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Regards from Fukuoka

Fukuoka, Japan

Flying is often a hassle, especially when you need to fly a lot and there are no direct flights between the places that you want to go to. During my current trip I already had my fair share of problems. On the way to Phuket my flight from Bangkok to Phuket was cancelled, meaning that I had to spend 3 hours in Bangkok at the airport and missed the beginning of Stream Asia. I was not the only one that had that problem, several Stream Asia participants had planned their arrival on Phuket with not much time to spare, so we all ended up at the same later flight. That flight was pretty empty, which led me to believe that the original flight was simply cancelled to save money because there were not enough enough people on it.

Fukuoka, Japan

On the way back to Shanghai things got even worse. The flight from Phuket to Bangkok was on time, but the on the leg between Bangkok and Phuket we were notified by the captain that we might not be able to land in Shanghai right away because of heavy fog. We circled between Nanjing and Shanghai for about an hour until the fog finally started to clear and we started our descent. I was a bit worried that we had to stay in the air longer than planned because I only had a few hours in Shanghai quickly go home, say hi to my wife and kids, pack my suitcase and hop on another plane to San Francisco, but with just an hour delay I would be fine.

But no, things turned out a bit different: suddenly the pilot came on the intercom and started a long story in Thai (I am on a Thai Airways plane) from which I could not understand much, but from his tone I figured it was not a good message. And indeed, when he finally translated his story into English it turned out the fog had gotten worse and the plane was rerouted to Japan… While writing this we are on the approach to Fukuoka. The islands below me are beautiful, but I am less than thrilled. I have no idea if I can make it back to Shanghai on time to catch my plane to the US, and I certainly won’t be able to see my kids for 2 hours (my original plan) before going on another weeklong trip.

My plan is now to call my wife to pack a suitcase for me for the US and then send the driver to the airport. In case I make it on time back to China I might still be able to check-in and make it to the US later today. I have important meetings planned both tonight and tomorrow (some people are even flying in to meet me), so postponing the trip by a day is not a real option. The uncertainty about whether I will make it or not is actually worse than the delay itself. Anyway, can’t change it. Flying is a hassle. Regards from Fukuoka…

Update: After spending some time at Fukuoka airport, Shanghai opened again and we got permission from air traffic control to fly back to China. We landed around 11:15 AM at Pudong airport and I rushed through the large airport and customs to the exit gate. I had called my wife from Japan and she had come to the airport with our driver with my suitcase and a set of new clothes. I quickly repacked part of my suitcase and ran to the United Airlines to check in to my flight with just 45 minutes left before departure. I was the last (and only) person to check in and I was glad they still let me do so. Then I freshened up a bit, changed to a new set of clothes and then literally ran through customs, realizing that I had only been in China for about 15 minutes (my shortest stay ever). I bought a sandwich for on board and then boarded the plane to San Francisco with only minutes to spare. I made it! I am now in San Francisco where I need to change to the last part of my journey, a flight to Austin, TX. I have been traveling for close to 30 hours already and feel incredible tired and jet lagged, but I still have a whole day ahead of me. Starbucks will hopefully get me through it!

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Stream Asia 2011

Club Med Phuket @ Stream Asia 2011

I have been to a lot of conferences over the years, and the one I just got back from was among best of all of them: Stream Asia 2011. The event took place at the Club Med in Phuket (Thailand) and about 200 people were invited to join this 2-day unconference. Best of all, WPP paid for everything! They rented the whole beach resort, so there were no other tourists around to distract us from our sessions.

Session about Internet in Indonesia with Kaskus.us founder #streamasia. Good insights on future of mobile payments

Because it was an unconference you never know in advance what exactly will happen and what sessions will be presented. At the beginning of the conference the participants have to decide what they want to speak about and make sure they get a speaking slot. I had two speaking slots, one with Sarah Harden, Larry Namer, and Deborah Mei about what games traditional media is playing when it comes to digital, and one that I did by myself about the future of ecommerce. I also particpated in a couple of sessions and discussions related to online games, Internet in Indonesia, China, Facebook, and innovation & entrepreneurship. Most of the sessions were really good, especially because some of the topics were non-bloggable/twitterable so people could speak freely, and of course because the topics fit to my personal interests.

