The China Vortex

The story of western social network sites losing out to local Chinese competitors continues; this time MySpace China joins the list as its CEO Luo Chuan makes it official that he is going to leave to join a local online video startup.

Although it is a well-known fact that local management teams need to be empowered to compete successfully in the Chinese market, western tech companies continue to make the same mistakes over and over again. I believe that the reasons for this are:

• While there is much talk about diversity, there is the firm belief that “brands” must be protected with a unified set of features and look all over the world;
• Most VPs of marketing are not fluent in other languages and cultures, and try to dictate from headquarters. When they visit the local office, they appear sympathetic, but when they return to HQ, everything learned from visits to local subsidiaries is quickly forgotten;
• Local Chinese competitors are unrestricted by these considerations; they just do what they need in order to win users. There is very little if any discussion of “brand” and “look and feel”. These are the horses VCs like to bet on;

When you come right down to it, there is little a global brand can bring to the table in China. Most add a burden of a faraway headquarters without empowering the local management team to be more competitive. This is not a problem which is unique to China, it is also happening in the social networking market in Japan.

My conclusion: The problem does not lie with China, but instead lies with the reluctance of western social networking sites to empower their local management to do whatever they need to win users and market share. By trying to force common features, standards and branding too early from their headquarters way before the market is mature, they cripple their local companies’ chances of success, and cede the market to the local competitors.

That is why the successful local competitors get such high valuations; they make ideal acquisition candidates and give their founders a good exit strategy.

Ask Meg Whitman, former CEO of eBay.

I have spent a lot of time recently thinking, writing and researching on the implications of the Internet (hence my sparse article posting; my apologies) and what that means for how people do things in a corporate setting.

The most important takeaway so far is that blogging and the Internet will accelerate the death of corporatespeak. By “corporatespeak” I mean the gargled and mangled language which comes out of public relations agencies in the form of press releases, and which sometimes make it into mainstream articles in magazines and newspapers. This is the stuff where a company tries to preserve and protect its “corporate image” and speaks with authority to its customers, and ends up sounding like a robot because the message has been run through corporate communications and the legal department to insure that the company won’t get sued for any claims it makes. Ad agencies spend a good part of their time undoing corporatespeak in order to get the company message through to consumers in a way which sounds like there are actually human beings on the corporate side.

Even though I come from a marketing background, I have really hated corporatespeak with a passion, which is an important part of why I like the Internet. For me, the Internet is about facilitating asynchronous conversations. It allows me to meet people I have never met before, and would never have the opportunity to meet before if the medium had not existed. For instance, just yesterday, I connected with a group of IT professionals in France who enjoy reading this blog. It was good to know that there are people in France, and maybe other countries, who enjoy the content of this blog. The Internet is like a huge room with many small groups of people chatting away. If you are polite and friendly, you can walk up, introduce yourself, listen and contribute to the conversation. Then, when you want, you can say thank you, and move on to another conversation.

And the neat thing is that these conversations need not be going on at the same time.

Now, marketing and corporate communications departments are wondering what to do because they have been set up to “protect the corporate image” and “protect the management” respectively, and really don’t know what their new roles are. It takes a new kind of corporate communicator and a new kind of marketer to say “My job is to engage with the customers (or shareholders) in a new kind of one-on-one conversation” when that is not what they are used to doing.

It takes a certain of confidence and good judgment to engage in conversation. They can’t be corporate drones anymore; that way doesn’t work in this new world.

Did you know that corporate CEOs are human beings too? It would be really good if some of them expressed their thoughts online, without having to worry about getting spammed, etc.

One of the things I have noticed in China which is very different from the US is the huge number of people always in bookstores, especially the larger ones. Many Americans like to get their information from radio and TV and think of reading as a chore. I have never understood this attitude; I prefer reading to radio and TV. Words and text in an article expose how a person thinks, and how they analyze a problem in a way video and audio do not. It goes deep while television, especially in the US, is all about sound bites. It encourages shallow thought, which leads to (surprise!) shallow behavior.

This is why sometimes, when asked to comment on a given subject on radio or TV, I say no. If I feel that I cannot add something new, or a deeper viewpoint which people can think about later, I prefer to keep quiet. If I want to offer a viewpoint which will make people think a little longer and deeper, then an article is the best approach.

The great irony about the Internet is that it encourages the development of a whole new set of soft skills. Traditional advertising stressed divisions along media; now those divisions no longer exist. People have a whole smorgasbord of media available and they don’t divide along media lines; they divide according to where the content is and what is most convenient for them at the time.

The new soft skills will stress:

• How to converse intelligently with people, one on one, even in asynchronous conversations;
• How to listen to people and use that information to get insights;
• How to handle a difficult or bad situation and turn it into a good situation;
• How to keep the conversation going and add to it from time to time;
• Being proactive all the time;
• And maybe most importantly, knowing when not to say anything

Marketers and advertisers being able to have intelligent conversations? What a revolutionary idea!

If you will excuse my initial sarcasm, that is exactly what is needed. In writing, I have found the greatest challenge to be finding a voice I’m comfortable with. Now it’s easy.

The new advertisers and communicators will have to be able to think this way too.

It will be interesting to watch how this all develops…