This was an interview I did with CEO of Focus Media, Jiang Nanchun, for our first edition of Enterprise. Each month, I’ll conduct an interview with a Chinese business leader. I did this interview in Chinese and then translated it into English. Below, find both versions.
Q&A with Megan Shank
Bring the Noise, Bring the AD
According to Jiang Nanchun, CEO and founder of Focus Media, the only things his company lacks are flaws and competitors. Since its founding in 2003, Focus Media, an audiovisual advertisement network that installs LCD screens with targeted ads in office buildings and shopping centers, has bought out a host of worthy opponents and won a slew of accolades – most recently at the 2007 China Business Journal Entrepreneurial Competitiveness Awards where Focus Media was named “Most Competitive Chinese Company to List on the Foreign Stock Market” (it listed on the U.S. NASDAQ in 2005). Jiang, a 35-year-old Shanghai native, tells Newsweek Select’s Megan Shank his company maintains leadership in the industry by taking trends seriously and investing in research and education for its staff. Here he speaks about why his company thrives, the challenges it faces and the people he admires. Excerpts:
MS: Why can digital media succeed in China?
JNC: There are a lot of Chinese, offices are cramped, and office buildings are tall. The hospital, the office building—it’s normal to wait five minutes for an elevator. In the U.S., there are more elevators than people. You don’t have to wait for the elevator. So there’s no way to do that kind of business there. At the same time, Chinese are lustful consumers and fervent and diligent workers, so they need this kind of information.
MS: Do you enjoy living in such an ad-infested world?
JNC: The Chinese have always grown up in a noisy environment. If you give me a quiet environment, I’m not accustomed to it. Moreover, people will feel disengaged and bored while they wait for the elevator. Idleness is idleness—why not check out the newest mobile phone or car? So, if you ask me if having so many ads in our lives is good or bad, I believe there are too many ads, but, in fact, there were many ads before Focus Media existed. What we want to do is find suitable times and spaces to place ads and create a good communicative relationship with consumers. We want to increase advertisements’ effectiveness.
MS: After merging so many companies, what new challenges do you face?
JNC: We wanted to bring all of the excellence of the acquired company into our own, let the team continue and become one entity. The greatest challenge lies with (our) people. As soon as many in our staff make money, they lose their hunger, they lose their passionate initiative. This has become a problem. So we have to be clear why we do this. I also do not do this for money. I start working at 8 a.m. every morning and conclude at 2 a.m. in the morning – that’s more intense working than many other workers. I want influence. To change something in this industry with something we do gives me a feeling of merit. We want to develop this. When employees say we’ve made enough money and have no will to fight, it’s time for them to retire and allow another person with fight still in them to continue the work.
MS: Do you think you have monopolized the digital media market in China?
JNC: It’s a big domain. We can only say that in the digital advertising industry, we are leaders. For example, in regards to elevator televisions, we stand at 98% of the market, as to free media, we are at above 90%, Internet at 20% and phone advertisements at 50%.
MS: Which competitor is your greatest threat?
JNC: We’ve already bought out our greatest competitors and merged them into our company. We have no direct competitors now. What we want to do is research new digital media services. For example, in ten years, no one will watch elevator televisions—everyone will watch mobile phones. We want to do what’s going to replace what we do now. We want to replace ourselves instead of being replaced by someone else.
MS: What’s your competitive strategy?
JNC: We’re not undertaking any competitive strategy. We want to enter a whole new market, for example, in regards to the Internet, do we want to do it ourselves or to buy a company that does it? We’ve realized that purchasing companies that do something is faster than learning to do something ourselves. For example, no one had done digital television (in China) before. We always do what’s done first—never second. We want to be the leader by a long stretch—in a way that no one could catch up to us in five years. That’s our style.
MS: How did the U.S. subprime debt crisis affect your company?
JNC: We don’t do business in the U.S., so we don’t have any relation to the subprime debt crisis. Well, can it affect the entire world’s markets, or maybe possibly affect export businesses? But it can’t affect advertising, so it’s of no relation to us. Maybe companies will consider the domestic market, in which case, doing advertisements, we profit.
MS: Any plans to expand overseas?
JNC: At the current moment, we don’t have any plans to expand abroad. We don’t have the conditions to become an international company, so generally we adopt a league model with international companies. They pay us, and we teach them how to do it in their own country. Afterwards, they give us 1% of their business’s income. After they do very well, we won’t rule out the possibility of a M&A. But currently the Chinese market is already big enough. Within five years we don’t need to even consider operating outside of the country.
MS: How can you adapt to the market’s development?
JNC: We’ve researched consumers and clearly see the market. We will broaden technology and master the future. We’ve communicated with and understand what the advertisers want. We’ve brought together the best research team—technological developers and advertisement development researchers—to create our own team.
MS: Who do you look up to or admire?
