (except the first line). There are incredibly long stairs down to the stations. Ads are projected on the tunnel walls as the trains speed between stations. And there are video monitors in the train – this trip playing an infomercial for a nail clipper with a plastic case that catches the clippings. Really. I enjoyed riding the subway because in the middle of the day it’s filled with kids and their grandparents, both of whom seemed to enjoy me too.

Steps to the Subway

Vincent Gong is a Business Development Director at TripAdvisor. Before that he was at Hyatt for 10 years and was the online marketing manager for Howard Johnson (a 5-star chain here!). Vincent is absolutely charming, and this was a great rubber-meets-the-road meeting. Vincent knows the market inside and out and shared some interesting statistics.

• 70% of U.S travel is for leisure, 30% for business; China is the inverse
• Average stay U.S. 6 days, China 2 days
• Advance booking U.S. 25 days, China 3 days
• Cancellation rate in China 35-40%
• No guarantees in the Chinese market, it’s all cash (so there’s no Priceline, Hotwire, or Hotels.com model)
• 70% of hotel bookings in U.S. happen online, only 20% in China – it’s all done on the phone

TripAdvisor is entering the China market the right way, giving local management complete leeway – even the site name is different here. This seems to be a critical element of a successful China strategy, since so much is different – not just the cultural elements, but the internet and payments infrastructure too.

Next we met Nobert Chang, a serial entrepreneur. He’s an ethic Chinese who came here as an adult (I met a lot of these). He built a mobile gaming company that he sold to Sony, stayed on there for a while, and is now building another startup. He took us to a brand new hotel for coffee, on the 80th floor – nice place with an amazing view.

View (and pollution) from The Lounge on the 80th Floor of the Shangri-La Hotel

After a confusion about which Hilton I was staying at (this was constant the entire week – my hotel was new and taxi drivers don’t know it yet), Australian Fellow Jason Yat-sen Li and his delightful wife Lucy picked me up for dinner. We went to a charming Hunan place in a a courtyard in old Beijing. It was cool enough The food was excellent, and not at all like the Hunan food I’ve had in the U.S.

My power problems and an insane schedule led to be getting behind in updating, but I’m finally starting to dig out today.

Sunday night I didn’t sleep much. I was told to stay up until 10p the first night and made it to 9:45 before crashing. But I woke up at 2:45 like it was morning. I had breakfast at the hotel,  they have absolutely amazing buffets here. And met my I met my translator, Charles Jiang. We took the first of what would be many taxis to meet Tomer Rothschild at a Starbucks (they’re everywhere in Beijing like they’re everywhere everywhere else).

Tomer is a Wharton MBA who’s been in or around China and Taiwan since the ’90s. Among his experiences, he worked at Bally Total Fitness opening China.

• Bally’s joint venture with the China Sports Institute (part of the state, as is almost everything else here) was a very typical failure.
• There is extraordinary brand consciousness here – especially in things that “show”, like cars, handbags, etc…
• Things are changing at a furious pace
• A huge opportunity exists for new lifestyle products like wine, baby products, restaurants, spas, etc… People are looking for ways to spend their money.
• There’s a tidal wave of Chinese students going abroad to study, because the top schools admit less than 1% of applicants so there are extraordinary students who can’t get it, there is prestige in going abroad to school, and more progressive parents think the education is better outside of China.
• The government is critical here in a way it simply isn’t in the west. And it’s borders are wide and blurry.
• Best line, in reference to driving: “the hardware is great, the software is a mess.” Absolutely true, the Chinese are not the best drivers. I saw three accidents in my first 24 hours here.

The we took a long taxi ride to the “Silicon Valley” of Beijing, where Google, Microsoft et al have office towers near Beijing University and Tsinghua University. Other than the lack of Indian and caucasian faces, and the vertical rather than horizontal buildings, it could be Palo Alto – it has the same feeling. We had lunch at a Chinese “fast food” place. The food could have been from the Chinese place in the strip mall at home (actually, it’s excellent). We’ll see how it stacks up to a Chinese feast – supposedly I’ll be having one of those tomorrow. Then we went to Innovation Works to see Chris Evdemon and the famous Kai-Fu Lee.

entrepreneur at Innovation Works

Chris is a successful Greek entrepreneur and angel investor, who is now Investments & Business Development Manager at Innovation Works. He started an international computer skills testing company in Greece and sold it. Before coming to China he spent some time in Singapore. We spent most of our time talking about the early stage investment environment in China.

• Shanghai angels are more mature, Chris is President of a group there that is 10 years old.
• There are groups like the China Business Angel Network which has 60 members.
• There’s an interesting conundrum in that the very best seed opportunities are super-local and the angels can’t find them and they don’t know how to access the angels.

