Venture Sprout


Developing the next big thing for our global, social world

Joining Google in China

I’m starting the new year with a big change.  As of tomorrow, I’ll be joining Google in a role leading product management in China.  It’s an exciting change on many levels and I wrote a post on my personal Elliott Ng blog talking about my motivations at length.  Here’s a quick excerpt:

In this role, I’ll be leading a small, very-talented team of product managers who are doing two things: (1) launching products and supporting global R&D projects focused on Google’s global markets, and (2) driving a product roadmap serving the domestic Chinese market.  I’ll be commuting to China from Mountain View until June or July, at which point my wife, our 3 boys, and some subset of our accumulated “stuff” will lift off from our home near Mountain View and land in a new home somewhere in Beijing.  In the meantime, I’ll have plenty of time to rack up frequent flier miles, become “Googly” (aka programmed in the Google global culture) and build important relationships in the global R&D organization at Google which is Mountain-View centric.

Needless to say, that means my entrepreneurial energy will be applied toward Google’s incredible opportunities and huge challenges in China for the foreseeable future.  VentureSprout (aka Ng Ventures LLC) will go into hiatus for a while.

2010 was a great year in large part because of the opportunity to work extensively with HUBS1 Ltd., an online travel distribution company based in Shanghai.  I had the opportunity to speak at both the 2009 China Travel Distribution Summit and also the 2010 China Travel Distribution Summit, and I can say that my understanding of the China travel industry was so much deeper as a result of working inside the industry at a well-connected startup.  I’m thankful that Teddy and Shaun (the HUBS1 founders) allowed me to contribute to their efforts.  I’m still advising the company informally as their strategy has shifted post-World Expo, and I look forward to having them as trusted mentors and advisors on all that I’m doing.

I’m also thankful to Wei Jiang of 2DuNet, a good friend and exceptional entrepreneur, who has been carefully steering his startup through the difficult waters of the China automotive industry.  While I’m an “advisor” to his company (and a seed investor), in reality he has given me 10x the advice I’ve given him.  I hope I’ve been a supportive and trusted sounding board to him over the years.

Like everyone in China, I’ll probably have a few occasions to hand out a VentureSprout business card!  I don’t expect to be doing any angel investing in the near term, and I don’t expect to be incubating or heavily involved in any startups outside of my day-job working at Google, which will be demanding and heavy on travel between Mountain View and Beijing/Shanghai/Taipei.

I’m guessing my personal blogging will be only at and, but we’ll see how things go.  Excited about the start of this new year, and please look for me at these other URLs!

Tnooz: posted interview with about China TDS 2010

I posted an interview on Tnooz with Eva He, chief editor of, the organizer of China TDS 2010. Incidentally, since I’m moderating of the panels, I can offer a discount to the event: 10% discount off of the current rate of RMB 3800 from the event. Use the code “CTS555″ when you register and obtain a $50 off. Register.

Some key stats from the interview:

Overall growth rate in first half of 2010 was 19%

Domestic air travel grew 17.6% on a year on year basis

She stated “anticipated deregulation of China’s outbound travel and GDS market.”  I’d like to learn more about that.

More at the Tnooz post.

My personal China travel newsletter

Starting with my work helping set up and then later shutting down our UpTake Beijing R&D center, and most recently speaking at last year’s China Travel Distribution Summit, I’ve had the opportunity to connect with many leaders and interesting people in the China travel industry. But this year I realize I have not done a good job keeping in touch. I’ve been too busy to maintain a blog, but occasionally I want to send out an update or some links. So I set up this newsletter.

The newsletter is mostly for people that I know personally. If I don’t know you, nice to meet you, please go ahead and sign up! Expect an email to you asking you to introduce yourself! (I reserve the right to remove spammers and trolls from this list!)

join my personal update
* indicates required

Brands will be built in China travel this decade

This decade is THE decade the major brands will be built in China travel.

So what’s so exciting about the China travel industry?  Between you and me, it’s a question I get from my Silicon Valley-based wife! (and no, just to be crystal clear, I don’t have any other wives based anywhere else!)

Whenever I get the chance, I ask Chinese friends and acquaintances about what they think about travel.  I hear curiosity, somewhat unformed impressions about places, a desire to explore, a strong desire to buy authentic luxury brands at a good price (and iPods and milk powder too), and a desire to get away from the crowds.  In other words: independence, individuality and freedom.  Travel has strong, emotional power with Chinese consumers.

Because of this emotional power, I believe that THIS DECADE is when major brands will be built. Hotel brands will be built.  Online brands will be built.  Destinations will become branded.  Theme park brands will be built.  Car rental, cruises, outdoor/recreation equipment brands, you name it.

It’s already starting.  One Founder of a prominent travel Website in China shared that they get 65%-70% of their traffic directly; a similar Website in the US probably only gets 25-30% direct traffic.  Seven Days Inn (NYSE:SVN) surprised the industry by announcing in December 2009 that it would shut down all external points of distribution by end of 2010…because SVN feels it can grow entirely off of their social network and their loyalty program.  Something like that could never happen in the West.

