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The Secret Chinese Company That Owns Everything — Transcript

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0:00can I have a quick show of hands who's
0:01heard of
0:0310cent great
0:07start if you look at the world's most
0:10valuable companies you won't be
0:11surprised to find the likes of Apple
0:13Microsoft and Google but one name does
0:16stand out 10
0:19cent the company is worth more than the
0:22likes of Facebook MasterCard and Samsung
0:25and yet if you asked the majority of
0:27people what 10 cent does you'd be met
0:30with a confused look the truth is that
0:3210cent does everything because whilst 10
0:36cents mascot is a friendly looking
0:38penguin a more accurate animal to embody
0:40this conglomerate would be a giant
0:42octopus with tentacles reaching into
0:45almost every industry you can think of
0:47all over the world in most places
0:49tensent operates from the Shadows hence
0:52why it's not a household name but
0:54whether you realize it or not you almost
0:56certainly use products or Services
0:58tensent is involved with however in tens
1:00Cent's home country of China it's a very
1:03different story everyone is aware that
1:05tens Cent dominates their lives and
1:07that's because in China tens Cent has
1:09achieved the seemingly impossible one
1:11app to rule them all the Chinese company
1:14I'd be most worried about is 10cent
1:16because of WeChat in China it is s of
1:19impossible to live without WeChat it
1:21dominates every aspect of life in China
1:23from banking gaming shopping social
1:25media it's so essential to their daily
1:28life one business executive compared it
1:30to me saying that it was like water or
1:33electricity you see 10cent created an
1:36app called weats that's been dubbed the
1:38everything app or the operating system
1:41of China and that's because almost all
1:43of China's 1.4 billion population use
1:46this app for an average of 4 hours every
1:48day that's more than the average
1:50American user spends on all social media
1:52apps combined and the reason people in
1:55China use WeChat so much is because it's
1:57basically every app you can think of
1:59rolled into one it's essentially
2:02Facebook PayPal WhatsApp Netflix Google
2:05Spotify Uber Yelp Tinder Zoom YouTube
2:09deliveroo Amazon and lots lots more all
2:12in one single app now there's no doubt
2:14that this is extremely convenient
2:16everything connected in one app and one
2:18profile you pay your bills through it
2:20call your friends through it and
2:21essentially live your entire life
2:23through it however one single company
2:25having access to literally all your data
2:28every aspect of your life from your
2:30exact location to your entire Bank
2:32history to every message and call and
2:33search you've ever made it's a lot and
2:36then it gets worse when you realize that
2:38the line between where 10 cent ends and
2:40the Chinese government begins is blurry
2:42meaning the Chinese Communist Party
2:45known as the CCP has access to all that
2:47information as well making WeChat one of
2:49the most powerful surveillance tools
2:51ever created not just that but private
2:54messages and images that are sent
2:55through 10 cents apps like WeChat are
2:57scanned to see if they need to be
2:59censored if you say anything that the
3:01Chinese government doesn't want you to
3:03the best case scenario is your message
3:05just doesn't get delivered worst case
3:07scenario is you end up in jail or simply
3:09disappear for example one citizen
3:12literally just made a light-hearted joke
3:14to some friends about a government
3:15official and soon found himself jailed
3:17for a text and it almost seems like the
3:19CCP wants people to be aware of this in
3:22order to prevent them even trying to say
3:24anything they don't like in the first
3:26place because the Chinese government has
3:28even openly confirmed that it can access
3:30deleted Weck conversations as well
3:32without permission from the user or
3:34courts now of course as we know from
3:36snowden's leaks countries surveilling
3:38their citizens with technology is
3:40certainly not just something that
3:41happens in China however China has
3:43definitely taken it to new levels
3:45Amnesty International is an organization
3:47focused on human rights and carried out
3:50a report of how messaging apps handle
3:52their data and they concluded the worst
3:54offender by far was 10 cent the only
3:56company to literally score zero out of
3:58100 for its treat M of data this is
4:01because of massive problems about
4:02transparency and what they do with data
4:05where it ends up and not even denying
4:06that it gives the CCP a back door to
4:09access all encrypted messages now of
4:11course pretty much all Chinese companies
4:13have to have some ties to the CCP in
4:15order to be allowed to succeed but 10
4:17cent is unique because it has been
4:19allowed to monopolize entire Industries
4:22in China and use brutal tactics to wipe
4:24out competitors without any interference
4:26from Regulators but in exchange for that
4:28freedom someone would say as a result
4:30they've been turned into a weapon for
4:32the Chinese government it's estimated
4:34the CCP has thousands of members inside
4:36tensent including party officials on the
4:3810cent executive board who can influence
4:40decisions for example during the initial
4:42covid outbreak the Chinese government
4:44used WeChat for population control
4:46assigning color codes to determine
4:48whether people were healthy and what
4:49they were eligible for like if they were
4:51allowed to leave their homes or not
4:53another example is ordering 10 cent to
4:55change their games to conform to
4:57Communist Party values as well as making
5:00add facial recognition to their games so
5:02kids can only play them for a Max of 90
5:03minutes per day but before you think
5:06this doesn't affect you think again the
5:09vision of 10cent is to connect people
5:12and connect everything you see once
5:1410cent built their Monopoly in China
5:16they began expanding abroad and
5:18essentially went on one of the biggest
5:20shopping spree in history they've
5:22invested heavily in companies like
5:24Reddit Tesla Discord Spotify Snapchat
5:27and Universal Music and those are just a
5:29couple of the many hundreds of companies
5:31outside of China that tensent are now
5:33involved with they are also the largest
5:35gaming company in the world with Revenue
5:38significantly higher than any competitor
5:40this is particularly crazy when you
5:42consider that gaming is just one of
5:44countless different Industries T and
5:45operates in and yet their gaming
5:47division alone is bigger than the entire
5:50company of Nintendo or EA and the reason
5:5310cent is so dominant in gaming is
5:55because they own 100% of Riot games
5:57creator of League of Legends 40% of Epic
6:00Games creator of fortnite not to mention
6:02stakes in Ubisoft Activision Blizzard
6:04and so many more of the world's most
6:06popular games the same is true in other
6:08Industries for example 10 cents payment
6:11division is nearly as big as PayPal's
6:13entire business and it's reported WeChat
6:15pay generates over 1 billion payment
6:17transactions per day more than visa and
6:19MasterCard combined they've also got
6:2210-cent music they're huge in Esports
6:24and are even now involved in making
6:26Hollywood movies like Men In Black I
6:28think if you look at and uh music the
6:30company makes about 400 million 500
6:33million in profit in other words it's
6:35hard to fully grasp just how large
6:3710cent is but it's only recently that
6:40the West has started to realize the
6:42influence 10cent andless China actually
6:44have one small example was how blizzard
6:47the World of Warcraft Studio partially
6:49owned by tenens Cent banned a gamer who
6:51endorsed the pro-democracy movement in
6:53Hong Kong in other words China seemed to
6:55be using 10cent as a weapon to influence
6:57decisions outside of China this caused
7:00many people to ask how is this one
7:02Chinese company seemingly now dictating
7:04what people in the US are allowed to say
7:07the same was true with the
7:08NBA
7:10youj you see 10c video has a deal with
7:13the NBA to stream their matches but in
7:152019 Daryl Mory manager of the Houston
7:18Rockets tweeted Fight For Freedom stand
7:21with Hong Kong in response 10 cent said
7:24they would not be streaming any Rockets
7:25matches in future so soon after this the
7:28manager was forced to delete delete his
7:29support for Hong Kong Backtrack on his
7:31stance and apologized for his
7:33inappropriate tweets players then came
7:35out stating that they love
7:37China yeah we apologize um you know you
7:42know we love China we love you know
7:43playing here so whilst in recent years
7:46some have started to wonder if China
7:48could use 10cent to influence things
7:50abroad the answer seems to be that they
7:53already are multiple governments from
7:55the US to India have now called WeChat a
7:57security threat and others suggested
8:00it's a monitoring weapon in your pocket
8:02and turning now to the major decision by
8:04the Trump Administration Banning the
8:05popular social media apps tick talk and
8:08WeChat from us app stores US president
8:10Donald Trump issued an executive order
8:13last month targeting the app as a
8:15security threat but what's perhaps Most
8:17Fascinating about tensent story is that
8:19you can look at it in two ways on one
8:21hand tens Cent is one of the greatest
8:24business success stories ever at one
8:26point the company had only $1,000 in its
8:28bank account and so the Journey of how a
8:31group of friends turn their struggling
8:32startup into one of the world's largest
8:34companies is remarkable and filled with
8:36useful lessons and genius business
8:38strategies what they have achieved is
8:40ridiculously impressive and there is
8:42definitely an argument that tens Cent
8:44has been unfairly caught in the middle
8:45of a political storm that they didn't
8:47want any part of but on the other hand
8:50tensent is often surrounded by
8:52controversy this includes their brutal
8:54monopolistic practices to crush any
8:56competition their blatant plagiarism of
8:58just ripping off other companies and
9:00apps their extreme censorship and
9:02violations of privacy and freedom of
9:04speech accusations of poor working
9:06conditions and the fact multiple
9:07countries now see it as a national
9:09security risk because of its close ties
9:11to the Chinese government but I do want
9:13to be clear to just dismiss 10cent as a
9:16puppet of the CCP is unfair in fact
9:18right now the Chinese government is
9:20actively hurting 10cent business and is
9:22responsible for wiping hundreds of
9:24billions of dollars of 10 cents
9:26valuation which of course just raises
9:28even more questions why would the CCP be
9:30damaging one of its most useful assets
9:33as you can see the 10-cent story has a
9:35lot of different pieces to it there is
9:37both good and bad and several plot
9:38twists along the way honestly I've
9:40covered lots of different business
9:41stories but tensent is one of the most
9:44fascinating in this video we're going on
9:46a journey through 10 cents insane
9:48history to find out the truth behind
9:50this gigantic business Empire a company
9:53that influences so much and yet is so
9:55rarely discussed how did they get here
9:58what are they planning next and what
9:59does it mean for all of us so buckle up
10:02because I assure you the story of tenent
10:05is going to be a wild ride
10:08[Music]
10:32[Music]
10:37if you walked past Elon Musk Jeff Bezos
10:39or Mark Zuckerberg I'm pretty sure you'd
10:41notice but when it comes to 10 cents
10:44founder and CEO despite running such a
10:46gigantic influential Corporation it's
10:49quite likely you've never even seen him
10:51before he goes by the name of pony in
10:54English our next guest is the founder
10:57and CEO of 10cent Pony however this is
11:01his actual Chinese name but since in
11:03English his surname translates to horse
11:05he goes by the name Pony as a bit of a
