and

Tech leaders with Chinese characteristics

How history and culture shaped Chinese tech leaders
Oct 2022
1
Executive summary

● Over the years, many friends in our communities have asked us a lot of questions about Chinese tech giants: Alibaba, Tencent,
ByteDance / TikTok, Meituan, Didi, J&T, SHEIN etc… Questions asked are on strategy, culture, people and reasons behind successes as
well as failures. Some of these companies are making their presence felt outside China too. But who are these “Chinese tech
companies”? How do they make decisions? Should we be welcoming, or worried?

● Guoli Chen, Professor of Strategy at INSEAD, and Jianggan Li, founder and CEO of Momentum Works have spent the last two years to
decipher Chinese tech companies and their global expansion. They recently published the book “Seeing the Unseen – behind Chinese
tech giants’ global venturing” (Wiley), which summarised successes and lessons learned from Chinese tech companies into People,
Organization, and Product and Leadership (POP-Leadership) framework.

● In this report, the Momentum Academy team, together with Professor Chen and Jianggan Li expand on what influenced and shaped
the strategies of Chinese tech leaders. Specifically:

○ Chinese history and folklore (e.g. Romance of the Three Kingdoms, Journey to the West);
○ Mao Zedong’s wisdoms used in the Chinese Revolution, and why it is still relevant today;
○ Myths of China’s tech growth (e.g. the great firewall protected chinese companies), and what are the real facts;
○ Commonalities of the new generation of tech giants leaders from ByteDance, Meituan, Pinduoduo.
○ And finally, the “Sharks versus crocodiles”: how does that analogy remain relevant, 20 years after Jack Ma made it famous.

● History and stories (the words share the same root) have always been the best way to share lessons and give direction to the future
generations. We hope that you will enjoy reading this report, no matter which industry we are in, or which battle you are fighting.

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© Momentum Works
The authors of Seeing the Unseen: Chinese tech giants’ global venturing

About Guoli
Guoli Chen is a Professor of Strategy at INSEAD. He received his PhD in
Strategic Management from the Pennsylvania State University. He
teaches Competitive Strategy, Blue Ocean Strategy, Global Strategy to the
MBA, PhD, and Executive Education participants.
Chen’s research focuses on the influence of CEOs, top executives, and
boards of directors on firms' strategic choices (e.g., M&A, globalization,
CSR) and organizational outcomes.

About Jianggan
Jianggan Li is the Founder & CEO of Momentum Works, a
Singapore-headquartered venture outfit.
Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and
served as the Managing Director of Foodpanda. He holds an MBA from
INSEAD and a degree in Computer Engineering from Nanyang
Technological University. Apart from English and his native Mandarin, he
is also fluent in French and conversational in Cantonese & Spanish.

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© Momentum Works
Guoli and Jianggan have analysed global expansion of 20+ tech majors

And synthesised the key takeaways into…

“Seeing the unseen - behind Chinese tech giants’ global venturing”

analyses experiences, challenges and lessons learnt by Chinese
and Chinese inspired tech companies, and their major competitors.

Order from Amazon or from bookstores nationwide

(in selected countries)

4
© Momentum Works
We summarise the key success factors to the POP-Leadership framework

People: the micro-agents of the firm, Leadership: set the ambition and
who make things happen: direction for the firms:
Where to hire? How to motivate, train and To understand a firm’s strategy, we first need to
evaluate? How to build the core value and study its strategist. Leaders provide a shortcut
team up with the best lieutenants (e.g., to comprehend or even foresee the next
Alibaba’s core value and HR system) strategic move (e.g., Jack Ma of Alibaba; Yiming
Zhang of ByteDance).

Organization: addresses the Product: the interface to engage with

fundamental issues such as decision clients, to generate and capture value:
rights, information communication, and Product is related to a series of decisions that
resource allocations: include three Ws and one H. (i.e., what to offer,
How to keep organizational agility when firms when to enter, where to enter, and how to
become bigger (e.g., continuous enter new market)
POP-Leadership is a strategy framework created by
organizational restructuring, rotation of Guoli Chen, professor of strategy at INSEAD, and
executives, and intense internal competition) Jianggan Li, CEO of Momentum Works.

Source: Seeing the Unseen 5

© Momentum Works
We use history and anecdotes to demonstrate these principles

Also - why is almost every tech company in China using an animal for logo?

