David Li of GreaterHeat Sets His Sights on SEA and Beyond
Looking ahead, Li plans an IPO on Nasdaq in 2024 when his entire 2023 revenue reaches US$50 million.
For Chinese Internet entrepreneur David Li, who is the chairman and CEO of GreaterHeat Pte Ltd, a Singapore-based Web3 infrastructure provider, would concur that 2021 was an “annus horribilis”. Just prior to this, the Chinese Internet industry was booming, fuelled by a ready supply of knowledgeable young tech entrepreneurs, many of whom modelled themselves on Jack Ma, who operated in China’s fertile unregulated business environment. “Develop first, control later!” had been the government’s rallying cry in those days and accordingly, China’s Internet sector had been booming like never before.
Then, in 2021, the good times came to an abrupt end. Suddenly and without warning, the Chinese government pulled the plug on Ant Finance’s IPO. At the same time tech companies like Alibaba, Meituan and Baidu all came under crushing government crackdowns. The result was that Chinese Internet companies let go around 20-30 per cent of their employees and many promising future investments were cancelled. The Chinese government had its own reasons for acting as they did, but for scores of entrepreneurs like David Li, it was a sign that China had for the time being reached its watershed as far as tech expansion was concerned. The hard news was that no company in the industry which remained in China would be able to develop.
For Li, this was an almost catastrophic year. At the tender age of 19, when he was still a computer science student at a university in Henan Province in China, he had already set his sights on becoming an entrepreneur. Back then he identified two criteria for the sort of business he would create: firstly, it must be a new business, and secondly, he needed to be a provider of the technology which would fuel that business. His decision to study electronics and computer science was driven by the realisation that the development of computer technology was the fastest in human history and was without any real barriers to entry except technical knowledge itself.
Li realised that in China, traditional non-state-owned industries such as property development and automotive production required hundreds of millions of RMB in capital. Most fresh entrepreneurs lack the start-up funds to even get started in such businesses. The new and sunrise computer and Internet-based businesses, by contrast, had no entry barrier and were easy to start as long as you had the technical ability. That was the realisation which led Li to fix his sights on becoming not only a tech entrepreneur but an Internet knowledge-based “hero”.
He began to lay his foundation. During his university days, he obtained his computer technology certificate and then became the assistant to one of the professors where he taught new students about computers and the Internet. This was all good training. Before graduating he had already secured a job offer at Shanghai Zhan Xun as an IT engineer with responsibility for providing technical support for leading smartphone brands such as Lenovo, Samsung and ZTE. His work on smartphones was, as he states, “an eye-opening experience” but life as an employee was not what he dreamed of; he still aspired to start his own business and fulfil his ambition of becoming an entrepreneur, so he left the company after one year.
Li returned to Zhengzhou where he set up his first business in Internet software: Henan Creative Republic Network Technology Co., Ltd. It was at this point that fate intervened once again when the Internet saw its paradigm shift from fixed computer-based to mobile. This shift required an entirely different mindset on the part of its players; now, data has begun to emerge as the driving factor, specifically who is behind the mobile phone, what is their locations, and how people are linked together in mobile peer and friend networks.
The initial iterations of this new business model have since become staples of the mobile era — online to offline (O2O) businesses such as food ordering and delivery apps are all done on the mobile phone. This was revolutionary since many traditional businesses such as food and beverage could transition to the Internet initially, and then to a mobile app using technology to help the enterprise expand and gain new market share. For those early bird pioneers in this new industry, there were quick and significant successes to be made. Li’s first pot of gold was in 2012 — a profit of 1 million RBM within just one year. Thinking business was easy, he became arrogant and over-confident and over-expanded his business.
In 2014, his operations lost his past two years’ profit. Other O2O tech platforms like Meituan and Taobao, which were highly subsidised by major backers were able to seize his market share. The silver lining was that Li managed to sell his business to those other companies but his lesson had been learned: in his youth and naiveté, Li had thought that he could compete with them on a playing ground which was far from level. These companies had lowered their price to 10 per cent of Li’s price to compete with him and sat back waiting for their competitors to go under.
During this time, Li was also cheated by other companies because he was too heavily geared towards technological problem-solving and not experienced enough in the pitfalls and pratfalls of strategising a business. Li had signed an agreement for these other companies to use his company’s technology as its investment in a new business but got cheated in the end. This made Li realise that his previous mentality of self-reliance and independence in business was not necessarily the correct approach to doing business. He came to the realisation that the whole business ecosystem is intertwined and that you need to cooperate effectively with other partners. Neither could he obtain support or insight from his parents since they had the traditional mentality that merely getting a “good, stable job” was the best way to live.
