Livecast #12: Andy Tian of Asia Innovations, Copy from China, Exporting Live Social Apps Globally

Andy Tian is the founder of Asia innovations group, a company that has a suite of live social apps, e.g. Uplive, Lamour, SupreFans with more than 410 million registered users located in over 150 countries and regions worldwide.

Andy has strong opinions about what’s the best way to take the most interesting things he has seen in China and throughout Asia, and export them to the rest of the world. Hear about:

How China’s uniquely firewalled off environment created a different ecosystem, thus resulted in different revenue models of social apps in China;

What is Operation aka Yunying (运营) in China, and how it works differently in western countries;

The twin trends of globalization & localization in social apps;

Why Andy implemented multi-regional operations from the start;

What he believes are the unique catalysts for the explosion of livestreaming eCommerce in China, and why it hasn’t taken off just yet in the U.S. or anywhere else.

TRANSCRIPT

Rui: Hey everyone. I’m so pleased to present this fascinating interview with an old friend of mine, Andy Tian. Andy is the founder of Asia iInnovations Group, which is a company that has a suite of live social apps, covering video socials, social dating, and social fandom. As of June 30th, 2021, the company had more than 410 million registered users located in over 150 countries and regions worldwide.

Some of Asia Innovation’s apps that you might’ve heard of, might be Uplive, Lamour, SupreFans, Wink or FancyU, or maybe not, since they’re really mostly targeted at emerging markets and young people. 

Andy was born in China, grew up in the United States. And he founded Asia innovations in 2013 to do, well, pretty much exactly what the name says, take the most interesting things he was seeing in China and throughout Asia at the time and export it to the rest of the world. Andy has some strong opinions about what’s the best way to do that. And I think you’ll really enjoy his insights. So here we go. Andy Tian of Asia Innovations Group.

If You’re here, you basically followed my prompt of copy from China, exporting live social apps globally.

And that is the topic we have today. Andy Tian is the CEO and founder of Asia Innovations group, which is behind some of the biggest live social apps that are active outside of China. Can you tell us a little bit about your personal background, as well as Asia Innovations Group?

Andy: Sure. I’ll start with the company. Asia Innovations Group is a leading life, social company focused on emerging markets. So it has been around for eight years now. And together we have a set of social products that operate across all emerging markets. So we’re a little unique in that we only focus on this one.

So these emerging markets include MENA (Middle East and North Africa), pan-India, Southeast Asia, Greater China, and America, particularly South America. We have several flagship products applied with the largest independent live social video platform outside of China.

Lamour is the number one downloaded dating app across emerging markets. SupreFans is the number one social fans platform in China and then, growing internationally as well. We also have other businesses going online. Altogether, we serve 40 million users and with our 12 offices around the world. Together we have 1400 staff. We’re a unique breed that we take a service approach to to the concept of live social as Rui explained before.

Live social is basically very simple. Prior kind of a social products are geared towards text chats, photos, short videos, long form videos. All of our products allow users to communicate and socialize live directly via video, or voice, exactly like right now what we are doing on Zoom, but it’d be more fun, cuz it’s live social videos.

So I think that’s just naturally where the world is going, especially in this climate. So personally it’s kind of a misnomer to have a group to name as a Chinese company, right? I think that companies today are global by definition because your products will be downloaded and will be used by global users.

So we are headquartered in China, but our background is a mix of east and west. Looking at my own personal background, I was born in China. I moved to New York in Queens at 10, and survived the hard knocks of Brooklyn at high school, went to MIT for design and came back to Asia in 2000 as a young guy and then looking for startups. 

So I founded one of the earliest social startups in China in 2000, allowing users to create their own website content around music, so Myspace in Chinese in 2000. Yeah, that didn’t go well. So we had a lot of users, but missing something called revenue. 

Then I want to learn more about this thing called revenue. So I went to BCG for two years, doing consulting. After learning about adjusting the best font and color, and with two by two charts. I worked at Google when it first started. So I joined in October, 2005, and then led the mobile business in China , introducing the Android system to China and the Asian world. So that was really fun.