Thomas Crampton interviewing Sir Martin Sorrell on stage #streamasia

There were also some plenary sessions, among other a Q & A with WPP CEO Sir Martin Sorrell. He was very open about how he views the advertising world, his clients and his competitors. The only problem was that his talk took place right at the moment that the earthquake took place in Japan, meaning that many in the audience (incl. me) were paying too much attention to the Japan events on Twitter and Facebook. In a way it was a bit surreal, Martin talked a lot about Japan (I won’t repeat what he said, I think it was off the record) while he was not aware of what was happening there but many in the audience were.

Conductor Itay Talgam at Stream Asia 2011

Another very good session was with the renowned conductor Itay Talgam about conducting music and leadership. I did not know him before Stream, but got to know him a bit on the ride from the airport to the resort when he coincidentally sat next to me. For one thing he is very modest, in the bus he just told me that is a musician! During his talk he let us look at how conductors conduct their orchestras, something I never really paid attention to. Very interesting to observe the differences between some of the world’s top conductors, esp. the final one in which Leonard Bernstein (Itay Talgam’s teacher) conducted an orchestra with his eyes, eye brows and mouth. But, as Itay stated, this is not how you get started in conducting!

Stream Asia 2011 - Nicolas Zurstrassen

Of course a major part of this kind of events is the networking. The people that were invited were a good mix of advertising people and their clients, people from traditional and new media (incl. Facebook, Yahoo! and Google), entrepreneurs and VCs. Almost everybody you met to was interesting to talk to and I met a lot of cool people. Several of my business friends were also there and it was good to catch up with them as well.

Extravaganza Party Stream Asia 2011

The evening program was also quite something. Among others there was a gadgethon where people could show off their gadgets. Some really cool things were shown, among others the iPad 3 (ask Scott Spirit about this one, it was made in China), and iPhone with a TV antenna, a demonstration of the Motorola Xoom, and some gadgets that people put together themselves. There was also Powerpoint Karaoke, where you have to do a presentation based on a powerpoint that you have not seen before, leading to some hilarious situations. And of course here was the Stream Band consisting of Stream participants, playing until deep in the night.

Gadgethon at Stream Asia 2011

The event was very well organized by WPP, despite it being an unconference things went very smoothly. The resort was nice and quiet, the right atmosphere for a conference. The food and drinks were very good, so good that I ate way too much and also had quite some wines and beers over the past 2 days. The only thing that could have been better was the wifi. That’s more the problem of Club Med than of the organizers, who even managed to set up their own Stream Asia network during the event, but it was still difficult to connect. In my room there was no connection at all, so I did most of my work at the swimming pool!

All in all I look back at a great event with excellent participants and good content. Glad I took the time out of my busy schedule to join this conference, it was absolutely worth it.
All my pictures of the event are here on this Flickr set

Club Med Phuket beach at Stream Asia 2011

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New offices

New UnitedStyles office

Both UnitedStyles and Spil Games Asia’s game studio moved into new offices this week. A pure coincidence, but it was kind of interesting to have 2 new places to work from after I came back from San Francisco.

New UnitedStyles office

UnitedStyles’ move was not completely voluntary: the building where we had our office is going to be ‘redeveloped’, meaning that it will be demolished and something more valuable will be built there. Not a bad thing for us actually, because the new office is much brighter and we are next to our production partner.

Moving into the new Spil Games Asia office

The game studio moved within the same building to a bigger and brighter office. The old one was not bad, but this one has a lot more windows and it looks a lot better. My office is a bit smaller than my old one, but the views totally compensate for that: the Suzhou Creek is right below my window and in the distance I can see the Pudong skyline with the Oriental Pearl Tower.

