Moderator: Good evening, welcome you to our friends talk shows, and we hope that through this interview will give users and entrepreneurs more practical guidance on the start-up, today we have invited The three guests, vice president of Alcatel Shanghai Bell, Mr. Wu Bin, please Manager Wu and our friends to make a call.
Wu Bin: Hello everyone, I am of the Wu Bin Alcatel Shanghai Bell.
Moderator: Gentlemen, here is the Alcatel Shanghai Bell, director of venture capital investment in Mr. Xu Feijie.
Jie Xu: Good afternoon, everyone, My name is Xu Jie.
Moderator: Gentlemen, here in Beijing Han-chen, president director of Science and Technology Co., Ltd. Mr. Qin Qiling.
Yee-ling Qin: Good, My name is WuYee-ling, Beijing Han-chen, president of technology.
Moderator: I am Yang. I would like to please you on your own experience and an area of concern introduced.
Wu Bin: I would like to briefly introduce myself. My name is Wu Bin. Four years ago I returned from abroad in 1990 out of a country, a country of Norway, Switzerland, France have worked, and finally to work in Canada. In Canada, Nortel Networks Nortel is responsible for the global optical network market, Nortel was up 80% of the global optical network market. After a few years ago I joined the Shanghai Bell Alcatel, now Alcatel Shanghai Bell, I was responsible for technical and strategic work in this area. Including standards, venture capital, the company's technical direction, network strategy and corporate strategy. Am very pleased to share with you my views on the risks of investment.
Jie Xu: Xu Fei everyone My name is Alan. Alcatel Shanghai Bell in my investment strategy. Venture capital over the past two years is a focus of the work we have, so today I am glad to have the opportunity to chat with you with regard to the risk of investment.
Yee-ling Qin: Good, I am not the same as with Wu Bin, Wu Bin is returned to China ten years ago, I was ten years ago to go abroad, to Canada, I had done at home university professors, foreign companies to go abroad to work after, and then started. MIT has recently come back to me and a friend of Mr. Liu Yaping, as well as domestic business partners and we can work together on the Han-chen has done a Beijing technology company, the company just received Alcatel, have been Jie Wu Bin and Xu Fei investment.
Moderator: We have an interview today announced the theme of "favorite VC strategic investment and what types of enterprises." We hope that today's interview will allow the industry to venture Alcatel Shanghai Bell has a more in-depth understanding. But also to our online interactive interview, and finally the formation of information will allow entrepreneurs to give the industry or the Alcatel Shanghai Bell to have a more specific understanding of investment in the future, then look for more targeted. In addition to today's interview on this topic, focusing on strategic investments in VC favorite subject of the type of business, we also do some aspects of the investment and financing to start, and I weaved users will be some problems. Alcatel Shanghai Bell Fund What kind of enterprise that is the most investment value of the business, you tend to what kind of business investment.
Wu Bin: I would first answer on this question, because I think to answer the strategic investment in VC like what kind of enterprises, first of all to talk about the Alcatel Shanghai Bell is what kind enterprise, and then we like to vote is what kind of business, let me finish my flying kit to add. First of all, Alcatel Shanghai Bell is a very meaningful joint venture enterprise, we have 50% of the shares owned Assets Supervision and Administration, 50% of the shares of Alcatel, it is a joint venture. We actually owned the 160, one of the state-owned large enterprises, the SASAC are with China Mobile, China Telecom, China National Petroleum, Bank of China's enterprises and so belongs to the SASAC, so our company is a very special international localization of the enterprise resources in China, around 7,000 employees. It should be said that we in the telecommunications industry, specifically in the mobile and fixed networks are a business productive. From such a corporate position to say, it should be said that our business is a relatively large enterprises, often say there will be some new areas of development, as a too concerned about the large enterprises, there may be some small businesses to do things they did than large enterprises do, and because they are relatively small, they are faster, they do relatively fine, speaking from this perspective, we very much hope that we can not in the area involved, or is our speed, not changes in the industry can be achieved in this area to do some investment in these enterprises, to complement our existing R & D less than some of the above, it is we do an original venture capital. So that from this point, we do risk-based investment strategy, we are concerned about what? We follow the venture capital-based financial institutions, we are also very concerned about the return on investment, which is any person who is very concerned about how much money to invest how much money they hope to earn. Also on this basis, we are also very concerned about the business we are able to vote with our complementary product lines, or by vote of the enterprises in our company can not be covered by an industry with a number of areas inside the development direction of on the extent of some of the leading. In addition, each company may have the Director, is inadequate, we may invest in companies doing some of the products, solutions, the company is doing than we are good, then we will certainly invest in this type of enterprises. Fei Jie, you see there have nothing to add.
