Power of Scale Logo

Power of China’s Twitter Clone: 100,000 Followers in 4 Days, 1000 Comments/Tweet

by Vincent Chan on May 25, 2010

Today at TechCrunch Disrupt, DST co-founder and CEO Yuri Milner, talks about Internet is big everywhere in the world, especially in countries like China, Russia, Japan and South Korea. According to Milner:

…the pace of change is really accelerating. You can become very big very fast.

So how fast can that be? Let’s look at Sina’s Mini-blog, the Twitter clone in China. It’s growth is phenomenal. For instance, Charlene Choi, a pop singer in Hong Kong (see attached picture), has signed up an account with Sina 4 days ago. And now she already has more than 100,000 followers and average more than 1,000 comments per tweet! (Sina’s mini-blog has implemented a Facebook-like commenting feature)

That’s really freaking fast.

The scary part is that this Twitter clone still hasn’t gone mainstream yet. Given that China has more Internet users than the US now. I believe the network effects that we are witnessing in this country is only the tip of the iceberg. Will it be 10x more powerful? I don’t know. But more and more US startups are starting to pay attention to the rise of this digital superpower now.

One interesting fact: you actually cannot search for Google’s chinese name on Sina’s Mini-blog. Such a serious censorship software! 🙂

If you enjoyed this post, get free updates by email or RSS.

Great we have 3 comments already

Write Your Business Plan in Pencil

by Bob Reiss on May 19, 2010

This guest post was written by Bob Reiss (@bobsreiss), the author of Bootstrapping 101. Reiss is an Army veteran and graduate of Columbia University and Harvard Business School. He has been involved in 16 startups and is a three-time INC 500 winner. He has been the subject of two Harvard case studies and is a frequent speaker at University Entrepreneurial classes.

The smartest entrepreneurs plan on growing and are prepared for change.

I have a few words of advice for first-time entrepreneurs, as well as seasoned business owners looking to hit a new stage of growth. My advice is this; write your business plan in pencil. I realize this may be difficult for all you non-golfers, but doing so will illustrate two important principles.

  1. Change is inevitable
    I have little doubt that you (the small-business owner) will shortly have to change, amend, modify, scrap or abandon your original business plan altogether. One of the attributes of successful entrepreneurs is flexibility. By writing your business plan in pencil it forces you to look at change as the only constant. Make change your friend, embrace it and work it to your benefit.

    The reasons why your original plan will need to be changed after your company is operational are myriad. It’s likely you under or over-estimated your competition, margins, cash needs, competencies and suppliers. Or you misjudged market need and size. Every entrepreneur discovers new opportunities that didn’t appear until there was actually a business up and running.

  2. We must avoid business plan worship
    When we see documents neatly typed (and maybe even received praise for them), we are reluctant to change. Especially for those who attended business schools where the plan took on a larger than life importance. People whose plans got high marks, or even worse, won a business plan contest, tend to feel their plan is inviolate. They also tend to believe that if they rigorously adhere to the plan it will yield the riches of their dreams. It’s my hope that the mental image of a pencil will remind you that change is good and will help you reach your goals.

Most small-business owners that I know never wrote a business plan. In 16 start-ups, I’ve never written one. And John Altman, a very successful entrepreneur, founder of six companies and former professor of entrepreneurism, never wrote a business plan for his start-ups, either.

Most people who write a business plan do it to raise money or because someone told them that’s what they’re supposed to do. The fact is that a detailed plan is only required if you want to raise money from a bank or venture capitalist. And both hardly ever offer a loan or invest in early stage companies. So your energies are wasted writing those long and thick plans.

Now don’t get me wrong. I strongly believe in planning, just not in long, voluminous tomes that will probably go unread. For most sole proprietors, that business plan can reside in your head, or–if you must commit it to paper–on a napkin.

If you really want to write a plan, try this. At the start of each year write what your goals are and specifically target new areas of distribution and the names of new accounts that you want to clinch. Also, put on paper the names of current customers with whom you want a deeper relationship and the strategies you’ll employ to do so. This plan should only run one or two pages. I also recommend you write down your accomplishments and shortcomings from the previous year. While you can do this exercise primarily for yourself, I would also share it with members of my team.

As your company gets bigger, that’s when those written planning documents become paramount. As your company grows you want to be sure all your employees are on the same page and equipped with the knowledge of how they can contribute to the company goals.

It is a reversal of commonly accepted logic to suggest you postpone the business plan until you’ve reached a growth spurt. But, as John Altman said on this point, “If you’re going to empower the other people in your company, guess what; you’d better give them a map to the highway you’re on! Otherwise, they can’t share that vision in your brain.”

(This article first appeared at www.entrepreneur.com – 5/14/10)

If you enjoyed this post, get free updates by email or RSS.