View from the Spil Games Asia office

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San Francisco / GDC 2011

Golden Gate bridge panorama

I am writing this from a trans-Pacific flight back to Shanghai after an intense week in San Francisco for the Game Developers Conference 2011. It’s the only game conference that I have attended 3 years in a row, and I think it’s the best game conference out there. Not only because of the sessions, but especially because everybody in the industry is there, from start-ups to giants like Disney and from game programmers to CEOs and VCs. I like the atmosphere where you can do a lot of business during daytime followed by networking and drinking at one of the many after-work parties – work hard, play hard.

Game Developer Conference 2011 (GDC)

This year I mainly did a lot of media interviews for Spil Games about our transition from casual game websites to the biggest social game platform in the world, targeted at girls, teens and families. Spil has grown tremendously over the past year, with total traffic now at 130 million unique visitors/month and a revenue growth of 60% in 2010. And this is just the beginning: where last year Spil Games got about 10% of its revenues from end-user monetization (e.g. people paying for virtual goods) and 90% from advertising, this year it is already about 30% virtual items (even though advertising keeps on growing fast as well).

I also talked to journalists and analysts about Spil’s mobile strategy, where we focus on browser-based (HTML5) games that can be played for free on every smartphone. All of our sites are now available in a mobile version, just type a site on your smartphone (for example agame.com, gamesgames.com or GirlsGoGames.com) and you can start playing free games right away without an app store and without downloading. And it works on every smartphone, so not only on Android but also on the iPhone.

Game Developer Conference 2011 (GDC)

I enjoyed doing the interviews, although doing them a few days in a row gets a bit tiring as well. Interestingly not one talk was the same, some people were well prepared and asked insightful questions, others less so. I also realized that during the first interviews I had to really think how to formulate things, but at the end of the week it sort of went automatic.

And that was probably good, because I managed to build up a huge sleep deficit during the week. Partly because of the jet lag: when I wake up in the middle of the night I have the bad habit of checking my email, meaning that I normally don’t go back to sleep anymore (either Holland or China is always working when I wake up). And of course partly because of late night dinners with VCs and going to some of the GDC parties that never start before 10 or or 11 PM.

Downtown San Francisco

Thursday afternoon I was so tired that when I came back to my hotel room a bit early (around 4:30 pm) to work on mails before dinner I could hardly type on my laptop anymore. So I decided to give in and just sleep for 30 minutes before going out for a walk and a coffee to clear my head. That helped, because during dinner I was totally fit again and even went to the Playboy party until 1 AM. Not sure how healthy it is, but luckily I don’t do this every week.

Game Developer Conference 2011 (GDC)

But the lack of sleep is worth it, I love this kind of busy weeks. The only real down side is that I am very far behind on my emails once again. I feel bad about that, I normally try to answer important mails within 24 hours, but there are a couple of them that have been waiting 4 or 5 days to be answered. Hopefully I will wake up very early on Monday morning so I can get a couple of hours of work done before the kids wake up and have to go to school.

Of course I also managed to get some free time, but not as much as I hoped and mainly before GDC started. The weekend before GDC was great. I arrived on Friday in the Bay area already, so I could meet with a couple of VC friends in Palo Alto and Menlo Park to discuss some ideas. On the plane over from China I hadn’t slept at all (I was flying economy in the back of an old B747 that was completely full…), but still managed to stay awake the whole day.

I went for a run right after I arrived in my hotel in Palo Alto, that’s for me always the best way to fight jet lag. That combined with tons of coffee of course. At night I even had a nice dinner before falling into a deep sleep around 11 PM. Saturday morning I got up very early, worked on emails and went for an early morning walk in a freezing cold Palo Alto (TV was talking about the possible first snow since 1976, but I didn’t see a snow flake). I love the Bay area, especially Palo Alto, and like I mentioned on this blog before it’s not unlikely that one day I will live here.

