Biography: After writing and helping to edit Computers & Automation magazine while studying biophysics at Massachusetts Institute of Technology in the 1950s, Patrick McGovern, founder and chairman of International Data Group, became associate publisher after graduation in 1959.
He left in 1964 to form technology research company International Data Group and launched weekly magazine ComputerWorld in 1967 in the US before its international expansion in 1972.
McGovern has overseen IDG’s launch of more than 300 magazines and newspapers and championed the expansion of IDG’s online network to include more than 450 websites in more than 90 countries. IDG’s five venture partnerships across China, Korea, Vietnam, India and the US have more than $3.5bn under management.
McGovern talked to editor James Mawson.
Mawson: Why did IDG start corporate venturing, and why China?
McGovern: We started venturing for new companies because of the rate of growth of technology markets. IDG is active in 90 countries and tied to how quickly ideas move from technology laboratories to companies, products and services. New companies are more motivated to do this and the quicker it happens the faster markets grow.
In emerging markets, however, entrepreneurs formed companies more slowly than in Silicon Valley, which had hundreds launched each month. So, whereas China was a good market [IDG set up a joint venture in China in 1980] there was a reluctance among local Chinese investors to back start-ups with just a paper plan rather than tangible assets. They wanted collateral in case the business failed.
IDG knew technology markets and in 1993 set up IDG Ventures to back start-ups as an experiment. This was also when the so-called sea turtles – the Chinese who had left China – were ready to return and present business plans for new ventures requiring a few hundred thousand dollars or a million.
Everyone laughed at me for backing them as there was no stockmarket and companies could not issue stock, so they said it was not the right environment.
But I talked to China’s then-president, Jiang Zemin, and he promised stockmarkets by the end of the 1990s and we were encouraged by that and started investing in 1994.
These investments included Tencent, where we invested $1.2m and sold it for $200m, Baidu where $2m turned into $700m, Soufun where we invested $1m for 10% that was worth $100m and Ctrip where $1m became $26m.
By 2000 it became clear there was a great opportunity and lots of venture capitalists went over, so we said if it works in China, what about elsewhere, and so set up a $100m Vietnam fund in 2004, $150m in India in 2006, and $50m in Korea in 2008. Its been a good use of cash.
Mawson: Are you the Warren Buffett of the media and venturing world?
McGovern: In a way. I spot good markets and hire strong people and then get out of the way, but give them praise if they do well. Unlike our VC units, IDG does not look to sell because if they fit the mission we can keep long term. If not we can move on.
Mawson: What is exciting about the future?
McGovern: Reader revenues from mobile devices and internet, as advertising is less reliable. The concept of mobility and 24/7 access to the internet and information is a life-transforming thing. It transforms the education of the young. Its been shown that children using computers have higher IQs and more neural connections, and having no single organisation manipulate facts or opinion will help the human race.
I visited Russia in 1960 and they told me they feared a surprise nuclear attack from America as its economic system was so far superior. [State newspaper] Pravda had shaped people’s fears and promoted mutual aggression.
Mawson: what’s been your biggest achievement?
McGovern: IDG’s information helps 500 million people every day or week make more effective use of technology to improve lives. Our aim is to help 1.5 billion in this way by 2020.