JNC: I adore a lot of people, including the CEOs with who were my classmates. There’s a lot of things to study. These people include CEOs of the companies I merged into Focus Media and include my competitors. As a leader, it’s imperative to understand new things and to immediately copy them so that others cannot surpass you. If you don’t appreciate and study (what others have done) then you will fall behind. Ma Yun (CEO of Yahoo’s Alibaba), Niu Gensheng (Mengniu Company—ed.note: China’s biggest domestic milk company) and several others and I often meet up and share viewpoints. Our generation of CEOs really knows how to study.
很喧闹，很广告
分众传媒的创办人兼CEO江南春说，他的公司惟一缺的就只是瑕疵和竞争对手。分众在办公大楼和商场安装LCD显示屏，向目标受众播放声像广告。自从2003年成立以来，分众并购了多家竞争对手，也赢来了业内的嘉赏──在中国经营报主办的“2007中国企业竞争力年会”上，分众传媒被选为“2007中国最具竞争力的海外上市公司”。35岁的江南春不久前接受《新闻周刊 中文月刊》的单梅兰采访，他表示，分众传媒之所以在业内遥遥领先，是因为公司紧紧跟上时代潮流并且注重调研和对员工的培训，他也谈到公司为什么可以在中国市场如此成功，一路遇到的挑战和他崇敬的人。摘录如下：
数字化媒体为什么会在中国成功?
因为中国人多，办公室很挤，办公楼也高，去医院、办公楼，乘电梯都要等，等五分钟很正常。在美国，电梯比人多，乘电梯不用等，生意就没法做。同时，中国人的消费欲望也很强烈，努力工作，努力消费，所以就是需要得到这类信息。
你是否喜欢在这样充斥了广告的世界下生活？
中国人一直是在比较喧闹的环境下成长起来的，你给他一个安静环境，反而会不习惯。而且他们会觉得在电梯口无事可做，闲着也是闲着，当你这时告诉他最新的手机什么样，最新的汽车怎么样，他们会说我为什么不看一下呢？所以，如果问我广告那么多好不好，我认为广告的确是太多了，但其实在分众之前广告就已经很多，我们就是要找到合适的时间和空间去放广告，创造一个和消费者更加良好的沟通关系，让广告更加有效。
你们在兼并了那么多公司以后面对什么新的挑战？
我们要把收购的企业优势整合在一起，让团队继续下去，和我们融为一体。最大挑战是来自人方面。很多员工在赚钱的时候，饥饿感就没有了，没有了创业的激情，这就成问题。所以要搞清楚为了什么而做，我也不是为了钱而做，我每天早上八点工作到零晨两点，比很多人工作强度都大，我要有影响力，通过做一件事情来改变这个行业，就是一种荣誉感。我们要培养的就是这个。当他们说钱赚够了，没有斗志了，那就让他退下去，让有斗志的人上来继续。
分众是否已垄断了大陆的数字媒体行业？
这是一个很大的领域，我们只能说，在数字媒体广告行业，我们是领导者。比如在楼宇电视方面，我们占据98%的市场份额，免费媒体方面占了90%以上，互联网占20%，手机广告占50%。
哪个竞争对手威胁最大？
主要的竞争对手都被我们收购了，现在没有直接的对手。我们要做的是研究新的数字化媒体业务。比如十年后，大家都不看电梯电视了，都看手机了，我们要做的就是未来可能替代我的人，自己替代自己，而不是我被别人替代。
你们的竞争策略是什么﹖
我不做什么竞争策略。要么就是我们要进入一个全新的市场，比如在互联网是自己去做还是去购买？我们发现的速度比自己做更加快。譬如数字电视，没有人做过，我们就去做。我们只做第一不做第二，并且是要遥遥领先，五年内无人能及，这是我们的风格。
美国的次债危机对你们有什么影响？
我们不在美国做生意，和美国的次债危机关系不大。那么会不会影响全球市场呢，可能会影响出口企业，但是它们不做广告，和我们没有关系，可能它们会考虑内销，要做广告，那么我们反而得利。
你们打算拓展海外市场么？
目前没有开拓海外市场的打算。我们还不具备成为国际公司的条件，所以一般对国际公司采取加盟的形式。它们付我们一笔钱，我们教它们怎样在自己国家做，然后每年给我们1%的营业收入。等它们做得非常好了，我们不排除兼并收购。但是目前中国的市场已够大了，五年之内我们都不考虑出去。
你们如何能够适应市场发展？
我们研究消费者洞察市场，开放技术掌握未来，和广告主沟通了解他们要什么。我们把最好的研究团队、技术开发人员和广告商业模式研究人员结合，形成了自己的团队。
你崇拜什么人？
我崇拜很多人，包括和我一起在CEO班学习的人。有很多地方可以学习。他们包括我收购的公司和我们的竞争对手。作为一个领导者必须了解新的东西，立刻模仿不让别人超越，如果不去欣赏学习的话就会落后。我和马云（阿里巴巴）、牛根生（蒙牛集团）等经常会碰面，分享各自的观点，我们这代CEO都是很会学习的。
Haha, total non-answer to the “Do you enjoy living in such an ad-infested world?” question. Dripping with the slimy rationalization typical of his generation.
Micah Sittig
March 7th, 2008