11:07joke the fact we don't usually hear much
11:09about Pony Mar or know much of his story
11:12is mostly by Design tensent tries to
11:14walk the tight RPP of keeping both China
11:17and the rest of the world happy and
11:18since that's very difficult to balance
11:21he opts to not speak out publicly much
11:22at all it's better to just say nothing
11:25rather than cause controversy and
11:26headlines the other reason we know so
11:28little about Pony is that unlike his
11:30arch nemesis Jack Mah the founder of
11:33China's other dominant company Alibaba
11:35Pony is introverted and simply doesn't
11:37like being in the spotlight and this has
11:40always been the case growing up Pony Mar
11:42was a quiet kid who mostly went
11:44unnoticed throughout his sco is the only
11:46time he did get much attention was when
11:47he hacked into his University's
11:49computers and got a reputation as a
11:51great coder in fact for his university
11:53thesis he created a software program
11:55that could help forecast stock price
11:57movements and this software was so
11:58useful but at age 22 he sold the program
12:01to the company he was interning at for a
12:03price of about three times his annual
12:04salary by the time Pony graduated from
12:07college the internet was in its very
12:08early stages and whilst of course it was
12:10very primitive back then Pony was
12:12excited by its potential and began
12:14thinking of business ideas to try and
12:16capitalize on this exciting new internet
12:18technology however although Pony was
12:20undeniably a very talented and
12:22hardworking programmer the beginning of
12:24his future business empire did not come
12:26from some revolutionary idea that pony
12:28himself gr you see it's time for the
12:31first uncomfortable truth about 10 cents
12:33the business was started by just ripping
12:35off someone else's idea and as we'll
12:38soon see that has remained a fundamental
12:40part of 10 cents business strategy ever
12:42since but it all began when one day Pony
12:45was browsing online and stumbled across
12:47something called icq an internet chat
12:49platform that at the time was pretty
12:51groundbreaking it was basically the
12:53first mass adopted instant messaging
12:55system on the internet letting any two
12:57people online have a private conver
12:59ation in real time so in 1998 Pony and
13:02his tent co-founders which was three of
13:04his friends from school launched their
13:06own duplicate chat service that was more
13:08catered to the Chinese market now
13:10admittedly it was a common practice in
13:12China to just clone popular Western
13:14Services for example Buu copied Google
13:16Alibaba copied eBay webo copied Twitter
13:19and so 10cent copied icq but just to
13:22demonstrate how much of a ripoff 10
13:24cents chat product was of icq they
13:26literally called their service o IQ so
13:29They just added the letter O to the name
13:30initially though 10 cents future looked
13:32Bleak they got the cheapest office they
13:35could in a chaotic and Loud neighborhood
13:37full of Street vendors pedling knockoff
13:39Electronics they were crammed into a
13:41tiny room which bizarrely had a disco
13:44ball hanging from the ceiling to be fair
13:46though once tenson had set up their
13:47internet chat service oq they did a
13:50great job of tailoring it more towards
13:51the Chinese market one simple example of
13:54this is that because download speeds in
13:56China were so slow in the '90s it would
13:58take ages for people to download most
14:00chat programs whereas 10cent made sure
14:02their chat software had a much smaller
14:04file size so downloaded much faster also
14:07unlike other chat software where you
14:08could only message people you already
14:10knew Pony made it so that on oq
14:12Strangers could connect if they wanted
14:14to as well thus laying the early
14:16foundations of it becoming a social
14:17network at first though the problem was
14:20that very few people even knew oq
14:22existed Pony himself later admitted when
14:25users first came nobody was in the chat
14:27room I had to keep them company and talk
14:28with them
14:29sometimes I had to change my profile
14:30picture and pretend to be a girl so you
14:33had the CEO talking to random people in
14:35the chat hoping they'd like the service
14:36enough to keep using it now to be fair
14:39this was actually more of a side project
14:40for 10 cent in the early days Pony
14:42initially spent more of his time trying
14:44to work on a software that connected
14:45Pages or bleepers as they were also
14:47known to the internet unfortunately that
14:50idea was going nowhere and so Pony was
14:52relieved when one evening he logged onto
14:54their chat app and saw a spike in users
14:562 months in they'd hit 500 users and
14:59from that point the user number began to
15:01rise faster and faster each month as
15:03people in China shared oq with their
15:05friends and family before long the chat
15:08app was growing so fast that it became
15:0910 cents only focus they ditched the
15:11pager idea completely and went all in on
15:14oq thousands of users were now joining
15:16every day and so you'd think Pony would
15:18have been thrilled but in reality he was
15:21more stressed than ever that's because
15:23there were three major issues Number One
15:25servers in China were expensive at the
15:27time and they kept having to by more
15:29which was particularly problematic
15:31because of issue number two Kent wasn't
15:33making any money oq was taking off like
15:36a rocket but it wasn't monetized and so
15:39they were actually just losing money the
15:41more people used it but then worst of
15:43all issue number three one day in 1999
15:46about 9 months after starting oq Pony
15:49received a thick envelope in the mail
15:51from America it was a letter from the
15:52lawyers of AOL a big American company
15:55who owned the original icq chat software
15:57that 10 cent had copied
15:59it said they were suing tensent for
16:01violating intellectual property laws and
16:03demanded tensent stop using the name oq
16:06immediately by this point oq had hit 1
16:09million users and was growing rapidly
16:11but 10 cent didn't have the money for a
16:13lawsuit they barely had any money at all
16:15in fact most of the small 10-cent team
16:17were doing freelance work on the side to
16:19try and raise enough money to pay the
16:21rising server costs they were all
16:22working crazy hours and getting very
16:24stressed out So eventually Pony decided
16:27to try and sell the company ands
16:29surprisingly though given the lack of
16:30Revenue and legal issues nobody wanted
16:32to buy it people just kept saying they
16:34didn't see how it would make enough
16:36money to be sustainable but then Pony
16:38learned about the concept of venture
16:40capital investors who were looking for
16:42companies that weren't necessarily
16:43profitable yet but had huge future
16:45potential as soon as Pony learned about
16:47this concept he immediately began
16:49contacting VC firms and managed to get a
16:51meeting with China's most well-known
16:52Venture Capital fund called idg capital
16:55in the pitch Pony used an unusual tactic
16:57brutal honesty he told idg if you don't
17:01fund us right now 10cent will probably
17:03die and even if you do give us the money
17:05the future is still uncertain Pony also
17:07admitted they weren't fully sure how
17:09they would even monetize their chat
17:10software but what he did know is that
17:12millions of Chinese people liked using
17:14it and that there could be real value
17:16there now you'd think that this would be
17:17pretty underwhelming to investors but
17:20surprisingly idg Capital agreed to
17:22invest in 10 cents years later one of
17:25idg's decision makers said that Pony's
17:27total honesty rather than the typical
17:29overconfidence and false promises that
17:31Founders offer make is actually what
17:32made him think Pony was a really downto
17:34earth guy who could be trusted which
17:36encouraged them to invest so idg Capital
17:40along with another VC firm together
17:41invested $2.2 million for 40% of 10
17:45cents business it's not an exaggeration
17:47to say that if the deal had not gone
17:48through right then 10cent probably
17:50wouldn't exist today not only were they
17:52nearly out of money but the dotom bubble
17:53burst in 2000 an investment in cash
17:56burning internet businesses all but
17:57dried up luckily for 10 cent though
17:59they'd got the money just in time and so
18:01could continue operating there was still
18:03the lawsuit threat from AOL to deal with
18:05though and so Pony was forced to shut
18:07down the OIC Q domain names and Rebrand
18:09their chat app as something else
18:11eventually Pony decided to rename it as
18:13simply QQ so their legal trouble was
18:16sorted they had enough investment to
18:17carry on running and their user number
18:19continued to grow at an insane rate
18:22after hitting a million users in year 1
18:24they reached 50 million in year 2 as
18:26more and more people in China shared the
18:28software with other people so they could
18:30chat tensent had perfectly adapted the
18:32original icq chat to fit Chinese
18:34consumers better now just one issue
18:37remained making money whil you think
18:39having lots of users would make
18:41monetization easy back in the early
18:422000s on the internet in China it
18:44actually wasn't Pony tried multiple
18:46monetization strategies including
18:48placing banner ads on QQ selling qq's
18:51chat software to companies and charging
18:53a small membership fee to use the
18:54software all of these failed and in fact
18:57the membership fee in particular
18:59backfired horribly people in China hated
19:01the idea of paying a fee to use any
19:03internet service and so this allowed
19:05some competitors to gain market share
19:07from 10 cent on qq's third birthday in
19:092003 Pony scrapped the subscription fee
19:12and made QQ completely free again but of
19:14course they had to make money somehow
19:16luckily it was around this time that
19:18some 10-cent employees had discovered a
19:20Korean website called SE club.com which
19:22allowed people to create personalized
19:24avatars with customizable appearances
19:26and clothing it seemed really popular
19:28popular in career so tensent decided to
19:31once again copy a popular feature from
19:32elsewhere and launch their own avatar
19:34feature inside QQ called QQ show thus
19:37giving Chinese citizens a way to express
19:39themselves by having their own unique
19:41character to represent their profile for
19:43a very small fee you could buy designer
19:44clothes accessories and styles for your
19:46character whilst buying things for your
19:48avatar was cheap equivalent to just a
19:50few cents it cost 10 cent nothing and
19:52those microtransactions added up fast
19:55this feature quickly became very popular
19:57especially amongst younger users your
19:59avatar became a signal of your status
20:01and the feature worked particularly well
20:03because many people had started using QQ
20:05as a dating app adding strangers
20:07randomly and chatting with them and so
20:09the Avatar function was a way to express
20:11some personality and in some cases
20:13established themselves as being rich by
20:15purchasing the most expensive Avatar
20:17items finally Pony could relax a little
20:2010- cents chat software Q was now making
20:22money by selling these virtual items and
20:24they soon crossed a 100 million users in
20:26China Pony even met his future wife
20:29through QQ for 3 months he was chatting
20:31with a girl on there before they met in
20:33person funnily enough when they first
20:35started chatting on QQ she had no idea
20:37she was speaking to the founder of the
20:38service she reportedly messaged him
20:41asking who are you and he wrote back I'm
20:43penguin dad a reference to the fact that
20:45tens cense mascot was a penguin but she
20:47just replied then I'm penguin mom their
20:50relationship began from there and 6
20:51months after meeting in person they were
20:53married unfortunately for Pony that
