The book "Ma Huateng & Tencent"
I have been very fortunate to have found this book "Ma Huateng & Tencent - A business & life biography":
https://www.amazon.com/Ma-Huateng-Tencent-Biography-Entrepreneurs/dp/1911498282
To understand the DNA of the company, we need to understand the management (because they are the ones that run the company). Such information would only be available if you know the management personally or listen to their speeches or read a book written about them.
After reading this book, my confidence level in Tencent has increased.
From this book, I have learned the followings about Ma Huateng and his company Tencent:
• Ma is a capital market entrepreneur as well as a software engineer, yet had always preferred the latter side and retained an *inexhaustible interest in programming*.
• Ma had a subtle and distinct business philosophy, which others had dubbed the "Three Self-Questions". He was said to have frequently asked himself the following three questions in situations where the wisdom of engaging in a new business initiative had to be assessed:
Question 1: Can you be an expert in a new area?
Question 2: If you dont do it, who will?
Question 3: Once completed, can the new project maintain a competitive advantage?
• In an age of extensive portals, the internet knew only one harsh reality: there was no second place, the only available space was for a winner. If one company pushed forward, another would have to exit.
• Why Tencent's ecommerce portal Paipai (http://www.paipai.com) lost to Alibaba's Taobao?
- As an IM software, QQ was quite successful, creating a huge community into which most of China's users could be absorbed. However, being a community, it was mainly seen as meeting interpersonal needs rather than consumer ones.
- By contract, Taobao had gathered together a growing number of businesses, which in turn attracted more and more buyers.
• Tencent vs Baidu
- By 2014, Baidu already had over 1 billion registered users and daily page views of over 2.7 billion. Its younger user base was an important part of its predominance.
- Baidu's advantage over QQ group (Tencent) was that it created a sense of community and a strong sense of belonging, whereas QQ was mostly simply a messaging tool.
- Ma was inspired to try and integrate the experience of search engines with Tencent's existing products, in order to create a personal, community-based, intelligence, agile product.
• Tencent Games has already become one of the biggest domestic online gaming social communities. Under the open internet strategy advanced by Ma, Tencent Games covers 5 categories, including casual gaming platforms, huge online games, middle scale casual games, table games and battle platforms.
• Ma was quite successful in terms of providing a satisfying user experience. 'People first', had always been his creed. So he would do no worse than his competitors.
• Understand user demands
- The reason that Tencent could enjoy such a massive market was because it had a huge and stable user group. This user group had been acquired by knowing and understanding the psychological needs of users.
- Ma placed much emphasis on the core function of a product, whether that be to save time, solve problems, or promote efficiency.
- Ma actually required Tencent to develop the core capacities of the product to its extreme. Once this was achieved, it was harder for potential rivals to catch up, and Tencent could exert its competitive edge.
• Growing addiction to Tencent products
- Many Tencent users have become 'addicted' to Tencent products. What Ma had been thinking about was how to maintain this attractiveness. In other words, how to keep users addicted.
- First aim is always to maintain the products' simplicity.
- Second vital step towards maintaining product attractiveness has been designing products that allow users to multitask.
- Third has been to development of products that allow the users to develop a feeling of control.
- Forth uses micro-innovation to simulate users.
- Fifth involved paying attention to the ways in which users absorb information through conscious and sub-conscious means. In order to develop an addiction, Ma always used a great deal of creativity to encourage users to employ their products repeatedly.
- Sixth constituted ensuring that users engage with the product repeatedly.
- Seventh was making users feel 'cool'.
- Lastly, to compliment users continually.
In the current competitive software market, only those who can cultivate the addiction of their users can profit.
• Ranking of 5 largest social networking service providers in 2014
- First place went to Facebook who had monthly users of numbered 1.35 billion, close to the total population of China.
- Second and third places belonged to QQ and QQ space (Tencent), with 645 million active monthly users.
- Fifth entry was Wechat, active monthly users numbered 438 million.
• Ma considered anime to be Tencent Entertainment's new battlefield. Ma focused on the following 4 aspects:
1. Striving to produce good work for fans.
2. To strengthen the animation to spread its influence further.
3. Strengthening the games themselves.
4. Strengthening related products to ensure content could be further developed.
Investors who are interested to invest into Tencent (700HK) can:
• Buy direct.
• Do Tencent accumulator.