Jie Xu: Shanghai Bell Alcatel venture officially announced in June last year, before that, Alcatel in China have had the operation of venture capital investment and over two companies, earnings and returns are very good. Beginning last year, we are officially in the local operation, we are concerned with the area of investment is related to the field of TMT innovative enterprises. These innovative enterprises in China should be the main local operator, we are now the main investment direction, can be so few, one is our communication with the Internet and telecommunications-related technical or product, this may be directly counter to what we have doing business relations. There is a Web-based communication we call the value-added services, including value-added services and applications, there are many applications such as broadband Internet applications, mobile communications applications, the future application of 3G, which is a major investment in our direction . Also known as one of our new media framework for the future, this piece of digital media. There are also just said that the application of industry investment, the main case. Types of companies we invest in start-up period should be, he is usually one to two years, or may grow slightly longer history, we more concerned about the investment company's products are not innovative, or his Are there any innovative business models, while his team is experienced, Then the team is not in itself. From there we look at the company since the establishment of the time this development is not very marked increase in users, or orders, or revenue growth, which is more concerned about several aspects.
Moderator: That may be concerned about the Alcatel Shanghai Bell to invest more of their products is the perfect industrial chain, is not it can be understood?
Wu Bin: It should be said that this is not what we see is a condition of investment, the conditions can not be song you can remember. First of all, we look at a business with all of our financial-based venture capital is the same, we look at return on investment, return on investment from this perspective, we look at this enterprise is to look at 4:00, we see enterprises are not able to meet them that or a combination of them, the first market, the second is talent, and the third is the business model, the fourth is the technology. Did you see the market faster than any other competitor has opened up the market, do you have a large customer base; from the perspective of your business model is an innovative business model; the third team to you than others more stable, more experience, more passion, more to innovation; the fourth, you do not have the technology is patented, is not able to lead your competitors. From four aspects, one or a few can meet our requirements, or that we think it is very promising, we will invest. However, on this basis, we also hope that our investment in enterprises, with the combination of a certain strategic. The front of us also mentioned, there are three aspects, the first, is that what they are complementary with us, because there are some things that can not be made or not made; the second is there any better than we do , some small areas of relevance; Third, they represent an emerging industry, the industry is likely to be associated with us, the Internet, or inside the telecommunications industry is a very important and the future of the branch of a development. Based on these three points we might make an investment.
Moderator: What are the reasons that give you the total investment in the creation of the Qin Han-chen company.
Wu Bin: Han-chen Qin general they are doing the company's IPTV set-top box industry companies. Their existing set-top box products, but they will do next home gateway, so a Video Pod, now Apple's IPOD is a very well-known, it is added to the list of things video, and now there are MP4, but the difference is It is not very easy to network, it needs to be downloaded from the computer you something, not very easy to download from the network. They do some multi-media products. We invest in their company, I think from just said let's look at these four points, from a technical aspect, they are the most in China's leading set-top boxes and multimedia terminal in this piece, the second from the professionals say, we all listen Qin刘总to the sum of experiences, is a very good team, they have more than a decade in the IPTV experience in the. From the industry talk about IPTV, in fact, only a few years, and they have decades of experience, so we are very optimistic about such a team. From technology, from the talent, I think it is very, very good. From the market, their industry, are now a number of IPTV in China, the company, set-top boxes inside the company, they are very leading, was well received. The last one is the business model, business model inside a whole are exploring IPTV, we are optimistic about the IPTV such a direction. I would like to, if we are there are three four-point is 100% sure, then we must be a vote winner.
