In the summer of 1995, after graduating from the Mechanical Engineering Department of the University of Science and Technology Beijing, Sun Wenhai began his work at China Metallurgical Equipment Corp. and was assigned to Baoshan Iron & Steel Co., Ltd. in Shanghai, with primary responsibility for facilitating imports of technology and equipment. Given the opportunity to visit enterprises in the U.S., Japan and Europe, he was able to expand his horizons and accumulate first-hand experience with advanced technology. Through these experiences, Wenhai acquired the necessary knowledge to progress from engineer to project manager. After working in the state-owned enterprise for three years, he began to reflect on his life and career development and found himself inclined to break from what he perceived to be a pre-ordained future. Although he knew that it would not be easy to make a career transition, Wenhai began to consider what a new career path might look like.
The Road to a Tsinghua MBA
During the summer of 1998, Sun Wenhai was on a business trip in Shenyang when he happened into the Xinhua Bookshop on Taiyuan Street. He saw a series of MBA books published by Higher Education Press, one of which introduced the history and development of MBA education overseas and in China. The book noted that in the post-WWII U.S., one-third of the senior executives in the global top 500 enterprises had an MBA education. The book also introduced the admissions processes, curricula, and career trajectories associated with MBA programs. After skimming through the book, Wenhai made a decision to apply for a top Chinese MBA program, and the preparation process began.On a hot summer day in 1999, Wenhai rode along Chengfu Road and entered the East Gate of Tsinghua University, heading directly to the (at the time) newly constructed Weilun Building at Tsinghua SEM. As he stepped into the building, he saw a letter written by then-Premier Zhu Rongji, also the Dean of Tsinghua SEM, to the faculty and students at Tsinghua. The letter profoundly moved Wenhai. He had always admired Premier Zhu’s character and passion for learning, and the thought of studying under Dean Zhu was inspiring. He then decided to apply to Tsinghua for his MBA.In 2000, Wenhai was admitted to Tsinghua’s IMBA program. At dinner on the last day of school orientation, Wenhai and his new classmates, still filled with exhilaration about their new school life, were confronted with a question from their senior schoolmate: “What would you like to do in the future?” The question caused Wenhai to consider that his two years at Tsinghua would fly by quickly. He and his classmates began to reflect more proactively on their post-MBA futures. For Wenhai, one dimension of this reflection was to recognize the meaning and challenges of the Tsinghua MBA experience itself.Tsinghua MBA: Realization of Career-Shifting AspirationThere were two keys to Wenhai’s career transition. The first and most fundamental one was obtaining the requisite knowledge. Wenhai’s MBA coursework was a critical means to this end. As he had previously studied mechanical engineering during undergrad and knew very little about finance, accounting, economics, and management, he had to compensate for such knowledge gaps. The International MBA program was truly one of a kind at the time: adopting English as the language of instruction and drawing on MIT’s curricular inputs and expert faculty via an unprecedented collaboration. Many of the program’s Chinese teaching faculty had also received their doctoral degrees abroad, and almost all of the faculty had studied abroad in some capacity. Among them were such highly regarded Tsinghua SEM faculty members as: Qian Xiaojun, then-director of the program, who taught Managerial Communications; Chen Guoquan (Organizational Behavior); Wei Jie (Macroeconomics); Chen Jian; Chen Guoqing; Chen Zhangwu; and Chen Taotao. As the Class of 2002 was the fourth IMBA class since the launch of the program, Wenhai and his classmates were so proud of their Tsinghua SEM heritage that they referred to themselves as the fourth cohort of Whampoa Military Academy, a famous military academy that had produced a litany of prestigious commanders from many of China's 20th-Century conflicts. Wenhai’s horizons were expanded by the IMBA program’s open teaching style and practice-based orientation, all of which laid a solid foundation for his transition towards finance.The second key to Wenhai’s career transition was an internship opportunity at China International Capital Corporation Limited (CICC). Wenhai had resigned from the state-owned enterprise after matriculating at Tsinghua. In June 2001 at the end of his first academic year, CICC came to Tsinghua to recruit some interns. After several rounds of interviews, Wenhai was offered a three-week internship. His responsibility was related to Sinopec’s A-share IPO. On the same day as his final interview, as soon as he finished the interview at 4:00 PM, he started his work of collecting information and typing away until midnight. He was so excited about the opportunity to work at the best investment bank in China and participate in the biggest IPO of that year that he couldn’t fall asleep at night. More importantly, he also made the decision to work in finance in the future. Through this internship, Wenhai also met Mr. Teng Weilin, a managing director of CICC who appreciated Wenhai’s talents. Mr. Teng was both a good teacher and a helpful friend and provided much guidance for Wenhai, even counseling him as he navigated some of his life turning points. After three weeks, Mr. Teng acknowledged Wenhai’s outstanding performance and agreed to extend his internship. Between the middle of June 2001 and April 2002, Wenhai worked on significant projects involving state-owned enterprise reform and pre-listing preparations. It was a challenging period for Wenhai. For many nights, when he came back to his dorm at Building 34 via taxi from CWTC, where CICC was located, it was frequently 1:00 or 2:00 AM. When his roommates were sound asleep, he was still doing his homework. In only a few hours, early morning arrived with the onset of another long workday. Career Transition to Investment: A Vibrant New Life In 2002, Wenhai graduated from Tsinghua’s MBA program. Prior to his graduation, Draper Fisher Jurvetson Ventures (DFJ), a leading venture capital (“VC”) fund in Silicon Valley, was in the planning process to expand its investment in China. A senior Tsinghua schoolmate asked Wenhai whether he would like to work in VC, a relatively new area in China at that time. Although there were not many courses covering VC available at the time, Wenhai had some understanding of the field by virtue of having taken Professor Gao Jian’s VC courses at Tsinghua. On April 22, 2002, after five rounds of interviews, he became DFJ’s first local employee in China. In the following six years, he participated in the establishment of the fund’s Beijing office and rose from Associate to Executive Director of DFJ Global Entrepreneurial Investment Fund and eventually Head of China. His leadership and participation contributed to the completion of dozens of domestic investments and the overseas listing of several enterprises, including Kong, Longcheer, Focus Media, HiSoft, Spreadtrum, and iKang.