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Being the First Mover in a Startup Business
On January 21, 2015, TONG Zhilei, the Chairman and President of ChineseAll Group and Mr. CHEN Jining, the then-President of Tsinghua University, together rang the opening bell at the Shenzhen Stock Exchange, symbolizing the successful listing of ChineseAll on China’s Growth Enterprise Market. It was at that moment that TONG Zhilei couldn’t help reflecting on the past 15 years of business startup and growth efforts. Reflecting on countless logged hours of toil and sweat, he had no regrets. His memory took him back to the beginning of his startup, that is, his undergraduate study at Tsinghua University.
In 1993, when summer was transitioning to autumn, TONG Zhilei was full of excitement. He had just been admitted to the Department of Automotive Engineering of Tsinghua University, the cradle for New China’s automotive engineers. It seemed a sacred calling to rejuvenate the Chinese automotive industry. He made a commitment to himself that he would study hard and undertake the sacred mission the nation had entrusted to him. In order to gain more practical experience, he participated in Tsinghua’s Youth League Committee and student union, where he played an influential role. In the fourth year of his undergraduate study, he was elected as the Secretary of the Youth League Committee of his department, and he later became the president of the “Truth Seeking Society,” a well-known learning group at Tsinghua University.
Every night after TONG Zhilei finished his work with student organizations, he would return to his dorm, a single room in Building No. 16, which was provided to him after he was elected as the department’s Youth League Committee Secretary. He frequently pulled all-night study sessions. After the first two years of study at Tsinghua, besides his major coursework in automotive engineering, he also selected management and law courses at SEM and the School of Law. His schedule was so tight and his workload was so heavy that he often had no time for meals. Sometimes he made use of the 20-minute break during afternoon classes and rushed to the canteen for dinner before rushing back again to the classroom.
At midnight, when the moon shone on the flowers of Tsinghua’s campus and a gentle wind brought the message of spring, a robust figure would pass along (now) Xinmin Road and come to the track on the east sports field. There was TONG Zhilei, carrying out his physical exercise plan with the aim of maintaining both his body and his mind. Running lap by lap, he reminded himself that just as a journey of a thousand miles begin with single step, great expectations also start from every strenuous effort. Surrounded by the beauty of Tsinghua’s campus, he would turn to his jumping exercises, then follow them with tireless basketball shooting drills.
Being a First Mover in a Campus-Based Startup Space
TONG Zhilei’s path of starting a business, driven by a pioneering and patriotic spirit, began on Tsinghua’s campus. Soon after his enrollment at Tsinghua University, he and several other students from the Department of Automotive Engineering together set up the first personal website – “Huayunfang” – on Tsinghua’s campus, which was also the first local area network that could be shared by students in the same dorm in China. One of the initiators was TONG Zhilei’s classmate and roommate who achieved the top score in the national college entrance exam in Guangxi province. Their original motive for the startup was to prove that students of the Department of Automotive Engineering were as outstanding as those from the Department of Computer Science, which was said to be the best in Tsinghua. In 1999, TONG Zhilei and his fellow students changed the name of “Huayunfang” to “FanSo,” which soon became one of the most popular portals among Chinese college students during that time. With the emergence of the internet in China and in order to spend more time on the start-up, LU Jun, one of TONG Zhilei’s classmates and partners to start up the company, even decided to suspend his schooling, and became the first student to do so in China.
In the same year, the Ministry of Education approved 9 qualified graduates of Tsinghua University to be admitted to the IMBA program jointly developed by Tsinghua and MIT, of which 4 were from SEM and the other 5 from other departments. TONG Zhilei was one of the lucky 5. He later participated in organizing the first Tsinghua Business Plan Competition, which generated huge social response. Afterwards, in the First National Business Plan Competition for College Students hosted by the Ministry of Education and the Central Committee of the Communist Youth League in the October of 1999, TONG Zhilei and his “FanSo” team won the first-place gold medal, together with venture capital worth 6.6 million RMB, making them the most-financed business startup team on campus.