Qin Yee-ling: I choose to believe that Alcatel is the right-han-chen's选择. Because we set up, our goal is to create a target or to create a such a world-class enterprise. Then, step by step we are taking toward the goal. First step, we use a year and a half years, in 2004 we created in June, then the use of almost a year and a half, we made the company in China in the technology and the leading product lines are. However, we believe that we re-use a year or so, making the technology and market, on the whole come to the international market leader in enterprise level, of course, our greater goal is to lead our team, came through as IPTV, as the network multimedia such a broad prospects for the industry, we make enough profit, and then to bring the capital market of the enterprise, and finally come to market this. In addition, our team we are very confident that the first choice team in the business, we not only choose a number of experienced, experienced business partners in such a batch of other, far-sighted enterprises in more aspects of leader I told刘总, Mr. Liu Yaping cooperation of MIT, Dr. He is, once the world's leading magazine published dozens of papers in academic and business experience are a lot of the above. For example, he was such a large-scale North American Philips company which has done nearly 20 years, of course, he eventually chose to return home and told to wear straw sandals started. In addition, I was engaged in teaching, research, also done a quick about 20 years before switching to business, to go abroad after doing it at the university for more than a year later, the last chance to move toward the enterprise. I have to a number of listed companies in China, as well as the other side to do research and development in Canada, has done probably more than two years, and then began to slowly start to explore how, finally, choose a few of my partners to start the creation of the Han-chen. Combination of the above in the team, we also chose to start There are several other products to do the technical research and development, in the IPTV industry, in the embedded computer and software above the level of a relatively high number of young entrepreneurs, partners. Of course, we told them over, we may have should be taught to him and when their teachers have this generation, but as a start time, it is necessary to select a match when, in fact, we do not value age and experience, we have chosen in the capacity of team we have three very young entrepreneurs with us to create this enterprise. When the normal operation of enterprises, we also recruit a lot of well-known Master of the University, as well as large companies in the foreign-funded enterprises in some of the work of experienced engineers to join our team, so we should be the team that is now in the entire framework, the technology is also a team leader. Another product to consider the above, we have to do more concentrated on the multimedia terminal. First of all, the breakthrough point, of course, in the IPTV terminal above, as Alcatel has chosen us, we would also like to take full advantage of Alcatel in IPTV such a world-leading role to help us bring this product to market, so we in the IPTV Alcatel above as to add the entire industrial chain, we are very focused on IPTV terminal to do this thing, so we put a lot of energy. IPTV terminal in this piece, from all levels to do. First of all, we do hardware terminals, slowly we want to do the business more valuable. Therefore, we in the terminal above to upgrade to integrated it into a platform for the application of a variety of software systems. Therefore, our company is more R & D software engineers, the company is also the ultimate goal would do in the software above the world's leading, especially in the embedded terminal above to play a leading role. End we are doing, we also considered the use of a variety of different levels of opportunity, especially in the development of large-scale IPTV operators have not yet start, we have also done a number of other considerations, for example, we do Video Pod This is a very successful model, is a handheld multimedia terminals. We are done, there will be samples out immediately. Can tell you now, this terminal is a very good thing, he will integrate all the hand-held multimedia and communication functions, for example, we called the phone very loud TV, our support for mobile TV terminals, we just passed front-end integration of a USB receiver, the entire multimedia platform that I can deal with all of the DVB, DMB these multimedia from a variety of formats. Through the network can also SKYPE audio and other things added. Of course there are many functions like a PDA, electronic books and so many features. In addition, we make our case in order to be able to scale in the market, it is necessary to every people, for example, users will be able to buy a street, with my IPTV such a box, and now we are re-study of P2P, embedded function of the IPTV system P2P thing, I believe that in the near future, we will be able to buy our boxes, on-line, just like with TV, watch internet media. But not the same as with the computer, he can high-quality, through the enjoyment of the TV screen.
