China’s Knowledge Vacuum & Founding BloggerInsight

China’s explosive growth and rapidly changing business environment is both a blessing and a curse.  For individuals who are well positioned and in-the-know, it creates opportunities and a barrier against potential competition, but those on the outside can feel like Genghis Khan trying to scale the Great Wall due to the limited transparency and shared knowledge.  Answers are rarely “Googleable”.  As young entrepreneurs in Shanghai, my partners and I had plenty of ambitious ideas but found it very difficult to find quality research and get market feedback on them.

It was in this knowledge gap that we saw an opportunity.  Unlike most developed nations, China has very little open source information.  Paying for traditional market research and consulting is expensive and the quality varies greatly.  Qualitative data is often inaccurate (simply completely made up) and more importantly qualitative analysis is disconnected from reality.  Over many long lunches and teatime brainstorming sessions, we came to the conclusion that the required information was not only offline, but still internalized by experts and industry practitioners.

In our day jobs and through personal networks we often received requests for assistance in understanding China or executing projects locally (those “hey, I know someone in China” sort of introductions).  What we lacked was a convenient, low-cost way to get market feedback.  While a lot is written on the importance of “guanxi” in China, most of it misses the point.  I can tell you that starting a business here today is not about bribing government officials and shady back alley deals.  If it were that easy everyone would be doing it. Guanxi is the friendly currency of favors, invested over dinners and trust-building exercises and spent in return for connections and assistance. To me, strong guanxi means having the ability to call someone who knows someone who knows the answer.

For foreigners and locals alike, “research” means talking with experienced people in the industry.  Understanding the complexities of the Chinese markets (China is certainly far from uniform) and staying ahead of the competition remain the largest challenges.  But everyone’s personal guanxi is limited and repeatedly asking personal connections to help others without compensation isn’t fair.  BloggerInsight was founded with the idea of closing the knowledge gap by using crowdsourcing to democratize market intelligence in China, connecting companies and experts online.  We use Chinese bloggers because they cover so many facets of life and their blog allows us to qualify their expertise.  What started as our own personal guanxi has ballooned into a full network of authoritative experts who specialize on their unique areas of expertise that we target based on their past performance.  As a platform BloggerInsight controls quality and works to build trust with both bloggers and clients.

Since launching in October 2008, we’ve been fortunate to grow quickly.  As entrepreneurs we chose to execute the BloggerInsight concept over all other competing ideas for two main reasons. First we felt the service was very practical; it filled a need we had ourselves.  Second, and this has become increasingly important given the current worldwide financial situation and troubles companies face fundraising, the business model generated cash flow from the very start. There’s a rule of thumb in startups that everything will take twice as long and cost twice as much as anticipated.  This was at least half true with our development taking much more time and energy than originally anticipated.  Finding reliable Chinese hosting providers, registering for ICP licenses and jumping through legal hopes is not my favorite part of running a company.  Main takeaways from our pre-launch period were:

• Bootstrapping shouldn’t mean skimping – Find people, quality people, with experience doing exactly what you want and pay them what’s needed to do the job well.
• Try before committing – It is true that working long hours in a startup is similar to marriage (or so I’ve heard as a bachelor).  I certainly spend way more time with my coworkers than my friends.  Luckily there’s overlap here.
• Nothing is impossible, it just takes time and patience – Learning “on the fly” is absolutely necessary and everyday is a challenge but baby steps turn into real progress.

Since launching in October at the CNBloggerCon in Guangzhou, our platform has grown to include hundreds of bloggers.  They continually impress me with their knowledge and critical thinking.  Each individual approaches problems from a unique angle but brings an open mind and constructive criticism.  As founders, our challenges have quickly changed from finding enough qualified experts to complete case studies to limiting the number of responses to avoid overwhelming clients.  We’ve learned how to shape the questions we ask and information we present to more accurately help customers make decisions and solve problems.

By connecting clients and expert bloggers, BloggerInsight hopes to fundamentally alter the economics of information and lower the barriers to success.  In doing so, we hope to reward new media for it’s independent voice.  Finally, entrepreneurs and businesses have access to high quality qualitative market intelligence in China at reasonable prices.

I’m pleased to have the opportunity to share my experiences here on CNReviews, BloggerInsight will be contributing more in the coming months with mini-case studies, translated Chinese blog posts and personal experience. We’re looking forward to hearing your thoughts and ideas as well, I hope CNReviews can continue to be a place to share and connect with others.

BloggerInsight founders Lucas Englehardt and Xue Ying will be regularly guest-posting on CNReviews over the upcoming months, sharing with CNR readers some interesting insights their army of expert Chinese bloggers from various fields have on modern China. Have a topic about China you’d like to ask them? Take this opportunity to suggest some questions in the comments below.