China travel companies are putting up some good growth results.  Ctrip (NASDAQ:CTRP) announced 46% year-on-year Q2 growth in net revenue, and 48% year-on-year Q2 net income growth (see earnings call transcript on SeekingAlpha, and Tnooz commentary) We’re seeing some great growth results from some of the listed companies in the travel industry in China.  China Lodging Group (NASDAQ:HTHT) announced 39.2% year-on-year Q2 revenue growth (Yahoo), and Home Inns (NASDAQ:HMIN) grew 26% year-on-year in Q2 (see earnings call transcript on SeekingAlpha).

China (CNTA) releases 2009 travel industry statistics

China National Tourism Association released some 2009 travel industry statistics (zh).   The report, translated by ChinaHospitalityNews, states:

The report reveals that China achieved total revenues of about CNY1.26 trillion from tourism  in 2009, which was an increase of 9% over that of the year before. During the year, China’s domestic travel continued its rapid growth, its inbound travel market resumed gradually and outbound travel market developed steadily.

According to the report, in 2009 China received a total of 1.9 billion domestic tourists, which was an increase of 11% over that of 2008. The country’s domestic tourism revenue reached CNY1 trillion, an increase of 15%. Its inbound tourist numbers reached about 126 million, a decrease of 3% compared with that of the previous year and its outbound tourist numbers reached about 47.5 million, an increase of 3.6%.

The full report can be found here (zh).  Here is a machine translated version (which isn’t great but you get the main points of the report):

Recently, the China National Tourism Administration to convene to analyze the tourism economy in the fourth quarter, according to Bureau of Exit-entry and exit statistics provided by the National Tourism Bureau and the National Bureau of Statistics Division and the Rural Division City conducted jointly by urban residents and rural residents in a sample of domestic tourism survey data, the National Tourism Administration Office of the Secretary for Information and Research Institute of China’s Tourism Tourism Economic Analysis report, the 2009 full-year operation of the tourism economy were analyzed.

First, the overall development of the tourism industry.

In 2009, China’s tourism industry in general to maintain a rapid growth in tourism to achieve a big increase in total revenue. Predicted that the annual total tourism revenue of approximately RMB1.26 trillion yuan, an increase of 9%.  Among them, the domestic tourism market continues rapid growth of inbound tourism market is gradually restored, stable development of outbound tourism market.  At the same time, tourism, a substantial increase in the scale of investment, business performance began to rise, tourism industry to further strengthen the leading role in economic and social.

Second, tourism development environment: a global international tourism began to boom with the economic recovery picked up the steady growth of the domestic economy has laid a foundation for rapid growth in domestic tourism.

Sustained by the financial crisis, the global economy in 2009 is expected to fall 2.2%.

联合国世界旅游组织公布,随着经济复苏的迹象日渐明显,全球入境旅游景气指数开始攀升,四季度达到92,比一季度提高35个点。 United Nations World Tourism Organization announced that as there are increasing signs of economic recovery, the global inbound tourism climate index began to climb the fourth quarter to reach 92, Biyijidu increased by 35 points.

World Tourism Organization, the number of incoming tourists to the whole world the latest forecast from the beginning of a decline of 8.4% adjusted to fall by 5% or so.  In the CPC Central Committee and State Council, under the correct leadership and continue to enrich China’s full implementation of the comprehensive response to the impact of the international financial crisis package, a good trend of economic recovery to consolidate economic and social development has achieved remarkable results.  China’s GDP growth is expected in 2009 will exceed 8%。 Steady domestic economic growth, supporting the rapid development of China’s tourism industry。 Mass domestic tourism market has become a solid foundation for the development of China’s tourism industry has maintained the momentum of vigorous development.

三、三大市场“两升一降”,国内旅游市场持续快速增长。 Third, the three major market “two liters a fall”, the domestic tourism market continues to grow rapidly.
1. 1. 国内旅游市场 Domestic tourism market
According to the National Tourism Bureau and the National Bureau of Statistics Division and the Rural City Division, which jointly carried out by urban residents and rural residents quarterly sample survey of domestic tourism in 2009, the first three quarters, the number of domestic tourists was 14.3 million passengers, compared with a year earlier, an increase of 9.4%; Domestic tourism income 767.3 billion yuan, an increase of 15.4%.  Based on projections, the number of domestic tourists throughout the year about 19 million passengers, compared with same period last year 11%; domestic tourism revenue is expected to exceed 1 trillion yuan, an increase of over 15%.

In 2009, the rate of urban residents traveling surge in first three quarters of excursion rates were 56.8%, 50.6% and 49.9%, 42.2% over the same period the previous year, 39.4% and 41.3% respectively, 14.6,11.2 and 8.6 percentage points higher; over night were 1445 yuan per capita spending, 1539 yuan and 1677 yuan, 1642 yuan lower than the same period last year, 1651 yuan and 1,690 yuan; day tour spending per capita were 306 yuan, 279 yuan and 283 yuan, a second-quarter basically the same as a year earlier, slightly higher in the third quarter, an increase of 9.5%.