Moderator: total Qin Han-chen has just introduced the business when you invest them with particular emphasis on it is that their team is strong, and just have a User problems.
users: how you look at the choice of investment, in which his team proportion.
Jie Xu: team is usually like this, we first and foremost a company, we carrying out the process of screening, first of all, we look at their business plan is not innovative, if this is the case, we will consider this month the team. First of all, this team because you have a good idea, if there is no implementation of a very powerful team, you will not be able to achieve what you think.
Wu Bin: I would like to team, the users means that we choose what kind of team we can win the investment. The first one is related to the experience of watching them, like the Han-chen of the team, they have a lot to do IPTV experience, IPTV is a very new field, so the experience is very important. The second is passion, an innovative capability, which is very important, but is that all entrepreneurial-type person, which are relatively more passion, innovative thinking. The third risk is that venture capital investment, a lot of things are the seat of your pants, it is like looking for a girlfriend, like marriage, can not see these two right. Sometimes, if some friends want to start, when a venture capital, we talk about it on the collapse, and the feeling is wrong, it does not matter because there are a variety of outside investors, my suggestion is more than to find a few, do not know when is the last all of a sudden, and very much appreciate your people, this person alone, we can also do an investment.
Moderator: Xu just talking about the total value of Alcatel Shanghai Bell to see first whether there was a very good business model business plan. The second point is the team. However, this technology does not seem to be very high up the role.
Xu Jie: We invest in this business, and technology is one part.
Moderator: He is not the technology is leading, if not a particularly important factor is it?
Jie Xu: Technology is on the one hand, depends on what type of the enterprise. For example, some technology-based businesses, some services do SP or CP to do, this situation is different, different companies have different methods of analysis. If related to technology-based, such as Han-chen technology company, we may have the technology on a very important position. In fact, I just said the first point, that is, innovative technology or business model which includes the technology inside. We are preferred and may also request you, if it is a technical company, we hope that he will own the intellectual property development.
Qin Yee-ling: I add a speech to fly kit. In fact, they see a time when a technology, from our being the object of investment, we need first of all, I have a business plan, how I can do technically, I have what kind of talent, this is only on paper things, as part of our business, we need to prove to investors, even if you make the same things to him that you would like the technology is indeed the best. This is the case, in fact, to get investment in the Chen-han, before it is really such a thing to do, when we do IPTV, we selected a platform at the time when I went to the election, I will consider I want to be a future expansion of the new features of such a structure, and then in the structure above, I go to create a structure of an embedded software system, so I called a lot of suppliers, to After the lap, I found a platform for a company to meet my request, and then we started to do his. However, in the process of doing is very difficult because the company's platform at the beginning and not very perfect, so we spent in the technology above a lot of power, on the use of technology in our own ability, enabled him to make the platform a perfect product, then we are on the adoption of such a story proves that we are such a strong technology company.
Moderator: just in front of吴总said that Alcatel Shanghai Bell is a strategy-based VC, that Alcatel Shanghai Bell Investment Fund to invest the time to do, and other VC-based financial What is the difference between them?
