Ushi Is Trying to Become China's Version of LinkedIn

Dominic Penaloza's Bilingual Site Facilitates All-Important Personal Introductions While Avoiding Competitors' Problems With Spam

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With no LinkedIn in China, a year-old clone is focusing on localization and product quality as the keys to success for a business-networking site in China, according to co-founder and CEO Dominic Penaloza.

"We think we've cracked the code on how to do it properly," Mr. Penaloza said of Shanghai-based Ushi (pronounced YO-shi). "Us vs. LinkedIn, the difference is that we're a local company, with a local team."

Dominic Penaloza
Dominic Penaloza

Perhaps the most promising in the spate of professional networks that have cropped up in China recently, Ushi -- meaning "outstanding professionals" -- launched its bilingual Mandarin-English version in May 2010. The company debuted with 100 established "charter members," a move that had the effect of casting A-list actors in a movie. Ushi has been steadily outpacing predecessors Tianji and Wealink in traffic, despite its modest 250,000-member base.

While the company is "deliberately not trying to make money" and doesn't yet have a media-sales department, advertisers are knocking. Past campaigns consisting of a Dell "CTO Corner" and a Starbucks-sponsored "badge" were successful, and new partnerships are being negotiated. Recruitment revenue, LinkedIn's top revenue stream last year, may also prove lucrative for Ushi. "Recruiting experienced people is the No. 1 headache, or constraint, on business for most people. Offering recruitment solutions, there's just a huge need and there's only a few solutions, so I think we can do very well there," Mr. Penaloza said.

A LinkedIn enthusiast who first moved to China in 1993, Toronto-born Mr. Penaloza, 41, began using the site during its early stages. As the network's popularity grew, he began wondering when a successful Chinese version would take hold, seeing the void as perplexing.

"[Chinese] people love business and love business networking and just do it all the time, do it automatically. It's not a foreign, alien thing," said Mr. Penaloza, who has family roots in Xiamen, a coastal city in southeastern China. "It was pretty shocking that there was no such service."

Although LinkedIn isn't blocked in China like Facebook and Twitter, and company execs visit the country, a spokeswoman said "Entry into China is complicated and not something that we take lightly. We're keeping an eye on China and LinkedIn's growth in that country, but we aren't currently in the market and don't have immediate plans to be there."

In Asia, LinkedIn has regional headquarters in Singapore and operates in India and Australia, with plans to open a Japan office this year.

After a few years of waiting and a chance encounter in 2007 with LinkedIn founder Reid Hoffman on a Tokyo airport bus, Mr. Penaloza, together with Beijing native Quentin Zhang, decided to go for it.

While online engagement like social networks and microblogs are popular in China, business-networking practices remain steadfastly traditional. Protocol dictates several in-person meetings, usually with a mutual friend present, according to Mr. Penaloza. Ushi's local-friendly features include an events platform that facilitates the all-important business introduction, leveraging technology and maximizing efficiency. Upcoming events can be shared and discussed among contacts. Once at an event, users can "check in" using their phones, see if other Ushi members are in attendance and perhaps set up a face-to-face meeting.

Ushi also expanded on conventional payment methods, offering micropayments for one-time services to be paid for in "coins." According to Mr. Penaloza, many Chinese users prefer the pay-per-use model to buying a package of services that may go unused.

Ushi has proven particularly attractive to entrepreneurs, an effect of Mr. Penaloza's prior career -- and Rolodex of contacts -- in private equity. Nearly all early-stage investors based in China are Ushi members. Charter member Warren Ching, founder and CEO of, began using Ushi to network with other entrepreneurs.

"An angel investor approached me on Ushi because they thought my business was interesting," said Mr. Ching, whose company was later funded by the same investor.

For now, Ushi membership is by invitation, allowing the company time to build out its product. "The better our system becomes, the more open we can become without risk of it devolving into what the original failed cases devolved into," said Mr. Penaloza.

Ushi is not without competition. Already trailing closely behind in traffic metrics is the newly-launched RenHe, and China tech pundits are watching for JingWei, a new venture backed by RenRen, a popular Facebook-like social network, and Zhaopin, an established job search site. Unlike bilingual Ushi, they operate only in Chinese.

Mr. Penaloza's confidence in Ushi rests partly on his co-founder's deep product experience. Mr. Zhang, 36 , was Tianji's original product director and knows firsthand the pitfalls of the business. Tianji users were plagued by spam, but Ushi is apparently considered trustworthy, as 53% of members have listed their mobile phone numbers on the site, said Mr. Penaloza.

He is coy about whether he hopes to eventually sell Ushi, or try to go public like LinkedIn did last month. "An IPO is certainly a future possibility."

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