20:55happiness would be shortlived as little
20:58did he realized his company was about to
21:00go to war and their opponent was a
21:03hundred billion Corporation Called
21:09[Music]
21:22[Music]
21:26Microsoft in 2004 a chat service called
21:29MSN enter the Chinese market as a direct
21:31competitor to 10 cents QQ MSN was run by
21:34Microsoft which was terrifying for 10
21:36cent as Microsoft had such vast wealth
21:38and resources and Microsoft had decided
21:41to double down on its efforts in China
21:43given it was such a massive market and
21:45since their chat service was much more
21:46professional and streamlined than QQ MSN
21:49quickly attracted businesses and
21:50students QQ seemed more like a casual
21:52chat application but less of a serious
21:54communication tool on the other hand MSN
21:57was becoming more widely used in offices
21:59in China and thus it was quickly eating
22:00into qq's market share tensent really
22:02just had one big advantage over
22:04Microsoft though msn's decision- making
22:06was much slower because of their
22:07bureaucratic corporate hierarchy where
22:09every big decision had to be signed off
22:11by their American headquarters for
22:13example it was actually msn's China team
22:15who suggested the idea that users should
22:17be able to still receive messages even
22:18while offline and be able to see them
22:20when they came back but the suggestion
22:22never went anywhere meanwhile tensent
22:24managed to incorporate the same feature
22:25in just a couple of weeks and it proved
22:27to be hugely popular and so even though
22:2910 cent had grown into a fairly big
22:30company by this point they still acted
22:32more like a scrappy startup this offer
22:34meant their apps were a bit buggy and
22:36had some issues but they were able to
22:37launch new features really fast get
22:39real-time feedback and just fix issues
22:41along the way with very regular updates
22:43another issue for Microsoft MSN chat was
22:45that initially they kept all their data
22:47back on us servers which meant 10cent QQ
22:49chat service that ran on local Chinese
22:51servers was much faster to use but the
22:53biggest mistake for MSN was that they
22:55later Incorporated their MSN chat into
22:58their platform form MSN live and this
23:00just confused users as now to use the
23:02chat they had to go to a website instead
23:03and it was just unnecessary extra steps
23:06ultimately despite having greater
23:07resources MSN lost the fight to 10 cents
23:10in truth China hadn't been a main
23:12priority of theirs Microsoft had bigger
23:13battles going on elsewhere like with
23:15Google in the US whereas 10cent at the
23:17time had just one Focus which allowed
23:19them to go all in but this victory over
23:21Microsoft was a critical tourning wa for
23:2310 cents as after defeating a much
23:24bigger company they went on to
23:26completely dominate the chat Market in
23:27China in half a billion users in late
23:302005 and it was this dominance that
23:32would be the springboard for all of
23:34Pony's other plans you see Pony had a
23:36vision of being much more than just a
23:37popular chat platform but instead a
23:39whole network of integrated internet
23:41services as this would make it much
23:43harder for anyone else in the future to
23:44try and compete with them and so tenset
23:46began adding several other features into
23:48QQ like the ability to access news and
23:51after seeing how quickly tencent was
23:52growing a South African company called
23:54naspers had decided to invest $32
23:56million in tensent and become their
23:58largest shareholder in fact they still
24:00are to this day meaning NASA's got one
24:02of the highest investment returns ever
24:04but back when they first invested in 10
24:06cent this gave Pony the influx of cash
24:08you needed to begin the next stage of
24:09his plan and this is where things start
24:12to get crazy
24:27[Music]
24:32tensent had realized that a lot of
24:33people used QQ whilst playing games as
24:36people would chat with their friends
24:37whilst they were all playing so tensent
24:39decided the next logical place for them
24:41to expand was into both acquiring and
24:43building games of their own since they
24:45already had such an active user base
24:46within just a year of integrating games
24:48into QQ tensent had added another $50
24:51million in annual revenue now 10 Cent's
24:53quick expansion into the gaming Market
24:55was aided massively by the fact they
24:57were a Chinese company as you may know
24:58the internet in China is restricted by
25:00the great firewall which stops people
25:02within China accessing many websites the
25:04Chinese government don't want them to
25:06including the likes of Facebook and
25:07YouTube and that's largely because it
25:09wants to censor what its citizens can
25:11see but it's also because it wants to
25:13promote local Chinese companies instead
25:15and as a result in many Industries China
25:17has a policy where foreign companies
25:19have to partner with a local Chinese
25:21company to be able to sell their
25:22products or services in China and so
25:24this meant 10 cent could simply team up
25:25with makers of successful games in other
25:27countries and then adapt and distribute
25:29their game to the Chinese market these
25:31licensing deals allowed 10 cent to make
25:33a lot of money quickly without even
25:34having to produce any games themselves
25:36they could just partner with makers of
25:38popular games in other countries bring
25:39their game to the Chinese market and
25:41promote them to their massive QQ user
25:43base since inational companies were
25:45reliant on finding a Chinese partner if
25:47they wanted to enter the Chinese market
25:48tensent knew they had a lot of Leverage
25:50and an unfair advantage in negotiations
25:52if game makers wanted to bring their
25:54game to China's gigantic population they
25:56needed a Chinese partner and better than
25:5810cent given their huge user base one
26:01example of 10 cent power is illustrated
26:03by an anecdote from the American video
26:04game developer Zinga when they were
26:06trying to agree a deal with 10 cents an
26:08ex singer employee said negotiations go
26:10on for months and months and then by the
26:12time you get to the redline stage in the
26:14contract all of a sudden at the last
26:15minute they change everything it's a
26:17business tactic they use to wear down
26:19their partner but as well as licensing
26:20games for the Chinese market tenen did
26:22make some of their own games too
26:24normally by just replicating fairly
26:26simple games that were working well
26:27elsewhere for example QQ speed was very
26:30heavily inspired from Mario Karts this
26:32of course was even more lucrative than
26:34licensing as it meant they kept all the
26:35money for themselves and it was low risk
26:37as they were using Game Concepts that
26:39were already proven to work well abroad
26:41and just making their own version of it
26:42for China however since China had a
26:44major lack of digital piracy enforcement
26:46tensent realized if people weren't
26:48paying for games up front and were just
26:49sharing them for free why not make the
26:51games free for everyone and make money
26:53through in-game sales instead like
26:55paying for extra lives features and
26:57upgrades nowadays of course
26:58microtransactions within games are
27:00extremely normal but 10cent were
27:02definitely one of the first to push this
27:03so heavily and it worked 10cent Revenue
27:06continued to rise with monetization now
27:08going so well tensent ipoed in 2004 on
27:11the Hong Kong stock market which
27:13provided them a warchest for tensent to
27:15invest heavily in more expansion and
27:16growth however that growth would only be
27:18possible thanks to tensent culture now
27:21most Chinese tech companies are
27:22notorious for their long work hours the
27:24schedule is often referred to as the 996
27:26schedule meaning you work 9:00 a.m. to
27:28900 p.m. 6 days a week and that includes
27:31hours and hours of unpaid overtime
27:34that's illegal but the government turns
27:36a blind eye because long hours like that
27:39built China's Tech Giants his day at one
27:42of China's Tech Giants started at 8:00
27:45a.m. and should have ended at 8:00 p.m.
27:48but he says nobody wanted to be the
27:50first to leave or you'd be labeled
27:52unprofessional
28:01[Music]
28:13and certainly at 10 cent the culture was
28:14very demanding with internal meetings
28:16often going on past midnight but tent
28:18also had a strict hiring process as Pony
28:21believed that 5 a players were better
28:22than a team of 50 who weren't fully
28:24committed as even one person lowering
28:26the standards and not working hard can
28:28reduced team morale and drag down
28:29everyone else to their level not just
28:31that but one of the key culture
28:32decisions Pony made after their battle
28:34with Microsoft was to ensure that almost
28:35everyone in the business had freedom to
28:37pitch new ideas and work on new projects
28:39so rather than having a specific
28:41research and development division
28:42everyone was expected to innovate as a
28:44result the whole of 10 cense Workforce
28:46were actively monitoring the market for
28:48new apps and ideas they could
28:49essentially rip off and incorporate into
28:51QQ even Pony himself said in an
28:53interview at the time I don't blindly
28:55innovate the smartest approach is to
28:56learn from the best examples and then
28:58tried to surpass them Pony pointed out
29:00that this is exactly what American Tech
29:01giants like Microsoft and Google did as
29:03well but in China it really was the wild
29:06west where anyone could just blatantly
29:07copy anyone else with no protection and
29:10to be fair this wasn't One Way whil
29:1210cent copied others others copied
29:1310cent as well but because 10 cent QQ
29:16software gave them access to hundreds of
29:18millions of Chinese users it meant they
29:19could then divert that attention to the
29:21new features they launched giving them a
29:23huge Advantage before long tensent had a
29:25notorious reputation as a killer copycat
29:28at one point its reputation fell so low
29:31it was embroiled in a full-blown media
29:33controversy and Pi openly accused and
29:36scolded it for violating copyrights and
29:3810 cents reputation took an even bigger
29:40hit after a battle with a security
29:42company called Ki that offered a popular
29:44antivirus software called 360 Safeguard
29:47tensent had decided they wanted to get
29:48into the security Market as well so
29:50they' created their own very similar
29:52version of ki's security software called
29:54QQ doctor and because they could simply
29:56integrate it into the already very
29:58popular QQ software they almost
30:00immediately gained a 40% market share in
30:02China so Ki who decided to fight back by
30:05launching a big media campaign accusing
30:07tensent of spying on its users saying
30:09tensent accessed user data and files on
30:11people's devices it didn't have
30:12permission to tensent sued Ki as a
30:14result but in the court of public
30:16opinion this backfired as it looked like
30:18a bigger company just trying to silence
30:20a smaller company with legal threats
30:22rather than actually trying to
30:23demonstrate their innocence and then
30:24tensent made an extremely bold move they
30:27informed you users that ki's software
30:29was not compatible with QQ meaning users
30:32had to choose either keep ki's security
30:34software or keep their beloved chat app
30:36that connects them to all their friends
30:38and family you couldn't use both if QQ
30:40detected Ki 360 Safeguard on your system
30:43QQ stopped working but tensent gamble
30:45paid off tensent knew that ultimately
30:47most users were too connected to Q to
30:49abandon it so Ki were mostly the ones
30:51who lost users instead people just
30:53switched to qq's antivirus software
30:55which was very similar anyway it was yet
30:57another victory for 10cent and proof of
30:59how easily they could launch a new
31:00internet service and almost immediately