After coffee with Chris I had over an hour with Kai-Fu. He was extraordinarily open and generous – I can understand why he is so beloved here.

• The Innovation Works business model started out somewhat like Idea Labs’ – they would identify opportunities and put team together around them. That didn’t work because entrepreneurs are too independent and didn’t graft to someone else’s idea. Today they are more like an incubator, taking very very early stage ideas and putting their resources around them.
• There are three key challenges that Innovation Works can help with: 1) Hiring engineers, which isn’t a challenge for them. Over 100,000 have sent in resumes to Innovation works. (Yes, 100,000 resumes. Welcome to China). 2) Figuring out the right business model 3) Making very senior level connections.
• There’s a mis-match between both young engineers’ and sea-turtles’ expectations and reality. They think they’re ready to be CEOs and few are. He thinks that the attributes of the stand-outs, who will make good entrepreneurs are initiative, self-awareness, and business sense.
• We then spent a while talking about Google. I’m going to do an entire post about the search environment and Google after I’ve met with more people.

me, Kai-Fu, and Charles

My final meeting on Monday was with Francis Goh, Search Director @Neo Ogilvy. It was great to get the rubber-meets-the-road perspective from Francis (and thanks to Barry Lloyd for the introduction!). Francis explained a lot of how Baidu works, which will go in that separate post about search.

It was a long, good first day.

Finally, a few early observations about Beijing.

• It’s ugly. I love cities. Dirt, noise, crowds – none of that bothers me. But there just isn’t much that’s aesthetically pleasing about Beijing. That’s a big surprise.
• It’s not nearly as hectic as I thought it would be. It is busy and there’s a mix of cars, bikes, and pedestrians that you wouldn’t see in the west, but it’s not frenzied.
• It is hot here right now. Horribly oppressively hot and humid.
• People are generally very casual.

I’ve been challenged here by a combination of power supply issues, extremely limited wifi availability, and blocking. My power issues are resolved, thankfully.  There’s wifi in the mall down the street, which lets me receive but not send email. With power back, I have wired access in my hotel room again – phew! But you can’t – without proxies etc – access Facebook or Twitter from China.

All to say, things are great and I hope to catch up with my blogging later today!

We landed in Beijing at about noon, a bit early. The airport is huge, soaring, spotless, and extremely well-designed. After a very short wait at customs I was whisked by a car from the hotel into the city. My initial impression was very different than what I expected. There are many bicycles but not nearly as many as I thought there would be. Traffic is a bit crazier than in Philadelphia but not much. (That said, making a left turn across traffic seems to be a game of chicken – between a crazy mix of taxis, bicycles tiny cars, and luxury cars. The main avenue leading to my hotel is lined with every one of the most expensive car dealerships: Rolls Royce, Mercedes, Aston Martin, Ferrari, etc and there are more Audis and BMWs on the street than in New York. It’s clear that there’s a lot of wealth here.

I was lucky to be upgraded to a huge room. I was warned that it’s critical to stay up until 10 the first night or jet lag will kill you, so I resisted drowsiness (I only slept a couple of hours on the plane, unfortunately), unpacked, worked out, and got ready to go to my first meeting. There had been some email exchange about how to get to dinner, and I knew that I was to get a car which would wait for me at the restuarant, just because it was my first day, but I didn’t have my final itinerary and had no booking information. So I got one from the hotel.

I met Jinwoo So and his assistant Tony Choi at an Italian restaurant, Tavolo. Mr. So is a 2006 Fellow and a runs a variety of business development groups at SK Telecom, including their Chinese market efforts. He is President, Growth & Innovation CIC, SK China and President, C&I Business, SK Telecom, China. We had a wide-ranging and very interesting conversation about the market, the business culture, the tremendous opportunity here, and the challenges. Mr. So is vey entrepreneurial, smart, knowledgeable, and charming (and speaks perfect English). His assistant Mr. Choi was also very impressive, young and with a very good understanding of the Chinese market, particularly for Internet companies. He’s been here for three years and is fluent in Chinese as well as English and his native Korean.

Some of the key things that were expressed by both men:

• There is an amazing growth of wealth here. It is what we’d think of in the U.S. as “new money” and it is driving luxury consumerism at an amazing pace. The prices of luxury cars here are double what the are elsewhere. There isn’t yet a maturity in the consumption, it is not value-based.
• There is a very small middle class, it’s not really a market yet – it’s the rich who are buying
• The Chinese culture is capitalist at the core, which is not the same thing at all as being democratic. All that’s happened in recent decades is that the capitalist tendencies have been unleashed.
• Working with and through government here is critical. It is easier often to do that at the local level, where economic development is the priority and the question of Chinese or foreign companies driving that development is less important.
• Regardless of where you’re doing business, it’s all about the relationship. Mr. Choi made the interesting observation that one reason for this is that the country is so big – unless an individual is enmeshed in a spider’s web of relationships, it’s just too easy to do something bad then head off to another province where no one knows you.
• It is incredibly difficult for non-Chinese companies to succeed in China. Note that Skype is alone among large internet players succeeding here. The recent announcement that Xinhua and China Mobile are joining forces to create a mobile search company.
• There seems to be a winning formula in the internet space here: a founding team that is a mix of people who are here and steeped in the local culture and business community with hai gai (or sea turtles – Chinese who have studied and/or worked abroad and are now coming back).