Despite the ups and downs and the potential rewards, Li was not content to confine himself to the new world of mobile apps. He had had the foresight, even as early as 2012, to understand that the future lay in the still-developing industry surrounding digital and cryptocurrencies. In 2018, Li transplanted his team from Zhengzhou to Hangzhou. He had the idea to pivot his business from mobile to blockchain-integrated solutions. His new company, DigiCode, would provide enterprises and users with solutions built around the blockchain, a completely new and revolutionary end-to-end distributed ledger system which everyone was talking about. Li moved his employees into offices adjacent to Alibaba’s own office area to motivate himself and his staff.
Hangzhou at that time was regarded as “China’s Silicon Valley”, more specifically the so-called “Data Zhejiang” Yuhang District’s is Yuhang Technology City, where hundreds of technology companies crammed into an area one-fifth the size of Singapore. At Yuhang was an abundance of mature technology talent, a situation which was helped by the region’s enlightened regulatory climate. In Hangzhou, Li set about using the new technology to solve everyday problems. His business experienced the fastest growth in Hangzhou in line with the rapid growth in cloud infrastructure and the explosion of data storage and data processing. From 2018-2020, DigiCode experienced ten-fold growth year-on-year.
Then, in 2021, came China’s great clamp-down on the country’s rapidly expanding Internet-based businesses. Says Li, “Our company, though successful, was still very young and we needed to develop and move ahead. We reached the shocking conclusion that if we remained in China, we would not be able to develop as we wanted.” Li went back to the drawing board. If China’s Internet business technology was more advanced and already ahead of other countries, could it be possible to effectively move this technology advantage to new countries and regions? For example, the Southeast Asia region had some 600 million people, a massive sustainable consumer market. With a culture somewhat similar to China’s and populations which were mostly friendly to Chinese expertise and investment, if Li moved his business to SEA this may be the solution (for geopolitical reasons any move to the USA or Europe was sadly out of the question).
In 2021, Li set up GreaterHeat Pte Ltd in Singapore, which serves as the headquarter for its global operation. He set about busily hiring staff, finding an office, all within half a year. In 2022, Li was ready to enter the SEA market in earnest. This latest iteration of Li’s entrepreneurial journey evolved into a now leading Web3 mining technology company. Li leads a global team of over 100 blockchain technologists and cryptographers at GreaterHeat to provide customers in SEA, EMEA and other regions with compliant, stable and low-cost cryptocurrency mining technology services and derivative businesses.
“Crypto mining is a very stable business,” says Li, “a stable business similar to many traditional businesses now. Because of this, GreaterHeat is wholly self-funded and we are not looking for outside funding right now.” Li is also optimistic in his outlook for Web3 infrastructure: “If Web3 (which is focused on crypto data in the same way that Web2 was focused on cryptocurrency) develops well, then Filecoin will do well too. Filecoin is now used by some public institutions, e.g., Internet Achieves, foundations, NY transportation data, weather data, etc.”
Filecoin is the data storage layer of Web3, and the world’s largest decentralised storage network. It is a permissionless system in which Storage Providers (SPs) offer data storage services to clients in return for payments denominated in the network’s native token, Filecoin. GreaterHeat has a Top 3 Filecoin Network Ranking, and holds 3.5 million Filecoins.
Amongst GreaterHeat’s achievements thus far are the awarding of over 70 patents issued by the National Copyright Administration of the People’s Republic of China. The focus of these patented innovations has been on blockchain, computing and data storage. GreaterHeat’s other notable achievements have included a tenfold annual growth for a consecutive 3 years running from 2018 to 2021.
Li accepts that relocating from China’s Silicon Valley to Singapore was the right decision, although other SEA countries were also evaluated. “Singapore is very suitable for young entrepreneurs, especially in new industries. Web3 is a new industry that is full of opportunities and it needs an environment which is politically stable, mature in its business structure, and furthermore it’s a place where entrepreneurs find it easier to focus on their products and business and service clients.” Li adds that many companies who remained in China are still hesitant. These are mainly companies dealing with exchanges, wallets, ICO cryptos, GameFi and the metaverse.
David Li’s future plans for GreaterHeat remain ambitious, having successfully relocated from one country to another, and completed his start-up according to all his business goals. This year from January to August 2022, GreaterHeat achieved S$20 million in revenue and targets to reach S$30 million by the end of the year. This revenue comes mainly from South Korea, Japan and SEA countries like Thailand and Malaysia. Looking ahead, Li plans an IPO on Nasdaq in 2024 when his entire 2023 revenue reaches US$50 million. “Our reason for wanting to list on Nasdaq is because other similar mining companies are already listed at Nasdaq. It shows that the US is friendly to mining companies like ourselves.”
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