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One thing I think every Silicon Valley startup and investor should be afraid of is the incredible rate and depth of adoption of new technologies in China.

I came across two examples recently. First, in China e-books have taken over paper books, not just in volume, but in publishers' minds [1]. Second, payment systems like AliPay are becoming the dominant in just a few years, completely circumventing credit cards [2].

Now, neither of these are technological breakthroughs in themselves. The Kindle has been around for over 10 years, and Apple Pay and its precursors are not news, either. However, neither of those technologies has had the impact on their respective markets that the creators hoped for. Paper books are still frequently cheaper than their Kindle versions, and there have hardly been any noteworthy straight-to-Kindle publications. Likewise, Apple Pay, which is only a replacement for your physical card, but still a transaction mostly owned by Visa/MasterCard, and not Apple, is still far from a dominant purchase mechanism, even in the Bay Area. All in all, the pace of adoption of disruptive technologies in the US is pretty poor.

So, as an entrepreneur, I'd be much more worried not about inventing the cool new tech before China, but actually getting people hooked on it.

[1] https://www.economist.com/news/business/21731860-tencents-ch... [2] https://www.wired.com/story/age-of-social-credit/




What China manages to do quite well is stop rentiers from stifling innovation. This is a remarkable achievement. There's corruption in China but the CPC has made it very clear that corruption that threatens national growth won't be tolerated.

Contrast this to America where an enormously large and powerful rentier class have come to completely dominate not just the economy but the government itself. These corporations have managed to carefully stifle and misdirect innovation in order to ensure their rents aren't threatened. Old school media and publishers have neutered ebooks and tried again and again to kill Netflix and any distribution vector they don't control. Banks have made it so Americans are only now just getting payment flexibility that others have enjoyed for decades. ISPs have killed net neutrality and will do their best to become the new railroads, making sure to take a piece of every pie even if it sets the country back. Note that these corporations didn't do it alone. Every step of the way the government was there to help powerful rentiers.


Every high growth era is defined by the abundance of "new adopters" - people who do not have habits or who are willing to change their habits. What happens with populations is that they do things a certain way for long enough periods of time that they don't want to do it another way.

This has little to do with Chinese policy, and a lot to do with the fact that Chinese life is moving from extremely rural/poor to middle class and thus, had no prior opportunities to do things like reading physical books, so no habits or preexisting preferences to overcome.


In what age did Chinese had no opportunities to read physical books? That was at least half a century back


I meant, reading physical books as a recreational activity because you're living on a farm with subsistence wages and lack the income or time to do so. China was a country with 750 million people living on less than $2 a day in 1990.

Not to mention the burning of books and disdaining of intellectual pursuit in the cultural revolution.


> What China manages to do quite well is stop rentiers from stifling innovation

Tell that to the dying startups that have to stand up against Tencent and Alibaba. Beijing is littered with them. Let's not forget the various Chinese state-owned enterprises.


Any successful Chinese business is or becomes a Chinese state-owned business. The only difference is that the Chinese govt is the rentier, versus multiple ones in the US.


You can't become a state-owned business. You either are (because you have government ties in the first place), or are not (and you are doomed, sorry for that). People have no chance to succeed unless born to the right parents. Even Chinese people admit that. The problem is not how many, but who the rentier is.


Vendor lockin is a big issue. Why should I buy a book that I can't use the way I want because of DRM, I can't get in my native language and is completely tied to a company? Oh, and it also costs more...

It is insane but greed has made the above commonplace across all aspects of the digital world.

Personally I think ebooks are still worth it, even if I have to buy it, strip the DRM (which is illegal) before reading it (on an eink display of course). But it has never been ready for mainstream (will it ever?) and it is not the techs fault.

We still don't even have a decent movie streaming service, and even if one existed it wouldn't matter because the content you want to watch makes that choice for you.

A decade ago we had awesome home theater software, they still exist but they aren't compatible with the media that is offered today. For that we need another device (chromecast) which is probably the dumbest device you can buy but somehow that is the best option available for consumers in 2018.


This is actually not too different from the e-book market in China, which is even more fragmented. There are at about a dozen well known e-book readers, and the books are not shared among different apps. Even crazier, Tencent published two different e-reader apps, both having large amount of users


Yes, DRM makes ebooks about 20% as useful as they should be. I don't think I'd mind paying more for ebooks if I could grab pieces of the text I find interesting and collate them with my own notes in a document that lives in an app designed for documents (like word, or Evernote, or Bear, or HTML.....)


