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Plenary Session 3: Leading Business Game-Changers

OBJECTIVE OF THE SESSION

This session discussed how game-changing businesses have leveraged technology to address the needs of consumers and what it takes to become a game changer. One of the key challenges for game-changing businesses is how they can work with policy makers to

address attendant regulatory issues that might hinder the growth of these new business models. The panel also discussed factors shaping the expansion of both new and established companies in global markets, as well as the opportunities and business implications.

From left to right: Nathan Blecharczyk, Ya-Qin Zhang, Jenny Lee, Joshua Tetrick, Christine Tan (moderator)

Moderator: Christine Tan News Anchor, CNBC Asia Pacific

Panellists: Nathan Blecharczyk Co-Founder and Chief Technology Officer, Airbnb

Jenny Lee Managing Partner, GGV Capital

Joshua Tetrick Founder and CEO, Hampton Creek

Ya-Qin Zhang President, Baidu Inc.

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KEY POINTS

Leveraging Technology to Meet Consumer Needs

• Technology has led to the emergence of disruptive businesses, which are able to meet consumer needs that were previously unaddressed or under-fulfilled. Such businesses can co-exist with incumbent players as incumbent players often possess specific advantages built up over time, while new entrants may have unique traits that appeal to certain market segments.

• Technology has enabled businesses to leverage online platforms to deliver offline services leading to new innovative business models. The impact of this disruption is expected to be as big as the industrial revolution itself. Referred to as “Industry 4.0” in Europe and “Internet Plus” in China, this wave is changing how business is conducted and how services are being delivered to consumers.

• For example, together with advancements in artificial intelligence, the increasing pool of data and computational capabilities will lead to a rise of online-to-offline (O2O) services. O2O services are anticipated to be the final step in enabling another wave of technological revolution, which could generate opportunities up to ten times larger than what we have today.

• Future game-changing business models will likely still come from addressing consumer needs, but the delivery will be enabled by the next wave of technological advancements, which would be able to provide further customization and individualized service.

Regulation: A Double-edged Sword

• As many game-changing companies were established less than a decade ago, they face regulatory challenges across the international locations they operate in since many of the industry standards and regulations had been established for a different era. Pro-active engagement of policy makers is therefore essential to convince authorities of the value proposition that these new businesses bring to the economy.

• While regulation may often be perceived as a hindrance to the growth of start-ups, it can also help bring about much-needed consolidation in certain industries, thereby elevating the standard of products and services offered to consumers. For example, the introduction of regulatory measures to the online consumption and distribution of videos in China helped consolidate the industry to five to ten high quality players, providing consumers with much better products.

Global Products, Local Instincts

• With 4 billion consumers now possessing a smartphone, the market for entrepreneurs is now global. However, competition is intense. Because of network externalities, only the entrepreneurs who emerge to be the best-in-class would benefit. While geographical boundaries have been greatly diminished by technology, good local know-how is still an advantage. Working with local partners helps business game-changers to better address the needs of consumers.

• It is important for entrepreneurs to leverage the strengths and capabilities of home markets, as they reach out to the global marketplace. Companies should leverage the capabilities available in its home markets, in order to build products that could cater to the global audience.

• Talent is critical as a factor for consideration when deciding where a business should operate. In China, traditional and highly-regulated mobile

Plenary Session 3: Leading Business Game-Changers

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internet businesses tend to be concentrated in Beijing, while the focus on supply and manufacturing chains in the Internet of Things (IoT) would draw most companies into cities in the southern parts of China like Guangzhou and Shenzhen.

The Way Forward

• There are tremendous opportunities to leverage on technology for game changing businesses to solve real problems faced by the world today. To succeed, these businesses need both visionary leaders and investors. The next batch of successful business game-changers will emerge, when there is a successful amalgamation of a unique business model, a strong management team, good market fit, and the right financial support.

• Looking forward, regulatory issues arising from disruptive businesses need to be delicately calibrated. Regulators should provide entrepreneurs with sufficient freedom to innovate, without unnecessarily restricting growth opportunities arising from companies harnessing the benefits of technology. An effective form of regulation that can react to the needs of consumers and businesses would require active consultation and partnership between business leaders and policy makers.

Plenary Session 3: Leading Business Game-Changers