In this episode of The Negotiation, we talk with Justin Mallen, Founder, and CEO of Silk Road Telecommunication, a data services company based in Hangzhou. Justin has been in China since the ’90s and founded his company in the year 2000, foreseeing the immediate need for data service centers to play a pivotal role in China’s emerging internet roll-out. We talk about what it means to process immense amounts of data for high-traffic days like 6.18 or 11.11, and how China grew from no internet users to triple that of the US at nearly 900 million today. We talk about the state of China’s mobile internet and which of the big three are dominating and why, including a quick lesson on something called “peering” that is widely used in North America but still not adopted by the Chinese carriers. We also talk about 5G - what it is, what it means for infrastructure, and the future technologies it brings significantly closer to becoming a reality. Lastly, we talk about Huawei and how that company is doing amidst tremendous pushback from the Trump Administration on security concerns on one side, and the impact of COVID-19 on the other that has decelerated the roll-out of 5G, something that most expected to catapult Huawei to the top rungs of the market. Enjoy!
Today on The Negotiation, Todd speaks with Justin Mallen, Founder, and CEO of Silk Road Telecommunication. He shares what it is like being one of the few successful foreign entrepreneurs in China, having entered the market during a time when it was far from the economic powerhouse that it is today.
Justin says, “China’s telecom infrastructure is owned and operated by three incredibly large, state-owned enterprises: China Telecom, China Unicom, and China Mobile. Back then, they had the one key resource which you needed: networking; and they did not want people in their space.”
Justin defines success, at least in the early days, simply as “being able to create a business that had staying power”. SRT is a capital intensive venture that was founded in 2000. It is a thriving operation today, but the road to get to this point was fraught with scores of challenges in the beginning. Primarily, it was a matter of turning these carriers—and other gatekeepers—from competitors into partners. Justin’s prediction that the internet would take the world by storm in the near future was a driving force that paid off in spades.
As a data center business, SRT began with infrastructure as a service as its sole focus: they build, operate, maintain, and own the buildings that house all the servers for the internet. Today, these sites serve as the “heartbeat” for tech companies such as Alibaba, Tencent, and JD.com. Because of recent, rapid advancements in technology, today, SRT also offers platforms as a service (cloud, data, and big data analytics vendors) as a necessary additional layer atop infrastructure.
Information traveled incredibly slowly in the early 1990s China. Justin’s initial goal was to simply speed things up. The biggest strength he saw in the country’s carriers was that they were very eager to invest in building up the infrastructure and capabilities of the internet. The goal of SRT was to develop the infrastructure so that the cost of delivery to consumers could be minimized. Over time, this grew the number of internet users in China to over 900 million in the first quarter of 2020.
5G takes the latency—the time it takes for data to move between a device and the servers—down to zero. It makes connectivity much smoother and effectively instant. Driverless cars are incredibly prone to accidents if they use 4G, with its latency of 40 milliseconds. 5G removes this barrier, as well as those of many other industries, which allows for further innovations such as telemedicine and remote surgery.
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Despite being the world’s most potent economic area, Asia can be one of the most challenging regions to navigate and manage well for foreign brands. However, plenty of positive stories exist and more are emerging every day as brands start to see success in engaging and deploying appropriate market growth strategies – with the help of specialists.
The Negotiation is an interview show that showcases those hard-to-find success stories and chats with the incredible leaders behind them, teasing out the nuances and digging into the details that can make market growth in APAC a winning proposition.