So I’m still a loyal Android user up to now. 

And 2008, startups bug bit. Again, I started one of the earliest sort of game companies in 08 on Facebook, based in Beijing. So we had a mix of a western and eastern staff, even in 2008, to develop an English space sort of game played by millions of people using some of the Chinese mechanics. 

And then Zynga acquired my company in 2010 to become Zynga China. So I ran Zynga China from 2010 to 2013. At the height, Zynga China was the largest independent, original game developer studio in Zynga outside of SF headquarters. And we, again, even though it was a team of about 300 based in Beijing, we developed games that were in 10 different languages, played by users around the world.

So Asia Innovations is simply an extension of my experience since 2008.

Rui: Okay. Thanks for that background. I learned a little bit as well, but really when I met you were still in Zynga China, and I remember in 2013, you said, you were going to quit and start this company Asia innovations for this reason, that there were innovations coming out of Asia, specifically China, and that you wanted to take it globally.

Could you tell a little bit about what you were seeing at the time that made you think about live social as the sector that you wanted to play in and take out of China?

Andy: I think it’s, you know, a hat of America,right? And then Chinese, those two different hats.

From an American point of view, I was from the angle of Google and Zynga. So I think arguably two of the more established consumer companies and then with also the ongoing trend of Android as a mobile device. 

What I saw was that U.S. tech companies are awesome building infrastructure, right? Newest technology innovations that basically still power all of the world. From Android, from HTML5, from Java and then languages and so forth. 

So I think that the Chinese domestic economy and ecosystem, because it was uniquely firewalled off, created a different ecosystem.

The American consumer Internet has always been joined by Google. So you build consumer products and you just connect to Google AdSense, any of the APIs and you make money. Focus on building, serving your users, creating great content, and then the money will come. So you don’t have to really worry about how to generate revenue. If you have an engaged consumer user base.

In China, in 2000, while Apple iPhone 5 or 6, even then there were no ads. Internet ads were a very small revenue stream. So for companies to survive, they could not rely on just serving users, getting traffic, They have to generate revenue directly from end consumers.

And what happens? Games and what’s called mobile value added services were two of the biggest revenue streams that supported Chinese Internet companies in the early days. I think that’s part of the biggest difference that results in some of the innovations that’s coming up .

For example, when I was at Zynga, Zynga was actually one of the first large Internet companies, any company in the U.S. that was fully based on a virtual items revenue model, microtransaction model from games, right?

The first one, so before, I remember talking to many of my friends in the US. Oh, virtual goods based games that will never work in the U.S. We just want to pay for a monthly fee and a bit of box space. So I think that these differences in kind of a consumer behavior and ecosystems is what’s creating the differences now, so one of the underlying drivers of an innovation state.

Rui: I remember reading your interview you had recently with PingWest, right? Like you actually said that your friend at Instagram had suggested virtual goods. And then he got shut down because it just didn’t fit into the business model of the company.

Andy: Yeah. Not only him, but I think that, just a lot of the virtual goods, a lot of innovations, quote unquote from Asia, from China, have already been in the U.S.. It’s just that when a company is very large in the U.S. you gotta get very conservativeabout pushing your boundaries, which is actually one of the stark differences. When in the U.S., you think I’m getting large, they slow down a lot, but Chinese ones, they do a lot more.

Rui: I completely agree there. So anyway, in China at this time, you’re starting the company 2013, there were actually a lot of other companies that were trying to export Chinese apps abroad, so I can think of Cheetah, APUS. 

Cheetah is not really anywhere to be seen at this point. I think APUS is still around actually, but most of them are tool-based companies. You decided, however, to start with games and to do live social. What are you thinking about your same cohort of companies, and do you think that their current fates surprise you at all?

Andy: As you’re doing a startup, I think that you don’t really think about landscape too much. So I think most people, when they create startups, it’s based on what they know, and the sector that they know and their experience with.

So I’ve been doing mobile, international mobiles and also sorts of games since 2008. That’s what I know. So naturally , I didn’t really look at the other companies what they’re doing so much as what I know when I see as the biggest opportunity, I already saw that as a lot with a ton of product innovations around virtual goods, gamified social revenue model.

