A DATE WITH DATA

Song Li made him­self into a com­puter cu­pid by es­tab­lish­ing China’s most suc­cess­ful on­line dat­ing site

The Peak (Hong Kong) - - Contents - STORY KATE WHITE­HEAD

Song Li has the qual­i­ties of a text­book se­rial en­tre­pre­neur: he loves talk­ing about ideas, piv­ots when nec­es­sary and loves risk. He walked away from a lu­cra­tive job at Mor­gan Stan­ley to start his own busi­ness, and that big step has turned into a big re­ward.

In No­vem­ber last year, he sold a con­trol­ling stake in his on­line match­mak­ing busi­ness, Zhenai.com, to PAG Asia Cap­i­tal, one of Asia’s largest pri­vate eq­uity firms, and now he’s plan­ning his next big thing.

“Life’s a jour­ney, I’ve given more than a decade of my life to Zhenai, and now I’d like to try some­thing dif­fer­ent,” says Li.

Born in a sub­urb of Shang­hai, Li trained as a molec­u­lar bi­ol­o­gist at Cor­nell Univer­sity and, af­ter re­al­is­ing that fid­dling with Petri dishes in a lab wasn’t his thing, switched to Columbia Univer­sity, where he earned a PHD in fi­nance. Af­ter years work­ing as a se­nior in­vest­ment banker in the US and Hong Kong, he ful­filled a life­long dream to run his own busi­ness.

Zhenai, which trans­lates as “true love”, was his sec­ond ven­ture. The first was Memes­tar, a short mes­sage-based chat fo­rum that he sold to the Chi­nese tele­com firm Sina. Fol­low­ing a year of “gar­den­ing leave”, he set up a mu­sic shar­ing com­pany in 2005. He then no­ticed peo­ple were go­ing on­line not just to share mu­sic, but to chat. He re­alised that what peo­ple wanted was a plat­form for sin­gles to meet. The mu­sic shar­ing busi­ness mor­phed into a dat­ing busi­ness.

But it wasn’t un­til 2008 that Zhenai the dat­ing site re­ally took off. Li at­tributes the phe­nom­e­nal suc­cess that fol­lowed to the rapid adop­tion of smart­phones. He re­calls long man­age­ment meet­ings dis­cussing whether to spend the ad­ver­tis­ing bud­get on the web­site, the mo­bile app or to split it be­tween the two. He was un­de­cided un­til one day he was on the MTR and no­ticed that ev­ery­one around him was glued to their smart­phones.

“I re­alised this has to be the trend. I got off the train and called my chief op­er­at­ing of­fi­cer and said: ‘The de­bate is over. I don’t care if we have to spend ex­tra money, just do it.’ I’m glad we did be­cause other­wise we would have missed it and the com­pany wouldn’t have sur­vived. To­day 90 per cent of our new mem­bers reg­is­ter through their smart­phone,” says Li.

Smart­phones were an ideal tool in the dat­ing game – not only could users spec­ify the type of per­son they wanted to meet, but the mo­bile de­vices meant they could get in­for­ma­tion about prospec­tive dates fast.

“Peo­ple don’t sit in front of their com­put­ers all day. Smart­phones meant that we could send peo­ple the right prospects in real time,” says Li.

Li has never used the dat­ing site him­self – he’s mar­ried with two kids – but that doesn’t stop him from get­ting ex­cited about the on­line dat­ing world. He can reel off all sorts of in­ter­est­ing facts gleaned over his years in the busi­ness. For ex­am­ple, it turns out that men are es­pe­cially keen on women who are pri­mary school teach­ers and nurses.

“Men are less in­ter­ested in women who are in IT and en­gi­neer­ing, or who are in­vest­ment bankers. I think be­cause they per­ceive these as high-pres­sure jobs and they might be work­ing all night,” says Li. On the other hand, men pre­fer women who are three years younger than them, how­ever, that’s vari­able.

“The higher the earn­ing power of the man, the more likely he would ask to date younger women,” he says.