• Buy unit trusts that invest into Tencent like UBS Equity Fund - China Opportunities.
https://www.amazon.com/Ma-Huateng-Tencent-Biography-Entrepreneurs/dp/1911498282
To understand the DNA of the company, we need to understand the management (because they are the ones that run the company). Such information would only be available if you know the management personally or listen to their speeches or read a book written about them.
After reading this book, my confidence level in Tencent has increased.
From this book, I have learned the followings about Ma Huateng and his company Tencent:
• Ma is a capital market entrepreneur as well as a software engineer, yet had always preferred the latter side and retained an *inexhaustible interest in programming*.
• Ma had a subtle and distinct business philosophy, which others had dubbed the "Three Self-Questions". He was said to have frequently asked himself the following three questions in situations where the wisdom of engaging in a new business initiative had to be assessed:
Question 1: Can you be an expert in a new area?
Question 2: If you dont do it, who will?
Question 3: Once completed, can the new project maintain a competitive advantage?
• In an age of extensive portals, the internet knew only one harsh reality: there was no second place, the only available space was for a winner. If one company pushed forward, another would have to exit.
• Why Tencent's ecommerce portal Paipai (http://www.paipai.com) lost to Alibaba's Taobao?
- As an IM software, QQ was quite successful, creating a huge community into which most of China's users could be absorbed. However, being a community, it was mainly seen as meeting interpersonal needs rather than consumer ones.
- By contract, Taobao had gathered together a growing number of businesses, which in turn attracted more and more buyers.
• Tencent vs Baidu
- By 2014, Baidu already had over 1 billion registered users and daily page views of over 2.7 billion. Its younger user base was an important part of its predominance.
- Baidu's advantage over QQ group (Tencent) was that it created a sense of community and a strong sense of belonging, whereas QQ was mostly simply a messaging tool.
- Ma was inspired to try and integrate the experience of search engines with Tencent's existing products, in order to create a personal, community-based, intelligence, agile product.
• Tencent Games has already become one of the biggest domestic online gaming social communities. Under the open internet strategy advanced by Ma, Tencent Games covers 5 categories, including casual gaming platforms, huge online games, middle scale casual games, table games and battle platforms.
• Ma was quite successful in terms of providing a satisfying user experience. 'People first', had always been his creed. So he would do no worse than his competitors.
• Understand user demands
- The reason that Tencent could enjoy such a massive market was because it had a huge and stable user group. This user group had been acquired by knowing and understanding the psychological needs of users.
- Ma placed much emphasis on the core function of a product, whether that be to save time, solve problems, or promote efficiency.
- Ma actually required Tencent to develop the core capacities of the product to its extreme. Once this was achieved, it was harder for potential rivals to catch up, and Tencent could exert its competitive edge.
• Growing addiction to Tencent products
- Many Tencent users have become 'addicted' to Tencent products. What Ma had been thinking about was how to maintain this attractiveness. In other words, how to keep users addicted.
- First aim is always to maintain the products' simplicity.
- Second vital step towards maintaining product attractiveness has been designing products that allow users to multitask.
- Third has been to development of products that allow the users to develop a feeling of control.
- Forth uses micro-innovation to simulate users.
- Fifth involved paying attention to the ways in which users absorb information through conscious and sub-conscious means. In order to develop an addiction, Ma always used a great deal of creativity to encourage users to employ their products repeatedly.
- Sixth constituted ensuring that users engage with the product repeatedly.
- Seventh was making users feel 'cool'.
- Lastly, to compliment users continually.
In the current competitive software market, only those who can cultivate the addiction of their users can profit.
• Ranking of 5 largest social networking service providers in 2014
- First place went to Facebook who had monthly users of numbered 1.35 billion, close to the total population of China.
- Second and third places belonged to QQ and QQ space (Tencent), with 645 million active monthly users.
- Fifth entry was Wechat, active monthly users numbered 438 million.
• Ma considered anime to be Tencent Entertainment's new battlefield. Ma focused on the following 4 aspects:
1. Striving to produce good work for fans.
2. To strengthen the animation to spread its influence further.
3. Strengthening the games themselves.
4. Strengthening related products to ensure content could be further developed.
Investors who are interested to invest into Tencent (700HK) can:
• Buy direct.
• Do Tencent accumulator.
• Buy unit trusts that invest into Tencent like UBS Equity Fund - China Opportunities.
Comments
Post a Comment