Today at GMIC Beijing 2014, James Shen, VP of Qualcomm and Dan Wong, VP of Samsung discussed entrepreneurship in global context with Vijay Vaitheeswaran, China business editor of the Economist.
The panel agreed that innovation was the most important factor for success, defining innovation as fresh thinking that creates value for customers. James Shen added “For Qualcomm, innovation in the Chinese market is even more important than in the West, as it is a distant market for us. We work with around 100 OEMs in China, and innovating to meet the unique demands of Chinese customers is our number one priority.” He went on to explain that in the past, Qualcomm was only based in San Diego, and struggled to understand the needs of the Chinese market despite frequent trips to the middle kingdom. Qualcomm now has a research & development (R&D) centre in Beijing, and a huge engineering team in Shanghai, making it able to quickly discover and respond to the needs of local customers.
Samsung has established R&D, design and content services operations centers in centres of excellence around the world. Dan Wong explained that these centres are tasked with developing products and features that succeed in the local market, and then investigating whether these can be applied globally. He added that product innovation isn’t enough on its own, and must be complemented by innovation in the business model and the operation of services across the different geographical regions.
An example of this kind of innovation is Samsung’s partnership with restaurant review app developer Dianping. In order to compete with the growing number of low cost smartphones reaching the market, Samsung needed a way to demonstrate the quality of their products, and show customers the difference. A special version of the popular Dianping app was produced, that took advantage of the powerful capabilities of phones such as the new Galaxy S5, as well as the increased bandwidth offered by the 4G mobile network recently launched in China. The app showed customers high definition 360 degree views of restaurants, allowing customers to hold up their phones and literally look around. Curating local relevant content into a new user experience provided the necessary wow factor.
An entrepreneurial approach is taken in Qualcomm, added James Shen. The company encourages innovation in its intrapreneurial employees, taking on multiple projects at once to discover what succeeds, and working to 6 or 12 month execution phases, as opposed to the more traditional 3 to 5 year periods. Samsung fosters an entrepreneurial spirit, pushed by a competitive market to constantly invent new ideas and track the performance of their innovations shared Dan. The broader ecosystem is leveraged too, by bringing many external companies onto the Samsung platform.
Mr Shen said that in the past, the only exit strategy for companies was an IPO in the US. However, these days mergers and acquisitions are increasingly common, and are a very viable option for startups. This is a huge motivator. The downside is that because many of these M&A activities are strategic, the valuations are grossly inflated. This creates unrealistic expectations in the market, and leading companies with no product and zero revenue to believe they are worth more than they really are.
Author: Carl Robinson