Unless you follow SaaStr on Quora, things may have looked a little quiet here for the last 5 weeks.
Well, that’s because hosted WordPress (what Saastr.com is powered by), along with Facebook, Twitter, YouTube, and a good chunk of Google, are all blocked in China by The Great Firewall. Â Quora for now is unblocked. Â You can get to LinkedIn, but most of the links don’t work, so the social sharing part doesn’t.
And SaaStr has spent the last 5 weeks in Shanghai, Â Yes, you can get around The Great Firewall, in part, with a VPN. Â But since everything is about Going Mobile these days, I decided to also spend these 5 weeks with just an iPad and Kensington keyboard. Â No laptop. Â No practical non-corporate VPN for me to use to get around The Great Firewall.
I have no profound learnings. Â But FWIW for those heads-down on building up SaaS businesses in the U.S., with a little kicker in the U.K. and maybe Australia … some learnings:
1. Â Shanghai Really is Bigger, And More Vibrant, Than Any Other City In the World. Â Shanghai isn’t as sophisticated as New York yet, in the arts and all that, near as I can tell. Â And certainly not in finance. Â But in most every other way, it seems about 10x bigger, younger, stronger, faster. Â Skyscrapers stretch to infinity on the skyline, and it seems like anything and everything is being built, created, or dreamed. Â The Shanghai Apple stores? Â There’s not just a line when a new iPhone comes out. Â There’s a 50-100 person line. Â Every. Â Single. Â Day.
2. Â Not Complying with The Great Firewall Is a Big Deal – At Least in B2C. Â This shouldn’t be a big issue in B2B. Â But in B2C, not complying with Chinese censorship is a huge deal. Â Facebook and Twitter are irrelevant in China, and Google is a bit of a joke with a redirect to Google.hk that only partially works in practice. Â It doesn’t matter if a few expats can VPN in. Â Social services need to work on the web without friction to work at all.
3. Â It Makes Sense That In 4-5 Years, SaaS Will Be {Starting to Get} Big in China. Â B2C is as big in China or bigger than here. Â Enterprise is real. Â But SaaS revenue is nonexistent today in China for most SaaS vendors. Â Today, for almost all SaaS companies, their APAC strategy is a lot of Australia, maybe a little Singapore and possibly Hong Kong, and if you hit it right, Japan can really work (see, e.g., Salesforce or Evernote). Â But China? Â A big goose egg.
But it clearly won’t be the case in 4-5 years. Â I don’t have the answer or insight of how to take advantage of that yet. Â What does makes sense though is that B2B should be a far better opportunity for U.S.-based companies than B2C. Â Much U.S. B2C is either blocked or dominated by Chinese players. Â But business-process oriented SaaS companies are a better fit.
My only suggestion: when the time comes you land your first real Chinese company as a customer — bet on this customer, hard. Â Accelerate your localization efforts. Â Get a local presence / rep quickly. Â Do whatever it takes. Â When you finally get one, I bet you’ll get more. Â Everything in Shanghai especially is just exploding.
4. Â Mobile is Critical in the Enterprise. Â But Mostly for The Consumptive Part. Â I spent 5 weeks in Shanghai with just an iPad. Â I didn’t miss a beat on my media consumption (other than Netflix et. al. which are blocked or don’t work in China). Â But realistically, I couldn’t do any real work. Â I couldn’t really edit documents, or presentations, or at least for me, really compose blog posts. Â It’s just too hard with just an iPad and Android. Â Just a good reminder that mobile is amazing for consumption. Â But in the enterprise especially, rather more limited for creation and calculation. Â In enterprise, it’s not either or. Â It’s both.
5. Â The Start-Ups Seem Just as Cool as in the U.S. Â I didn’t get a chance to visit a ton of start-up, but I visited the offices of several B2C companies. Â Just as many 27″ iMacs. Â Beautiful lofts and creative spaces. Â And with so many more resources to draw on.
6. Â In 10 Years Time, One Child is Going to Be a Big Drag. Â I may be wrong on this, but at least in Shanghai, the impact of One Child is clear and profound. Â The educated, the tech-focused workforce almost entirely have only one child. Â In another half-generation, where will the engineers be? Â Who will build the Chinese web companies of 2028? Â It’s a ways out. Â And the talent pool will still be vast. Â But the countless families with just one child, the parks almost empty of children, the clothes stores without even a children’s section … it seems to me it’s going to be tough for China to compete a generation or so out.
With that, we’ll be back to your regularly scheduled SaaS programming.