31:02become the market leader in the media
31:04headlines such as 10-cent Empire out of
31:06control started to appear as this was
31:08clearly monopolistic to essentially ban
31:09your users from using a competitor's
31:11product but interestingly the Chinese
31:13government showed no interest in
31:14intervening they seemed quite happy to
31:16sit back and let 10cent grow only later
31:18would it become clear why but with no
31:20regulations or laws to stopped them
31:22between 2005 and 2010 10 cense Revenue
31:25went from $200 million to $2.9 billion
31:28however as tensent continued their
31:30expansion in China opening up more
31:32internet services and the leveraging
31:33qq's massive user base to make them
31:35popular eventually they realized a new
31:37strategy might be needed for a while
31:39tensent had simply been trying to work
31:40on everything competing in loads of
31:42different sectors and making clones of
31:44all different internet services and just
31:46seeing what worked basically they tried
31:48to compete everywhere rather than
31:49playing to their own strengths and
31:51really 10 cents biggest strength was in
31:52leveraging its QQ chat platform with
31:54hundreds of millions of users to direct
31:56traffic to other places like they did
31:57with news and gaming so as their copycat
32:00reputation got worse one 10cent
32:01executive said there's a lot of great
32:03entrepreneurs outside and if you turn
32:05every single one of them into your enemy
32:06it's not a good thing as a company you
32:08can't actually hire those entrepreneurs
32:09so what are you going to do investment
32:11is actually the best way to get a piece
32:13of their action thus tensent began
32:15shifting its strategy towards investing
32:17in Chinese companies instead of always
32:19trying to directly compete against them
32:20and crush them for example tensent paid
32:23$448 million for 36.5% of China's thirdd
32:26largest search engine and merged their
32:28own search product into that rather than
32:30competing 10cent was now willing to back
32:32a champion rather than do everything
32:34itself essentially 10cent new strategy
32:36was almost to become a startup incubator
32:39it would invest in businesses and take
32:40some of their equity and then build an
32:42ecosystem of connected companies that it
32:44could help grow using its existing user
32:46base and infrastructure another example
32:48was when 10cent combined with China's
32:49second largest online retailer jd.com
32:51tensent had no real expertise in
32:53e-commerce themselves and so they
32:55figured it made sense to just back one
32:56of the most prominent companies in in
32:57the industry in exchange for equity and
32:59then leverag their own internet traffic
33:01experience and capital to help the
33:03company they backed succeed as a result
33:05tensent became a king maker a support
33:07from tensent could help ensure a company
33:09was successful and from tens Cent's
33:11perspective it meant they massively
33:12reduced operational complexity as they
33:14weren't doing literally everything
33:15themselves anymore before long 10cent
33:17was one of China's biggest investment
33:19companies and QQ was now much more than
33:21a chat software it was a portal to many
33:23other internet services that tens Cent
33:25had either created or invested in and
33:27thus QQ seemed Unstoppable but
33:30interestingly the one app that would
33:32eventually surpass QQ was also created
33:34by 10
33:35[Music]
33:47[Music]
33:50cent 10cent had already succeeded with
33:53q's desktop chat app which had now
33:55evolved into a website portal with
33:57online games and other internet services
33:59but in 2010 mobile internet was
34:01beginning to rise in popularity very
34:03quickly many Chinese people began using
34:05a smartphone but not a computer Pony was
34:08paranoid that with the switch to mobile
34:09happening a new startup could displace
34:11their dominance so he decided 10cent
34:14needed to create this new startup
34:15themselves internally within 10cent Pony
34:18created three separate teams to work on
34:20a new mobile messaging app meaning they
34:21were competing against each other and
34:23also competing against 10 cents desktop
34:25app QQ this practice of teams in
34:27internally competing at 10 cent is
34:29normal in fact the culture of 10cent has
34:31been described as a shark wom
34:33referencing how some unborn sharks
34:34cannibalize siblings in the womb to
34:36ensure their own Survival so basically
34:38rather than put all their eggs in one
34:40basket multiple teams at 10-cent work on
34:42a concept like a new mobile chat app in
34:44this case and the best survives or as
34:46Pony himself has said you either wait
34:48for someone else to kill you or you do
34:49it yourself first so tent began work on
34:52their mobile chat app that they wanted
34:54to essentially be a clone of WhatsApp
34:55and kick a free mobile chat app where
34:58people could send messages to their
34:59contacts using Wi-Fi or mobile data
35:01interestingly tent had actually tried to
35:03buy WhatsApp for $10 billion rather than
35:05starting a new at from scratch but
35:07because pony m had to have back surgery
35:09the discussions got delayed in that time
35:11Mark Zuckerberg swooped in and bought
35:13WhatsApp for $19 billion and some think
35:16the possibility of 10-cent buying
35:17WhatsApp prompted Zuckerberg to close
35:19the deal so quickly either way after the
35:21WhatsApp deal fell through tensent
35:23decided to pursue their own chat apps
35:25instead and in January 2011 they
35:27launched we chat although in China it
35:29has the name wayin unlike QQ which had
35:31been developed for desktops WeChat was
35:33specifically made for mobile despite
35:35this the Apple was not a massive hit
35:36right away but it did start to gain
35:38Traction in China when tensen added a
35:40feature called push to talk which
35:42allowed people to easily record a voice
35:44note and it would convert what you said
35:45into a text message this was immediately
35:47a very popular feature but once again it
35:50was copied from someone else an app
35:52called Talk boox you see at first tent
35:54had offered to buy Tor box but whilst
35:56negotiations wrong going tensent just
35:58replicated talk Box's app within wichat
36:00by themselves and inevitably beat
36:02talkbox with their Superior resources in
36:05later years companies in China would
36:06learn that an offer from 10 cent was
36:08actually an offer you couldn't refuse
36:10you either lose your company by selling
36:12to them or lose your company by them
36:13copying and crushing you at least if you
36:15sell your company you make some money
36:17when Pony was asked about this at a
36:19conference in China he said in America
36:21when you bring an idea to Market you
36:22usually have several months before
36:24competition pops up allowing you to
36:25capture significant market share in you
36:28can have hundreds of competitors within
36:29the first hours of going live ideas are
36:31not important in China executioners so
36:34WeChat was now gaining momentum in China
36:36and just like QQ tenson did not want to
36:38keep it as just a chat application in
36:41fact because WeChat was a mobile app
36:43that people would always have with them
36:44wherever they were Pony quickly realized
36:46that the amount of services they could
36:47connect to WeChat was seemingly
36:49Limitless for example within wechat's
36:51app Tenten introduced a feature called
36:52moments basically their version of
36:54Facebook or Instagram a real-time social
36:56media feed posts images and articles
36:59following the success of this they added
37:01a blogging service called Public
37:02Accounts so people could write articles
37:04which could then be shared on moments
37:05there was also official accounts
37:07allowing Publishers to distribute
37:08content and businesses to distribute
37:10products and services this would be like
37:12the equivalent of uh following their
37:14newsletter for example but nobody in
37:17China really uses emails very much so
37:19they're more likely to use WeChat to
37:21follow brands that they're interested in
37:23by 2012 WEA add 100 million users
37:25remember it only launched in 2011 thus
37:28making it the fastest social media
37:29growth in history taking only 433 days
37:32to hit 100 million users for context it
37:35took Facebook around 5 Years A year
37:37later in 2013 WeChat was at 300 million
37:40users but the key to wechat's eventual
37:42dominance in China was that tensent just
37:44kept bundling more features in this same
37:46app for example they added quirky
37:48features like drift bottle which was a
37:50service within WeChat to help people
37:51find new friends or dates you
37:53essentially put either a voice or text
37:55message in a virtual bottle throw it
37:56into a virtual and then another random
37:58user picks it up and decides whether to
38:00reply to a message or throw it back for
38:02someone else to get this actually became
38:03a really popular feature with many
38:05Chinese people making genuine
38:07friendships and relationships through it
38:08and for some people it became a hookup
38:10app tensen also created friends nearby
38:12for a similar purpose which was like an
38:14early version of Tinder and helped
38:16WeChat grow even faster but one of the
38:18most crucial developments for WeChat
38:20came about kind of by accident you see
38:21in China it's a tradition that during
38:23the Luna New Year people charitably give
38:25away red envelopes and packets
38:26containing money so weat decided to
38:29create a red packet function within
38:30their app so people could digitally send
38:32red packets to people which transferred
38:34real money to their accounts during that
38:36holiday over 75 million red packets were
38:38sent via WeChat this led 10cent to a
38:40clear realization mobile payments were
38:42the future this feature that was meant
38:44to be a fun little temper thing over the
38:46holidays ended up leading 10cent to
38:48create WeChat pay their mobile payments
38:50platform to digitally transfer money
38:52before long wechat's wallet feature was
38:54not just used to send payments to other
38:55people but as a way to pay for things in
38:57shops and in fact basically anything
38:59where money needed to be sent or paid
39:01rather than carrying around a credit or
39:02debit card it was easier to just use
39:04WeChat since their Bank details were
39:06already connected they won't ask for
39:08cash because nobody's really paying for
39:10anything with cash nowadays in China in
39:13fact even if you give them cash they
39:14might not actually be able to accept it
39:16once again this may seem like an obvious
39:18feature today but back in 2013 when it
39:20launched in China this mobile payment
39:22function was an incredible feature and
39:24hence helped WeChat become even more
39:26popular and as more people China started
39:28predominantly using smartphones
39:29eventually WeChat surpassed QQ even
39:31though they were both started as chat
39:33Services run by 10 cents WeChat was
39:35definitely better for mobile and mobile
39:36was becoming much more widely used in
39:38China by 2015 we chat crossed half a
39:40billion users of course whilst the app
39:42name hasn't changed chatting is now just
39:44a tiny fraction of what WeChat does
39:46which leads us to the most crucial
39:48feature of all for WeChat the feature
39:50that turned it into the Super RP it is
39:51today that dominates the lives of almost
39:53everyone in China in January 2017 we
39:56chat launched a feature called mini
39:57programs that allows users to access
39:59tens of thousands of other apps within
40:01wechat's own app completely bypassing
40:03the need for an App Store so for example
40:05instead of you having to download a
40:06separate app for every single restaurant
40:08hotel or shop you go to they'd all just
40:10have a mini program within WeChat this
40:12not only allowed WeChat to connect
40:13itself to people's offline lives as well
40:15as online but it helps a me WeChat as