“Sense and caution are necessary for venture capital,” cautions Wenhai. From a resource allocation point of view, VC allocates scarce capital and resources to the most active link among efficient enterprises. It involves examination of hundreds of projects each year, including all the upstream and downstream components of relevant industries, but only a few investments can ultimately be selected. VC also makes some people rather emotional. A sense of achievement is easily felt at the sight of the meteoric rise of shares of the portfolio company. Wenhai still remembers the sleepless night of August 5, 2005, when Baidu was listed on NASDAQ in the U.S. Due to the time lag, he and his teammates had to carefully monitor the stock price at their computers all through the night. They witnessed the shares rise from $29.00 all the way to $125.00. They sent one another emails to express their exultation at how the predicted price had been beaten time and again from $30 to $50 to $80 to over $100. Even after a stock split, Baidu’s shares have now risen to $200. However, Wenhai also dealt with enterprises that went bankrupt after years of poor management. This is quite common in the world of investment, but he still feels a genuine sense of loss for these companies. He also feels regretful about some strong projects that he was unfortunately unable to invest in. VC and PE Industry Analysis and Student Entrepreneurship In early 2008, Wenhai joined GGV Capital as a Shanghai-based partner and participated in several investment projects. In early 2013, he left GGV Capital and came to Shining Capital. The three funds in which Wenhai has worked differ. DFJ focuses on early-stage investment with the high-risk, high-return proposition typical of technology-based VC firms. GGV Capital concentrates more on B-round investment and emphasizes enterprises in expansion phases with relatively good returns. Shining Capital prefers B- and C-round investment opportunities and is adept at selecting the investment phase and direction based on its enduring business advantages. Wenhai believes, despite similar principles in making investments, that practices vary widely depending on investors’ differing understandings, which may lead to distinct investment results. More concretely, he suggests there are two major types of investors, namely, those with tendencies towards risk-preference and risk-aversion. He views himself as the risk-averse type, willing to take returns as high as possible only on the condition of manageable risks. Wenhai compares himself to martial arts students learning from grandmasters who have perfected the art, noting that he still has a great deal to learn before himself becoming a “grandmaster.” Whereas investment banks used to be popular in finance, now VC and PE tend to take the lead, which is increasingly reflected in the paths of graduates from most top universities. However, Wenhai suggests this may not be a good phenomenon. For one thing, the VC and PE industries will go through a sifting process in which many players will be knocked out. Furthermore, the industry requires people to possess relatively high versatility and is not necessarily suitable for everyone. Comprehensive analysis capability is highly valued in investing, though there is a balance of art and science involved, and many journalists, actors, pilots and even athletes have become successful investors.Wenhai has his own understanding of successful and failed entrepreneurial enterprises. First, he identifies the critical importance of choosing the right market. Second, he points to selection of a good team and properly valuing people. To Wenhai’s thinking, focusing on these two keys accounts for a majority of the success of entrepreneurial enterprises, balanced, of course, with other factors such as business model, technological barriers, and strategic timing. Based on his years of work experience, Wenhai has his own observations of the emerging trends towards student entrepreneurship. First, starting up a business is difficult, especially for students without much social experience, so students should be prepared for the possibility of related failures and have reasonable expectations. Second, student entrepreneurs have their own advantage in their openness of mind. There are numerous examples in the U.S. of university students who have dropped out and started their own businesses: Mark Zuckerberg, Bill Gates, and Steve Jobs, to name just a few. Wenhai believes that in 10 years’ time, Chinese students could do as well as U.S. students in entrepreneurship, as the improvement of economic conditions, social safety nets, and basic living standards will reduce their worries about survival and will provide support for their startup endeavors. Meanwhile, students with expanded horizons will also care more about philosophical and social impact issues and will more fully exhibit their potential once they obtain freedom of mind from many traditional pressures, which Wenhai believes will also lead to a higher quality of startups. Wenhai views an MBA education as a major boost to the growth of entrepreneurship. Although he himself is not an entrepreneur in the traditional sense, he notes that many people come to business school with questions about startup endeavors. MBA programs provide timely help for them. Exchanges among classmates and integration of resources are exceptionally beneficial. Compared with students who received their bachelor, master and doctoral degrees consecutively with minimal work experience, MBA students, with their incoming access to technology and social networks, are perhaps more likely to succeed as entrepreneurs. Wenhai believes that the Tsinghua MBA program facilitated his successful career transition in that it not only provided a critical foundation of knowledge but also expanded his social network. Tsinghua’s alumni resources in finance and other industries are extensive. “What year did you graduate from Tsinghua,” is an instant comradery-builder among business partners. Alumni networks have played a critical role in Wenhai’s job search process and proven even more valuable on the job itself. As he reflects on his experience at and beyond Tsinghua, Wenhai acknowledges the fork Tsinghua presented in his life’s path as well as his desire to pass his experience on to successive generations: “The most important turning point of my career and even my life was my joining the Tsinghua MBA program. I am so grateful for Tsinghua and am very willing to contribute to the development of Tsinghua’s future students.” Original report by Fu Haijing (student reporter)Supplementary interview by Chen Fang and Wan JunSupplementary editing by Wan Jun