Finally, it was fun to witness a bit of Korean etiquette while here. I got half of the business card exchange right: hold the card with two hands, present it carefully. But forgot with the first one that I should study it carefully for some time and make a comment of some sort about it. Mr. Choi took care of all of the logistics for diner, from the reservation before to summoning the server and paying.

I am looking forward to meeting Mr. Wang, CEO of Cy-Fan. Mr. So made that introduction for me and appreciate the help tremendously.

I’m blogging this at 3 a.m., unfortunately, after only 5 hours of sleep. I generally sleep about 6 hours but I’m worried that i’ll collapse by the end of the day. I have four meetings, including dinner.

A note on technology logistics – I have connectivity via a short ethernet cord, there’s no wifi in the room. Happily it was easy to share my connection with my iPad so I can surf and email from bed. And Skype works perfectly.

Finally, I don’t think I’ll be doing such long posts from here on. I’ll be trying to do brief summaries of each meeting.

It’s not often any more that i get to do something major that i haven’t done before. Beyond the great business meetings and connections that my Fellowship is providing, there are core experiences that I’m hoping will stretch me. Others should just be fun.

In the plane, flying First Class, so far, was different.  Lots of Chinese flight attendants, mostly Chinese travelers, announcements in Chinese. You’re given a cool little case with toothpaste, socks etc. The seats go completely horizontal and have a canopy to keep out the light.  Dinner is 5 courses. Old hat for many, I know, but it’s all cool to me.

On the more substantive side, I’ve never traveled so long so far by myself. Or been away from my girls for more than a week. Been in a place where I can’t read a thing. All taken together, I hope to get outside my comfort zone.

It’s been a whirlwind at work and I haven’t had adequate time to really sink into the reality that I’m off to China today. But, nonetheless, here I go.

Got picked up at the house and driven to EWR by a driver, Tony Vendetta, who does all of Eisenhower’s driving. Great guy, even better name, and a very nice way to do it. I got an upgrade to Business Class, so checkin was a breeze, and my colleague Adam gave me a card for the President’s Club (thanks!), so I’m hanging out in style with wifi and power to write this, my first trip post.

A rush of activity over the last week got me to this point. My schedule looks great. I start with a dinner tonight, and I have 3-4 meetings a day in Beijing. I do have one morning to visit the Forbidden City, but otherwise it’s packed. Then I’ll fly to Lhasa on Saturday and tour Tibet. The NYT conveniently had an interesting article on TIbet this week - China Seizes on a Dark Chapter for Tibet. I fly to Shanghai on Tuesday for another (less-packed) three days of meetings. I’ll add to the 40 million visitors to the World Expo while I’m in Shanghai; reports are that it’s absolutely amazing. Then home on the 28th.

My plan is to blog daily with summaries of my meetings. I have no idea if that’s a realistic goal.

Finally, here (again, for future Fellows) are some notes on all of the logistics leading up to my departure:

• My schedule is probably 80% filled. I got lots of advice to leave a lot of open time for ad hoc meetings and just to relax, but every next meeting that came up was too good to pass up. I had been warned that I could end up with too many Government and Academic meetings, but I think I may have ended up with too few! Happily I can address any imbalance when I go back in November.
• About 10 days ago we found out that my coordinator in China, Ms. Liu Yibo was going to be in Taiwan while I was in China and so she was replaced by Ms. Claire Zhang. I was concerned initially, but Ms. Zhang jumped right in with perfect and proactive follow-up and communication.
• I will have an interpreter, Charles Jiang, who works with Eisenhower a lot, with me for most of the trip. And a driver, Bai Gang when necessary.
• One of the key elements of courtesy that is different in China is the exchange of gifts. Frequently, I’m told, people I meet with will present me with a small gift – a tin of tea or a paperweight for example. When they do, I need to reciprocate. I got nice pens because they were relatively light and small and affordable.
• I was up to date on the vaccinations I needed. I got a first aid kit list from a friend who travels to China often, and picked just a few things from it to bring. Everyone tells me to stay 100% clear of the water, even for teeth brushing.
• My prior post outlined my phone situation – not straightforward at all. It turns out I don’t have an Eisenhower China mobile, so I guess I’ll just use the one I got from that same fried (thank you Yili!!!)
• Finally, a staple topic of every Fellow conversation: packing. Everyone says to pack light, so I did. I have a suit, a jacket, a skirt, a pair of dress slacks, a bunch of blouses, and two black shoes (one of which are sandals – it’s going to be hot there!). Plus jeans and t-shirts. And I’m wearing sneakers and a jacket (for Tibet). That plus my Yoga mat and a crazy array of electronics and protein bars fit in my standard roll-aboard. I hope I have enough stuff. It’s sure nice not to have to check any luggage. I’ll buy a bag in China to check on the way home with whatever I pick up while I’m there.

