When talking about his business, Misa Zhu, founder of Chinese artificial intelligence start-up Rokid, frequently uses two words not often associated with tech: gorgeous and patient.
That’s because making high-end AI products that are both technologically superior and beautiful to look at is key to Rokid, a company Zhu likes to describe as "a product company for the consumer." Patience is another key value for the Hangzhou-based start-up, which in January raised a nearly US$100 million series C round led by the most patient of capital providers: Singapore’s national wealth fund Temasek Holdings.
"(If you are building) a 100-year business, why rush?" the 42-year-old former Alibaba research lab chief told China Money Network during a one-hour interview at the company’s headquarters in a lush, attractive compound near Hangzhou’s West Lake. He likes to call this office, surrounded by greenery and a small pond, "the jungle," and the hundreds of staffers "monkeys." "Nobody tells you what to do here. You need to figure out what you are passionate about," he said.
It takes courage – and carries with it a certain degree of risk – to "be patient" in the age of super-fast business and technology cycles in today’s China.
Rokid’s Founder Misa Zhu Speaks To China Money Network
For the smart speaker market that Rokid is competing in, the industry landscape is shifting daily. Tencent Holdings Ltd., for example, announced that it would launch its own Tingting smart speaker to the public on April 20. Alibaba Group, Baidu Inc, Xiaomi Inc and JD.com Inc have all released self-branded smart speakers. Not to mention numerous independent start-ups like Mobvoi, which China Money Network spoke to last year, that are eyeing the Chinese smart speaker market. Around 350,000 smart speakers were sold in China last year, according to market research firm GfK SE.
Compared to other Chinese AI start-ups, Rokid’s "patience" is in great contrast to those that are ultra aggressive in both product development and fundraising. According to China Money Network’s China Unicorn Ranking, there are eight unicorns (private companies valued at US$1 billion or more) in the AI sector. Rokid, according to Zhu, is not a unicorn yet as he doesn’t "want to be a unicorn so fast" to put "great pressure on everybody."
By contrast, Beijing-based Chinese AI company SenseTime raised a US$600 million round led by Alibaba earlier this month at a valuation of US$4.5 billion. Another company, Face++, raised US$460 million led by China State-Owned Assets Venture Investment Fund last October.
Zhu said that he does not feel "pressured," as "it is still very early stage" for the AI industry. Rokid, as an AI product company for consumers, has the potential to one day become something like "Apple plus Google," because everything we use will be "smart" in the future.
"In ten-years time, AI technology will become ubiquitous. There will be smart cars, smart TV, smart everything. The consumer market will be the biggest AI market, and the most successful AI company will be the consumer product company," Zhu predicts. "For now, we just focus on building gorgeous products."
Rokid’s smart speakers do indeed look different from the pack. The Alien, the company’s first smart speaker product released in 2016, is shaped like a drop of water. The Pebble, Rokid’s mass-market smart speaker product, looks like a nicely rounded "pebble". Both products are, frankly, gorgeous.
Read an interview Q&A below. Also subscribe to China Money Podcast for free in the iTunes store, or subscribe to our weekly newsletter.
Q: Rokid wants to be an AI company that’s patient and doing business for the long-term. What would a successful AI company look like in ten years, in your opinion?
A: Rokid is more of an user interface company than a pure AI company. To be exact, we are a product company to the consumer with a focus on user interface, which means connecting end-users with high technology. Take cellphones for example, a lot of people are using touch screen today but some (especially older people) feel uncomfortable with it. AI helps everyone by making high-tech products more friendly to users, and that’s our goal.
Q: Basically, you want to revolutionize man-machine interface using voice and augmented reality and other technology, all rolled into one product?
A: Most AI companies nowadays are focused on 2B (to business) business. They are sort of "cash cows" (generating revenues) from government budgets and enterprises. However, I truly believe a successful AI company will be a consumer product company. In ten years, AI technology would become ubiquitous. There will be smart cars, smart TV, smart everything. The consumer market will be the biggest AI market, and the most successful AI company will be the consumer product company.
Q: Something like Apple?
A: Back in the time of PCs, Internet and mobile Internet, you can change the market with one single product, like the iPhone. The AI era is different. It’s impossible to win the war with one single product when everything is smart. One has to open its platform to other companies in the industry to build good products (on top of it). This is the mission of Rokid.
Q: You say the biggest AI company would be consumer product company. How big would they be? Will they become the size of today’s Baidu, Alibaba, Tencent?
A: Much bigger. Tech giants nowadays have lots of data and resources to build their own AI ecosystem. But I believe it’s the product company who will win the final war. The winner will be something like Apple plus Google.
Products are just one revenue (source). This is the first step to make money. I think the key in the future will be the ecosystem.
Q: You mean data?
A: No only. The ultimate product of Rokid is the user experience, how to make the user feel comfortable and friendly to use high-tech products.
Q: But you can’t really make money by offering great users experience?
A: Not exactly. iPhone is quite expensive. Users are paying for good product, good experience and the good taste.
Q: What’s your predication for the Chinese AI industry landscape?
A: I know tech giants like BAT (Baidu, Alibaba and Tencent) are investing and have acquired some AI companies. But I think that’s a temporary situation. BAT are ecosystem and platform companies. Rokid, however, is a real consumer product company, with hi-tech products backed by deep research. I don’t believe tech giants will rule the AI world. The future for Rokid and other smaller AI companies is promising.
Q: Do you have an estimation of the future growth of this industry by revenue?
A: (Just imagine the biggest company as) Apple plus Google.