The Chinese Businessman Paradox (2018)

There is a lot of insight in the description of all the individual, small- and medium-scale Chinese businesses in the region, and the article is well worth reading for this reason.

However, extrapolating these observations alone is not enough to explain the emergence of a relatively closely-knit elite of powerful business moguls who have a finger in every pie and can apparently do no wrong in their respective geographic areas of operation, while seemingly being unable to capitalize on the same business acumen to successfully expand beyond the region, a question the article also brings up:

> Consider a question that I’ve been interested in for the past 10 years: what separates the Robert Kuoks, the Mochtar Riadys, the Ng Teng Fongs and the Yeoh Tiong Lays from the rest of the traditional Chinese businessmen who have graced both sides of the Malaccan Straits?

To anyone interested in some good answers to the above question, along with an extensive background discussion, I heartily recommend the book "Asian Godfathers: Money and Power in Hong Kong and Southeast Asia" by Joe Studwell, a well-researched study of the topic that is also captivating to read:

https://www.amazon.com/dp/0802143911

I have skimmed through the post series and some comments over here, like from the Singapore Chinese about non-startup business and Ronnie Cheng chinese love money comment https://www.youtube.com/watch?v=O_KpLrHCAx0

There are only two reasons why a business can succeed from Chinese point of view, I am writing this as a Malaysian, ethnicity is Chinese.

1. Work Hard (grit)

2. 会做人 (know how to take care of other people's feelings and needs first)

To elaborate on the second point, you have to know how to lobby and please

1. the government

2. the police

3. the other rich businessmen/women

4. the clients/customers

and of course those of famous people around the town you operate your business in, like

5. bad guys who are notorious

6. pretty/powerful people

if you are doing all of these, it is just bad luck that if your business fail, from Chinese point of view.

There are infinite reasons why a business will fail, and as a Chinese businessman, what you would do is to quit that industry and start in another one (grit).

I mean, the mundane explanation would be that there are simply a huge number of Chinese businessmen, and that by proxy there are a large number of successful ones (and an even larger number of unsuccessful ones).

I've been lead to believe that grit is the most common trait among successful business people. Maybe that is a western belief.

I also think that culture is too. But that we make our own culture though the friends, family, associates, and communities we participate in. If you roll with a culture that puts a lot of importance on business success, then maybe it will help keep you motivated through the tough times. It will help your grit.

It may be more about the survivorship, than any of the supposed traits that make a good businessman. Why are the winners often superstitious? Because superstition works? No, more likely I imagine, is that they take unpredictable moves from time to time. Often that is a mistake, and those businessmen we ignore. But if they make a random move and succeed, we laud them as a real Chinese Businessman, a True Scotsman.

I read this series some time ago, and I thought there were many gems in it that tracked my experiences that I could not articulate.

For instance, there's a bit in here about rationalism, and how the rationalist community might be good at being "correct", the kind of rationalism espoused, which prizes removing biases, doesn't always result in achieving the desired ends or winning.

https://commoncog.com/blog/chinese-businessmen-superstition-...

To me, a pure rationalism relies on your mental models of the world being correct in essential ways (to use a PCA analogy, in the principal components). However, the business world is one where higher-order effects dominate, so even if you have a rational first-order mental model of the world, that mental model is often insufficient.

This is where the empirical approach shines. The terms are used loosely in the article, but it differentiates between "epistemic rationality" (how do you know that your beliefs are true?) and "instrumental rationality" (how do you make better decisions to achieve your goals?), and the observation is that businessmen with high acumen -- in any culture, I would argue, but especially among the early Chinese settlers in Southeast Asia who generally lacked much formal education -- tended to employ "instrumental rationality" a lot. It was a kind of experimental culture within a conservative culture, which I find fascinating.

This seems to track with how startups work today -- create an MVP, ship, get feedback and iterate -- as opposed to the old product development approach of doing market surveys/focus groups, waterfalling the product engineering and then shipping a shiny product (that potentially no one wants).

I personally think that for most things, first-order mental models (i.e. simple cause and effect) will get you 80% of the way there, but in order to get over the lump of the last 20% of diminishing returns (where higher-order effects dominate), empiricism/instrumental rationality is necessary.

In the flip side, one of the downsides of being hyperrational is to overthink things. All mental models of the world are incomplete, so one can end up optimizing a narrow model of reality. We've all come across stuff that "shouldn't technically work" but do in real life. In many cases, it's more useful to just interact with reality directly. Uber and AirBnb shouldn't work -- some might argue they don't -- after all, who would trust strangers enough to book a car or a room on the Internet? Yet, empirically they do work for the most part, or at least the trust part does.