His startup survived 5,000 rivals in China to list on Nasdaq. Here’s what he learned.

James Tan (far left) at 55tuan’s IPO.

2011 saw a massacre of China’s over 5,000 daily deals sites. More than 2,000 of them died as winter chilled the group buying industry.

55tuan, one of the leaders in the industry, was not spared, laying off workers and shuttering offices. 2012 brought more bad news, as thousands more daily deals sites called it quits.

But 55tuan – now called Wowo – survived the onslaught, and in 2015 listed on Nasdaq after many delays. It raised about US$37.3 million despite a net loss of US$32 million and a revenue of US$36 million in 2014.

By then, 55tuan was ready to shake off its daily deals past. After listing, it sold off its daily deals business and became a marketplace for food suppliers.

One of 55tuan’s founders, Singaporean James Tan, had already left Wowo to focus fully on Quest Ventures, a venture capital firm that backs startups in Asia. He is joined by many of his Wowo co-founders.

James and gang now share their hard-won experiences and networks with a portfolio of over 20 startups. Here are some of the things he tells them.

China’s startup scene is still as brutal today as it was then

When James founded his company in 2009, there was rampant copying of American startup ideas.

It used to be that a Chinese residing in America would return home and start a company based on what he’s seen there. Think Robin Li of Baidu.

But TechCrunch became widely read among the startup crowd in China, causing a much faster spread of ideas. The pace of copying accelerated, creating the daily deals bubble in China.

Wang Xing, founder of 55tuan rival Meituan, best epitomizes that approach. He founded Renren, a Facebook clone, and later Fanfou, a Twitter clone. This strategy allowed sites to become popular in short order.

“At that time there was a joke: ‘C2C’ means copy to China,” says James.

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