Page 95 - How China Is Winning the Tech Race

previously Chen’s senior vice president and chief strategy officer, is today his
co-chief operating officer, sitting within arm’s reach of Chen in a shared
executive office. His chief financial officer, Xiaoxin Chen, another alumnus of
Stanford’s business school program, sits diagonally across from Chen. Both
Liu and Chen graduated in the top 10 percent of their class.
Chen brings in the founders of the sites he acquires, putting them in
charge of their respective business units. The founder of Mop.com is now a
senior vice president at Chen’s firm. “We give them equity and vesting rights
and high responsibility to do what they used to do and achieve their targets,”
Chen says. Keeping the entrepreneurial family intact is a lesson he learned
from Sohu, from which Chen and his two cofounders bolted after it acquired
Chinaren.
“I am applying what I learned in investment books: Buy companies of
intrinsic value with a barrier to entry and then nurture them,” Chen says.
Among other sources, he’s read and can recite from George Soros’s interview in
The New Money Masters, Sumner Redstone in A Passion to Win, and digital
age luminaries Bill Gates, Jeff Bezos, and Larry Ellison in The New Imperialists.
Chen says that after reading how both Redstone and Murdoch ran short on
money in building their conglomerates, his biggest lesson is that cash is king. “I
want to make sure I have an ample supply of cash to do deals,” he says.
If there’s one worry Chen doesn’t have, it’s capital. The $48 million
venture sum he raised in spring 2006 gives him “a sense of freedom” and
“flexibility to plan for the future,” he says, adding, “We’ve been through
bubbles before. This will help us be a long-term, viable company.” What to
do for an encore? “I want to build a company like Warren Buffett did with
Berkshire Hathaway and use the same philosophy. The only difference is that
mine is in the consumer Internet market.”
When I chatted with Chen in Beijing a couple of months after the money
hit the company bank account, he was looking relaxed and trimmer. He says
he’s been on a steady diet of oatmeal for dinner and routine visits to the gym
most mornings. If he doesn’t keep his weight in check, his wife gets to buy
whatever designer goods she wants. Not that they have financial troubles.
Chen and his young family live in a suburban-type luxurious housing devel-
opment in Beijing. Chen even takes time for a Kodak moment as I snap
photos of him standing proudly in front of his new Lincoln Mercury, the same
model that patrolmen use in his adopted Lone Star state.

Oak Pacific Interactive—W eb 2.0 on Steroids 69