40:17the everything app even before this
40:19tensent had created so many of their own
40:21Services bundled into weats like
40:23payments games and dating but this mini
40:25programs feature meant there was
40:26basically no need to even have other
40:28apps on your phone because services from
40:30other businesses were now available via
40:32WeChat as well for example China's
40:34dominant ride sharing platform DD have
40:36their own mini program within WeChat so
40:38if you want a taxi you don't need a
40:39separate app or there's a mini program
40:41within WeChat for food delivery or
40:43tracking parcels and pretty much
40:44everything else you can think of so to
40:46demonstrate this let's imagine for a
40:48moment you're a Chinese citizen and
40:50you're meeting a friend for dinner you
40:51call them through WeChat to confirm the
40:53plans you book your taxi to the
40:54restaurant via WeChat in the taxi you
40:56play games and browse the news via
40:58WeChat send your friend your location
41:00via WeChat access the restaurant's mini
41:01program via WeChat which means you can
41:03view their menu via WeChat then take a
41:05photo of your food and post it on your
41:07social feed which is on WeChat pay for
41:09your meal via WeChat then afterwards if
41:11you want to go and watch a movie guess
41:12what you book your tickets through
41:14WeChat essentially imagine your life
41:16without a smartphone at all and in China
41:18that's what life would be like without
41:19WeChat okay I think I've said the word
41:21reach out too many times but anyway as a
41:23result of this mini programs feature
41:25tensent has essentially become the
41:26GateKeeper to the market for other
41:28businesses since people don't really
41:30need to use the app store when WeChat
41:31has everything inside of it so companies
41:33almost have to partner with 10 cents in
41:35order for their services to be used but
41:37this means 10 cent can effectively tax
41:39all of companies by taking a percentage
41:41of the revenue generated through their
41:42mini programs WeChat is linked to other
41:46companies so you go through WeChat to
41:49another app or website and then you buy
41:52through there but you pay with your wead
41:54now what's interesting is that an
41:56allinone everything at like this has
41:57been suggested outside of China as well
42:00in fact even quite recently Elon Musk
42:02talked about x a super app similar to
42:04WeChat if you're in China it's basically
42:06you kind of live on WeChat it does
42:08everything and we don't have anything
42:10like that um outside of china such a
42:12such an app um would be really uh useful
42:15but it was quickly shut down we have
42:17enough concerns about big Tech and
42:19social media without one single company
42:20controlling everything but now you can
42:22see why tenant has become a money
42:24machine because unlike many of the big
42:26Tech Giants in the west such as Facebook
42:28and Google 10cent doesn't need to rely
42:30so heavily on Advertising Revenue in
42:32fact some 10cent staff joke about how
42:34Facebook's business model is very
42:35primitive there's a quote from a 10-cent
42:37employee saying when you have a billion
42:38users the last thing you should be
42:40thinking about is how do I sell them a
42:41ton of ads what you should be thinking
42:43of instead is how to ensure you keep
42:45these users happy so you don't drive
42:46them away because you're annoying the
42:47hell out of them and that's what's
42:49notable about we chats it has kept a
42:51pretty clean interface and doesn't spam
42:53users with ads it doesn't need to they
42:55make so much money through
42:56microtransaction since they're involved
42:58in so many aspects of people's lives
43:00when you have over a billion people
43:01using your app for so many different
43:03parts of their life every single day
43:04those small fees on every transaction
43:06add up in a massive way how would you
43:08describe it to you how important is it
43:10half on my life basically everybody
43:12there uses it at least everybody I know
43:15that is aged 70 or younger in China uses
43:17WeChat basically the app can help you
43:20with all aspects of Life literally in
43:23China however given that WeChat
43:25dominates people's lives in China you
43:27may wonder why it's not so popular
43:29outside of China whil we don't have
43:31confirmation of exactly how many people
43:33use it outside of China estimat suggest
43:35possibly up to around 100 million which
43:37is decent but it's a tiny fraction
43:40compared to the well over 1 billion
43:41people inside of China who use weat and
43:43most of the people who use WeChat
43:45outside of China are Chinese expats
43:46living abroad or people needing to
43:48connect with others who are in China so
43:50if weat is so useful in China why didn't
43:52the rest of the world adopt it why
43:54doesn't 10 cent expand more in other
43:55countries well this is where things get
43:58dark the simple answer is that the same
44:00reason 10 cense apps are so big in China
44:02is precisely the reason they're not so
44:04big anywhere else it's time to look at
44:0610 cense complicated relationship with
44:08the Chinese
44:20[Music]
44:24government before we get into 10 cents
44:26current Rel relationship with the CCP
44:28it's important to understand how things
44:30all began in 1979 the then leader of
44:33China designated an area called shenzen
44:35as the first test zone of his new
44:37economic plans this would be the first
44:39part of China where capitalist business
44:41models were allowed and this began
44:42China's rapid Ascent to becoming a
44:44global superpower nowadays shenzen has
44:46been dubbed the Silicon Valley of China
44:48as it's home to many of China's Tech
44:49Giants including tenzen but the Chinese
44:52government's plan was essentially to
44:53give some Chinese companies a huge
44:55amount of Freedom as long as they were
44:57benefiting the country overall so when
44:59companies like tenens Cent and Alibaba
45:01capitalized on the internet and built
45:03massive user bases China was happy to
45:05allow them to build such dominant
45:06companies by any means necessary without
45:08any real regulation as long as they were
45:10benefiting China and the CCP overall
45:12they felt it elevated the image of China
45:15and Chinese entrepreneurship by having
45:16these hugely successful companies it
45:19also meant that rather than foreign
45:20companies succeeding in China like the
45:22big American Tech Giants instead local
45:24Chinese companies would dominate as the
45:25government made it mandatory for foreign
45:27companies to partner with a local
45:28Chinese company and finally the CCP knew
45:31that if some Chinese companies became
45:33huge Empires then they could invest in
45:34lots of other companies both in China
45:36and abroad thus by proxy allowing China
45:39to have a lot of influence on the world
45:40and control the narrative they want so
45:42basically for the Chinese government
45:44tensent was an appealing Prospect having
45:46access to so much data was great for
45:48government surveillance and censorship
45:50and understanding the psyche of its
45:51citizens Physicians who were on the
45:55front lines who were warning about the
45:57pandemic even before it had a name uh
46:00had their Communications uh censor
46:02WeChat routinely blocks accounts for
46:05discussing issues like the pandemic or
46:07human rights abuses in shinjang they
46:09went to my father and threatened him wow
46:12and said that if your daughter doesn't
46:14stop talking about human rights we are
46:15going to persecute your family like in
46:17the culture Revolution after their
46:19accounts are blocked users say that the
46:21police come in to question
46:25them
46:38for the problem is the app is so crucial
46:41for existence in China that users cannot
46:44even give it up so China was mostly
46:47happy to not interfere and let 10cent
46:49continue to grow its dominance even if
46:51it sometimes used anti-competitive
46:53tactics of course the CCP were wary of
46:56how much power this gave 10 cents which
46:58is why their relationship is not as
46:59straightforward as you might think they
47:01knew it was important to make sure 10
47:03cents was very closely aligned with the
47:05CCP and give them reminders that if 10
47:07cents stopped being useful to the
47:08Chinese government tensent power could
47:10just as easily be taken away but anyway
47:12let's talk about what this partnership
47:14actually means kense stance is that in
47:17order to comply with China's legal and
47:19regulatory requirements it can process
47:21and handle private information without
47:23requiring user consent in certain
47:25situations those situations being if the
47:27Chinese government wants us to the CCP
47:30reportedly have a direct line to the
47:32desks of 10-cent product managers and
47:34are able to order deletions whenever
47:35they want or monitor specific accounts
47:37and specific phrases in both public and
47:40private posts one particularly
47:41intimidating policy change in 2017 was
47:44that group admins on wi chats were made
47:46personally liable for whatever was said
47:48on group chats they run many simply
47:50deleted their groups as a result tend
47:52also feeds data to China's social credit
47:54scoring system which can affect what
47:56citizens can do all that information
47:58they have like payment history real-time
48:00location who you're associated with can
48:02allow the government to create an
48:03incredibly detailed picture of who you
48:05are what you buy and how you behave thus
48:07allowing the government to give you a
48:08score of how trustworthy you are as a
48:10citizen they're constantly monitored by
48:12facial recognition cameras that are able
48:15to instantly put a face to a name now
48:18the Chinese are also ranked it's
48:20aggregating data gathered by Banks
48:22private companies and the state to rate
48:24if someone's a good or bad citizen good
48:27score brings benefits but people with
48:29low scores lose rights the cinema names
48:32and shames people considered
48:34untrustworthy Plastering their details
48:37even their addresses across big screens
48:39among them is this journalist Leu who he
48:42got a little too close to uncovering
48:44corruption among high-profile party
48:46members he was blacklisted he only
48:49realized when he tried to buy a train
48:51ticket and was told he was banned from
48:53traveling but as 10cent grew larger it's
48:56seems the CCP became more demanding
48:59tensent has to employ hundreds possibly
49:01thousands of their own sensors whose job
49:03it is to block anti-government posts
49:05tensent then began deleting lots more
49:07posts and suspending accounts that
49:09stepped out a line there are multiple
49:11examples of creators such as blogger
49:12Laura Leanne who had hundreds of
49:14thousands of fans reading her work but
49:16after making one comment the CCP didn't
49:18like her account was deleted without
49:20warning and her income gone and thus
49:22whil Chinese citizens clearly enjoy the
49:24convenience of WeChat which admittedly
49:26is such a useful app in the back of
49:28people's minds they're aware that their
49:30every move and comment is documented
49:32something which the CCP openly remind
49:35people of whatever tensent can see the
49:37Chinese government can see and so it's
49:39kind of crazy that over a billion people
49:41have opted to sacrifice all aspects of
49:43their privacy and free speech for
49:45convenience there's apparently a joke in
49:47China that if you order too much food
49:48via WeChat you might get the police
49:50tracking you thinking you're harboring
49:51fugitives now to be fair here I really
49:54do not believe 10 cent set out to create
49:56a government government surveillance
49:57tool this wasn't some evil plan tensent
49:59was started by some entrepreneurs
50:01wanting to build a business like anyone
50:03else but they managed to create
50:04something so popular that the only way
50:06the CCP would allow it was if they had
50:07some control too so tenent didn't really