Source: Seeing the Unseen 6

© Momentum Works
Table of content Momentum Academy 2022. All rights reserved. The material
contained in this document is the exclusive property of
Momentum Works. Any reliance on such material is made at the
users’ own risk.

1. History of Chinese tech companies 101

2. Why are founders in China reading Mao?

3. What do Meituan, Bytedance and

Pinduoduo have in common?
4. Sharks vs Crocodiles

7
 Momentum Academy 2022. All rights reserved. The material
contained in this document is the exclusive property of
Momentum Works. Any reliance on such material is made at the
users’ own risk.

1. History of Chinese tech companies 101

8
 History of Chinese tech companies 101
Each wave lays the foundation and infrastructure for the next
Hundreds of service/ Covid brought all giants
Taobao launched in Meituan Delivery, product sharing with a new round of
Alipay and Tencent’s
2003 Renren was founded Ele.Me, and Baidu companies in different funding into this industry
Caifutong became a ANT Financial Group
launched delivery fought in industries are reaching
payment service
food delivery service their peak
provider

430 Million QQ users in

2008 WeChat Pay launched

Community group The regulatory

Internet financing Food delivery buy and fresh
Social networking Start of Mobile payment Sharing economy crackdown wiped out
took off took off good ecom edtech
Pre 2000 -2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

BAT founded The war of thousand Massive companies Live streaming then
Short videos Crash of fintech
group buy Smartphone users merged live commerce
overtook PC users China's government start a
Dianping merged with Meituan
Meituan won Huya and Douyu streaming Led by TikTok and new policy against
launched Kuaishou, total users overpowered Fintech
reached 820 Million companies

Didi merged with Kuaidi ANT Financial group failed

WeChat launched and bought Uber China IPO
Taobao started
live commerce

Source: Seeing the Unseen; Momentum Works insights 9

© Momentum Works
Demystifying China’s tech growth - why China companies have grown so fast
What we hear
Chinese policies, such as the
“Great Firewall”, sheltered local
Chinese internet companies
from competition with western
giants
In China, copyright means
copy-it-right. Chinese
companies plainly copy tech
products and business model
Chinese tech companies have a
toxic work culture - exploiting
employees through the 996
culture
Source: Seeing the Unseen; Momentum Works insights
© Momentum Works
Fact check!
The “Great Firewall policy hurt,
not protected these companies.
It encircled an ecosystem of
fierce competition and impeded
their global ventures of Chinese
tech companies
Copying is not enough. Chinese
companies go beyond copying,
they continuously make
incremental innovations to stay
competitive
Chinese tech companies need to
maximise proficiency to
compete, even at the expense of
their employees
Foundations for China’s tech growth
1. The 1966 cultural revolution was aimed at purging remnants of
capitalist and traditional elements from society. Whilst it was
violent and detrimental to the traditional culture, it:
● Provided a clean slate to effectively build social
infrastructure; free from resistance of traditions
● Made everyone speak the same language and had the same
education - creating a very large homogenous market
2. Policy push for entrepreneurship since 2014
● At Summer Davos 2014, Premier Li Keqiang’s famously
said:
“Leverage the current of the reform… to create a new wave of
“mass entrepreneurship” and “grassroot entrepreneurship”
across 9.6 mil square km of territory of China to form a new state
of “mass innovation”, “everyone’s innovation.”
● National and local governments moved in quickly to
provide funding, policies, information, etc.
3. Riding the waves of luck and timing
● It is not just pure grit, talent, or a simple centralised
government maneuver, but a confluence of various
factors (e.g. being the world’s factory, fast improving
infrastructure, a large diligent workforce with good
education, etc) 10
 Momentum Academy 2022. All rights reserved. The material
contained in this document is the exclusive property of
Momentum Works. Any reliance on such material is made at the
users’ own risk.

2. Why are founders in China reading Mao?

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Entrepreneurs in China draw lessons from history (and sometimes mythology)
The Art of War Romance of the Three Kingdoms
Allegedly written by a general (三国演义) Selected Work of Mao Zedong
called Sun Tzu - analyses Part historical and part fiction - the novel (毛泽东选集)
tactics to outsmart focuses on the three power blocs that Five-volume collection of the written works
opponents and win war with emerged from the remnants of the Han of Mao Zedong from 1926-1957. Includes
dynasty, and would eventually form the Mao’s thoughts on differences in social
minimum effort. Mao Zedong
three states of Cao Wei, Shu Han, and structure, communism, revolution,
said that the lessons helped economics, war tactics, welfare of the
Eastern Wu. It deals with the plots,
him defeat Chiang Kai-Shek’s personal and military battles, intrigues, and masses, serving the people, cadre policies,
Nationalist forces during the struggles of these states to achieve history and selected case studies about
Chinese Civil War (1946-1949) dominance for almost 100 years. Chinese regions.

