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Tencent: Patience, Emphasis on R&D, and Adequate Funding Finally Paid Off

Many important corporate management lessons can be learned by studying how the publicly held Chinese company Tencent has been run since its founding back in 1998. Perhaps one of the most interesting facts about it, according to the British publication “The 50 Best Businesses,” is that Tencent “reportedly remained unprofitable for [its] first three years.”                   

Perhaps this tenacity is best understood by comparing the strong backing of this company’s products to how American TV networks often view some newly ordered TV shows. Even after purchasing rights to an entire season of episodes, these networks will yank a new program off the air within just a few weeks when viewers don’t immediately appear in droves. Fortunately for Tencent, its venture capitalists were smart enough to keep hanging on for the long term.

Brief Company History                                                                                                            

As many now know, Tencent was founded by Ma Huateng (also known as Pony Ma) and Zhang Zhidong. The company chose to makes its first product “an instant message tool called Tencent QQ – [which] became very popular in China and the company developed into ‘China’s answer to AOL.’” Since that time, Tencent has experienced tremendous growth and has become, “China’s largest and most used Internet service providers for [such] platforms [as]: QQ (QQ Instant Messenger), WeChat, QQ.com, QQ Games, Qzone, 3g.QQ.com, SoSo, PaiPai, and Penpay.”

Success Helped Breed Additional Growth

According to “The 50 Best Businesses,” Tencent’s “development has influenced the way millions of Internet users communicate as well as their lifestyles. It went public on the Hong Kong Stock Exchange in 2004. It’s now the fourth-largest Internet company in the world behind Google, Amazon, and eBay.”

An Emphasis on Research, Development, and Training

All of Tencent’s added software and apps obviously just don’t suddenly appear. This company continues to make sure that more than half of its employees are members of its research and development staff. This move appears to have paid off handsomely. In addition, “Tencent has obtained patents related to technologies in [such areas as]: instant messaging, e-commerce, online payment services, search engines, information security, gaming, and many more.”                        

In an effort to continue leading the way with new technological investments and training, Tencent invested a very large sum to open the Tencent Research Institute. It boasts campuses in Beijing, Shenzhen, and Shanghai.

Today, the company is so eager to find new products and services that it has “open[ed] up its platform to other developers to create new things [for its highly successful program] WeChat” which is now ranked among the Top 20 social networking apps available for purchase via the Apple App Store in America.

To obtain help with handling all of your Georgia business planning needs, please contact the Law Offices of Shane Smith today.  You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.


Shane Smith
Advocate for the Seriously Injured in Georgia