50:10have any choice but to fall in line Pony
50:12is a pragmatic businessman and knows he
50:14has to keep the government on side hence
50:16when a reporter asked him about
50:17censorship at a Tech conference Pony
50:19seemed to side with the government by
50:20saying lots of people think that they
50:22can speak out and that they can be
50:23irresponsible I think that's wrong now
50:25to be fair we have no idea how Pony
50:27really feels but he knows what would
50:29happen if he spoke out against the CCP
50:31in any way and the reality is that
50:34China's laws require all companies to
50:36hand over data if requested in fact it
50:38reported that many companies in China
50:40have a special office at their
50:41headquarters called the Internet
50:43Security Police room where Chinese
50:45public security forces can intervene in
50:47company operations or track certain
50:48users which brings us back to the
50:50question why isn't WeChat as popular
50:53outside of China it's not like tent
50:54didn't try at all they do have an
50:56English version of their app and even
50:57ran Big Marketing campaigns like this
50:59advert with Messi to try and promote
51:01weat to the
51:03world WeChat the new way to connect
51:06download it now for free free voice and
51:07text messages we love we share WeChat
51:10however one of the most fundamental
51:12reasons for its limited International
51:13appeal is clearly because of this
51:15surveillance and censorship research
51:17from citizen lab found that the Chinese
51:18government does monitor and censor
51:20confidential information sent via
51:22tentant apps even from users outside of
51:24China for example I saw a story where
51:26one person in a private group chat had
51:28sent some news about Pro democracy
51:29protests in Hong Kong and was confused
51:31when nobody else in the group responded
51:33she only later found out nobody else
51:34could even see her messages as her
51:36private messages had been censored
51:37without her knowing it any taboo issues
51:39like mentions of tianan square or Tibet
51:41are censored on 10cent apps regardless
51:43of if you're in China or not so
51:45basically just because you were using a
51:4710cent app outside of China doesn't mean
51:48that 10cent wouldn't still have to
51:50supply any of your data to the CCP if
51:52they requested it remember T didn't have
51:54to stay on China's good side and thus
51:56many people understandably have some
51:57fear about one company especially a
51:59company with ti to the CCP having all of
52:01their info on every aspect of their life
52:03thus while surveillance and censorship
52:05is what allowed tensent to become
52:07dominant in China as it meant the CCP
52:08let them grow so big outside of China
52:10that has scared users off but it's not
52:13the only reason WeChat isn't as popular
52:15outside of China the second reason is
52:17that every country has different
52:18requirements WeChat works so well
52:20because it's perfectly tailored to China
52:22but for the app to be so effective
52:24elsewhere every country would need their
52:25own WeChat version with Services
52:27specifically suited to their country
52:29thirdly since China is such a massive
52:31Market it made more sense for tensent to
52:33go deep into that market where they
52:35already had lots of momentum rather than
52:36diverting resources to start from
52:38scratch in other countries after all
52:40China has a population of over 1.4
52:42billion people more than four times the
52:44entire population of the US but the one
52:46downside of doubling down on China was
52:48that 10cent didn't get the first mover
52:50advantage in other countries so if
52:52WeChat did want to try and become more
52:53popular in the US for example it would
52:55somehow have to compete against so many
52:57different established companies who've
52:58already managed to get their apps
52:59ingrained in people's lives but the
53:01final reason WeChat didn't work so well
53:03abroad is simply that it's historically
53:05been the case that Chinese tech
53:07companies struggle outside of China just
53:08as American companies struggle inside
53:10China however of course there has been
53:12one very notable exception recently Tik
53:15Tok a Chinese app which truly has
53:17managed to go Global and this leads us
53:20to one of 10 Cent's Most Fascinating
53:22battles
53:35[Music]
53:38in China once your business reaches a
53:40certain size you normally have to sell
53:42to or partner with one of the big three
53:45by do Alibaba or 10 cents but Tik Tok
53:48and its parent company bite dance were
53:50the one notable exception now if you've
53:52seen my video on the history of Tik Tok
53:54you'll know that the Western social
53:55media Giants like Facebook and Google
53:57completely dismissed the threat of Tik
53:59Tok until it was too late they let Tik
54:01Tok become one of their biggest
54:02advertisers thus letting them steal
54:04hundreds of millions of users from their
54:06platforms as Tik Tok ran endless ads on
54:08YouTube and Facebook only years later
54:10with the American Tech Giants realize
54:12short form content was here to stay and
54:14launch their own short video apps to
54:16compete but by that point Tik Tok had
54:18already become a massive hit through
54:19advertising on their platforms tensent
54:22on the other hand immediately realized
54:23Tik tok's threat and carried out their
54:25usual Playbook move move tensent
54:27assembled a large team to recreate a
54:29very similar app to Tik Tok within
54:30WeChat and then run massive promotions
54:32to advertise it tensent also banned Tik
54:34Tok from advertising on their platforms
54:36and straight up just started blocking
54:37links or mentions of Tik Tok on its
54:39platforms like WeChat it's interesting
54:41because when Elon Musk briefly blocked
54:43external links to competitors within
54:45Twitter everyone when this is dumb but
54:47in China that's just part of the game
54:49and an example of the anti-competitive
54:51tactics that have enabled China's
54:52biggest companies to build such huge
54:54businesses unfortunately for 10 though
54:57for once this tactic didn't work Tik
54:59tok's biggest strength was its machine
55:01learning algorithm that very accurately
55:03showed users the content that would keep
55:04them on the platform longer and thus
55:06once people were hooked on Tik tok's
55:08algorithm that already knew their
55:09preferences and was perfectly tailored
55:11to them there was little incentive to
55:13switch to 10- cents copycat version and
55:14start over with an algorithm that didn't
55:16yet know their preferences so well so
55:18Tik tok's first mover Advantage always
55:20gave them the edge things actually got
55:22heated between 10 cents founder pony m
55:24and bite dances founder jangi Ming
55:25because Jiang posted a screenshot of Tik
55:27Tok being the number one most downloaded
55:29app in the world and underneath
55:31criticized tensent for making an almost
55:32clone version of Tik Tok and for Banning
55:34Tik Tok within WeChat pony felt this
55:36public criticism was unfair given this
55:38was a common practice in China and he
55:40bluntly responded your words can be
55:42regarded as slander the heated public
55:44spat captivated China as both CEOs were
55:47normally so mild-mannered and reserved
55:49but it was clear no love was lost in
55:51this bitter rivalry however seeing Tik
55:53Tok succeed globally on such a huge
55:55scale something which 10 cents on apps
55:57like Gchat have never managed to do was
55:59definitely tough for Pony to take but
56:01wait hold on a second remember back at
56:04the beginning of this video I said
56:05tensent had a lot of influence all over
56:07the world well if their two most popular
56:09products cuu and WeChat aren't that
56:11popular with people outside of China why
56:13is 10cent considered such a dominant
56:15global company with influence all over
56:17the world to answer that it's time for
56:19us to look at tent's genius bigger
56:21picture strategy for world domination
56:36[Music]
56:40Pony once called a meeting of tensent
56:42top managers and highest ranking
56:44employees to plot out tensent strategy
56:47the meeting has since been dabbed the
56:48conference of the Gods since it was
56:50essentially A Meeting of Minds that
56:52would plot out tenson plans for
56:53Domination and the decisions made in
56:55that meeting were have serious
56:56ramifications for not just China but the
56:59rest of the world the main purpose of
57:00the meeting had been to establish what
57:0210- cents core competitive advantages
57:04were and how those could be exploited
57:06the answer was fairly simple 10cent
57:08advantages were that they have huge
57:09amounts of traffic and money far more
57:11than any competition and thus the plan
57:13became step one attract other businesses
57:15to launch their own mini programs via
57:17WeChat so they could leverage some of
57:18wechat's traffic step two tensent would
57:21then invest money into the businesses
57:22that were doing the best since tensent
57:24had all the data of which many programs
57:26people were using how often and how much
57:27money they were spending step three
57:29after investing in certain businesses
57:31tensen could then artificially give more
57:33traffic to the companies that invest in
57:34thus making them even more money which
57:36they can also reinvest in even more
57:38companies in other words 10cent can Sher
57:40pick the best mini programs invest in
57:42them boost their popularity and
57:44practically guarantee their investment
57:45as a big success no other company in the
57:47world has quite the same level of data
57:49on user Behavior to see what's popular
57:51and then the ability to significantly
57:53increase their value further by
57:54promoting them with M we chats if also
57:56creates synergies between tens Cent's
57:57Investments for example tensent has a
58:00significant stake in DD which is China's
58:01equivalent of uber and through WeChat
58:03tensent can promote DD more thus giving
58:05it an unfair advantage and increase the
58:07value of its investment but not just
58:09that because DD uses WeChat pay tensent
58:11also takes transaction fees on every
58:13payment it did the same thing after
58:15investing in the Chinese e-commerce
58:17company JD once tensen owned part of the
58:19business they massively increased JD's
58:21visibility within their apps to drive
58:23more sales of course all of this was
58:25insanely lucrative for 10 cent but then
58:27came the next part of the plan using
58:29some of the money it generates from its
58:30cash cows in China to invest in
58:32companies abroad thus letting 10 cent
58:34diversify away from China this is
58:36particularly important for 10 cens
58:38because if their entire Empire is only
58:39based in China they are totally at the
58:41mercy of the Chinese government so
58:43tensent has acquired or invested in many
58:45hundreds of companies outside of China
58:47in all different Industries thus
58:48building a huge International portfolio
58:50for example tensent became one of the
58:52largest shareholders of Tesla tenson
58:54also bought parts of Reddit and Discord
58:56this did prompt some backlash and
58:57concerns as some argue that if tens Cent
59:00has access to a company's data so does
59:01the CCP and that through 10cent they can
59:04subtly influence decisions in these
59:05International companies and thus
59:07ultimately influence Western culture
59:09since the Chinese government can use the
59:11apps for surveillance in China that same
59:14could be done to users in the US it
59:16sounds extreme but it's not unrealistic
59:19just look at the NBA example from
59:21earlier where the coach backtracked on
59:22his comments and apologized after
59:24threats from 10cent and China but to be
59:26fair here tensent do mostly seem to stay
59:28out of the way of the international
59:30companies they invest in and just take
59:31an equity percentage and then not get
59:33too involved or at least they haven't
59:35yet as a result of this hands-off