Pacific coastline at San Francisco

During breakfast I actually checked a local real estate paper and found my dream house: a 17-acre house with pool, vineyard and stables in the hills above Cupertino with a view all over Silicon Valley. Too bad I am not in the market, this is exactly the kind of house I would love to have one day (especially at this price, USD 2.4 million seems not very expensive considering the large piece of land and the location, but I am no expert yet).

Surfer on the beach at Half Moon Bay

Once it got a bit warmer (around 10:30 AM) I checked out of the hotel and drove to San Francisco along highway 1, making a stop at the beach in Half Moon Bay. I love the Pacific beach there, although it’s normally quite cold and windy at this time of year. I got to my hotel around 1 PM, quickly checked my mails and then crashed for an hour on my hotel bed. To wake up I went for a long walk along Market Street to Embarcadero and walked all along the Bay to Pier 39, taking pictures during the leisurely stroll. After an early dinner with a nice bottle of Californian Cabernet Sauvignon in a wine bar in North Beach I decided to call it a day and went back to my hotel to catch up on sleep.

Nice Parisian-style cafe close to Union Square

I didn’t sleep a lot during the night, but felt pretty good the next morning. I had a late breakfast at a French style cafe close to Union Square and then spent most of the afternoon relaxing in the sun, reading a book and the New York Times. At night I had dinner and drinks with some of the Geeks on a Plane participants. We had tapas and had a lot of fun. I met a lot of new people including some that I had been following on Twitter for quite some time already. I learned a lot about some new companies, and also finally got a Square device for my Android (their co-founder turned out to be sitting next to me at dinner). We ended the night at a cool cocktail bar just off Union Square (a former speakeasy), where I left the group a bit earlier than planned because of a business phone call from China. No big deal, at least I was in bed on time.

Interestingly my wife informed me on the weekend that she would also come to visit me in San Francisco, and she indeed showed up on Tuesday – with 2 empty suitcases. She had a lot more free time than I did and managed to fill them up completely in 4 days at all the shops around Union Square! I didn’t have a lot of time for her, but at least I managed to take her for lunch or dinner sometimes, and she probably got to see more of San Francisco than I had over the past years. She now also understands a bit better why I like the Bay area so much, the quality of life is very high here (climate, life style) plus there is a huge entrepreneurial vibe. She normally complains that when I come back from a trip to SF I am often in a gloomy mood for a day or 2 until I am adjusted to life in Shanghai again…

It was a busy but very good week and I actually look forward to being back in China in a couple of hours. I miss my kids a lot and there is a lot happening at among others UnitedStyles and Spil Games Asia. Better too busy than not having much to do!

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UnitedStyles.com officially launched!

UnitedStyles.com officially launched!

Today, February 28, 2011, UnitedStyles.com was officially launched. After our closed beta in November last year we got tons of feedback from our users and after improving the site and the user experience we now open the site to the whole world.

UnitedStyles is a customized kids online fashion site, where kids or their parents can design garments. Right now only girls fashion, but soon we plan to also add boys and baby wear. UnitedStyles brings the experience of fashion design within reach of everyone. It shows you do not need to to a designer school to create a unique and fashionable outfit. Wouldn

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Inside Sina Weibo

Grace' Sina Weibo account

China has many Twitter clones and the biggest one (by far) is Sina Weibo. I am amazed by the huge growth of Weibo over the past couple of months. Almost all my Chinese friends and colleagues use it, and even my wife became a heavy Weibo user (so no more complaints about me sharing our whole life online!). After she stepped down from her management role at Tudou.com a couple of weeks ago to spend more time with the kids, I can now follow her whole life in pictures and quotes on Weibo (her account is here). Of course I also have an account, but I only use it to read other people’s updates, so no need to follow me there.

I would not be surprised if one day Weibo will be bigger than Twitter. It is certainly already miles ahead in terms of functionality. But most people outside China have no idea about the service and its functionality. Beijing-based blogger Bill Bishop therefore put a post on his blog today with an embedded presentation of Weibo’s history and main functions, including lots of screenshots.