Remember we built social games at Zynga, right? So,  we saw that the social aspect was the key for games roles. What if we turn around, not build social games? We build gamified social. So we started a company we didn’t even think about live social, that was ten years ago, but we did think about our call as gamified social.

What if we stop building games, farm games, where people can send GIFs and socialized in the game. You turn around, you get a social platform where people can play games directly in the challenge, just like Facebook messenger games right now, but except back in  2014. 

So that’s persisted across all of our pots currently. The Chinese based companies going to national was only a trickle back then, and now it’s becoming a little stream. Still not a full river yet, but will become.

Rui: So I want to hone in on Yunying (运营) or operations. It’s basically a huge part of live social. It’s actually a huge part of e-commerce in China as well. It’s something that I think people in the west don’t really understand because that’s not how Western companies work. 

I want you to explain what you think Yunying (运营) or operations mean. And why do you think that’s especially important for your type of business.

Andy: Sure. I think that it’s something that Silicon Valley based companies folks don’t understand maybe, but if you ask any restaurateur, any retail group in the U.S. that actually serves users directly, that get revenue paid by user directly, they completely understand what it means, because it’s called service, servicing users. Users pay you, they expect a level of service, and you serve them. In the Valley, we live in a bubble. 

If you go to Google, you go to Zynga, you go to the biggest consumer companies in games and entertainment, they all expect service. I, give you my money. I have problems. I have issues. I want to be in contact with you. Look at Airbnb. Yes, they have a great platform, but they have a very large service department. And that customer service comes in two parts, right?

One is the basic platform, as like reactive servicing. If you run into issues, problems, with the product, there must be a way for the paid consumer, not the paid consumer who spends money to contact you to get it resolved.

Number two is also for marketing and then engaging users. So in e-commerce, that’s called like our Black Fridays, right? Discounts, operations and or so forth. So you need to proactively engage users with marketing events and contents and all sorts of reasons that users would continue to pay you. And on the other reactive side, you must serve users that have issues and problems. So that’s what we call Yunying (运营) in China.

Rui: So basically when Chinese users, they’re just expecting something different each time they log in, a new promotion or a campaign, or maybe some new mini game, basically something else that’s going on. Even if I logged in this morning and I’m logging in tomorrow, I might want to see something different. And that’s not maybe as Western users, we’re a little bit easier, because we haven’t been as serviced as, well, by the app makers. 

I just want to emphasize to the audience, like how much operations there are in the typical Chinese Internet company. For your company, how many operations staff would you say there are, just like a rough percentage basis?

Andy: We have a total company of 1400 staff across. So we have a couple hundred engineers and product managers, so probably, I would say half a company in one way or another serves users.

Rui: Yeah, that sounds very similar to what I would say most, even some of the biggest Internet companies in China, like a lot of people don’t realize ByteDance, for example, has a ton of operation staff. It’s not just an algorithm running.

Andy: In large U.S. companies too, even though they don’t talk about it. I was on Google, right? Same as Zynga, actually a huge amount of Zynga staff work in services. So again, servicing, just not customer servicing, it’s proactive content marketing, that’s revenue generation. So I would say engaging and servicing. Those two are the best combination to describe the ChineseYunying (运营). 

The reason why you see Chinese companies do a lot more than the U.S. is one thing: survival. The competition in China is so brutal, I mean literally. People are just competing left and right, there’s no host bars. It’s like UFC without the Octagon in China, literally. And then in the states, it’s like we play tennis. There’s no judge in the China style. 

With that level of competition, everybody fights over you, the customer. So you have to employ any tactic you can to engage these users, because if you don’t, the next 10 guys are gonna eat your lunch. So you are in a box. (In the) U.S., the level of competition is far less.

Rui: Kaifu Li is fond of saying that as well. There are other companies like Asia Innovations going abroad using this type of China inspire China, trained methodology. So I know in your space, there is Yala. And there’s also YY, Bigo. Can you tell me a little bit more about what you think makes you different from the competition?

