Earlier this month, I was trying to slip away from an event after a draining night of socializing when a friendly voice called out to me. The fellow beckoning me was a long-time acquaintance, seated amid a group of well-dressed men and women at a chic bar overlooking Hong Kong. Around me, a cryptocurrency party was in full swing.
Inwardly, I groaned. He was one of the many smooth-talking entrepreneurs I knew, a master in the art of name-dropping and, well, never seemed to be focused on the same business for long. An arriviste.
In the six years I’ve known B (that's how I’ll refer to him), he’s managed to transform himself from an e-commerce merchant who boasted 100 million yuan in sales a year, to an anime intellectual property hoarder, to a virtual-reality hardware investor, and now a cryptocurrency baron who’s invested in at least 70 projects in the past year. Whatever is hot, you turn your head and he’s there. Apparently thriving.
In high spirits, B seemed to have gained some weight, perhaps due to too many nights out on the town. The group was feasting on a platter of Iberico ham and French cheeses, washing it down with bottles of Château de Lancyre Grande Cuvée. A woman showed me her crypto jewelry. “This part is from Xinjiang,” she said, running her finger along the chain. “I flew to Japan to seek this part out.” The necklace was a bitcoin wallet with a chip. She tells me only 1,000 pieces will be made, so the bauble would be finite. Just like bitcoin.
When you cover technology in China, this is what it’s like. The country is in the middle of a massive tech boom, minting billionaires as money sloshes into the sector, backed by government ambitions to dominate the sector. Beijing and Shanghai together drew almost $72 billion in funding since 2012, according to CB Insights. There are plenty of rags-to-riches stories. And much-inflated egos.
I suspect that many of the enterprises I see are little more than Powerpoint slides, catch phrases and good money chasing bad. And strains are starting to show. Venture capital firms saw a 44 percent decline in deployable capital for China, according to data compiled by Zero2IPO. VC exits are also down 65 percent in the first half, the researcher said.
So that's why I keep in touch with B, to get a sense of what’s around the corner. I pay attention to my social-media feeds and figure what people like B are up to. He’s an entrepreneur, but more importantly, a survivor with a keen sense of what will work and what won’t. So while it’s easy to denigrate China’s arriviste tech culture, I remind myself that these things come in cycles. Booms will go bust.