59:37approach though some accused tensent of
59:39basically abandoning Innovation and now
59:41just essentially becoming a gigantic
59:42investment fund funneling money from its
59:44apps in China into promising companies
59:46in other countries rather than creating
59:48much that's new or original itself and
59:50they don't even really try and build
59:52their brand that much internationally at
59:5410 on Twitter is actually suspended
59:56because someone had been holding the
59:57Twitter handle with a bio saying Daddy
59:5910 cent come and buy my accounts
1:00:01basically they were expecting 10 cent to
1:00:03come and buy the at 10cent Twitter
1:00:04handle off them but 10 cent didn't
1:00:06bother building their brand
1:00:07internationally isn't a big priority for
1:00:09them they're happy to just quietly
1:00:11invest abroad now one of their most
1:00:13lucrative Investments has been in gaming
1:00:15the gaming industry is estimated to have
1:00:16generated $176 billion of Revenue in
1:00:1920121 almost five times the box office
1:00:22of the movie industry and 10 cent are
1:00:24essentially the biggest players in the
1:00:25market now of course even from the
1:00:27relatively early days of tencent they'd
1:00:29been experimenting with games themselves
1:00:31especially mobile games in fact their
1:00:33game honor of Kings is so popular in
1:00:35China that there's a black market where
1:00:37people pay for others to play the game
1:00:38for them to improve their ranking as
1:00:40just like everything else in China it's
1:00:41connected to we chair so some people pay
1:00:43better players to improve their game
1:00:45stats as it's a bit of a social and
1:00:47status symbol however most of 10 Cent's
1:00:49original games were overly tailored to
1:00:51the Chinese market often featuring
1:00:52Chinese propaganda to appease the CCP
1:00:55and so it became clear to tensent that
1:00:57rather than trying to promote their own
1:00:58games abroad it made sense to find games
1:01:00with potential and just give them loads
1:01:02of money to help them grow quickly and
1:01:04take a percentage of their company as a
1:01:06result tenson is invested in studios
1:01:08that make some of the biggest Global
1:01:09titles such as League of Legends
1:01:11fortnite World of Warcraft Clash of
1:01:13Clans player unknowns Battlegrounds and
1:01:15the mobile version of Call of Duty they
1:01:17also partnered with Roblox to bring
1:01:19their games to the Chinese market but
1:01:21two of 10 Cent's most important
1:01:22Investments were buying 100% of Riot
1:01:24games and 40% of of epic games one of
1:01:27the world's most valuable startups this
1:01:29not only gave them a stake in some of
1:01:30the most played games on the entire
1:01:31planet but also investment in Epic Games
1:01:33as unreal game engine which has been
1:01:35described as the world's most advanced
1:01:37real-time 3D creation tool and is used
1:01:39for all kinds of different projects
1:01:40whilst 10 cents investments in
1:01:42international game studios have been
1:01:44extremely lucrative it's also brought
1:01:45some unwanted attention to the company
1:01:47many fans noticed that after 10cent
1:01:49acquired some of these popular games
1:01:50there seem to be more upgrades and
1:01:52unlockable content within the game that
1:01:53required additional payments and some BL
1:01:56this on 10 cent Being Greedy as they
1:01:57were clearly pushing for more
1:01:58microtransactions like is the norm in
1:02:00China another issue arose after
1:02:02acquiring Riot games as tensent wanted
1:02:04to turn their most popular title League
1:02:06of Legends into a mobile game to make
1:02:08even more money from it but the game
1:02:09developers didn't want to do this that
1:02:11was never their vision of what the game
1:02:12should be and since it was their game
1:02:14they thought that was the end of the
1:02:15discussion but they later found out
1:02:18tensent had gone behind their back and
1:02:19made a ripoff of their game which is
1:02:21where honor of kings came from one Riot
1:02:23games employee said we were stunned they
1:02:25were blatantly ripping off our
1:02:26intellectual property to add insult to
1:02:28injury tensan even used notable League
1:02:31Of Legend players to promote their new
1:02:32game which caused many people to assume
1:02:34Riot games was actively involved with
1:02:36this new game even though they weren't
1:02:38to be fair to tenen they were right that
1:02:39a mobile version would be popular by the
1:02:41end of 2017 honor of Kings the League of
1:02:44Legends inspired game was the most
1:02:45popular mobile game in China it was also
1:02:47in 2017 that tenzen overtook Facebook to
1:02:50become the fifth largest public company
1:02:51in the world their Cash Cow apps in
1:02:53China were more dominant than ever and
1:02:55their internet International Investments
1:02:56were paying off massively that's
1:02:58extending 10 cents influence all across
1:03:00the planet and it has to be said that
1:03:01nowadays 10 cent are truly great at
1:03:03finding ways to monetize for example 10
1:03:06cense video platform essentially their
1:03:07version of Netflix now inserts extra ads
1:03:10into movies and TV series that weren't
1:03:12there in the original such as adding
1:03:13extra Billboards and signs in the
1:03:15background tensent Cloud hosting
1:03:16business has also become very profitable
1:03:19just like Amazon web services that
1:03:20started off to host their own services
1:03:22but then began selling it as a service
1:03:23to others plus as if tent weren't
1:03:25already dominant enough the outbreak of
1:03:27Co was actually great for 10- cents
1:03:29Revenue people were at home on their
1:03:30phones more than ever which meant using
1:03:32their services and playing their games
1:03:33more 10cent generated $86 billion in
1:03:362021 alone and 35 billion of net profit
1:03:39making them one of the most profitable
1:03:41companies and so you may think that
1:03:43would be the end of the story that 10
1:03:45cent would be unstoppable many
1:03:46shareholders clearly thought so as
1:03:4810cent market cap was approaching 1
1:03:50trillion us but in 2020 suddenly 10cent
1:03:54began to face a lot more scrutiny quite
1:03:56suddenly Donald Trump began threatening
1:03:57to ban weats and other Chinese apps
1:04:00president Trump is making good on his
1:04:02threat to crack down on two popular
1:04:04chinese-owned social media apps he
1:04:06signed executive orders Banning Tik Tok
1:04:08and WeChat from operating in the US on
1:04:11the grounds that the Chinese Communist
1:04:12Party could use them to steal users
1:04:14private data censor anything critical of
1:04:16China and help spread this information
1:04:18of course there were definitely strong
1:04:19political motivations for this attack on
1:04:21Chinese apps and the subsequent
1:04:23executive order to ban them in the US
1:04:25but even now with the Biden
1:04:26Administration there are continued
1:04:28investigations into these Chinese apps
1:04:30and whether they are a national security
1:04:31risk that should be banned and thus as
1:04:33one of China's biggest companies tensent
1:04:35was thrusted into the international
1:04:37Spotlight more than it would like it may
1:04:39have taken a while but it seemed people
1:04:41were finally realizing the influence
1:04:42that tensent and this China actually had
1:04:45luckily for tensent their strategy of
1:04:47taking minority stakes in international
1:04:49companies gave them a lot of protection
1:04:51for example even if the US did want to
1:04:53take action against 10 cents it's not
1:04:55like they would ban credit or Discord
1:04:56just because 10cent had invested a lot
1:04:58of money in them the only risk was
1:04:59governments Banning apps 10cent fully
1:05:01owned and created like WeChat but as we
1:05:04know most of their users are in China so
1:05:06Pony figured this negative media
1:05:08attention in the US wasn't going to
1:05:09cause too much damage to tense Empire
1:05:12overall as long as tensent was on good
1:05:14terms with the Chinese government things
1:05:15should work out he breathed the S relief
1:05:18realizing maybe things were going to be
1:05:19okay after all but then quite suddenly
1:05:22Pony's worst nightmare became a reality
1:05:25you see tenson has faced a lot of
1:05:27business battles we've seen them go to
1:05:29war against Chinese companies like Ki
1:05:31big American companies like Microsoft
1:05:33and even political battles like with the
1:05:34US government but there is one enemy
1:05:37pony m most certainly did not want one
1:05:39enemy that could genuinely destroy them
1:05:41the Chinese
1:05:45government hey guys before we get to the
1:05:47next part of the story I just want to
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1:06:09and now let's get back to the story
1:06:22[Music]
1:06:27in 2018 rumors of a change in government
1:06:30policy began to spread and then one day
1:06:32Chinese Regulators suddenly stopped
1:06:34approving all new games from being
1:06:36released the CCP said It felt kids were
1:06:39becoming addicted to video games and
1:06:41they were also growing concerned about
1:06:43how violent some games were one
1:06:45government publication described online
1:06:47games as spiritual
1:06:48opium when the CCP announced a ban of
1:06:51kids under 18 playing games for more
1:06:53than 3 hours a week people under age 18
1:06:56are now allowed just 3 hours of gaming a
1:07:00week 10- Cent stock price immediately
1:07:02started to fall later that year 10 cents
1:07:04profit fell for the first time in over a
1:07:06decade largely because it couldn't
1:07:08release or monetize new games due to
1:07:10this new government policy to appease
1:07:12the Chinese government tenen had to make
1:07:14big changes for example tenen introduced
1:07:16facial recognition in their games and
1:07:18began using police databases to verify
1:07:20the identities of its users and their
1:07:22ages that way it could ensure people
1:07:24weren't playing games and suitable for
1:07:25their age and also that they weren't
1:07:27spending too much time playing tenen
1:07:29also had to change the nature of some of
1:07:30its games to ensure they aligned with
1:07:32the ccp's values for example one of
1:07:34their most popular games pubg previously
1:07:37involved a 100 people killing each other
1:07:39until one person is left but tenton had
1:07:41to change it completely they rebranded
1:07:43it as game for peace and the story
1:07:45instead became about patriotic Warriors
1:07:47the violence was removed and blood was
1:07:49replaced with green liquid when someone
1:07:51gets shot instead of dying the character
1:07:53simply waves back and disappears The
1:07:55game was filled with banners of
1:07:56nationalist slogans and patriotic
1:07:58propaganda basically the game was
1:08:00completely censored and as some users
1:08:02pointed out turned into a prover
1:08:04propaganda machine whilst most people
1:08:05didn't like it they had no choice Kent
1:08:08had realized that despite their huge
1:08:10power and wealth they were still
1:08:12completely at the mercy of the Chinese
1:08:13government and then things got much
1:08:16[Music]
1:08:18worse in October 2020 Jack Mar's company
1:08:21the ant group a gigantic fintech company
1:08:23in China Was preparing for its IPO it
1:08:25was all approved and ready to go and
1:08:27then jackar gave a big speech where he
1:08:29seemed to publicly speak out against the
1:08:31Chinese government more specifically he
1:08:33openly criticized China's traditional
1:08:35Finance industry and its Regulators
1:08:37shortly afterwards the an group IPO was
1:08:39abruptly cancelled supposedly by order
1:08:42of the Chinese president himself then
1:08:44Jack's other company Alibaba became the
1:08:46subject of an antitrust investigation
1:08:48with allegations of using
1:08:49anti-competitive monopolistic practices
1:08:52and then Jack Mah a guy who was always
1:08:54happy to take the Limelight and do
1:08:55speeches and interviews and high-profile
1:08:57events just suddenly disappeared all of
