China: World’s Largest Startup

Those that stuck around for today’s keynote were treated to a fascinating glimpse in to the real world of business and life in China. James McGregor, who has spent over twenty years as a journalist (Wall Street Journal China Bureau Chief) and businessperson there, reminded me what a pleasure it is to listen to a true expert.

In his recent book “One Billion Customers : Lessons from the Front Lines of Doing Business in China” McGregor relates the stories of his experiences and over 300 interviews with Chinese from all walks of life. The title of his book was taken from a book written in 1937 by Carl Crow called “400 Million Customers” about Crow’s experience starting the first western ad agency in Shanghai.

According to McGregor, there is a lot we can learn about China and it’s culture by understanding it’s pre-communist history. “China is all about business--I think of it as the worlds largest startup”. There is a tradition and culture of commerce there that is much more fundamental to Chinese life than most westerners appreciate.

The phrase used to wish someone a happy new year in China translates to “congratulations on getting rich”. “Does that sound like a population that is ready for communism?” asks McGregor. But, while he views the emergence of communism as an “accident of history” it would be wrong to think his view of Chinese government is completely negative or in any way without nuance. “The communist party is probably the best run corporation in China.” He describes the party as (like many US corporations) very democratic at the top, and completely autocratic at the bottom.

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First Ten Years of Internet Growth Nothing Compared to Second

As a prelude to the first ad:tech keynote given by Sequoia Capital Partner Mark Kvamme, ad:tech chair Susan Bratton welcomed a packed room of attendess to ad:tech San Francisco 2006 and told the audience there would be 9,000 attendees to this years show, breaking all former ad:tech attendence records. In addition, she mentioned there would be 300 exhibitors, 200 speakers and 55 sessions, more than any prior conference. Noting the conference’s tenth tyear anniversary, Bratton, calling the show the “biggest, deepest and widest” to date, told the audience ad:tech would be expanding its conference series to Sydney, Hamburg and Paris this year and, in 2007, to Mumbai, Dubai among others.

Following her introduction, Bratton introduced Kvamme who quickly followed the ten year theme Bratton had begun by telling the audience the next ten years will see growth in the Internet space that will make the first ten years seem trivial. Noting all media expcept the Internet is declining in use, Kvamme pointed out the disparity between adspend and consumption comparing television to the Internet. Thirty two percent of people are reached by TV and 38 percent of ad dollars are allocated to TV. In contrast, the Internet reached 32 percent of people but only receives five percent of ad dollars. With TV CPMs hovering around $64 and $10 to $30 for the Internet, Kvamme sees huge growth potential for Internet advertising.