Pat McGovern is the founder and chairman of International Data Group (IDG), the world's leading technology media, events, and research company with 2009 revenues of $3.05 billion.
He is on the Advisory Board of IDG Capital Partners which manages $2.5 billion in capital to invest in China-focused technology companies. They are arguably the top VC firm in China today. I asked Pat how it happened in this interview:
Q: It's not conventional wisdom for a firm like IDG to make the move into venture investing. How and when did you decide to do that?
A:Our research has shown that the rate of growth of the technology market is related to how many new products and services are being introduced into the market.
Entrepreneurial start-ups have the best record of taking the latest technology from the laboratory and bringing it to the market with better price performance or application characteristics than those already available.
Therefore, we decided to help stimulate the growth of the technology market by investing in start-up companies which results in the long run in greater revenue growth and profitability for IDG.
Q: And when specifically did you decide to go into China?
A:IDG's mission is to help people worldwide increase their standards of living, productivity, and quality of life by learning how to acquire and useinformation technologywell. Since China has the world's largest population, we desired to enter China as early as possible.
Fortunately, we were able to establish a joint venture in China in March 1980 to offer technology publications and information services. This was the first joint venture of any type between the U.S. and China.
Q: When I travel through China, I hear about IDG Capital Partners all the time. You're arguably the top venture firm there today. How did that happen?
A:In the early 1990s, a considerable number of people who had left China to get educated in the United States and Europe and had worked for one or more technology companies in the U.S. were beginning to return to China. They wanted to start new companies based on their knowledge of the latest technology and using the marketing methods and business practices that they had learned overseas.
At that time, local Chinese investors were focused on investing in asset-based companies, such asreal estate, highway builders, manufacturing equipment producers, etc. They were reluctant to invest in the business founder who only had a paper plan to show them.
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