Andy: Sure. Number one, we are the only company where the co-founders are American, so we actually understand how international market culture behavior really works. That’s really important and deep.

Two, we are fully multi-region. For example, Yala operates mostly in the middle east and equal-focus on a couple of markets. We’re very global, right? We’re operating all multiple regions at the same time.

Three, we are not focused on any one product, even though our biggest part right now is live video social, live streaming. We are focused on the next generation of social. First generation: Instagram, YouTube, Snapchat and Whatnot, have this idea of one app fits them all, right? Because there was nothing before, you don’t have any photo apps before Instagram. So of course it would be used around the world.

But now that everyone has grown up on this first generation mobile. People want different experiences, want to customize, especially if you look at emerging markets, different language, different religion, different culture behaviors, right? The folks in the middle east and the folks in Brazil were very different, and they do not play together.

So I think that the idea that we espoused and we actually execute towards that. We have fundamental social principles for the company, product wise live social feature, video voice, interactions across everything ,number one. Number two, heavy servicing and engaging users. Number three, gamified revenue model of public social.

But with these constant  force and heavy analytics driven experience from Zynga days, our products will be much more and more customized, more and more tailored towards a particular emerging market area. For example, one of our dating apps Migo is focused on Spanish-speaking emerging market users.

Rui: That’s really interesting because in general, you see people try to have a global app, right? Especially when people look at TikTok’s success, it’s like, oh, you have the right idea, then this should be able to fit everywhere. And you’re saying you’re betting on the other direction.

Andy: Where it worked in the first inning of the social baseball game. So like I said, we are literally in a very early base run. So if you have never eaten rice before, fried rice is fine, but once you eat rice before, they want noodles, they want dumplings, they want curry rice too.

So I think it’s a matter of users having grown up on the first day of products. Now they want more, better, more customized.

Rui: Do you think that being multi-region from the get go, were you able to learn things from one region that you could apply to a different region?

Andy: Very interesting. Yes. I think we plan to be multi-region and multi-product portfolio simply from experience of looking at Google, look at Zynga, Facebook and Tencent. My co-founder was the second in command of Tencent corporate strategy when he ran mobile product strategy and investment strategy.

So we look at how do we build a hundred billion dollar company or even a $50 billion dollar company. You must have a portfolio and then you must have a large set of geographic areas to serve. And that’s literally how we decided to be multi-region, because China and U.S. are two single contiguous market star, big enough to create by themselves $50Bn, $100Bn dollar companies.

But if you look outside of China and U.S., each emerging market region is still a bit small, right? So you have to serve all of them to be scaled up. So I think that’s just a practical reason why we started. And we’ve seen that advantages of you building operations in one single region does not necessarily mean that you can operate under other regions.

It takes two years to three years to actually be somewhat functional in any international markets. So we’ve chosen the beginning instead of one single region and then sequentially go to another. It’s going to be hard anyways, let’s do it parallel.

So we built 12 offices, literally two years. And then each one of them is at least four years old. So that allows us operationally now being able to have a stable base in which to grow all of our products. So I would say it’s a structured strategy like considerations from the very beginning.

And then in terms of learnings, I think the biggest learning is that, number one, it’s hard stuff to even start it working. This is a reason why you don’t see that many firms like us even doing emerging markets social, because it’s just a really hard thing.

You don’t have payments infrastructure. The phones are still less powerful. Data rates are very high, and people are not trained in social, right? The servicing requirement is high.

Remember, users’ economic level does not determine how much service they want. It doesn’t matter if they pay a dollar or a hundred dollars. They are actually trying to expect the same level of service. There’s a long time to build up and be able to provide the best experience for users.

And I think the other thing we learned is that there are many commonalities. We look at social use cases, what users want, especially young people.

If you remember, emerging markets have a larger proportion of young users than China or U.S.. When you’re young, it doesn’t matter to me to go get an Eastern user, or an Indian user, or a South American user, you actually want to spend a lot of time online, and you’re very easy to pick up live video, live social.