Women, on the other hand, are in­ter­ested in men who work in fi­nance and IT – money is the key fac­tor. Li has charted the cor­re­la­tion be­tween how much a man earns and how many vir­tual “winks” he gets on the site. “It’s al­most a per­fect graph trail­ing up. You can … very ac­cu­rately

“MEN ARE LESS IN­TER­ESTED IN WOMEN WHO ARE IN IT AND EN­GI­NEER­ING, OR WHO ARE IN­VEST­MENT BANKERS”

– Song Li

cal­cu­late for ev­ery 1,000 yuan salary in­crease how many more winks he will re­ceive. For women (re­sponse to earn­ings) it’s flat, it makes no dif­fer­ence,” says Li.

Zhenai.com has more than 120 mil­lion reg­is­tered users, and new users join the dat­ing plat­form at a rate of 40,000 to 50,000 a day. Last year Li said the plat­form grew 50 per cent in a year and it is pro­jected to grow at least 30 per cent in 2018 – lit­tle wonder the com­pany was an at­trac­tive prospect for a buy­out.

In Fe­bru­ary this year, Xiao Suin­ing, chair­man of China for PAG, com­pli­mented Zhenai’s busi­ness model in a state­ment to The Peak, sug­gest­ing that ex­pan­sion was in the cards. “PAG will con­tinue to sup­port Zhenai’s rapid growth and bring to bear PAG’S broad strate­gic and fi­nan­cial net­work to help the com­pany con­tinue to con­sol­i­date its lead­er­ship po­si­tion. We see tremen­dous po­ten­tial to grow and ex­pand Zhenai’s busi­ness in China and across Asia,” said Xiao.

Li is now a mi­nor­ity share­holder and re­mains on the board, which means at­tend­ing a board meet­ing ev­ery few months. Es­sen­tially he’s free to do his own thing. Since he stopped run­ning the com­pany, his daily rou­tine – once his wife, a ven­ture cap­i­tal­ist, has left for the of­fice and his sons have gone to school – is to go for a swim in the rooftop pool at the Four Sea­sons Ho­tel.

“I just need to leave home to pre­tend I’ve got some­thing to do. I

ZHENAI.COM HAS MORE THAN 120 MIL­LION REG­IS­TERED USERS, AND NEW USERS JOIN THE DAT­ING PLAT­FORM AT A RATE OF 40,000 TO 50,000 A DAY

take my lap­top, at­tend a class and then read mar­ket re­search re­ports – that’s how you come up with ideas, you study what’s go­ing on around the globe,” says Li.

He’s also tak­ing an on­line fin­tech course of­fered by Ox­ford Univer­sity and when that fin­ishes, plans to take an­other on blockchain.

“The rea­son I at­tend these classes is be­cause I want to see the for­est. If I’m go­ing to get into a new in­dus­try, I want to have broad ex­po­sure first and see the en­tire value chain. Be­sides, af­ter work­ing non-stop for 20 years it’s nice to have a break,” says Li.

He’s still some way off know­ing ex­actly what his next busi­ness will be, but he’s fo­cused on ar­ti­fi­cial in­tel­li­gence and blockchain fin­tech, es­pe­cially with de­cen­tralised ap­pli­ca­tions. “I don’t like the cur­rent sta­tus that you have a small num­ber of in­ter­net gi­ants mo­nop­o­lis­ing data and traf­fic, which is re­ally bad for en­trepreneur­ship be­cause they can jack up me­dia price over time which makes cus­tomer ac­qui­si­tion costs pro­hib­i­tively high,” says Li.

He’s con­fi­dent that we will see ap­pli­ca­tions on de­cen­tralised platforms in the fu­ture - it’s just a ques­tion of when. Is it a risky ven­ture? Yes, but that’s what he finds so ex­cit­ing. “That’s what tech en­trepreneur­ship is all about – you take a big risk in do­ing some­thing that is not in good shape yet,” says Li.

“Most en­trepreneurs over­es­ti­mate their own abil­i­ties; they over­es­ti­mate the odds of suc­cess. You al­most have to be a bit ig­no­rant of the kind of risk you are tak­ing,” he says.