The overall stability of rural residents travel rate, travel rate the first three quarters respectively, 35.8%, 25.6% and 24.6%, basically flat with a year earlier; per capita spending was 311 yuan, 275 yuan and 287 yuan, an increase of 16.2 a year earlier %, 2.2% and 7.8%.
2. 2. 入境旅游市场 Inbound Tourism Market
Exit and Entry Administration under the Ministry of Public Security to provide statistical data entry, as well as in 2009 in 31 provinces (autonomous regions and municipalities) carried out a sample survey of inbound tourists to spend data, in January 2009 to November, China’s 115 million tourist arrivals million, down 3%; entry number 46.45 million overnight trips, down 4.8%; tourism foreign exchange earnings from 36.23 billion U.S. dollars, down 3.9%.  Accordingly, forecast that the annual tourist arrivals of about 126 million passengers, down 3%; of which there were about 50.5 million overnight tourism trips, down 5%; foreign exchange earnings of about 39 billion U.S. dollars, down 4.5%.
2009年,入境旅游市场整体处于低位运行状态,除4月份和8月份分别出现2.2%和3.1%的短暂性增长,其他月份均呈下降态势,最大跌幅出现在3月的-11.3%,最小跌幅为10月的-0.8%。 In 2009, inbound tourism market as a whole is running low, except in April and August there were 2.2% and 3.1% of the short-term growth, a declining trend in other months, the biggest drop occurring in March to -11.3%, the smallest decline in -0.8% for 10 months. 但是从全年态势来看,月度降幅在不断收窄,整体入境旅游市场在逐步恢复。 But from the whole trend point of view, the monthly drop in the constant narrowing of the overall inbound tourism market is gradually being restored. 预计全年入境外国游客下降12%左右,香港和澳门游客分别下降1%左右,台湾游客增长约2%。 Predicted that the annual immigration of foreign tourists decreased by about 12%, Hong Kong and Macao tourists decreased by about 1% of the Taiwanese tourists increased by about 2%.
3. 3. 出境旅游市场 Outbound tourism market

Exit and Entry Administration under the Ministry of Public Security to provide outbound statistics, in January 2009 to November, China’s outbound 43.41 million passengers, an increase of 3.3%.  Accordingly, forecast that the annual number of outbound tourism was about 47.5 million passengers, an increase of 3.6%.

In 2009, outbound travel market in general is running smoothly, despite the May to July fell for 3 consecutive months, but began to accelerate growth in the third quarter and fourth quarter growth rate of nearly 9%, maintaining the number of departing throughout the year to achieve a certain level of growth , an increase of the overall trend has not changed.

四、旅游产业供给:投资规模大幅增长,产业发展更具活力。 Fourth, the supply of the tourism industry: a substantial increase in the scale of investment, industrial development more dynamic.

According to statistics released by National Bureau of Statistics, in January 2009 to 11 months, China’s urban fixed-asset investment grew 32.1%, which is closely related with tourism, accommodation and catering industry increased 38.6%, wholesale and retail trade increased 45.4%, 80.7% increase in rail transport, road transport increased 48.7%, urban public transportation increased 55.0%, water transport increased 35.5%, both higher than the national average.  Tourism-related industry, a substantial increase in the scale of investment, directly led to the rapid growth of investment in tourism, local tourism investment dynamic emergence of prosperity for tourism development has injected new vitality.

五、企业经营业绩:企业经营业绩开始回升,景区类企业经营状况较好。 5, business performance: business performance began to recover well in business class scenic areas.

According to statistics released by National Bureau of Statistics, is closely related with the tourism industry to maintain rapid growth in operating efficiency.  In January 2009 to 11 months, accommodation and catering industry sales grew 16.9%, wholesale and retail sales rose 15.3%, civil aviation passenger traffic growth of 19.6%.

Tourism management department to monitor industry information display, scenic class enterprise performance better than travel agents and hotel industries.  Among them, business conditions in the western region affected by the financial crisis better than larger central and eastern regions; urban and peri-urban scenic tourist attractions than the long-term management situation better; mature operating conditions of the top scenic spots in general than those without resources are better scenic spots .

Travel agents, due to sharp drop in inbound tourism business, pure inbound tourism to pick clubs and to inbound tourism-based small business travel agencies, due to product mix and a single, risk-resisting ability is weak, the most difficult operations, and as Taiwan Tourism The rise of Taiwan’s travel tour with a qualified travel agents operating conditions generally good.

Hotel regard, by the financial crisis, business-oriented hotel guests have been hit more than to leisure guests oriented hotel team; to immigration source market-oriented hotels have been hit more than for the domestic tourist market Lord of the hotel; foreign hotels have been hit more than the general-funded hotels.

The attached Table 1 in 2009 foreign inbound tourism market (see original report)

In 2009, foreigners entering the market as a whole was sluggish trend in the first quarter fell significantly, in addition to Russia, South Korea and Mongolia, the Japan, the United States, Malaysia, Singapore, the Philippines, Mongolia, Australia, Canada, Britain, Thailand, Germany, Indonesia, India and France and other major source markets, the largest year-year decline in January to March.  Into the second half, the admission of aliens overall market rise month on month decline gradually narrowing.  In July after some of the major source markets for a single month of positive growth for four straight months, U-shaped or V-shaped tracks are obvious.
Foreigners entering the market the whole year is expected to decline 12% or so.  16 major source markets, Russia, South Korea, Mongolia will reach double-digit decline, in which Russia dropped by more than 40%, South Korea down 20%; Indonesia, Canada and Malaysia is expected to achieve positive growth; Singapore, India is expected to flat ; the remaining major source markets decline narrowed to about 5%.

