In less than 4 years, this entrepreneur built a $23 billion company and became one of the richest people in China. Here's what he knew that most entrepreneurs don't
Colin Huang is the founder and CEO of a shopping app called Pinduoduo, which is used by as many as five million people in China every day. When Huang’s company went public in late July at $24 a share, it was valued at just under $24 billion, making Huang the 12th richest person in all of China.
All of this took him less than three and half years.
While it may seem as though Huang’s success occurred overnight, one early investor in Huang’s company, Ron Cao of Shanghai-based venture firm Sky9 Capital, says that Huang’s foundation as an entrepreneur was decades in the making. Cao says that his firm was extremely impressed with Huang’s entrepreneurial qualities, leading them to invest in Pinduoduo’s Series B round along with Sequoia, Lightspeed. Tencent.
Here’s what Huang knows that most entrepreneurs mightn't, according to Cao:
He understands the international markets better than most.
“He’s probably more sophisticated than the typical US entrepreneur because he’s seen more, because he’s international, because he’s bilingual,”. Said Cao of Huang.
Huang spent several years in Silicon Valley working as an engineer at Google in the early 2000s, which Cao suggests might've led to his well-rounded knowledge of international markets.
“US entrepreneurs don’t typically understand the international market so well,”. Said Cao.
He's decades of entrepreneurial experience.
Pinduoduo is far from being Huang’s first company.
Cao describes Huang as a “serial entrepreneur”. Who previously built three companies: two shopping startups and a gaming studio called Xunmeng.
While none of these early companies turned out to be blockbuster successes, “he made money on them,”. Says Cao.
Huang’s longterm entrepreneurial experience was a defining factor in Sky9’s investment, said Cao.
“It takes lots of effort to run something. You don’t learn how to be a CEO in school. When a young person starts something early, it shows that they’ll probably have more of a product-driven company,”. Cao said.
He knows how to spur viral, social-based shopping.
A big part of what accounts for Pinduoduo’s success is the way that it incentivizes shoppers to share on the platform itself — even though it’s a shopping app, not a social media site.
Pinduoduo connects groups of buyers to suppliers who ship out their steeply-discounted products once a group has agreed to buy. If people are excited about a product that they want to buy, they’re likely to share it on Pinduoduo to get their friends and family to opt-in on the deal.
Cao describes this as . “social commerce,”. A form of shopping that leverages the power of personal networks to the advantage of both the business and the consumer.