5th century BC 3rd century BC 14th century 16th century 20th century

Chu - Han Contention (楚汉相争)

Journey to the West
After the fall of the Qin dynasty, the empire was divided.
The mythical novel, where a Buddhist monk, Tang Sanzang,
Contention broke out between Xiang Yu's Chu state and Liu
travelled to India to obtain sacred Buddhist texts. Together
Bang's Han state. Xiang Yu, a descendant of a famous noble
with a team of the condemned - Monkey King (powerful ,
general, controlled much of China. Liu Bang, was a low-level
impatient, lacking self-control), Pigsy (lazy,selfish, timid and
bureaucrat before the war. Odds were in Xu’s favour.
horny), Sandy (hardworking but unimpressive) and Dragon
Prince a.k.a the white horse (composed but could unleash
However, Liu exhibited greater political savvy and
power in times of stress) . The decade-long journey involved 81
leadership. He had the correct understanding of the
hardships, including harsh terrains, bandits, armed conflicts,
competitive landscape, put the right people on his team
seduction and all kinds of demons. Jack Ma once said that
and built allies and partnerships. In comparison, Xiang was
Tang Sanzang was probably the best entrepreneurial leader in
less strategic, acted on impulse and was often offensive
(fictional) history - he was able to lead the team towards the
toward allies and key advisors. Within 4 years, Xiang lost the
ultimate goal, even though he did not have any other
war. Liu went on to found the Han Dynasty.
Source: Seeing the Unseen; Momentum Works insights superpowers himself. 12
© Momentum Works
Mao Zedong left particular abundance of wisdom for tech entrepreneurs

Many entrepreneurs draw inspiration from Mao, viewing his strategies as a startup playbook.

“敌进我退, 敌驻我扰,
“没有调查就没有发言权” 敌疲我打, 敌退我追”
“农村包围城市”
“Those who have not conducted “We retreat when the enemy is
advancing; we harass when the “Seize the countryside to
investigation shall have no right
enemy is camped; we strike when encircle the cities”
to speak”
the enemy is tired; and we chase
when the enemy is in retreat”

Case studies
where these
wisdoms are
applied in tech

Source: Seeing the Unseen; Momentum Works insights 13

© Momentum Works
What are founders learning from Mao? (1/3)

In May 1930, Mao conducted a massive ground research on the small

没有调查就
“ remote county of Xunwu “寻乌”- strategically located at the junction
of Fujian, Guangdong and Jiangxi provinces. In his 80,000 word long
report, Mao detailed the history, agriculture, business, artisanry,
land ownership, major conflicts, and people’s behavior of Xunwu.
This helped set form his revolutionary strategy.
没有发言权
Everybody who read the report was impressed by its level of details.

Those who have

not conducted
investigation shall have
no right to speak
Alibaba had in-depth knowledge of China, especially the dynamics of millions of small
businesses in china, compared to Western giants - Amazon and eBay - which simply
copied its US strategy/operation, without adapting it to the needs of the Chinese
Market.

In 2004, Taobao overtook eBay in most metrics in China.

Source: Seeing the Unseen; Momentum Works insights 14
© Momentum Works
What are founders learning from Mao? (2/3)

During the Korean War: “The Chinese moved largely at night to avoid air strikes and

敌进我退,
敌驻我扰, 敌疲
“ aerial observation. As soon as they met resistance, they would break off into selected
small units to engage the opposition. However, if they met no resistance, the whole army
formation often moved in the darkness right past defensive emplacements deep into the
rear of enemy positions.”

我打, 敌退我追

We retreat when the Groupon’s entry into China saw the growth of thousands
enemy is advancing; we of deal sites, many of which pivoted their model to group
harass when the enemy buy of goods in addition to services. Unlike competitors,
Meituan did not pivot to a group buy business model
is camped; we strike
then. Meituan knew that when Taobao - with its influence
when the enemy is over goods sellers - attacks, the other competitors would
tired; and we chase simply be obliterated and shut down.
when the enemy is in Meituan emerged the
retreat Meituan only decided to enter e-commerce of goods later, winner of the war of a
when they had a larger customer base and most of the thousand group buys

competitors were no longer in the market.