主要客源市场情况: Major source markets of:
Since entering the Japanese market in July to resume faster, increased considerably, the overall recovery trend is more evident. From October onwards, the total number of immigrants than South Korea, again became the largest source market.  Predicted that the annual inflow of roughly 3.3 million passengers, up by around 4% decline.

South Korea’s market drop of about 20%.  Narrowed in November fell 0.7% year on year, the future trend remains to be seen.

After the Russian market since November 2008 has been a continuous fall, since the 2nd quarter of 2009, there steady recovery trend.  April to August, the fourth consecutive month to keep chain growth, but still more than 40% year on year decline.

First three quarters of the U.S. market fell 6.4% in November year on year growth of 4.0%.  In December, by the U.S. economic recovery is weak and Christmas holidays, the impact of arrivals will not be significantly increased. Predicted that the annual inflow of roughly 1.7 million passengers, up by around 5% decline.

Malaysia, Singapore, the Philippines, Thailand and Indonesia in the first half compared with last year varying degrees of decline in September after the apparent recovery。 It is expected that the five countries with the annual number of arrivals in 2008 was essentially flat.

Australia, Canada and other markets in July a single month since four consecutive growth, the market was U-shaped or V-shaped trend, is gradually returning to normal growth track.

Britain, Germany, France and other markets experienced sharp decline after the beginning of the year, November has been fully achieved positive growth year on year recovery trend evident.

Report of 2 in 2009 Hong Kong, Macao and Taiwan with the Mainland tourism market entry and exit conditions

2009 Hong Kong, Macao and Taiwan inbound tourism market is “a liter of two down”, that is a slight rise in the Taiwan market, Hong Kong and Macao markets declined slightly.

Outbound tourism market is “two liters a fall”, that is the number of mainland residents to travel a substantial increase in the steady growth of tourism for mainland residents to visit Hong Kong and went to Macau, a small number of tourists despite the recent rebound, but the total trend is downward.

一、港澳台入境旅游市场 First, Hong Kong, Macao and Taiwan tourism market entry
1, Hong Kong: Hong Kong compatriots to leave the Mainland for changes in the market characteristics, namely, by the global financial crisis and the obvious impact of influenza A, 1 month to 3 months, May to July on the decline; 2 is a holiday excursion is the Hong Kong residents the necessary content, April Easter, August summer vacation in December for Christmas and a good growth in the Mainland; third, the economic recovery, the employment situation has brought the matter to enable Hong Kong to the mainland compatriots narrowed the overall decline in the trend.

Predicted that the annual number of arrivals in Hong Kong compatriots about 77.3 million passengers, down 1.3% over the previous year.

2, Macao: Macao compatriots number of arrivals was Xianyanghouyi trend.

Changes in its market characteristics, namely, during the economic downturn, going north to spend a marked increase; second is when the economy improves, labor tension, full employment, rising incomes, travel less.

Macao’s gross domestic product rebounded in the third quarter, government revenues, gaming and tourism revenues better than expected, the employment situation improved.

Meanwhile, Macao’s political activities in the second half more, the Chief Executive election, the fourth term Legislative Council election, to celebrate the tenth anniversary of the return of large-scale series of activities and Macao compatriots to remain actively involved in local, travel less.

Predicted that the annual inflow of roughly Macao compatriots 22.7 million passengers, down 1.0%.

3, Taiwan: in 2009, the Taiwan compatriots in the Mainland was the number of shocks up momentum into the fourth quarter, the growth rate to accelerate.

First cross-strait relations have improved, so that more Taiwan compatriots on the mainland’s economic recovery and future development of the first full confidence in business travel is increasing; second cross-strait direct flights in 2009, a substantial increase in the frequency, variety, convenience, economy, transport and effective reduce costs, direct flights from Taiwan to promote rapid growth of the mainland market; third, two-way cross-strait tourism exchange and cooperation continued to deepen, to effectively mobilize the industry rushed to mainland China in Taiwan tourism initiative.

Predicted that the annual number of Taiwan compatriots entry more than 4.45 million passengers, an increase of 1.5%.

二、内地(大陆)居民出境赴港澳台旅游 2, Mainland China (mainland) residents to visit Hong Kong, Macao and Taiwan outbound tourism
1, the Mainland residents to visit Hong Kong: Hong Kong in 2009 for the “individual visit” policy put in place and the signing of CEPA Supplement 6, is the number of mainland residents to visit Hong Kong tourism a major factor in the overall steady rise, although influenza during the epidemic on the Mainland Travel to Hong Kong to a greater impact, but the implementation of non-permanent residents in Shenzhen to Hong Kong to “personal visit”, Shenzhen residents from Hong Kong several times a year endorsement “individual visit” documents and other favorable factors have led to the annual number of tourists to Hong Kong to the mainland was steady growth. The whole year is expected to travel on the number of Mainland residents to visit Hong Kong will be more than 17.5 million passengers, an increase of 3.8%, the “individual visit” passenger growth expected to exceed 8%.