Wu Bin: It should be said that the entire investment process, we said it was the same. That we received a lot of first business plan, business plan may be a friend would like to start over from the fat from the Internet, or it may be time to participate in the meeting we got some business plan, our business plan from the book selection part of the business we are interested in doing deep research step, if we feel that business is good, we will exchange views with the entrepreneurs, may be the next step we will then make a due diligence, after due diligence, we companies will make a decision, our decision-making process is also very short, may be in the 12 weeks to make a very quick decision-making, decision-making, we risk entering a real investment, put money into such a vote process. It should be said that investment from a risk perspective, the strategic investment in investment companies and financial enterprises, the distinction is not very large, the process may be added a little bit with the financial difference between VC-based, that is, before we invest, Although investment decisions very quickly, but when making investment decisions related to the cause we will be the leadership of the Department, or call them together, with a decision to do so. So this decision is very important, because as a strategic investment fund, with the traditional distinction between a number of financial funds, I think the difference in the three points. First, we are doing business assessment, we are more authoritative. We look at the industry to see technology, depending on the market and the direction of the quasi-too great, this is our first advantage. The second advantage, in fact, that is to say, when we go to vote, we will help these enterprises to market better, the capacity of our market is very strong, so when we invest in our business solutions part, we are very willing to help them to sell some products. Of course, we do not want to invest in our business by 100% to sell our products, our investment in shares of the enterprises generally relatively small, accounting for more than ten per cent. This is to help the market, we provide the value of the second. The third value, because Chinese enterprises are now generally out of the way is listed on a single channel of relatively. Shanghai Alpha unique and very long history, that is, investment in our business, we have the possibility of mergers and acquisitions. Therefore, up from three points, said a preliminary assessment is that a market is to help the latter, and the third is the last possibility of merger and acquisition, strategic venture capital, with the traditional financial-based VC general there is a difference between of. So I just said that in the process, the addition of a, let us come in the relevant business in order to be able to fully meet the very beginning that the inside of the three requirements in order to better help us to invest in the future of the enterprise The success of a very important role to play.
Moderator: This is not because ASB is backed by venture of the Alcatel businesses to enterprises outside the relative financial value of the special?
Wu Bin: Yes, I said just now that three of our enterprise strategy to provide special value. This should be entrepreneurs looking for investment is very, very attractive. Because especially in the second point, the capacity of marketing, said normally it would be a big bottleneck, I began to say the technology, market, business model, our talent. Relatively speaking, if we say that market power is very strong, and all of a sudden open up a market for venture capital firms to find, relatively speaking very little, if he once opened the market usually do not need the risk of investment. Generally speaking is a very good team, a very good technology, there is a very good business model, and then a sum of money he needs to do more to open this market, then we risk-based investment strategy is usually to provide they are most needed these two points.
Moderator: may present as a result of the industry strategic understanding of the VC is also less, you can explain to us, and now China's strategy-based VC what?
Wu Bin: As far as I am aware of, like Intel Capital, Nokia, Cisco, Siemens, Qualcomm, etc.. About 78, relatively speaking, the whole investment sector in China, there are hundreds of venture capital, but the real strategic investment company will be 78.
Jie Xu: Although the risk of strategic investments that he is not so much quantity, but in fact the risk of investment in the share of the industry as a whole is a very special status. Because吴总was also said earlier, the strategic venture capital-type common type of financial investment does not have the risk characteristics. Alcatel Shanghai Bell, as we are also very welcome to us with some very good visibility, and the market in China has a very good investment and success stories of the financial risk of investment cooperation, which is one of our investment strategy. This will focus on different, there is a different complementarity. We usually have a lot of experience in the financial-based venture capital is also very interested in cooperation with us.
Wu Bin: For example, the Han-chen of our investment, we, together with Gobi investment company. Desert-based company is venture capital finance.
Jie Xu: they are specialized for this piece of digital media.
Moderator: Now the whole IPTV industry's investment is also more still in the wait-and-see attitude, why you choose to invest for the Han-chen IPTV technology business enterprise?
