#46 - Tencent's Chief eXploration Officer, David Wallerstein on WeChat, QQ, and Gaming

**Craig Cannon** (0:00)
Hey, this is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is with David Wallerstein and Anu Hariharan. David is Tencent's Chief Exploration Officer, and Anu's a partner here at YC.
So just a quick reminder before we get going, if you haven't yet subscribed or reviewed the podcast, it'd be awesome if you did. All right, here we go.

**Anu Hariharan** (0:20)
Well, hello everyone. Thank you so much, David, for being here. I wanna introduce David Wallerstein, who is the Chief Exploration Officer at Tencent.
David joined Tencent in 2000, when the company had only 45 employees, and today you have about 38,000.

**David Wallerstein** (0:38)
I believe so. Yeah, we'll have to check with our head of HR.
Give or take 1,000, something like that. A few thousand here and there.

**Anu Hariharan** (0:45)
Well, it is clearly one of the world's largest internet companies, as well as the largest gaming company in the world. And as many of you know, Tencent is also the creator of WeChat.
So, thank you, David, for joining us today, and also for speaking at our private event.

**David Wallerstein** (1:02)
For YC, anything.

**Anu Hariharan** (1:03)
Thank you.
So, let's go back to even pre-2000. You grew up in the US. What took you to China?

**David Wallerstein** (1:13)
That's a very long answer, and I'm going to try to make it short. But it kind of relates to my work today. I was always pretty deeply concerned about the world and trends in the world.
And I felt that going back to, I guess, the early 1990s as a student, studying global trends and studying global history, I felt China was destined to become a very important country, that the economy was going to continue to grow. It had been growing in the early 90s, but China was not a popular country for, at least Americans back there, at least myself, the way I viewed the world. It was kind of like on the side, and other countries like Japan were a much bigger deal. I actually had spent time living in Japan.

**Anu Hariharan** (1:54)
You went to high school in Japan.

**David Wallerstein** (1:55)
I went to high school there. I was an exchange student. I lived with a Japanese family, and yeah, I was a Japanese person basically for the time I lived there. I've lived in Japan on and off for about four years, and that made me very comfortable just speaking a foreign language, an Asian language, and being the only non-Asian in the room has always seemed very natural to me, even since before I was 16
But then when I got interested in China, I kind of redeployed this skill set that I had developed to kind of survive in Japan as a kid, which is like you just have to learn the language super fast.

**Anu Hariharan** (2:29)
So you went from Japan to China.
And I know you also talked about NASPERS sort of exploring, in fact, potentially acquiring Tencent, pre-2001. So talk about how did you first come across.

**David Wallerstein** (2:42)
Okay, so I was doing management consulting in China. So take all that background I told you about, and I ended up having a passion for getting foreign companies into China. Again, oh, the theme I was talking about with China is going to be very important for the rest of the world. I was thinking the theme in my mind, really from the mid-90s, was how do we help China integrate to the rest of the world? So China is a productive member. All the great international institutions out there work for China as they do America and the other countries in China. It's just part of our global community, right, in a very proactive way. And I thought the best way to do that would be to integrate the Chinese economy with the rest of the world and to accelerate that. So I was very interested in the 90s to bring US companies to China. I was working as a management consultant, predominantly for telecommunications and what we called IT-related issues back in pre-Internet, right?
And then I started helping these different companies. And in 1999, very early, I think it was February 1999, I came across a company called NASPERS, who became my client. I was very young at the time. I was like 20-something, 21 maybe.
And they wanted to enter China's Internet market. And they had recently done a NASDAQ listing and had quite a bit of capital to back their plans. Maybe it was like $100 million or something, which was a lot of money back then and still a lot of money today, right? So we started working together to invest in different companies in China.