Setting up cost-effective communications between the U.S. and China isn’t simple.

Skype certainly is – you can’t beat free – and I intend to use Skype (on my iPhone, iPad, and MacBook Pro) over wifi as much possible. I’m staying in business class hotels, so I should have reliable wifi.

But I also need to be accessible to folks from their phones in the U.S. and to be able to call phones in the U.S. from China. I’ll be using Skype for both of those options too:

• SkypeIn – which lets people call my Skype from their phone via a unique U.S. phone number, $12.05 for three months after a 33% discount for buying SkypeOut
• SkypeOut – which let’s me call phones from Skype, $13.99/month

Together, these will let me talk with people on their phones in the U.S. very cost-effectively. But they still require me to be on Skype.

To bridge to a phone in China, I have a China mobile phone – thanks to a friend who travels there frequently – for which I’ll buy a SIM when I arrive. Rates seem to be in the $20 for 1-2 hours of talk. I’m pairing that with a calling card (yes, cheeziest site ever, but she says they’re for real) at $.032/minute after the caller enters a jillion numbers.

The last element is a separate China mobile that Eisenhower provides that is exclusively for local calls about scheduling and logistics. Yes, that totals three phones.

Not addressed yet in this solution is text. I bought $5 credit on Skype for SMS, but messages cost $.09 each! I think that I’ll get text on my China mobile, but I won’t know until I’m there.

The goal of all of this was to have a call from the U.S. to my U.S. mobile reach me in China cost-effectively. It doesn’t seem that that’s possible today. But my Rube Goldberg solution should get me most of the way there. I just have to remember to forward my iPhone and put it in Airplane mode (with wifi on) for the duration of my trip when I board the flight on Saturday.

I’d love to hear if anyone has a better solution than all of this complexity…

Two weeks until I arrive in Beijing. At this point I have 10 confirmed meetings, almost all through my own networking. All of that has been very smooth, except for the confusion regarding two different Zhang Tao’s – one at Baidu and the other at Dianping.com. There are 10 more of those meeting in process, and the Eisenhower network is just starting to kick in. I’ve gotten a lot of messages back from people that a month is way too long ahead in China.

I’ve also had conversations with more people here who have worked in China, including Bill Doran from Morgan Lewis and Ron Drozd from the World Trade Center of Philadelphia, and venture capitalist David Williams. I and have continued to hear a consistent refrain: there’s tons of opportunity in China – for the Chinese. The challenges around intellectual property are well-known. I have been surprised to hear, though, things like how difficult it is to collect payment and how transient relationships with U.S. partners can be. I’ve had warnings to, in effect, keep my hand on my wallet. Chinese will all be happy to meet with me, I am told, with a single goal: to learn everything they can about how we do things. I’ll be very interested to see for myself.

My visa for China has come through, but not yet for Tibet. And I’m starting to think through all the specifics – what to pack, what kind of suitcase I should take, etc…

My dates were set and I got plane tickets and hotels this week! We’ve made a major change and (‘m going to China twice rather than split between China and Korea. Although I’m disappointed that I won’t get to Korea, it makes more sense to concentrate my limited time in one country. I’ll fly direct from Newark to Beijing on August 14th, spend a week there, then fly to Lhasa for a couple of days, and finish in Shanghai on the 24th-28th. In November I’ll go back to Beijing and Hong Kong.

Carter Tseng

I’m thrilled that Dr. Carter Tseng, co-founder of Microtek, has agreed to help with my program in Beijing.

Logistically, I’m applying for my visa, connecting to schedule meetings, and trying to figure out how to coordinate my meeting efforts with my program coordinator in China. It’s all getting very real now!

With less than three months to go, preparation has moved into high gear.

I and the other Fellow who is going to China this year had our introductory call with our coordinator in China (9:30 p.m. our time, 9:30 a.m. the following day his) and laid out our objectives. Erin Hillman, who is very active in all Eisenhower activities in China, talked us through the logistics of visas, hotels, translators, etc.

Most likely I’ll fly direct to Beijing and spend about a week there, then fly to Chengdu or another central city, and (hopefully) take the train to Lhasa.

Then I’d fly to Shanghai, spend a few days there and fly home.