Qunar’s American co-founder on succeeding in China as a foreign entrepreneur

Fritz Demopoulos, co-founder and former CEO of Qunar. Photo credit: Marek Koys.

Foreign tech companies have a tendency to fail in China. The list of casualties is long: eBay, Groupon, Google, Facebook, and now Uber – though Uber China’s merger with ride-hailing rival Didi Chuxing is actually one of the happier endings.

But there are success stories. Fritz Demopoulos, an American who co-founded Chinese travel site Qunar, is an exceptional example. After moving to China in 1997, Fritz left his position at Rupert Murdoch’s News Corporation and founded Shawei, a sports internet company. He sold Shawei for US$20 million in 2000 after getting backed by IDG, Softbank, and Intel.

If everyone is doing virtual reality, maybe you should be doing something else.

In 2005, he started Qunar with Douglas Khoo and Chenchao Zhuang. During his six-year tenure as CEO, he negotiated a US$306 million deal with Baidu and led the company to an IPO on the NASDAQ in 2013. Today, Qunar is one of the top travel portals in China. Not bad for a laowai.

“Woody Allen […] once said that eighty percent of success is showing up,” Fritz told audience members at Big Salad 2016, a startup conference held in Shenzhen on Saturday. “I think in 1997, 1998 in China, if you just showed up you would have some sort of chance at success. Today, it’s much more competitive.”

Be first

Nowadays, foreign entrepreneurs in China can’t rely on the advantages that older generations had, like superior management experience or international perspective. To run a successful foreign venture in China, the key is being first.

“There’s too many smart people in China, too many people who can execute. There’s no way you can compete just being a better operator. You have to be first,” he said. “You have to do something that no one else is doing. If everyone is doing virtual reality, maybe you should be doing something else.”

Fritz Demopoulos and moderator Jan Smejkal from Startup Grind. Photo credit: Startup Salad.

When Qunar launched in 2005, China’s travel industry was a blue ocean of opportunity. In fact, in its early years, Fritz and his co-founders had to self-fund the startup because investors didn’t get it. “There were so many […] people telling us: do a social network!” Fritz recounts to Tech in Asia. “Like we had the guys at IDG saying, hey, we’d invest in you if you did a social network.”

Part of Qunar’s resilience in its early days also has to do with the fact that Fritz and his founding team were stubborn. At the time, the concept of pivoting and The Lean Startup didn’t exist yet. “Luckily, we had never read that book,” says Fritz. “We thought if you have a difficult period, you have to just fight your way through it, and keep fighting and fighting and fighting.”

Leave product management to the locals

As the only foreigner at Qunar and CEO of the company, Fritz balanced authority with humility. For example, he and his team decided to run meetings in Chinese. It put Fritz at a disadvantage, but he didn’t mind since “the best ideas aren’t coming from me anyways.”

He also gave one of his co-founders, Chenchao Zhuang, full rein over product management. That was crucial to Qunar’s success in China, where execution reigns supreme and speed is essential.

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