2, Mainland residents to visit Macau: by the global financial crisis and the impact of influenza, while the mainland to Australia since the second half of 2008 to implement the “individual visit” The new endorsement policy, the number of mainland residents to travel to Australia a big margin.
The whole year is expected to travel to Australia on the number of mainland residents will be more than 10.9 million passengers, down 6%.

3, the mainland residents to tour Taiwan: According to Taiwan statistics, in 2009 mainland residents to tour Taiwan 606,000 passengers (not including the number of study missions for the public), to achieve the beginning of 600,000 person-times of development goals, but the larger the magnitude of changes each month . 三四月份井喷式增长、五六月份受甲型流感影响跌至低谷、七月份开始反弹、八月份受“8.8水灾”影响再次下滑,11月开始全面复苏。 San Siyue cent growth spurt and Wu Liuyue were affected by the influenza A drop bottom, in July began to rebound in August by the “8.8 flooding” effect once again fell in November has begun to revive. With the variety of transportation and convenient travel to Taiwan, as well as the deepening of cross-strait exchanges, the number of mainland residents to tour Taiwan rapid growth trend will continue. China Travel Market will grow, but foreign market entry difficult published an article that highlights the growth potential of the China market, but cautions that foreign businesses will have challenges penetrating this market. Read the article here at ChinaTravelTrends. The article was largely based on speeches and interviews conducted at the 2009 China Travel Distribution Summit in Shenzhen, which I attended.

Here’s a quote from Cyril Ranque, Expedia VP of partner services group at Expedia Asia-Pacific:

“It’s all about making it relevant for the local market,” he said. “For multinationals like us that’s hard to do, because we’ve been successful by rolling out processes and systems. And whatever we know from the outside that has worked to expand in the western world is not going to work here.”

Winning in China is “a pure execution game” rendering many of the advantages foreign brands have secondary to raw execution, claims Fritz Demopolous, founder and CEO of

“Look at Expedia’s failure,” Demopolous says. Expedia owns online travel agency, but has only been able to corner 10 percent of the market, compared to 57 percent for Ctrip, according to iResearch. “I don’t think there’s one company that has done well, but that’s not to say that looking forward, a foreign company may not do well.”

As Demopolous explains it, a successful online venture requires capital, technical knowledge and local expertise. Chinese companies have access to as much capital as a foreign competitor, he says, and the proliferation of open source technology lowers that barrier to entry.

“In the consumer internet space, knowledge and capital are free flowing,” Demopolous says. “Domestic companies aren’t at any disadvantage at all online. It’s a pure execution game, a numbers game.”

Some of the stats quoted in the story:

Market Growth:

  • Travel bookings in China: $65 billion by 2011 (source: PhoCusWright)
  • Online % of total Travel bookings in China: 20% (source: PhoCusWright)
  • Growth in tourism revenue, 2009: 8% (of course, the magic 8%!) (source: CNTA)
  • Growth in travel bookings, 2009: -4% (PhoCusWright)
  • Growth in travel bookings, 2010: 5% (PhoCusWright)

Outbound Tourism:

  • Outbound trips from Chinese mainland travelers: 50 mm in 2009 (source: Chinese National Tourism Administration CNTA)

Online Travel Agency (OTA) Market Share:

  • OTA market share: 57% Ctrip, 10% eLong (source: iResearch)

My opinion:
Its indeed true that most large Internet players have not succeeded in China. However, many other operational businesses and branded businesses have: Yum Brands, General Motors, NBA, Starbucks, Dell Computer, even Microsoft. I think pure local market businesses that facilitate sales of domestic products and services to domestic customers will be difficult for foreign companies to compete and win. But cross-border businesses where there is an international brand or international services *can* be arenas which foreign companies can compete and win.

Source: PhoCusWright 2009 “Emerging Online Travel Marketplace in China”

Chinese travelers will rapidly demand more and more from the travel industry

Maggie Rauch of TravelDailyNews and reported on the 2009 China Travel Distribution Summit and was kind enough to include some of my reflections on the travel market. Here’s an excerpt from the article:

At China Travel Daily’s recent China Travel Distribution Summit in Shenzhen, examples were lacking of social media campaigns that delivered clear ROI in travel search. While some players have been cautious with campaigns, others who have used social media haven’t found good ways to measure its effectiveness. But consumers in China will soon demand more, says Elliott Ng, founder of Uptake Networks, a Palo Alto-based company whose combines travel search and social media. Ng recently visited China, stopping in three cities including Shenzhen, where he attended China Travel Daily’s summit. Ng was surprised at the pace of change in the travel market here, and says he could see it leading to new tools for travelers that leverage search and social media.

“The Chinese travel market is growing so fast that consumers are going to start demanding the same things that travelers have elsewhere in the world. That means that people can start taking some of these social media models that work elsewhere, and copying them or being inspired by them.”