Cool we have 1 comment so far

Asia’s Leading Web Technology Event – echelon 2010

by Vincent Chan on May 11, 2010

Entering any Asian market involves commitment, patience and hard work. If you are determined to expand your web business into Asia, echelon 2010 is the one Tech/ Startup event you simply can’t miss. echelon 2010 (formerly known as unConference Singapore) aims to be at the frontier of the Internet and web technology landscape, where the main focus will be in bringing together the top brass of the web technology industry from various parts of the startup eco-system to facilitate discussion on the hot topics in the web startup scene.

echelon 2010 features keynotes, panel discussions, case studies, pitching sessions and exhibitions spread out over 2 days over the following areas:

  • Mentorship, Investments and New Funding Models
  • Cloud Computing and Enterprise Web
  • Social Gaming and Social Networking
  • Mobile Applications and Location Based Services
  • Product Management and Marketing
  • Social Media and Online Marketing
  • Startup Cultures and Lessons
  • Indonesian Startup and Mobile Landscape

It also features impressive lineup of speakers this year, including:

  • Dave McClure, Founders Fund
  • Joichi Ito, Creative Commons
  • Noah Kagan, Gambit
  • Vishal Gondhal, Indiagames
  • Rex Ng, 6waves <-- one of my favorite startups in Hong Kong!
  • Aneace Hadded, Taggo
  • …etc

Below are the testimonials from some of the event attendants last year:

“UnConference 2009 was an awesome experience for the iTwin team. It provided us with the best possible platform to reach out to the enthusiasts, influencers and entrepreneurs of the Singapore tech scene. It was a great group of people to get inputs and reactions from. The feedback we got that day was a huge boost (and help) for us. I also credit UnConf 09 for setting in motion a favourable chain of events that helped us move iTwin forward significantly. Our best wishes to the e27 team for echelon 2010.”
— Kalyan Takru, iTwin

“First, the organizers, e27, did an amazing job of not only organizing this conference, but getting big-shots from Cisco, Google, Salesforce and Skype to come down and share their insights. This is above and beyond anything I’ve seen in KL, and great both in terms of exposure and education for us.”
— Chak Onn Lau, Foldees

If you are interested in participating in this huge event, you can register a ticket on this site.

If you enjoyed this post, get free updates by email or RSS.

Cool we have 1 comment so far

Is DST Going to Be The Next Berkshire Hathaway?

by Vincent Chan on May 7, 2010

To many people, DST, the Russian Investment Firm, came to the web industry pretty much out of nowhere. Yet, in the past 16 months, this five-year-old company has purchased nearly 10% of Facebook (worth near $2 billion), led a $135 million financing round for Groupon, invested $180 million in Zynga along with others, and paid $188 million for AOL’s instant messenger service ICQ, which holds more than 50% of Russia’s instant messenger traffic. It’s like they are gathering all the hottest collectable toys today! And they make it look so easy.

So are we witnessing the birth of an Internet giant of this era? What is the story behind this secret company? Why did all the hottest startups take its capital when they still have enough funding in the bank?

Let’s reveal the story behind this extraordinary company now.

Serious Connections

According to its website, DST only has four partners, who have a strong complementary background from operations, investments and finance. And they also have seven analysts, all veterans of Goldman Sachs, Morgan Stanley or Citibank. Their investors are all well known investors or institutions, such as Goldman Sachs, Tiger Global and Alisher Usmanov, one of the Russia’s richest man. A Russian newspaper, Kommersant, estimated that Alisher should own no less than 30% of the company.

Most recently, DST got an investment of $300 million from Tencent, the huge Chinese internet company which has a market capitalization almost twice the size of Baidu, in exchange for near 10% stake.

Based on this long term strategic partnership, DST and Tencent are positioning themselves to benefit from global Internet growth. And obviously, DST’s portfolio companies like Facebook and Zynga will also benefit from these influential connections. Not only increase their exposure to the fast growing emerging Internet market, but also get the expertise from Russia, Euro and Asia Internet companies which are traditionally better at monetizing online games and social networks.

Invest for the Very Long Term

Yuri Milner, founding partner of DST, has analyzed all the tech IPO in the past 10 years, and he thinks that many companies went public too early. In his point of view, some companies didn’t have to go public that early. He thinks that if IPO is only driven by liquidity concerns, companies can get the additional capital from private sources, like DST, in order to release the financial pressure of the company.

Based on his experience, it turns out that only providing 5-10% of the liquidity could be enough for a good company to move forward for a few years and still makes IPO. In this way, the team will have more time to focus on product development making the enterprise more valuable in the long term. The fresh capital will also provide a cushion for the company as it continues its fast-paced growth and explores new revenue sources beyond advertising.

Like what Mark Zuckerberg said:

Facebook did not need the money. The financing will serve as a cash buffer to support our continued growth, allowing us to scale.

and Mark Pincus, CEO of Zynga, said:

Milner is a natural choice for any Web business that is at scale and interested in bringing more investors—but not in an IPO. He already had a very sophisticated understanding of social gaming. It was a very good alignment of goals.

After all, given that Yuri Milner greatly admires Warren Buffett, who is known for his long term investment advice, it’s not surprising that they have similar investing style.

Creative Financing

Their strategy is to make huge bets on market leaders at very generous valuations that other investors can’t afford. DST’s terms are very different from traditional VC deals. For example, they first invested in Facebook in May 2009 at a $10 billion valuation and later funded employee buyouts at a $6.5 billion valuation (a 35% discount for common stock). They did a similar deal with Zynga as well.

