Tuesday, January 20, 2009

Dinner in Beijing

I first went to China in 1987, after Tiananmen Square. We were helping Chinese students get out of China and in to study programs in the west. I had Chinese friends in Australia who marched in protest after the students were killed, were filmed by western media and logged by the government so they could never return. Well, never is a long time, and last year one of them finally did. What a change in China--like the man said, “it's not your grandfather’s China”. Chinese people bring new meaning to the concept of investing for the long term. I had a wonderful dinner in Beijing a few days before the opening ceremony on 8th of the 8, 2008…..there are two sisters you see, who grew up through the cultural revolution and to me they epitomize the new/old China.

Their father was a banking executive who suffered through the anomalies of being a successful financial guy when Mao offered his version of the New Deal. Seeing their father disgraced in this way, it's an amazing feat to me how this family turned their fortunes and reaffirms by belief that Chinese people are the greatest entrepreneurs on earth. I have done business with the older sister for many years in China and she has several remarkable gifts, one of which is the ability to look into a person’s heart and predict with great accuracy how they will behave in various circumstances. I have learned that it is pretty much fatal to do a deal in China without that older sister’s viewpoint and judgment.

Another gift is vision, and the ability to bring capital to bear to finance that vision. It's amazing to me that the older sister brings to any deal what Conrad Hilton called the greatest tradition of American business--your word is your bond, a deal is a deal, do what you say you are going to do. I’ve found that when things get really bad, older sister finds a way to keep to the deal, usually by going above and beyond the call of the deal. She expects to do business not just with me, but with future generations of me, and wants to build a trusted relationship--talk about investing for the long term.

And her third gift is the ability to convince large government entities to invest in her vision, which always helps ;-) To be sure she invests not for personal profit but for growth and the benefit of China. You see elder sister is a staunch communist party member and her mission in life is to build a better china than the one she grew up in. It shouldn’t be that much of a surprise to find this dichotomy in a communist country that has a for-profit government--any more than our democracy with the non-profit government ;-)

One of the advantages of being Australian, is you get used to being far away from everything; you understand just how different other cultures are; and you feel a little bit inferior to them, which means its easy to be humble and accepting of new environments. This is a big advantage when it comes to operating in other cultures, and one of the pitfalls suffered by many companies and investors when they tried to join the Chin-dia gold rush--it's critical to have locals on the ground to navigate the minefields for you.

Did I mention that their younger brother, the underachiever, spent 13years in Olympic soccer training camp, then after a critical injury did a PhD in Physics while in rehab……then founded a couple of US public companies, then…….but that’s another story ;-)

Answers to questions:

andmotion has left a new comment on your post "Marketing Power":

Interesting you mention brand, belief, religion and science here, Larry. Martin Lindstrom in his newish book "Buy.ology" brings brand, belief and religion together in a scientific way. Very interesting research using MRI and other scanning techniques to measure people's reactions (some in real time) to different stimuli such as advertisements, in terms of their effect on different parts of the brain. As we know, industries like cosmetics and perfume are masters at crafting 'beliefs' about product efficacy etc in their marketing. The research quantifies this effect, and the role of things like mirror neurons and somatic markers in forming our impressions of different products and brands. And how these impressions drive purchase behavior.

Its amazing what can be measured in our brain, there is a child psychology test that monitors frontal lobe activity and it's fascinating to see the neurons sparking in the really active and noisy kids and those quiet in the sedate ones. I just hope that the advertising agencies don’t get the hands on a way to monitor this direct reaction for us and feed us exactly what we want to hear in order to make us buy ;-)