In his presentation at the China Travel Distribution Summit, Ng shared what he sees as the top trends affecting social media, search and travel in the United States. Among the half dozen trends he named, Ng included: “Social media creates new ways for travel professionals and enthusiasts to affect travel decisions.”

As stated in the article, my presentation was really about global trends in travel technology and social media, not specifically about China. While I think the execution of various marketing tactics are different in China, the general principles are the same as they are around the world. Of course, execution is where great companies win and mediocre companies lose, especially in China.

I’ve been watching the China market since 2005, so I don’t mean to come off as a “fresh of the boat” Westerner staring at gleaming high rise buildings and “face” infrastructure projects. I mean to convey what I love so much about China, that one can never take last year’s perception of the market and apply it toward next year’s reality!

When it comes to consumption, don’t underestimate how fast Chinese consumers are learning to consume. Travel companies need to provide services and products aimed for tomorrow’s Chinese consumer, not today’s or yesterday’s. The happy conclusion I’ve come to is that the Chinese market has a long way to go from where it is today, and many lessons from Western markets can be applied (to some degree, and with localization) to the rapidly evolving Chinese market.

DragonTrail: China Travel Trends and Social Media

My DragonTrail friends Jens Thraenhart, George Cao, and Winser Zhao have published two very nice presentations on SlideShare. One provides an overview to a market that I’m getting increasing interested in: the China travel market. The second is a presentation that Jens gave at the China Travel Distribution Summit held at the Interlaken OCT in December 2009, hosted by focusing on social media and travel. Both are well worth looking at.

DragonTrail summary of China Travel Trends

Social Media and China Travel

Now on the second. Social media trends that the travel industry should pay attention to.

The DragonTrail team has also started a blog at, and has a great Twitter feed at @cnTravelTrends managed by Irma Tjahjadi.

Getting Media by Being Media

Larry Chiang convinced me to guest post on his Business Week blog.  The subject was about how to get press coverage in this new age of social media.  I’m crossposting the content in its entirely below. Keep in mind that I tried to write the article in the same style as Larry usually takes on his own blog, so it is a bit snarkier than my natural online voice.  But, damn, it was fun to be Larry Chiang for at least 1000 words…


Brians_Cat from the Ben Huh interview

Edited by Larry Chiang

by Elliott Ng

The Silicon Valley startup scene is obsessed with press.

A financing announcement in Matt Marshall’s VentureBeat.  A product review by Walt Mossberg in the Wall Street Journal.  The ultimate prize: a TechCrunch blog post.

In the reality-distorted mind of the typical entrepreneur, a new startup is one blog post away from generating the flywheel effect that launches that startup into the next YouTube, Facebook or Twitter.

As co-founder of a travel search engine UpTake, I was right there with the rest of the entrepreneurs, desperately seeking love from the blogosphere during our 2007-2008 launch.

At first I played the game.  I hired a PR firm.  I fired a PR firm.  I hired another PR firm.  That firm sent out massive amounts of email and made lots of phone calls.  We annoyed a number of people but we did get some coverage. We did everything by the book.

After a while, I observed that the companies that did the best did not play the game.  Instead of begging for media, they became media.

At UpTake we followed their example.  We raided the PR budget and used the money to hire over 50 bloggers to create a widely read travel industry blog, and seven other consumer travel blogs.  Now we get the press releases and the annoying PR emails.
** 1. Be Robert Scoble. (Or if you’re not Robert Scoble, hire one.) **

Back in 2003, Scoble joined Microsoft to be a video blogger at a nascent Microsoft blog called Channel 9.  He then started a blog called Scobleizer, where he proceeded to occasionally complain about Microsoft products.  In the era of command-and-control public relations, a guy like Scoble wouldn’t be able to say a thing to the press without a handler scripting out his every answer.

The personality, the celebrity, the transparency, and the independent editorial perspective — all made Scobleizer a media outlet in its own right.  Microsoft, through Scoble, had “become” media.


photo credit Kris Krug

Today Scoble works for Rackspace. Frankly, they are brilliant because they are just cut-and-pasting what Microsoft did in 2003, and on top of an intensely boring core business.  Think about it.  Who really cares about Web hosting and server collocation?  Isn’t that a totally commoditized industry at this point?  How much traditional public relations would you have to do to get the kind of noise and coverage that Scoble is producing for Rackspace?  They knew they weren’t Scoble.  So they hired one.

** 2. Stop trying to make news and start trying to break it. **

What if you just can’t become Scoble, and you can’t afford to hire one?  My company is a good example of this.  Unfortunately, we’re too humble to play the Scoble game, and we’re too poor to hire one. So what to do? So our solution was to stop trying to make news, and start trying to break news.

Honestly, our product just doesn’t have enough story angles to get the press we need to build our business.  A traditional PR approach is to try to manufacturer story angles.  The thinking goes something like this: “Maybe we can field some research and get some factoids.  Maybe we can jump on a trend.  Maybe we can reposition our product as something else.”  Well, after a while, this got futile and boring.  So we took a large part of our PR budget, and launched a blog network – 7 blogs, 50 bloggers, who collectively are a lot funnier and more interesting than all those “story angles” we kept brainstorming.