Some random thoughts to what could be going on, in no particular order:

1. Yarr, pirate it. Easier to consume things when you have few qualms as to how to obtain it.

2. Nothing lasts forever. Lock-in only exists if you can't let go for the next thing that comes along.

3. Upward mobility in quality of life and social class leads to a renaissance.


> 1. Yarr, pirate it. Easier to consume things when you have few qualms as to how to obtain it.

Don't some e-Book readers disallow you from reading things that you didn't download from them (or they don't support epub)?

> 2. Nothing lasts forever. Lock-in only exists if you can't let go for the next thing that comes along.

But you also can't migrate your old library to the new one, which is the main problem with lock-in (the issue isn't that you physically cannot switch away, it's that you cannot switch away without losing things that you've bought into).


Kindles don't have that restriction, and they're by far the biggest ebook reader family on the market. Yeah, they only support MOBI, but that's just a simple file format conversion that Calibre (FOSS, available on all major platforms) can easily handle.


> Don't some e-Book readers disallow you from reading things that you didn't download from them (or they don't support epub)?

If theory 1 is true, then the readers without this user hostile approach will thrive. Obviously pirates don't care for DRM locked devices.

> But you also can't migrate your old library to the new one, which is the main problem with lock-in (the issue isn't that you physically cannot switch away, it's that you cannot switch away without losing things that you've bought into).

My point was mental, not physical. People might naturally just drop old stuff for new shiny things. If things appear plentiful compared to the old ways, this attitude is easier to adopt. Do you regret throwing away your coffee cup in the morning?


do you regret throwing away your family photos? your car? your friendships?


The true problem with piracy is actually not the issues that others have mentioned with readers disallowing sideloaded files.

The main issue with piracy is that both Amazon and Apple have far more advanced typesetting systems in the custom file types (Kindle Format 8 and iBook format) that you get when you buy from their store.

The .epub format its still based on what, XML? .epub makes up most of what you see when you pirate. If you look closely you can see that most epubs actually are really badly typeset compared to the versions of the store.


I wish there was a guarantee that when you bought a legal eBook from Amazon that it would be well edited.

I bought the Kindle version of A Deepness In The Sky recently and it's full of what seem like OCR errors. Missing punctuation, spelling errors like "A1" instead of "AI", the word "hands" mysteriously in italics for a chunk of the book... There's no way anyone read it before putting it up for sale. I wrote to them in their formatting feedback form thing but that's just gone into the void.


1. Piracy is rampant, so paper books never had much of a chance in China. Paper books are still cheaper than the ebook versions because of piracy; official books bought at the xinhua book store can be plenty expensive, but no one buys there.

2. China still uses more cash on a percentage basis than the USA and most western countries. China basically skipped credit cards. I still prefer the new UnionPay tap-to-pay NFC cards, much better than scanning a QR code on your phone.


I must point out Alipay (and the like; I’ll just mention Alipay from now on for brevity) is not built to circumvent credit cards, in that there is nothing to circumvent. There is literally no way to pay except cash before Alipay; credit card usage is impossible except for the highest end of stores. Alipay is not created to replace credit cards, but because China is unable build a wildly workable credit system at all. If you factor in the most recent advancements (NFC without signature), credit cards are definitely surperior in most aspects.

What makes people feel that <insert developed country name> is lagging behind is not really credit cards, but legacy tech surrounding it. This is inevitable since credit cards have been around for a long time. China, starting from a clean slate, might seem to be in a better state currently, but moving from credit cards to Alipay is like re-writing your Objective-C app with React Native because it used some legacy APIs and no longer compiles. The problem is teal, but the solution is totally wrong.


+1 on adoption rates. I recently was recommended a random Chinese trucker video on Youtube. No english and I think they were in the remote Northern parts of China. These guys in the middle of no where and these guys are using wechat payments for delivery of goods.


You make it sound like it's some kind of moral upside to adopt new technologies when it's just the result of having a vacuum of world solutions. Happened before with mobile technology adoption, countries with bad infrastructure will adopt the new generation of that technology sooner.

Does it mean China is more vital? Not necessarily, it simply means they are filling a gap.


I retain more of what I learn when I have a paper book. It's also nice to be able to grab a paper book put away my laptop and leave my phone in another room and just read for an hour. It's too hard to do that with ebooks.


It's very easy to do that with a Kindle Paperwhite. And more likely that the book you want to read is actually with you at the time you want it.




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