Wu Bin: I think that this may involve understanding of the industry as a whole. We have mentioned many aspects of IPTV, in fact, as its name suggests IPTV is IP, the Internet, TV, Radio Network. In fact the integration representative of the industry a big trend. From the IP and the Internet to say, there are more than 5000 million PC, TV has more than 300 million Taiwan. You as a telecommunications operator to say, such as China Telecom, which now may be the customer base of 50 million PC users, or 60 million PC users, then how do you like to reach 300 million TV users, he would certainly hope to provide TV to transfer the contents; TV TV from the perspective of speaking, relatively speaking it is a simple model of radio, which broadcast mode, you may see the Internet is now the model of interaction is a leading model Therefore, there can not be transferred to the interaction. So I think IPTV is a general trend. Of course, since IPTV is a relatively new thing, so the relative risk of policy still exist. From the perspective of Alcatel Shanghai Bell said, because we are inside the industry, we first see it is a big industry trends, and secondly this is a relatively new thing, we better grasp the technology, Therefore, we should cast a number of IPTV-related companies. If fact, why do we vote to see Han-chen, is that we imagine the whole IPTV industry chain, including what. Is that when you have a content, a television program, from a headend equipment, the first client device is a radio and television system equipment, fired up the signal, the first long-distance fiber-optic network through the transmission, for example, spread to Shanghai from Beijing to Shanghai after the fiber-optic equipment may be equipment with the combination of data exchange, and then to the access equipment, access equipment that we called DSL, DSL directly from your home, after receiving the home, usually need a home gateway, home Gateway behind the need for set-top boxes. From the perspective of Alcatel Shanghai Bell said, we have a head-end equipment, there are fiber-optic equipment, data switching equipment, as well as access equipment, but our solutions to the home suddenly found that it seems less of a such a set-top boxes equipment, and then we go, we are not to invest in, and then we found such a like Han-chen in the industry-leading companies, is complementary with us, we decided to invest. From the perspective of the whole industrial chain, it seems, we have invested in a set-top box equipment, set-top box that is behind what? Is a set-top boxes behind the actual content. It is not a company can put all the full integration of broadband content, and the company of his content and his set-top box inside the door to load. This is the telecom operators, our customers are concerned about. Our customers, you can not sell my equipment, you have provided us with the business. If you can find such a company, we will vote in the company, which voted in after the company what we will be voting for? We may cast further, because the content of this consolidation of the company, he may have to integrate the hundreds of different operations, some specialized broadband movie release, some specialized broadband music, some education, some video telephony and so on. Therefore, we may be even more ahead of the vote, that is pure content providers to do this investment. So from this example, from the example of IPTV can be seen on the concept of investment in our company. If we say that the whole industry chain after cast, there may be related to the codec, IPTV codec involved certainly is not a company can do ABS, we do China's own codecs, if he has done very leading, then we may also invest in such companies. We are now in the field of investment, should be flying kit just talking about the area in the TMT may be we have the type of investment.
Moderator: before I see some media reports that the risk of other investments, may be more risk-based financial investment, they can fire the entire industry through methods to find the investment business, then you may need this shot in situ in their own areas of concern the way, and each project through the company together with other departments of view, or to study carefully, it this for you, is your advantage or disadvantage?
Xu Jie: Like what you just said the investment strategy of fire in all the financial risk of investment in one of the few.
Wu Bin: In fact, we fire, we fire in the field of TMT, we do not sweep the traditional industries, but this area here is also sweep you up.
Xu Jie: in this area which, like吴总just said, in the IPTV industry chain inside, we voted in the Han-chen terminal this a piece of technology, we are also opening a number of companies, It is content to do some integration, as well as original content company. I do not know if this is the fire you speak of in this way.
Wu Bin: We have a lot of talk about IPTV today, of things, in fact, we have what we call IPTV is a value-added fixed-line business, or in the field of fixed . In addition to IPTV, mobile phones we also have a lot of the field, we have mobile TV, mobile phone or streaming media is also very interested in related industries. We are also very interested in social network of P2P may be the intention of investment. So that from this area, we should be a fire situation. May be the beginning, you mentioned this problem, we have a career because of the involvement of the Department may be widespread in the industry think that we have more slowly, this matter should be han-chen understand it all too well from our talks began with the Han-chen, to the last done, I believe that many of our colleagues in the industry, we feel that the speed is more than them, because at the same time we are together with the cast of the Gobi, the relative said, we told them the rate of speed, should not lose. We set up a fund, we know that this is obviously a strategic investment in the company's weaknesses, so we process in relation to a time when our company is focused on the solution of this problem, speeding up the investment process.
Qin Yee-ling: Alcatel in the area of investment as a strategic type of a VC, it has a lot of experts, but are also the world's top experts, so they choose a company, especially for technology assessment, they compare a unique perspective.