Now we’re breaking industry stories. We’re talking about industry trends.  We’re covering other companies’ launches.  We’re getting invited to cover conferences as bloggers. We’ve built real relationships with people in the media rather than just pitching stories.  And yes, now we’re getting to see all the PR sins of all the other companies who are still playing the game by the book.

Another great example is a guy named Brian Solis.  Brian’s day job is straight-up PR firm called Future-Works.  He’s supposed to be begging bloggers for stories.  Instead, he launches his *own* blog,, and starts covering the industry himself! Then he hires bloggers from other top blogs.  Then he takes incredible pictures and shares them out for everyone to use.  Who do you think gets the love for their clients?

** 3. Don’t wait for your media target list to write about you.  Just start writing about *them*. **

Now that you’re in the media (well, sort of), you don’t have to wait around for David Pogue of the New York Times to write about you.  You can just start writing about him! Try this Judo move: writing a critique of something he just wrote that has nothing to do with your company.


Try to stir up some controversy.

Be a little snarky, but stay nice, and try to engage in an interesting conversation that moves his thinking forward. Liberally sprinkle in the right keywords to trigger his ego searches.  If it isn’t obvious by now, you’re not trying to stay “on message” with your company’s marketing plan.

So follow these three steps.  First, copy what Scoble is doing.  Second, start blogging about your competitors.  Third, get your media targets’ attention by writing about them before they write about you.

Anyone else have any ideas about how companies can “be” media? Post them in the comments below

Interesting Links on Games and Learning

Do games stimulate learning? How can addictive game mechanics be employed in the service of educational goals?

I had a great conversation with a fellow entrepreneur today about games and learning. He shared that he spent some time playing Farmville but could not envision himself spending his time creating a game that just seemed to waste people’s time. But we both decided that game mechanics were important for non-game people to understand. So I guess I’ll have to keep my World of Warcraft account live for at least 1 more month. :)   Here is a list of resources, subject matter experts, and links to follow to further investigate the general topic of games, game mechanics, and learning.

Interesting people and links

1. Amy Jo Kim

Since 2006, my thinking on social applications has been heavily influenced by the work of Amy Jo Kim.  In an  interview in the interaction design blog Bokardo,  Amy Jo Kim describes game mechanics:

Game mechanics are a collection of tools and systems that an interactive designer can use to make an experience more fun and compelling. Used well, game mechanics make a Web design more engaging, sticky and viral by incentivizing certain behaviors. However, game mechanics are not a panacea: to be effective, the mechanics need to be integral to the experience.

Two slide presentations introduce her concepts around applying game mechanics to interaction design and social application design.  The first is called “Putting the Fun in Functional“.

The second slideshare is called “Power to the Players”:

2. Raph Koster (bio, blog, essays, presentations, Metaplace )

I first ran into Raph Koster’s work when I saw him present at Kevin Werbach’s Supernova 2008 Conference.  I blogged about the panel, called “All the World’s a Game,” which sought to investigate these questions:

Massively multiplayer online games offer glimpses of how social interactions and work will develop in the Network Age. What can they teach us? How can businesses and online communities leverage insights from virtual worlds to develop more effective systems and practices?

I wrote an extensive post on the UpTake blog.  Raph linked to my post and an interesting comment thread developed.  There is also a video of that session. Raph has an intriguing presentation called “The Core of Fun” that is worth scanning.

Summary points Raph made:

  1. Raph shared about “emergent” play, like endgame raids in World of Warcraft and Everquest (aka Evercrack) not originally envisioned by the game developers but created by the players.
  2. Raph: “Humans enjoy transgressive play” and will always try to break free from the game constraints.

More detailed points Raph made:

  1. In response to Dave Elfving’s concerns about designers being trapped into a “gamist” mentality (more on this later), Raph responded that “games are indeed reductionist. All games resolve to mathematic models.” There is the danger that game designers fall into the trap of reinforcing simplistic but effective mechanisms for addictive play. But gamers are capable of transcending simple game mechanisms to create “play” that was not originally envisioned by game designers.
  2. For example, World of Warcraft is not about raiding (where a large group of high-level players engage in coordinated action in several separate teams to take down a “boss”). Everquest was not about raiding. Raiding was designed by high level players in Everquest. the actual game is killing mosters. The users created the raid. Raiding is not really part of the game of World of Warcraft. Raiding was “tacked on at the end of the game.”
  3. On the difference between playing World of Warcraft and raiding: “We’ve all been asked to go to dances. And forced to learn to dance. Endless succession of middle school dances, proms, etc….and then at the end of the game, you are asked to join a ballet company…synchronized collective action by a number of skilled players.
  4. Flickr was originally a MMO called “game never ending”. You could post photos as part of the game. But then they slimmed back their plan and
  5. “Humans enjoy transgressive play with game models.” People try to break out of the channels provided by the game. Raph gave an example of his son. First, “he hacked the game. Then what becomes a hack becomes a cheat code. Then, he look for hacks beyond the cheat code. Then we bought the PC version of the game to hack the data files. Finally, one eventually turns into a game designer.” (Not sure this is normal behavior and there was some comment that his son must be exceptional).