And it’s this key qual­ity, he says, that of­ten de­ter­mines who ini­ti­ates new ventures and who chooses to be an em­ployee rather than set up their own com­pany.

“You have a lot of peo­ple who are very ca­pa­ble but are risk averse. Ap­petite for risk doesn’t have any­thing to do, as it turns out, with your abil­ity,” he says.

If this is be­gin­ning to sound a lit­tle bit philo­soph­i­cal, that’s likely be­cause one of Li’s great pas­sions is psy­chol­ogy – he reads psy­chol­ogy books in his free time – and he en­joys pon­der­ing peo­ple’s mo­ti­va­tions and choices. He even thinks of the role of the en­tre­pre­neur as not un­like that of a philoso­pher. “In uni­ver­si­ties, pro­fes­sors come up with a hy­poth­e­sis and then make a small lab to test it. We (en­trepreneurs) just use so­ci­ety to test it,” he says.

Be­ing able to pivot quickly, in case a busi­ness model isn’t work­ing, is an­other key qual­ity that Li stresses, say­ing that he has no is­sue with chang­ing an orig­i­nal idea and go­ing back to in­vestors with the bad news, and also with a new plan.

“You have to be bru­tally hon­est with your­self about your idea. If the mar­ket re­ally tells you no one wants your prod­uct you should be flex­i­ble enough to change, to pivot,” he says. CB In­sights did a study of the fail­ure of over 100 start-ups and found that the num­ber one rea­son was “no mar­ket need” for the prod­uct or ser­vice.

Fast emerg­ing tech­nolo­gies mean that it’s even more im­por­tant to be flex­i­ble and seize the op­por­tu­nity to pivot when the op­por­tu­nity arises. Li has seen busi­nesses strug­gle with this. If some­one starts a busi­ness on an ex­ist­ing tech plat­form and some time into the project dis­cov­ers that a new plat­form has emerged, they typ­i­cally be­gin by telling them­selves it’s just a fad.

“They don’t want to think that they have spent a decade build­ing a busi­ness only to have it made ob­so­lete by a new plat­form so they will deny it un­til they are forced to ac­knowl­edge it’s not a short-term phe­nom­e­non,” says Li.

By the time they de­cide to get rid of their legacy sys­tem in favour of the new one they’ve of­ten missed the boat. It’s for this rea­son that Li is glad that he’s free of his legacy sys­tem and ready to em­brace new tech­no­log­i­cal platforms.

Though Li is tak­ing on­line cour­ses in the lat­est tech, he ad­mits that he’s not a tech­nol­o­gist. Rather, he prefers to stalk tech con­fer­ences, look­ing for pre­sen­ters who im­press him and then chat­ting them up to see if there’s a match. (If only there were a match­mak­ing app for this process…)

“I don’t know any­thing about en­gi­neer­ing or com­puter science, but it doesn’t mat­ter. You only need to fo­cus on the busi­ness idea, find the peo­ple with the rel­e­vant skills to join you, and then fo­cus on the man­age­ment side and sales, which I’m very good at,” says Li.

He honed his sales skills early in his ca­reer, sell­ing de­riv­a­tive prod­ucts at Mor­gan Stan­ley. He has used those same sales­man­ship skills to not only per­suade top tal­ent to join him, but also to per­suade peo­ple to pro­vide seed cap­i­tal. But talk­ing peo­ple into lend­ing him money and in­vest­ing in a new project is not such an is­sue these days be­cause PAG’S ac­qui­si­tion of a con­trol­ling stake in Zhenai has left him sit­ting very pretty.

Li, it seems, is now more in­ter­ested in tech and en­trepreneur­ship for its own sake.

“I find the process a very ex­cit­ing way of liv­ing – I can’t think of any­thing else that would give me the same plea­sure and ful­fil­ment as com­ing up with an idea, or­gan­is­ing a team and ex­e­cut­ing it,” he says. And thanks to the in­vest­ment from PAG, the world is his oys­ter.

“I have no fear of fail­ure any­more be­cause I’m fi­nan­cially well off – I’ve made more money than I ever dreamed of.”

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