You don’t mind showing your face, as people who are those for older, 35, 40, it’s a bit more awkward and or so forth. But young people, they don’t mind and they have a lot of time. They are okay with instant unscheduled experiences, right?

And serendipity is huge. Now those who are older, 30, 35, let me send you a schedule. Please look at my calendar. Let’s take a 15 minute catch up. That’s alien! Scheduled social interaction is completely alien, to young people across doesn’t matter what language or what culture we want.

What young people are interested in most, the opposite gender. That’s all you can think about. These are some fundamental, deep social needs that are cut across all regions.

Rui: That explains your portfolio is pretty heavy on dating.

So live stream shopping, do you think it’s going to take off outside of China? Like I see Amazon’s prime day livestreams are disappointing.

Andy: Just because you’re a large successful company doesn’t mean that you can do everything successfully.

So on the first try. I saw that I was like, great job guys. First try. I think like Mr. Bezos may be busy with other things, going to the moon. So I think that livestream shopping isn’t an organic result of a couple of different trends in China during the last 10 years, right? 

Number one, livestreaming itself in China has become a massive, like mass market feature. Everybody’s livestreaming, or long time watching celebrities, news, everything. So everybody’s used to the concept and used the experience of livestreaming, number one.

I think number two, there’s an incredible amount of speed, of size scaled up e-commerce online and enabled by logistics. People are lazy. I said, home, tick, tick, tick, package show up.

Number three, pandemic last year where people don’t want to go out to the shops.

And then, I think all of these things combined together to create an explosion of e-commerce you saw, but last year I think something like $150 billion dollars were transacted live streaming in China. That’s 2.5 X, 2.3 X growth from the year before, and this year it’s going to be even much bigger.

But livestreaming shopping in China started a couple of years ago. It wasn’t that big. It was natural if you are a streamer, or if you are somewhat of a YouTuber, Instagramer, when your hawking products are aligned, that’s when you do naturally, in the states too.

The concept of seeing the product and buying, those are two different platforms to the state. In China it’s the same platform. I think that’s what created social. Before, company like Xiaohongshu (小红书, little red book), they had livestreaming too, but it didn’t work because again, the link back to Taobao, back to a separate platform is what killed.

This was going to kill livestreaming. I think. So once you see Amazon, once you see like the e-commerce guys themselves getting into it and understand more livestreaming, that’s what’s going to take off in the U.S. or anywhere else.

Rui: I always like to point out that it was Alibaba that kind of willed the sector into being, by making it such a huge part of their site.

All right. One question that came in from the audience , why have emerging markets become so hot recently?

Andy: It’s a lot of users in emerging markets, right? They are overlooked a bit right before, because they were still .. China was emerging markets, has now since emerged. So I think it’s natural growth of economy and history. So now by the time that we talk about how hot emerging market is on a podcast, is probably has already been hot for a while.

And also because the economics and the infrastructure is getting to a point in which Internet companies can accelerate, but it’s one of those things where these companies had been building for 10 plus years.

Rui: There’s a question specifically about India. What do you think are some of the common factors that show that, hey, you’ve reached an inflection point for virtual goods. Specifically, what do you think it’ll take for it to reach escape velocity in India?

Andy: I think virtual goods is a national result of having a sizable gaming industry first, about the prerequisite or the tool that educates users and builds up the infrastructure for that.

Number two is efficient and frictionless payment infrastructure, right?

So China also benefited hugely from the early availability of Alipay, and now Wechat Pay as two efficient payment methods for all the China Apps. And then U.S., your advance comes with obviously having credit cards, right? So as an efficient payment method as well. I think for India, these two things are still being solved.

That’s not about users unwilling to pay. They really want to pay for my stuff. The rise of PTN and UPI, the universal payment hasn’t accelerated the shore. But I think the basic game industry in India is still rising, still very small. So once we see the game industry in India grow more, we’ll see a lot more virtual goods, virtual item based revenue model behind India. But that’s coming for sure.

Rui: What are some of the other trends you see for live streaming and dating apps?

