Nick Yang

By Lu


I attended a quick session with Nick Yang today. He shared some insightful gems, starting with his journey after graduating from UofM to his financial standing now. He graduated with EE degree from UofM in 1997. He was first exposed to the Internet when he came to the university. After graduating, he went back to China and feel the force of economic growth (the drastic change of environment) when he was there. He was sure China will be big one day and went on to study at Stanford for his graduate degree. At Stanford, Nick mentioned there’s a can-do attitude up in the air. He witnessed how the students harnessed dreams into reality.

Armed with this attitude, Nick went back to China and co-founded ChinaRen Inc in 1999. He mentioned how lucky he was because he was ahead of the curve at that time and managed to ride the wave of success. In 2000, became the fourth largest website in China and he was only almost 24 at that time. Goldman Sachs was his first angel investor who invested 15 million dollars over a period of time. In early 2000, Yahoo offered to buy ChinaRen for 100 million usd (before the tech bubble burst and Yahoo stock price was ranging around 300 usd). Confident of its growth prospect and some ill advice from GS, who projected a 400 million usd evaluation if ChinaRen has its own IPO, Nick rejected the offer. Then, the tech bubble burst a few months later. However, in the September 2000, ChinaRen was still sold to for 35 million usd, who offered it in cash. Back then, Sohu had its own IPO at 14 usd a share price. During the time of offer, the price dropped to 7 usd each. GS advised him again to negotiate the deal to become shares of Sohu since they were expecting the share to improve and bounce back to its previous level. Hence, the deal was changed Nick also got the position of CTO of Sohu. There, he witnessed how Sohu stock crashed from 7 usd each to around 1 usd each.

By this time, I was chuckling at his misfortune (or unfortunate advice), rejecting a 100 million usd deal to settle for a 35 million usd one that dwindle down to 5 million usd. Since he owned 10% of the original ChinaRen stock, his wealth now was valued at 500 thousand usd. Feeling that the company is going nowhere, he cashed in on the stock and reinvest 250 thousand usd with a partner to create a new company. He lamented how after he cashed in, the Sohu stock rise up to around 80 usd each (currently at 60 usd each). If he didn’t sell, he could have 30 million by now.

At that time, he felt there was a new wave coming to China and he was determined to ride this one as well. Back then, cellphones in China are still in their infancy, the black and white bits model (that I myself used for quite some time) are gaining ground around the street. However, he was looking further ahead, when the cellphones in China are capable of web surfing. Hence, he started KongZhong, China’s leading mobile Internet company and provider of mobile interactive entertainment, media and communities. He mentioned that it was very hard to get VC money back then because everyone suffered from the tech bubble burst. He met up with a lot of VC but each turned them down. In the end, only DFJ invested but 3 million usd for 33% stake despite his previous success with ChinaRen. His team worked very hard and after only one round of funding, they went public in just 2 years and 2 months from inception. This was very fast for any company (the only company that went public quicker was Ebay). A year or two later, KongZhong has an evaluation of around 350 million usd. Not a bad haul considering a few years of work.

In 2009, he quits his position as KongZhong President and start-up (Monkey King Search), a brand new start-up focused on conceptual search and intent on becoming Baidu’s No. 1. Competitor. Right now, he revealed that he is incubating another project in the energy field and give a lot of pointers on how to proceed with our life, searching opportunities and succeeding.

Those pointers will be here coming up soon.