3.  Douglas Thomas

Also at the Supernova conference was Douglas Thomas ((bio, bio, You Play WoW? You’re Hired in Wired 04/06, WoW Factor at, The Play of Imagination Beyond the Literary Mind (doc) with John Seely Brown on, What kids learn in virtual worlds on CNET, The Gamer Disposition on Conversation Starter blog at HBS Publishing which summarizes his presentation at Supernova).  He talked about The Gamers Disposition and highlighted key attributes of the gamer, which I blogged about at CNReviews.  Here’s an excerpt from CNReviews:

1. Gamers are bottom-line oriented


From the HBS post:

Today’s online games have embedded systems of measurement or assessment. Gamers like to be evaluated, even compared with one another, through systems of points, rankings, titles, and external measures. Their goal is not to be rewarded but to improve. Game worlds are meritocracies where assessment is symmetrical (leaders are assessed just as players are), and after-action reviews are meaningful only as ways of enhancing individual and group performance.

2. Gamers understand the power of diversity

From the post:

Diversity is essential in the world of the online game. One person can’t do it all; each player is by definition incomplete. The key to achievement is teamwork, and the strongest teams are a rich mix of diverse talents and abilities. The criterion for advancement is not “How good am I?”; it’s “How much have I helped the group?” Entire categories of game characters (such as healers) have little or no advantage in individual play, but they are indispensable members of every team.

3. Gamers thrive on change

From the post:

Nothing is constant in a game; it changes in myriad ways, mainly through the actions of the participants themselves. As players, groups, and guilds progress through game content, they literally transform the world they inhabit. Part of the gamer disposition is grounded in an expectation of flux. Gamers do not simply manage change; they create it, thrive on it, seek it out.

4. Gamers see learning as fun

From the post:

For most players, the fun of the game lies in learning how to overcome obstacles. The game world provides all the tools to do this. For gamers, play amounts to assembling and combining tools and resources that will help them learn. The reward is converting new knowledge into action and recognizing that current successes are resources for solving future problems.

5. They tend to “Marinate on the Edge”

From the post:

Finally, gamers often explore radical alternatives and innovative strategies for completing tasks, quests, and challenges. Even when common solutions are known, the gamer disposition demands a better way, a more original response to the problem. Players often reconstruct their characters in outrageous ways simply to try something new. Part of the gamer disposition, then, is a desire to seek and explore the edges in order to discover some new insight or useful information that deepens one’s understanding of the game.

I have a feeling that the theory that multiplayer gaming cultivates this kind of behavior is a little utopian. These behaviors may be great qualities that successful gamers have, but I’m not sure that games actually create these behaviors.

4. Andrew Chen
Andrew Chen has one of the best blogs on entrepreneurship and viral games and applications.  For example, I just read an older post about cultural differences between web people and game people.  Here are some of the categories of things that he covers:

5. Mitchel Resnick

Back when I was in Boston (a long time ago), I volunteered with a MIT Media Lab project led by Mitchel Resnick to pilot educational programs at the Boston Children’s Museum. The facility created a “Computer Clubhouse” where kids could play with programmable Lego Robots using a simple programming language.  Resnick emphasized a methodology called Constructivism.  I have not kept up with what Resnick has been up to, but here is an interesting 2008 blog post about his latest efforts–Lifelong Kindergarten Group, PicoCrickets and Lego Mindstorms.

6.  Bill Gurley post on

I was doing a little bit of research on a company called that apparently has been incredibly successful in Korea, in the online video instruction space.  Turns out Bill Gurley of Benchmark was looking at this too, and wrote a great post about the company.  Here’s his summary of what Megastudy is about:

Here are some quick notes on the company:

  1. Megastudy is at it’s core an online learning web site.
  2. The business model is subscription for each course.
  3. The “teacher” of the course gets something like 23% of the revenue for each class they teach.
  4. Because its online, a teacher can have an unlimited number of students.
  5. As a result, there are Megastudy teachers making over US$1mm/year in a country where the average teacher makes something like US$40K.
  6. In order to sort to the top of the list (and be popular), these teachers must be promotional, funny, engaging, effective.  Bottom line, they must be entrepreneurial.

Point #5 and #6 would create an interesting conundrum in the U.S.  Many here argue that U.S. teachers are underpaid, so in that sense it should be a huge welcome.  That said, I don’t think any teacher union in the U.S. would support the “eat what you kill” business model in use at Megastudy.

We have an investment in one interesting company that is borrowing part of its model from Megastudy, and part of the MMORPG world.  its a collaborative learning web site called Grockit.   Here is the TechCrunch review.

Grockit itself might be an interesting case to look at where game mechanics are being applied toward educational goals.


Game mechanics are critical to all social applications.  Understanding why people play games, what makes things fun, and what makes things addictive, is critical to social game success.  Learnings can come from various fields.  How can game mechanics be exploited to generated positive social outcomes, like education or community knowledge creation/curation (like Wikipedia)?  I believe that this trend of game mechanics applied to non-gaming applications is just beginning.