Episode 5: China Giant Series-Inside Tencent

Pony Ma co-founded Tencent in 1998 with four other classmates and launched their first product, a PC-based instant messaging software called OICQ, in February 1999.Pony was fascinated by the internet and believed there was an opportunity in the Chinese market for a localized instant messaging service.Tencent faced an uphill battle against established pager companies, which were the dominant communication tool in China at the time.They also lacked funds and had to bootstrap the company in the early years.

OICQ's initial growth was driven by its user-friendly interface, small installation size, and innovative features like "buddy lists" and personalized icons. Pony and his team adapted the core features of ICQ, a popular instant messaging software from Israel, to better suit the needs of Chinese users and the limitations of the Chinese internet infrastructure. They focused on keeping the software small and efficient, enabling it to run smoothly even on slow internet connections. This approach proved to be highly successful, as OICQ quickly gained popularity among Chinese internet users.

Tencent's early business strategy was marked by a willingness to experiment and adapt, often pivoting to seize new opportunities. After a legal challenge forced them to rename OICQ to QQ, Tencent shifted its focus from providing a free service to developing value-added services and exploring various business models. They introduced virtual goods, like personalized avatars and digital accessories, and partnered with other companies to generate revenue. This flexibility and willingness to experiment laid the foundation for Tencent's future success in areas such as online gaming and social networking.