Source: Seeing the Unseen; Momentum Works insights 15
© Momentum Works
What are founders learning from Mao? (3/3)

Mao believed that China was still a largely subsistence

farming society, and the real power was in the

“ countryside. To succeed in the revolution, the

communist must abandon their worker-focused
doctrine to set up bases in the countryside. When the
communists accumulated enough power through their
countryside and mountain bases, their attacks on the
农村包围城市 cities were both swift and decisive.

Seize the countryside to

encircle the cities
Alibaba built its ecommerce empire by first addressing the masses, C2C market,
focusing on low price products and individual sellers.

Pinduoduo has, ironically, also been using Alibaba’s early days strategy, to challenge
Alibaba in ecommerce. Pinduoduo started with a focus on low price products and built
up the sales volume. Once the volume is big enough and scale brought efficiency,
Pinduoduo moves up the value chain .

Source: Seeing the Unseen; Momentum Works insights 16

© Momentum Works
 Mao’s principle of 多快好省 has been used as value propositions for consumer tech

In 1958, Mao announces “多快好省 (Selection, Speed, Quality, Savings)” as

the guiding principle of building up the socialist economy

Today, the phrase is used by

investors to evaluate
Selection 多 companies.
duo
It is also used by many
Chinese companies as their
Speed 快 value propositions.
kuai
But no company can focus
The phrase reflects the general
desire of Mao Zedong to
Quality 好 on all four at the same time
and still remain cost
accelerate China’s economic hao
efficient. Most companies
development and revolutionise
industry and technology in the Savings 省 choose one or two factors
to differentiate themselves
country. sheng
from competitors.

Source: Seeing the Unseen; Momentum Works insights 17

© Momentum Works
 Momentum Academy 2022. All rights reserved. The material
contained in this document is the exclusive property of
Momentum Works. Any reliance on such material is made at the
users’ own risk.

3. What do Meituan, Bytedance and

Pinduoduo have in common?

18
Founders of Meituan, Bytedance and Pinduoduo have a lot in common

WANG ZHANG HUANG

Hometown Longyan, Fujian province Longyan, Fujian province Hangzhou, Zhejiang province

Dropout - U. Delaware masters; Made many business trips to visit and Studied Computer Science in Madison
US Connection
Copied US business models learn from the US Worked in Google

7 years
Entrepreneurial 7 years 7 years
Ouku.com (e-commerce)
experience before Xiaonei (Facebook copycat) Kuxun (travel tech)
Leqi (marketing)
founding current company Fanfou (Twitter copycat) JiuJiuFang (prop tech)
XunmengGame (gaming)

“多数人为逃避真正的思考， “牛逼的人找方法，傻逼的人找借口” “你可以说我low, 但无法忽视我的存在”

愿意做任何事情“
Chicken soup
Majority of people are willing to do Achievers find solutions, You can look down on me,
anything to avoid the real thinking. fools find excuses. but you can’t ignore me.

Source: Seeing the Unseen; Momentum Works insights 19

© Momentum Works
Their companies are challenging the dominance of Alibaba and Tencent

Impact The largest food delivery player in China Owns the largest short video company Third largest ecommerce company in China
today with 67% market share by TikTok (global market) and by GMV, breaking into the long-time
total sales1 , 42.5 million orders / day Douyin (China), amongst other apps dominance of Alibaba and JD

What they Beating well-capitalised Baidu Disrupting content / news / social previously Threatening Alibaba in ecommerce
did and and Alibaba’s ele.me in food delivery controlled by Baidu & Tencent;
which giant now going into ecommerce
did they
challenge Parent
Parent

Baidu Waimai

Key ● Hotel and travel ● Short videos ● Ecommerce

business ● Food delivery ● Ecommerce ● Community group buy
segments ● Quick commerce and community
group buy

The culture Doesn’t set boundary of how they can grow; Excessively data-driven Dare to be late comer
as long as the core is clear - “eat, drink, play”

1. Q1 2021. For more, refer Momentum Works’ Food delivery report 2021. Source: Seeing the Unseen; Momentum Works Insights 20
© Momentum Works
In addition to their founders, the three companies also have a lot in common

Started with Started with hotel business Started with user-generated Started with
masses to bring focusing on no star or content / everyday customers from tier 3/4 cities
volume one star hotels content creators

The enemies

Baidu Waimai Baidu News Kuaishou

Leverage on Delivery and fulfillment Army of freelance Penetration of low-end

existing infrastructure content producers smartphones and existing logistics
infrastructure infrastructure in the country

Doubted for a “The large, heavy operations Meituan “The market for content is “Pinduoduo is selling fake
long time has built is a blackhole that sucks in saturated. There is no and copycat products.”
too much money - and will it ever be room for you.”
profitable?”