Perseverance on the Brink of Collapse
In starting up FanSo, TONG Zhilei had the idea of creating ChineseAll, a digital publishing company. He believed that the accumulation of knowledge and transmission of culture promoted the progress of human civilization, in which transmission of words and characters played an extremely important role. Ancient Chinese figures like CANG Jie, CAI Lun, BI Sheng and WANG Xuan made outstanding contribution to human progress given their endeavors in creating Chinese characters, inventing paper and promoting printing and publishing technology. Every transformation in transmission of words and characters has had profound influence towards the development of society and culture. And China’s future digital publishing would have the same revolutionary effect. ChineseAll, in the spirit of “Inheriting Civilization by Digital Publishing” would lead and promote the great cause of digital publishing. TONG Zhilei believed that digital reading would change human life and that ChineseAll was poised to become a great company in this regard.
In May 2000, TONG Zhilei opened ChineseAll based on the reading channel of FanSo. The media press event was attended by many eminent guests, such as famous writers MO Yan, YU Qiuyu, YU Hua, and the Chinese Central Television presenter BAI Yansong, who served as the press host on the day of the event. TONG Zhilei believed that his dream was finally being realized in the emerging digital publishing era, but he never expected that a sudden change was just around the corner. Not long before the media press event, the US NASDAQ market plummeted with wholesale selloffs of hi-tech and internet company stocks. Suddenly, the global stock market, once promising, became a landscape of despair. Venture capital tightened and financing squeezed. There was no escape for the infant ChineseAll. TONG Zhilei had to pay out of his own pocket to sustain his company, but still he could not get away from the desperate situation. He barely had any savings left, and there was no way for him to borrow any more money. He and another Tsinghua MBA alum who had started a business at the same time had to borrow money from each other to pay employees’ salaries. Witnessing his beloved company coming to a dead end, he had no choice but to provide strategic consultancy to a state enterprise in Beijing. He saved every penny he earned for the dying company in the hope that it could somehow survive
In the second half of the year 2000, the situation became even worse. On a cold autumn weekend, TONG Zhilei, as one of the board directors of FanSo, got an emergency call from his colleague at FanSo and rushed to his office at TsinghuaTongFang Building. His colleague’s words rang in his head as he made the anxious commute: “The company has been split.” Did that mean the stock shares split? When he finally arrived at his office, he found an unlocked, disheveled room. All office equipment had been sold at reduced price to compensate employees, as the company had no money to pay their salaries. The realization hit TONG Zhilei like a ton of bricks. The business to which he had been devoted for years had now collapsed. He had been so ambitious in setting up the company, but now he had lost almost everything. He fully knew that business was war sometimes, but he never expected that the reality could be so harsh and cruel.
It was also the darkest day for ChineseAll. Only 3 employees remained, one of them the son of a mayor who now, for the first time in his life, had to take the bus to work. Although TONG Zhilei and his team had spared no effort in sustaining the company, the sales revenue for the year was less than 200,000 RMB. In the second half of 2001, TONG Zhilei met CHEN Ping, the Chairman of HongKong TideTimes Corporation, who recognized TONG Zhilei’s talents and decided to acquire ChineseAll. TONG Zhilei served as a professional manager at TideTimes for over 2 years, responsible for managing tens of companies and thousands of employees. Everything seemed to go smoothly now except for ChineseAll, still without enough support for its further development. In 2004, with the promise of “making ChineseAll a great listed company,” TONG Zhilei bought back his company with self-raised funds. Soon after, he led his team back to Tsinghua University Science Park for his second business start-up.
The Value-Added Tsinghua MBA Platform
Despite various hardships, ChineseAll emerged, phoenix-like, from the ashes of bankruptcy and embarked on a path of rapid and steady development. UP to now,ChineseAll is one of the largest digital publishers which provide copyrighted contents in China with over 70 million users from the own channel and more than 400 million from other cooperated channels. It provides millions of resources by collaborating with over 600 publishers, more than 2,000 famous authors, and over 800,000 cyber writers.With the three major resources of copyright, original intellectual property and online education, ChineseAll developed its “Book in China” series program of commercial value and promising prospect. While focusing on economic profit, ChineseAll also undertook its social responsibility, including co-initiating the Chinese Online Anti-Piracy Union, the only company in the digital broadcasting industry to do so.
Having come through all the setbacks and hardships in the past 15 years, ChineseAll, steered by the ever-youthful ambition of TONG Zhilei, has embarked on a new journey. TONG Zhilei says he doesn’t care much about the fame brought on by the company’s listing. Rather, he now cherishes even more what the Tsinghua MBA has brought to his life.
