Three innovation mindsets we can learn from Chinese entrepreneurs
China has been making huge leaps in economic, social, technological and cultural development for the past 25 years (since its Open Door Policy in 1978). In fact, if we can...
Here too, this long-term orientation seems to be filling up the (very small) room they’re meeting in. Few are the start-up founders that talk about taking on Silicon Valley giants, or where they want to be in the next 10 years. The naivety of Ma’s speech is almost touching, and yet, here he is today, managing a 500-billion-dollar company, the world's sixth-largest internet company by revenue. So yes, we stand to learn a lot from China’s ambitious Day After Tomorrow vision.
A Janusian view of the world
A few years ago, I was heavily influenced by an insightful article about the role of Janusian thinking in creativity and innovation: the ability to imagine two opposites or contradictory ideas, concepts, or images existing simultaneously. Albert Rothenberg, who came up with the concept, found that creative geniuses like Mozart, Edison, Pasteur and Picasso resorted to this mode of thinking quite often to achieve original insights. Like Vincent Van Gogh who showed us how one might see two different points of view at the same time in ‘Bedroom at Arles’. Or Einstein, who was able to imagine an object in motion and at rest at the same time.
"The Chinese do not think in terms of state OR market, but state AND market. For them, it's not “competition OR cooperation” but “competition AND cooperation”."
I immediately had to think back to this Janusian concept when I learned that an important characteristic of Chinese culture is their ability to synthesise and unify opposites and contradictions. While Western thought tends to be a lot more binary - there can only be 1 truth if 2 ideas oppose - the Chinese (supposedly because they are influenced by the Daoist principle of “yin and yang”) see all things as inseparable from their opposites. In other words: if A and B are opposites, only A OR B can be true in the West. While in China both can still be true and they will try to find a vision that unites both opposing viewpoints.
“The best example of this mental pattern comes from the Chinese language itself”, writes Diego Gilardoni, “where the word for “crisis” is the combination of the words “danger” and “opportunity”.” By being comfortable with this type of ambiguity, the Chinese for instance do not think in terms of state or market, but state AND market. Or “competition or cooperation” but “competition and cooperation”. (source.)
Just like that, right from the birth of the web, there was never any real antagonism between online and offline in China. While we were still struggling over here with the online or offline question, Chinese retail integrated both online and offline elements from day one. So it should not come as a surprise that what we view as the “amazing” and “unique” innovations of the cashier-less grab-and-go Amazon Go stores, has already been commercialized at full speed in China, by several startups, including BingoBox, Xingbianli, JD Daojia, as well as Chinese tech giants Alibaba and Tencent.
Make your customers rich
This last one is a remarkable insight that I learned from Pascal Coppens. We would never describe it that way, obviously, but the number one goal of western businesses is to take (more) money from our customers. We just want to sell our products and services and - however customer centric we are - it (almost) never crosses our minds to find out how we can help them gain money. We tend to adhere to a “me first” orientation, without actually giving back.
In China, that’s quite the opposite: it is customary to help your customers become richer. Minister of the State Council Information Office, Jiang Jianguo’s quote perfectly illustrates this point of view: “The Chinese word for ‘economy’ means ‘for society to prosper and benefit the people’”. Jack Ma, for instance, likes to state that Alibaba’s company culture is focussed on helping others, instead of making money. As Pascal says in his keynotes: the difference between Alibaba and one of its first competitors eBay is that it always kept its market place completely free. Its core service was and has always been free, and its revenue model was based on the additional services. EBbay on the other hand, asked money for its core service, which is a very different approach.
"The Chinese always look at the context first: what is the market, what does the customer want and need and how can we help them?"
True, we do have the exact same type of freemium business model over here, but the Chinese are much more consumer driven, always on the lookout to offer extra benefits to their customers. The best example of this is how Alibaba, even in 2003, offered online courses to its customers to help them understand their customers and the market better, to help them sell more. In other words: to help them become richer. Another one is how the Chinese Xiaozhu surpassed its competitor Airbnb in a very clever consumer-driven way: it pays consultants to give advice to the home owners on its platform so that they can attract more renters themselves, and … make more money. The surplus cost of the consultants is royally won back by the huge scale advantage this offers them with regards to Airbnb.
One of the reasons for this type of extreme customer centricity is that the Chinese always look at the context first: what is the market, what does the customer want and need and how can we help them? While we in the West tend to find ideas first – for solutions and products – and only then look at how we can conquer the market, and please customers. So next time you try to find new ideas for the Day After Tomorrow, flip your perspective around: instead of thinking how you can make more money, focus on how you can make your customer richer.