As we know, Soul is a company from China that was about to go public. They just pulled their IPO . The company is doing pseudo anonymous dating, so you actually can’t even upload your avatar. You just have this like cartoon character basically that you play with.

Andy: Yeah. I think the young people are naturally, on one hand they don’t want to use their picture in public. So many of us on WhatsApp, Facebook, don’t use our own pictures, right. That’s a natural way of we can go into more anonymous, more non-close, or non-Internet, non-intimate friends space circle that you can actually like your own identity, especially I would say, girls. So that’s the same psychological driver for everything.

I think Soul just a natural again, it’s like a natural evolution of social in which it’s people chat on voice a lot. So it’s more of a live voice, social.

It’s not really dating, more I would say social discovery, right? You are socializing with other friends, purely online without being meet offline. And that’s been happening in the U.S. for a long time, too. LinkedIn is part of the largest online social discovery platform for older people. Those models are everywhere. It is just that, China has more variety.

Rui: I’m just laughing at you saying LinkedIn is a social discovery for old people.

What is the role of recommendation algorithms in your apps, especially given that TikTok is very easy to understand, right? It’s a short video, they start off with whatever 30 seconds, right? So you react and you train the data set very quickly, but for live streaming, how does that work?

Andy: I think the recommendation algorithm is just a basic part of any consumer App where there’s more choices than what a consumer can pick right? So from e-commerce to video, to dating, to even texts at the article. I think most companies do recommendation to some extent. 

So for us, it’s like livestreaming, we have a tiny, if you scroll to any app, you’re seeing like a couple of thousand livestreaming at the same time, which one’s better for you, you probably don’t know, but we might know, based on your past viewing, it’s very simple.

If you are going to have to pick up a type of broadcaster streamer, you’re going there for 10 seconds, you leave. You are going into another streamer. You stayed about 10 minutes. You interact. A strong sign of interventions and we try to figure out why. Do you like what the content is? Is that a same language, certain kind of demographics match there? Is that there are more impacted users and or so forth. 

So they’re very simple and clear signals that will enable us to service again, because the recommendation is all about servicing things that you otherwise cannot discover to you. So we do that across all of our apps. And of course the bigger app the more user we have, the more we can actually serve better recommendations.

Rui: I guess this question is about this follow-up recommendation algorithm for physical dating on your looser feedback loop than video.

Andy: A recommendation algorithm for dating is one of the holy grills of dating. However, the issue is that I think we can only do recommendation on dating to a certain extent, because most people think that they can date better, they should have better dates that they actually can get.

Our dating is more social discovery, more socializing online. We have not focused on really getting that single transaction dating. Online dating has become too transactional and does not, no longer reflects how real world people get to meet.

I think that’s where the downfall of the algorithm is that you become so efficient in meeting two of them together. You lost that group social envelope and support, which is critically needed for real dating to happen.

Rui: What is sort of the inflection point for emerging markets for virtual goods? What do you think it’ll take for live streaming?

Andy: The inflection point is not there yet. I think number one is that it’s also the biggest live streaming China grew so quickly, because there are enough companies that are doing it. Livestreaming is never about just the technology part, right?

Mobile livestreaming was creating the U.S. Periscope, Meerkat. And we all know how that went down. So because of this lack of servicing of users, lack of engagement, just a pure platform, the product doesn’t really work. It’s really about the ecosystem, within the emerging markets that people need to get used to live streaming.

And then there are a couple of major kind of content areas that are still ramping up, for example gaming. So there’s only Twitch, right? That the still mostly in the U.S.. India is not there yet. That’s coming. So I think that there’s a lot of these extra pieces that provided the rise of livestreaming in China that we’d need to have first in the emerging market. I could pick the next few years.

Rui: Like all across the emerging markets or?

Andy: Southeast Asia is a huge way because the culture is close to China, right? Middle east is a little bit slower. India will come next. So the more Eastern the emerging market is, the faster this thing is sticking out.

Rui: Because the Chinese companies are going there?

Andy: It’s culture, Asian culture, and then it’s easier for them to connect, project over there.