In 1997, a joint IMBA program was launched by Tsinghua SEM and MIT Sloan, which was the first joint MBA program developed by a domestic business school with MIT. TONG Zhilei was confident that this program, in opening a new international horizon, would serve as a benchmark for domestic MBA education reform and bring dramatic changes to management ideas and practices. With a lens now extending beyond being one of New China’s automotive engineers and designers, TONG Zhilei read many MBA books, as he believed an entrepreneurial path would allow him to realize his dream at a higher level. He thus decided to apply for the joint IMBA program, considering Tsinghua MBA’s focus on developing students’ ambition, horizon and comprehensive capability. One of the admissions interviewers for TONG Zhilei was Professor ZHAO Chunjun, the then-deputy dean of Tsinghua SEM. Learning that TONG Zhilei was born in Yunnan Province, Professor ZHAO Chunjun asked him, “What’s your view on drugs?” The unexpected question, seemingly unrelated to management, actually reflected the unique and open perspective of the Tsinghua SEM faculty and the IMBA program. Thanks to the habit of wide reading and in-depth thinking, TONG Zhilei answered the question with confidence and composure, and ultimately received high marks for his interview.
TONG Zhilei believes he made the right life decision in applying for the Tsinghua IMBA program. Besides the best overseas faculty in China, top cases and modules, as well as various opportunities for international exchange, the Tsinghua MBA also possesses an ad hoc advantage in its real practice, which greatly benefited TONG Zhilei’s business startup. In the beginning of 1999, TONG Zhilei was voted by his classmates to participate in a global business plan competition in HongKong. There were 4 members in his team. One team member knew a new material technology owner with intellectual property rights to a self-luminous material. The material owner was invited to be the CEO of the company based on this project, but he did not participate in the competition. The team dubbed their company “Lunar.” Their team, among other candidates from many renowned Asian universities, won the prize for Outstanding Presentation. One judge, a chief representative from NASDAQ, noted that the absence of the CEO and technical expert cost them in the final competition results. Ultimately, although they did not win the first prize, the competition was of great significance to TONG Zhilei. For one thing, it was the first time for him to attend a business plan competition; for another, he realized that a good business plan was mostly about a real business project in which people could participate rather than a mere draft of a written plan. From TONG Zhilei’s perspective, one critical advantage of the Tsinghua MBA lies in its emphasis on practical experience in business reality.
Lofty Ideals, Model Results
As early as his undergraduate years at Tsinghua, TONG Zhilei knew that he was living in a great era of transformation. Like many other Tsinghua students, he had a dream to change the world and to become the most outstanding one among his peers. He had frequently discussed with his classmates that as China had no proprietary automotive technology, he intended to devote himself to independent R&D for the rejuvenation of China’s automotive industry. However, gradually he discovered that China was in more urgent need of real automotive entrepreneurs, like Lee Iacocca, who promoted great changes in the industry, than of engineers and designers. Even long before he started his own business, tracing all the way back to his middle school years, he had made a life goal of striving for human progress, and he considered himself fortunate to have been born into this key era of innovation.“Paper-making and printing technology, two great inventions China has contributed to the world civilization, would go through huge transformation because of digital publishing. How lucky I am to be able to participate in this transforming process!” It was this perspective that refreshed TONG Zhilei’s energy and ambition whenever he encountered difficulties in his later years of business startups.
From obtaining three bachelor’s degrees at Tsinghua University to following that with an IMBA directly after graduation to eventually witnessing ChineseAll’s successful listing after 15 years of entrepreneurship, TONG Zhilei’s success has covered a wide range of experiences. However, there is surely a common thread of purposeful dedication among them. TONG Zhilei’s dream to make ChineseAll a leading company in China’s digital publishing industry and the biggest Chinese digital platform has been realized. His trailblazing model serves to communicate a key message to young people who aspire to make great achievements in this changing era: one’s dream and pursuit determine one’s life trajectory. Your horizons, your breadth of mind, and, to some extent, even your life stage are all determined by your dreams and goals. The current business environment, with its noteworthy room for improvement, may present more difficulty for students to be successful in their business startups. However, traits of passion and vigor as well as the knowledge and talents stimulated out of students’ entrepreneurial endeavors has a nearly immeasurable impact. As long as you uphold your dreams and remain true to the right core values, despite the inevitable frustrations and hardships, you are on the path to realizing great expectations.
Interview & Report by WAN Jun