Case Blog

NOTE: This column first appeared min’s b2b.

During my last two years at Reed Business, I made 10 trips to China. I was very fortunate during this time to have an excellent partner in Hugo Shong, the Managing Director of IDG China and a general partner in IDG’s burgeoning venture capital business. If you want to do business in China, I strongly recommend the partnership approach–choosing the right partner is the key to success.

During my tenure at IDG in the ’90s, Hugo and I were both colleagues and friends. I had come to admire his intelligence, work ethic and the outstanding results he produced. Pat McGovern, IDG’s chairman and founder, had personally recruited Hugo to IDG. Pat understood that to be successful in China he needed a trusted person who could help him find the right partners to grow his brands in the Asia-Pacific region. Pat had launched Computerworld China in the early ’80s, and as the tech sector exploded in the early ’90s CW was well positioned to chronicle the growth, both globally and in China. With Hugo Shong’s arrival, IDG soon became the unrivaled tech media giant in China. The profits made in the tech sector led to a joint venture in the consumer market with Hearst, initially with Cosmopolitan China, which today is China’s largest consumer magazine (by measuring ad pages). The tech success also allowed IDG Ventures China to become the major force in venture capital investing in China. Hugo Shong and his very able colleague Quan Zhou, who drives the day-to-day investments, have never looked back, and their results are formidable. One of their early investments that had a significant return last year was the Chinese search engine, Baidu (BIDU), which trades on the NASDAQ.

While most companies think of China’s large population in terms of providing a tremendous consumer marketing opportunity, the B2B information services opportunities are equally as attractive and could yield even greater results over time.

For years, many venture capitalists from outside China approached IDG’s team about partnering, and two years ago IDG decided to partner with Accel Partners and Jim Breyer. Their first fund is doing very well and they are in the process of raising a second fund. Even strong U.S.-based venture firms need Chinese partners.

Reed Business was very fortunate to have Hugo’s guidance and partnership as we launched our joint venture company in China. I have learned over the years that even fierce competitors can become partners when each is able to contribute unique assets to a venture. In our case, Reed had some very strong brands with the potential to be global, and IDG had the benefit of doing business in China for more than 20 years, which gave them a significant infrastructure. Partnerships and joint ventures are never easy, but they are often worth the investment of time and nurturing because of their potential to yield very real dividends.

Leaders need to provide the vision and the pioneering spirit to open new markets. Sometimes this means that they must wander for years in the wilderness, believing in their vision while others struggle to understand it, and forging ahead until the results of their work demonstrate to everyone that their vision provided a clear path to growth. Pat McGovern clearly had the vision of China’s growing importance on the world stage long before almost anyone.

While I am writing about a Boston-headquartered company, IDG, I need to take this opportunity to point out that my alma mater, Boston College is 5-0 in the ACC, sixth in the country, and has a strong partner it couldn’t do without in Matt Ryan, the team’s first real Heisman Trophy contender since Doug Flutie. Couldn’t resist: Go Eagles!