In this way, it will provide an attractive exit opportunities for early employees and founders. Milner explained, as the company grows, the spread between common and preferred stocks will become narrow. That’s why they want to invest early.

Also, according to VentureBeat, DST not only did not request a board seat, their deals happened really fast. From start to finish, it only took about a week with a term sheet of one or two pages. This investing style is extremely similar to what Warren Buffett did 🙂

The way they bought preferred stock from the company and common stock stock from employees has become the hottest new way to invest in startups. People refer it as “DST deals”.

Expert in Scaling and Monetizing Social Networks

In the eye of DST, display ads are dumb. They believe that social media sites can do much more than that, such as virtual goods, micro-payments, social ads…etc, because the site knows who the customers are.

Yuri Milner was the CEO of Mail.ru, a Russian web portal, where he turned the company around operationally and positioned it to become the number one Russian speaking website. Their portfolio also includes two large social networking sites in Russia, Forticom and vKontakte.

With all these companies, DST already controls 70% of all Russia’s web traffic. Most importantly, these sites have already figured out how to make money using various business models, such as collecting micro-payments from users and selling virtual goods, something Facebook not very good at in this stage.

You may ask why those Russian sites are so profitable? One of the reasons is that Russia has the word’s most engaged social networking audience, according to comScore. The average Russian web user spent 9.3 hours on social sites, while the U.S. users spending 4.5 hours on them.

Given all these track records and experience, Milner is confident that Facebook, which has more than 400 million users, will be able to get into these new sources of revenue.

The Man – Yuri Milner

As you can tell, Yuri Milner, who earned an MBA at the Wharton School, is not a regular entrepreneur. He really knows how to play this game.

Marc Andreessen, a Facebook board member once said:

Yuri and his team were bringing in a level of knowledge about these businesses that was the best I’ve ever seen. They are walking encyclopedias of all business models of Internet businesses globally.

Milner was able to convince Mark Pincus, Zynga’s CEO, to get their additional funding when his company was already cash rich. Mark once said:

Milner already had a very sophisticated understanding of social gaming. It was a very good alignment of goals.

Although his company has so much capital, Milner did not blindly invest in big name startups. He typically follows a company for one to three years before investing. Prior to investing big money in to major US consumer web companies, Milner bought into smaller Eastern European web companies which is using similar strategies to better understand their different business models. Like Andressen said:

Milner and the DST team are walking encyclopedias of Internet business models.

At the same time, he is aggressively pursuing new investment opportunities. He spends as much as 75% of his time traveling to meet global startups which are in his potential investment list. He told Bloomberg BusinessWeek:

“I am making big investments. You just have to be personally involved. We monitor close to 50 companies globally that can be potential investment opportunities. I’d like to see DST as a significant global investment company in the Internet arena.”

DST is planning to invest $1 billion dollars on emerging web social startup companies around the world. And most of the new investors he is bringing in now are non-Russian. Milner really turns DST into a global investment group.


Although we are still not sure if DST’s investment will eventually pay off, it seems to me that Milner and his team are doing some great things for the startup and web community. Their real Big Hairy Audacious Goal probably is to become the Berkshire Hathaway of the tech industry in modern time. Can they make it? Is Milner going to be the next Warren Buffett? Time will tell.

If you enjoyed this post, get free updates by email or RSS.

Great we have 2 comments already

Two Ecosystems: iPhone vs Facebook

by Vincent Chan on May 3, 2010

When Zynga’s valuation is approaching $3 billion, with the possibility of an IPO over the next year, I wonder why the iPhone platform still hasn’t created a monster startup like Zynga yet. Apparently, I am not the only one with this question in mind. Ray Valdes from Gartner recently did an excellent analysis of the difference between these two developer ecosystems after attending the Facebook F8 conference.

So there is a long-standing perception in the market that the iPhone App Store represents a gold-mine opportunity for developers. This perception is not only found in the developer community, but among the broader audience of consumers and also investors, contributing to a high stock-market valuation for the platform owner. However, the gold-mine perception seems to me to have aspects that are more illusion than reality.

Check out the post for more!

If you enjoyed this post, get free updates by email or RSS.

Well we have no comments yet


Power of Scale is the offical blog of Primitus about scalability, innovation, branding, web, startup, customer development, organization building, Asia and more.

Want to Learn More?

Popular Posts

Our Product

The easiest way to collect and manage resumes online for small business. Eliminate the inefficiency of an HR email inbox, improve candidate quality, and reduce time-to-hire.



Follow this blog (What is RSS?)
Follow us on Twitter
Subscribe by e-mail (more info)

Enter your e-mail:

Join us on our journey

Primitus on Facebook

Kiva Loans

Entrepreneurs that we are supporting currently:
Rachabmoh Tagoeva
Animal Sales, Tajikistan
Mawéana SOSSAH
Charcoal Sales, Togo
Polina Twumwaa
Food Market, Ghana
Kadidiatou Gnabaly
Food Production, Senegal
Let's scale the power of philanthropy together. Please join our lending team at Kiva.