What Do You Do When Tencent Copies? Here Are 10 Ways a Startup Can Beat the Giant

Some of you might have read this article where it quotes Stephen Bell, a Shanghai-based partner at Trinity Ventures, who says he hears this gloomy sentiment all the time: “In the U.S., students think, ‘If I build something good, Google will buy me.’ In China they think, ‘If I build something good, Tencent will copy me.’”

Many Chinese startups (or startups that are based in China) fear that once they have a good idea, Tencent (HKG:0700) would easily and quickly copy the ideas, given its vast amount of resources, experience and users, leaving the startup with no room to compete in the Internet industry.

However, Leo Wang, an angel investor in mobile Internet startups and founder of China’s Mobile 2.0 Forum, believes that there are ways that entrepreneurs (especially those based in China) can build their product such that Tencent will find it difficult to compete with you. I listened to him give a talk recently in which he shared 10 key ways in which startups can fend off Tencent:

1. Believe In Your Own Product

It makes no sense when you are building a product and you do not even believe in it. You need to have the strong belief that your product will work for your users, before you being able to build a good product. A good product will materialize when you believe you have the capability to build such products.

2. Make Your Product Addictive

Leo draws parallels between development of a product and the invention of medicine and drugs. You need to make your product in such a way that it becomes like a drug. Not literally; but making your products really sticky is important, so that once users start using them, they can never quit. So think — how can you develop your product in that it is not just medicine (where you take it only when you need it), but develop it in ways it becomes addictive (like a drug). Tap into the inner motivations of your own users to want to use your product again and again. When it becomes sticky, the brand loyalty stays, which makes it difficult for bigger players like Tencent to enter the market.

3. You Need An Artist

Just like how all of us are drawn to beautiful objects and people, you need to build your product such that it is pleasant to the eye. Undoubtedly engineers are important people who will contribute to building the infrastructure, but the team needs an artistically-minded graphic designer who can beautify and package your product in the most presentable way possible. Leo strongly encourages startups to hire designers. If not, he suggests hiring girls for your team because ladies are better in terms of aesthetics (no wonder the PO designer is a girl).

4. Focus On A Specific Group of People

It is only natural to be greedy. However, not all products are able to cater to everyone. Identify and narrow into a specific target market, e.g. women aged 18 to 35 who are living in China, which itself is already a large pool of people. Many great companies start from targeting specific target groups. Look at Apple, didn’t they start from a niche target audience as well?

Leo Wang, in an image from his website.