Silicon Valley pay attention: this product is much better than Twitter, and Twitter (or other clones or even social network sites) can probably learn a lot just by looking at some of Weibo’s functions. It’s so good that I wonder if it might actually one day be able to take on Twitter.

Some of the key facts and features that Bill mentions in his presentation (embedded below):

  • Started in August 2009, now over 100 million users
  • Initial growth by getting celebrities to use it
  • Message threading possible (something I wish Twitter would have)
  • Very stable platform (compare that to Twitter and its Fail Whale)
  • Also 140 characters like Twitter (but you can say about 3-4 times as much in 140 Chinese characters), and if you retweet you get an additional 140 characters
  • Portal-like pages with highlights and hot topics
  • Create private lists of users, join groups around interests
  • No real monetization yet, firehose not for sale
  • In-stream apps, such as games,

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Shanghai Restaurant Week 2011

Shanghai Restaurant Week 2011 is coming!

Shanghai has many ‘fine dining’ restaurants but most of them are quite expensive. If you had always wanted to try some of Shanghai’s best restaurants such as for example Kathleen’s 5, Danieli’s, T8, M1NT, or Sir Elly’s, the Shanghai Restaurant Week may be your chance.

Organized by the team behind DiningCity Shanghai, Dutch entrepreneurs Onno Schreurs and Siem Bierman, this year’s Restaurant Week will take place from 7-13 March. During this week top restaurants will serve a special 3-course lunch or dinner for an amazing price. In the A-level category a 3-course lunch is RMB 118 per person and a 3-course dinner is RMB 248, at the other restaurants the lunch is priced at just RMB 78 and dinner for only RMB 168.

You can’t book directly at the restaurant, but you will have to book online through www.shanghairestaurantweek.com. Bookings will be directly in the reservation system of the restaurant. The website will open Tuesday February 22 at 10 AM. If you want to secure a table at the best restaurants better set your alarm because last year those seats were sold out in no time.

In total there will be about 50 participating restaurants in this Restaurant Week, representing cusines from all over the world. I got a sneak peek already and I saw among others French, Italian, Spanish, Japanese, Cantonese and Shanghainese restaurants on the list.

I tried Restaurant Week last year and was pleasantly surprised by the dinner that I had. Some people assume that for this kind of prices you will get smaller portions, but that’s not the case: the restaurants give you full portions and of the highest quality. It’s a great way of advertising for them for new customers. I am inspired to try out a few new restaurants myself, and like last year I will surely visit those places again outside of Restaurant Week if I like them. Don’t miss the opportunity to try out some of Shanghai’s greatest restaurants!

Online booking: www.shanghairestaurantweek.com. The site opens February 22, 2010 at 10 AM sharp.

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Groupon China off to a bad start

Groupon China site went offline again

Instead of going for a run during my lunch break yesterday I decided to write an article about Groupon China. It was published on the Silicon Alley Insider last night, the original article is here. Make sure to also read the comments under the SAI article, and the update I just added at the end of this blog post.

It doesn’t happen often that a US Internet company enters the Chinese market with a huge budget, so when a company does this the Chinese media follow all the steps this company makes.

The media know that most non-Chinese Internet companies eventually fail spectacularly, so a good story is almost guaranteed. Groupon seems to be doing its best to become part of the infamous group of companies like EBay, Google and Yahoo.

In January stories surfaced saying that Groupon wanted to enter China by investing hundreds of millions of dollars, which is a good way of attracting press. Then rumors about a potential joint-venture with Tencent (one of China’s biggest Internet companies) were reported, and these turned out to be true. Many people including myself thought this would be a smart strategy to enter the market and gave them the benefit of the doubt. But things have changed a lot since.

First came the news that Groupon China’s

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Higher prices could lead many people and businesses to leave China’s big cities

Pudong skyline
I wrote this article for the Business Insider, the original article is here.

China’s high growth over the past decades turned the country from a developing into a developed country. But the continuous high growth also leads to price inflation and higher wages. In big cities like Shanghai that may lead to problems that not everybody is aware of yet.

