Page 142 - How China Is Winning the Tech Race

China is the Promised Land. Super-speedy third-generation (3G) wireless
technology is coming soon as the government pushes to transform China into
a world-class mobile leader like South Korea and Japan. The much-antic-
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ipated service is predicted to be ready by the Beijing Olympics in summer
2008. When that happens, China’s mobile phone users will be streaming
video, viewing ads, buying services, playing multimedia games, and down-
loading music like there’s no tomorrow. Already loads of Chinese financial
services are shooting ads and services directly to customers’ cell phones.
Tiny Oriental Wisdom has carved out a big chunk of the Chinese financial
services market as clients: 3 of the nation’s largest insurance companies—
China Life, Pacific Insurance, and New China Life—plus 14 others, in
addition to 3 banks and 48 mutual fund companies. It even counts a Chinese
offshoot of the U.S. investment firm Franklin Templeton as a client. Oriental
Wisdom lures them with a package of ads sprinkled with quick news tidbits
on the stock market, real estate, and the economy.
Chinese citizens who grew up in the country’s state-owned economy
never had the “luxury” of receiving a cold call from an overly eager insurance
agent promising the moon with a new savings account or life insurance policy.
Now Oriental Wisdom is consigning to history the beleaguered insurance
salesperson who withstands slammed doors and threatening dogs in the yard.
With Oriental Wisdom, a cell phone is better than a foot in the door as a
method of selling.
The seven-year-old Oriental Wisdom is small but has a first-mover
advantage and market leadership in a specialized niche. The company had
$3.2 million in revenues and $60,000 in profits for 2006. The goal for 2007
was $7.4 million in revenues and $252,000 in profits, climbing to $20 million
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in revenues and $3.3 million in profits in 2008. Lingtu has a staff of 180
employees but needs capital to grow. Fund-raising is under way after the col-
lection of $8 million two years ago from Tina Ju of TDF Capital and Kleiner
Perkins and Jenny Lee of Granite Global Ventures in Shanghai. CEO Liu is
lucky to have these detail-oriented and strategic venture capitalists on his
board of directors; this is probably the only Chinese tech start-up with two
female board members in the clubby male venture space.
With a charismatic leader like Liu who has such good instincts, what
could go wrong? For starters, Oriental Wisdom is in a hot area that is bound
to become crowded with competitors. Already, rivals have lined up: the large

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