And now, they are encroaching into each others’ businesses

Source: Seeing the Unseen; Momentum Works insights 21
© Momentum Works
 Momentum Academy 2022. All rights reserved. The material
contained in this document is the exclusive property of
Momentum Works. Any reliance on such material is made at the
users’ own risk.

4. Sharks vs Crocodiles

22
Jack Ma thinks that crocodiles will beat sharks in rivers

“eBay is a shark in the ocean. We are a crocodile in the Yangtze River.

If we fight in the ocean, we will lose. But if we fight in the river,
we will win.”

- Jack Ma, Alibaba founder, 2003

Crocodiles Sharks
Behavior ● Lurk on land and in water ● Live in (salty) water (top of the ocean food chain)
● Breed fast ● Often lurk/hunt alone
● Hunt patiently, then violently ● Smell of prey from miles away
● Often stay in groups ● Kill ferociously but rarely attack people

Analogy Local companies Big international corporations

● Know the local ecosystem very well ● Command large territories
● Move fast when needed ● Able to mobilised abundant resources
● Compete with many other crocodiles ● Flexible in open ocean
● Don’t venture out in open ocean ● Can be intimidating in competition

Source: Seeing the Unseen; Momentum Works insights 23

© Momentum Works
“Crocodiles” will either evolve to become ‘sharks’, or die trying

Question: where is …

Source: Seeing the Unseen; Momentum Works insights 24

© Momentum Works
But did you know …

Crocodiles, being reptiles, are more advanced Yangtze river “crocodiles” are actually alligators
1 animals than sharks which are fish
2

Crocodile
Reptile
Live on land and water
Eat everything
Can walk backward

Shark Water Live in freshwater Live in a mix of fresh and

Fish saltwater
Only live in water
Only eat things in the sea Snout A wide and U-shape A pointer, V- shape snout
Only swim forward snout

Habitat South USA and China Africa. Australia, India, and

Central America

Source: Seeing the Unseen; Momentum Works insights 25

© Momentum Works
POP-Leadership questions to ask yourself

● What are your / your company’s core competencies?

● How to leverage your core competence in other

products/markets?

● What are your strategies when facing the challenges of fierce

competition and lack of resources? (build, borrow
or buy)

● What is the balance /trade-off between the short-term

profits and long-term growth?

● Do you need to restructure your organization/ resources to

achieve your strategy?
POP-Leadership is a strategy framework created by Guoli
Chen, professor of strategy at INSEAD, and Jianggan Li, CEO ● How to keep it agile to adapt to the environmental change?
of Momentum Works.

● What are the organizational roadblocks for a successful

overseas expansion? How do you remove them?

Source: Seeing the Unseen 26

© Momentum Works
 COMING SOON FROM ACADEMY

Keynote talks: What can we learn from Mao Zedong

This report is brought to you by
Why do Chinese founders apply Mao’s strategy as their startup
playbook? What are the learnings that shaped Chinese
companies business strategies and global ventures.

Case studies: POP-L strategies for Meituan

Momentum Academy is a subsidiary of
How did Meituan create their superapp strategy and deepen
Momentum Works which leverages our insights,
experiences and community to develop their moat to fend off potential competitors? What’s is their
real, immersive learning experiences for strategy to thrive in the fiercely competitive industry?
corporations and individuals.

Case studies: POP-L in Southeast Asian companies

Get in touch:
How companies in emerging markets use POP-L strategy to
yorlin.ng@mworks.asia
build Southeast Asia tech ecosystem? And ways to address
Head Momentum Academy
fundamental issues, set goals and engage with users.

© Momentum Works
 Further insights & reports from Momentum Works
Macro & investment Ecommerce & food delivery Fintech & digital banks Company anatomy Web3

And many more at:

insights.momentum.asia

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