For years prices have been rising steadily in China. The price of fuel is about 3 times as high as 10 years ago for example, but also daily necessities such as rice keep on going up in price. That is the same all over China, but especially in the big cities the housing prices are also going through the roof. They are now at such a high level that even white-collar workers cannot afford to buy apartments anymore.

I realized this for the first time about 2 years ago, when an employee came to me with a salary increase request. He wanted to buy a house and could not afford it without a higher salary. I did not grant him the higher pay so he left the company, but it made me contemplate about the relation between the level of salaries and the housing prices. They were getting out of sync fast. But housing prices only kept on rising after that, and at a much faster pace than the average salary increase.

Last year one of my best employees had a similar problem, she and her husband realized they would never be able to afford their own property in Shanghai and decided to go back to their hometown. There were more jobs there now and even though salaries were lower, they would have much more spending power and could afford their own house. Since then I heard similar stories from other entrepreneurs, many of their best people want to leave after a few years because the quality of life in secondary or tertiary cities is much better than in Shanghai.

For companies this can lead to serious problems. Wages have gone up tremendously over the past years. Starting salaries right out of university are still roughly the same, mainly because there is such a huge supply of fresh graduates. But if you want to keep the good people you need to give them wage increases of at least 15% per year. Over the past 5 years salaries for top managers have roughly doubled, and people will leave if they don’t get what they feel they deserve. Some top programmers now earn more than good programmers would earn in my home country Holland.

Friends running businesses in Shanghai are increasingly talking about setting up branches in China’s inner provinces. There salaries are still a lot lower and there is a lot more talent now than just a few years ago. That leads to additional costs, but it may offset the higher wages that they would have to pay in Shanghai.

My strategy has always been to hire good people out of university and pay them average salaries. Not top salaries, so you weed out the people that only work for money; they should also like their job and the good work environment that I am trying to create. You have to teach these employees a lot, because Chinese universities give them tons of knowledge but not necessarily the knowledge needed to work in the real world. The best people get high salary increases so they won’t be tempted to leave, and the ones that are average performers still get increases of 10% or more. This means that even the average people stay at least 2-3 years, which is quite long for job-hopping China, and good people stay even longer. Because the entry salaries didn’t increase very much I was able to keep the increase of total salaries relatively low.

But many companies do not want to hire people right out of university because of their lack of skills. And they are the ones that may be in trouble soon, because not only has their total salary cost more than doubled over the past years, but they are also still losing their employees because they can’t afford to live in Shanghai anymore. China is not a cheap labor destination like it used to be, and certainly not the big Chinese cities.

Because the countryside has developed a lot over the past years and many factories have moved from the East coast to inland China, there are a lot more job opportunities in smaller cities. I expect that over the next couple of years many white-collar workers will choose to leave cities like Shanghai to work in their home provinces. Similar to what has happened to blue-collar workers over the past years as well, they can get similar jobs and salaries close to their home towns now so they don’t want to work on the other side of the country anymore.

There are signs that this may happen sooner rather than later: in Saturday’s English-language newspaper the Shanghai Daily a reporter wrote that so far 90% of the domestic staff did not return from their hometowns to Shanghai after Chinese New Year. Last year the figure was around 30% at this time. And the staff that come back are asking for wage increases of up to 30%, meaning that a full-time cleaning lady now earns around USD 500 per month. If these people are now all staying in their home towns because of better economic conditions very soon their white-collar colleagues will follow their paths.

What does that mean for a city like Shanghai? Companies won’t leave, but they will likely move part of their operations inland. Probably the upward pressure on salaries will be less and this may have an effect on the housing prices as well. Many new apartments are currently empty waiting for real estate prices to increase further, so they can be sold at an even higher price. But if apartment owners realize that there are simply less people who can (and want) to buy them this may change. The sudden end of a bubble? Maybe. After over a decade in China I have learned that things can change fast here.