1:09:00his planned public appearances were
1:09:01cancelled and it seemed like he'd been
1:09:03exiled in fact some questioned if he was
1:09:05even still
1:09:06alive now it's worth pointing out tensen
1:09:09and Alibaba have been Rivals for years
1:09:11directly competing in so many different
1:09:13Industries in China as the country's two
1:09:15most dominant conglomerates so when Jack
1:09:17marah spoke out and faced immediate
1:09:18punishment Pony Mar must have thought
1:09:20he'd won but little did he know Jack's
1:09:23actions would be the Domino that began t
1:09:25downfall as well it turns out the
1:09:28Chinese government was not just going
1:09:30after jackar and his companies but all
1:09:32of China's big Tech Giants in 2021
1:09:35several other large Chinese tech
1:09:36companies including 10cent received huge
1:09:38fines for essentially being monopolies
1:09:41the fines added up to billions of
1:09:43dollars the CCP had allowed big Tech
1:09:45almost free reign for years now it was
1:09:47raining those Tech Giants back in now to
1:09:50say that Jack's public criticism of the
1:09:51government was the reason for what
1:09:52happened next is probably not true that
1:09:54incident was likely just the straw that
1:09:56broke the camels back in truth China for
1:09:58a while had been growing concerned about
1:10:00just how powerful some of these
1:10:01companies were becoming China's leader
1:10:03often promotes the idea of common
1:10:05prosperity and that the tech sector had
1:10:07definitely created a large wealth Gap in
1:10:08the country trying to limit that
1:10:10inequality would definitely be popular
1:10:12with many Chinese citizens the Chinese
1:10:14government also expressed National
1:10:15Security concerns of their own given all
1:10:17the data these companies like tensent
1:10:19have because sure China likes having
1:10:21that data for themselves but letting any
1:10:23single Corporation dominate too much
1:10:25could be be a risk for China so as well
1:10:26as the fines and some Executives being
1:10:28forced to step down new regulations were
1:10:30introduced to limit the power of some of
1:10:32these tech companies of course the stock
1:10:34prices of Chinese businesses began to
1:10:36plummet its estimated $1.5 trillion of
1:10:39value was wiped off Chinese Tech
1:10:40company's valuations due to the
1:10:42Crackdown 10cent in particular has lost
1:10:44over $500 billion off its market cap
1:10:47more than half its value since the
1:10:48Crackdown began and to be honest many
1:10:50were surprised 10cent were even dragged
1:10:52into this because unlike Jack Mah who
1:10:54publicly spoke out tensent were known
1:10:56for being extremely Cooperative with
1:10:57regulators and the government they were
1:10:59always compliant with policies and never
1:11:01publicly critical of the CCP and yet
1:11:0310cent was definitely targeted as well
1:11:05as facing anti-monopoly investigations
1:11:07and big fines their new games sto being
1:11:09approved and New Deals they wanted to
1:11:11make were blocked and part of the reason
1:11:13may have been that the CCP didn't think
1:11:15tensent was actually doing enough to
1:11:17help the state you see China had got
1:11:19into a difficult position as a result of
1:11:21Skyhigh rent costs its controversial
1:11:23zero covid policy and many extended
1:11:26lockdowns many citizens were unhappy and
1:11:28soon huge protests and riots broke out
1:11:30and it's clear some of this would have
1:11:32been organized and word spread through
1:11:34tensent apps like WeChat because
1:11:36although tensent do employ a lot of
1:11:37sensors to try and monitor things
1:11:39controlling the discourse of over a
1:11:41billion people isn't always easy there
1:11:43are ways around it like in China some
1:11:45people simply hold up a blank piece of
1:11:47paper as a protest symbol since that way
1:11:49it's hard for tensent software to detect
1:11:50any wrongdoing in other words tensent
1:11:53was inadvertently giving a voice to
1:11:54people to speak out through its apps and
1:11:56so perhaps the government began to see
1:11:5810- cents dominance as less of a good
1:12:00thing but the other reason for all of
1:12:02this is not so specifically about 10
1:12:03cents and more just that the CCP perhaps
1:12:06felt big Tech in general had grown too
1:12:07powerful and the government needed even
1:12:09more control and to remind everyone
1:12:11who's really in charge so basically it
1:12:13seems China had achieved what they
1:12:15wanted to by not having much regulation
1:12:16for years they'd allowed Chinese
1:12:18businesses to thrive they' got their
1:12:19surveillance tools like WeChat and
1:12:21enable Chinese companies to invest
1:12:23internationally to give China some
1:12:24influence abroad but now that they'd
1:12:26achieved what they set out to it seems
1:12:28the CCP wanted to send a message that
1:12:30even the wealthiest and most influential
1:12:32Chinese entrepreneurs and companies are
1:12:34not above the party or the law 10cent
1:12:36perhaps grew too large for the Chinese
1:12:37government and needed to be tamed and of
1:12:39course it should be pointed out that
1:12:41many of the new regulations and laws to
1:12:43prevent monopolies made sense it only
1:12:45seemed extremely aggressive because for
1:12:47so long there had been almost no
1:12:48regulation and within a couple of years
1:12:49a lot had changed but in the midst of
1:12:52all of this Pony began showing up for
1:12:53less and less public events even missing
1:12:55his company's own annual party and as 10
1:12:58cents valuation continued to fall some
1:13:00began to question what was going to
1:13:02happen to pimar and his business
1:13:04[Music]
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1:14:22[Music]
1:14:26before we get to this final chapter on
1:14:28what the future may hold for 10cent
1:14:30let's just quickly summarize where we're
1:14:31up to as we've covered a lot here and I
1:14:33think we could all use a very quick
1:14:34recap so tensent started out by copying
1:14:37a chat software and by tailoring it to
1:14:38the Chinese market they then turned it
1:14:40into more of a social media platform
1:14:42just as the era of desktop Computing was
1:14:43exploding tensent then used their
1:14:45resources to jump on the wave of mobile
1:14:46internet growth and became an essential
1:14:48part of Chinese people's lives by
1:14:49creating WeChat for mobile they then
1:14:51utilized the insane traffic they were
1:14:53getting from QQ and WeChat to diversify
1:14:55into other more lucrative opportunities
1:14:56like gaming and video tent's approach to
1:14:58Rivals was to clone their product or
1:15:00service and then drive vast amounts of
1:15:01traffic to it thanks to QQ and WeChat if
1:15:03that didn't work they'd buy out the
1:15:05company instead or buy a large stake in
1:15:06it and tensent continually kept
1:15:08reinvesting profits to either clone or
1:15:10buy other services and often swallow
1:15:11them into WeChat eventually tensent had
1:15:13a whole ecosystem of influential
1:15:15companies but the reason they were able
1:15:17to often use anti-competitive tactics
1:15:19and expans so rapidly was because of
1:15:20ties to the Chinese government who use
1:15:22their apps for surveillance and
1:15:23censorship this limited the appeal of 10
1:15:25cents apps outside of China and so they
1:15:27began investing in international
1:15:28companies instead including many of the
1:15:30biggest game developers and companies
1:15:31such as Reddit and Discord 10cent became
1:15:33one of the largest companies on the
1:15:35planet but once China began its
1:15:36Crackdown on big tech companies in order
1:15:38to reain them in after they'd become so
1:15:39powerful 10 cents valuation began to
1:15:41fall pH okay so that's where we're at
1:15:44but what next well the cracks have
1:15:46definitely been showing for 10 cents
1:15:48there have already been layoffs over the
1:15:50last few years and pony recently blasted
1:15:52employees for being lazy saying you're
1:15:54chilling on the weekends playing ball
1:15:56and began demanding a lot more from his
1:15:57team in an uncharacteristically
1:15:59aggressive speech but to be honest tent
1:16:02should be fine they are still an
1:16:04absolutely massive company worth
1:16:05hundreds of billions of dollars with
1:16:07huge influence still the crackdowns may
1:16:09have stunted their plans a little but
1:16:10tent is still a very powerful company
1:16:12WeChat still dominates the lives of
1:16:14people in China and tensent will
1:16:15continue investing in companies abroad
1:16:17tensent even had some good news within
1:16:19China in September 2022 when for the
1:16:21first time in over 15 months it got its
1:16:23first new game license approved d a new
1:16:25mobile game called Health defense the
1:16:27game was about public health and had
1:16:29very clearly been produced to please the
1:16:30Chinese government and that is perhaps
1:16:32the one thing that will change tensent
1:16:34will have to be even more closely
1:16:36aligned with the CCP to ensure there's
1:16:37no further issues for example tenent was
1:16:40actually one of the major investors in
1:16:41the movie Top Gun Maverick but they
1:16:43decided to pull out of the project over
1:16:45concerns that the film's themes could
1:16:46anger the Chinese government 10 centers
1:16:48also partnered with the ccp's propaganda
1:16:50Department to help promote their
1:16:52worldview and socialist values like they
1:16:54released the game clap for xiin Ping a
1:16:56game where you literally just clap for
1:16:58the president to show your appreciation
1:17:00so basically it seems clear that tensent
1:17:02is trying harder than ever to stay in
1:17:03the Chinese government's good books and
1:17:05I mean they don't really have a choice
1:17:07as for what's next for 10 cent though
1:17:09that's a question Pony is almost
1:17:10certainly thinking about often he was
1:17:12early to catch the rise of desktop
1:17:14Computing and then early to Double Down
1:17:15On The Rise of mobile internet as well
1:17:18so centent catch the next wave whatever
1:17:20that may be for example some believe the
1:17:22metaverse could be a big part of our
1:17:24future and tensent are arguably even
1:17:26better position than meta for building
1:17:28the metaverse given their dominance in
1:17:29gaming and Virtual Worlds already but
1:17:31then again the CCP probably wouldn't
1:17:33want a metaverse that they couldn't have
1:17:35a lot of oversight in so that probably
1:17:37limits 10 cent chances of building a
1:17:38Global metaverse and thus the eternal
1:17:41struggle for tensent to keep China and
1:17:43the rest of the world Happy will
1:17:44continue but what can't be denied is
1:17:47that tenens Cent is ultimately an
1:17:48incredible business success story whilst
1:17:50this video has of course looked at some
1:17:52of the controversy surrounding 10cent
1:17:54they've also done a lot of good too and
1:17:55made some incredibly useful apps so
1:17:57there is definitely plenty of lessons to
1:17:59learn here there's a quote I like a lot
1:18:01that you have to learn the rules of the
1:18:02game and then you have to play better
1:18:03than anyone else and I think 10cent is a
1:18:06great example of that they literally
1:18:07went from being a tiny company on the
1:18:09edge of bankruptcy to one of the world's
1:18:11most valuable companies and so I hope
1:18:13you've enjoyed this journey through 10
1:18:14cents history but now since we've just
1:18:16looked at one of China's most
1:18:18influential companies I think it's only
1:18:19fair we do the same with one of
1:18:21America's most influential companies
1:18:23which you can do right now by clicking
1:18:25the thumbnail on screen this is one of
1:18:26my favorites and I think you'll like it
1:18:28too anyway all that's left for me to say
1:18:30now is thank you for watching this video
1:18:31to the end you are a legend and I'll see
1:18:34you in the next video right here cheers
1:18:38[Music]
1:18:41[Applause]

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