When Charlwyn Mao, a Chinese student at Stanford University, was thinking of a name for his startup in 2013, he settled on Xiaohongshu, which means “little red book.”
It was a reference to the colors of his prestigious university, a bastion of American capitalism, and his former employer, Bain Capital.
But this week, his choice of name became the focus of an online conspiracy theory that the app was named after a compilation of Chairman Mao Zedong’s famous quotes, which some people translate as “the little red book.”
Xiaohongshu, a popular social media app in China, was relatively unknown outside the country until the impending ban on TikTok in the US led to an unexpected surge in US users. They call Xiaohongshu RedNote, but it doesn’t have an official English name.
Last year, U.S. lawmakers passed a bill that would ban TikTok unless Chinese owner ByteDance takes control of the company, saying it poses a national security threat. Unless the Supreme Court intervenes, TikTok will be banned in the United States on Sunday, cutting off access to the 170 million Americans who spend billions of dollars on the app.
A Chinese social media app that has strict content moderation regulations and is policed by the Chinese government’s powerful internet censors is set to benefit from a U.S. government effort to ban another Chinese-owned app. The irony of this has delighted netizens.
However, for Mao Zedong, it has nothing to do with Mao Zedong and is no laughing matter. He operates in a delicate regulatory environment where regulators do not look kindly on breaches of the Great Firewall, the digital divide that separates China’s online population from the outside world.
Xiaohongshu responded to its newfound popularity in the US by rushing to update its content moderation controls. Its co-founder and CEO, who actively avoids media attention, remains silent.
Mao is part of a second generation of Chinese internet entrepreneurs who emerged in the mid-2010s to challenge the dominance of giant corporations such as Baidu, Alibaba and Tencent.
While still at Stanford Business School, he pitched a lifestyle-focused Internet company to investors.
Initial funding came from US and Chinese backers ZhenFund, GSR Ventures, and what was then called GGV Capital. He and co-founder Miranda Koo, also a Wuhan native and marketing executive, experimented with several ideas, including a travel guide for Chinese tourists.
They ultimately settled on a photo-sharing app that focuses on lifestyle content. Mao later gained support from both Tencent and Alibaba, which is unusual for two archrival companies. Both invested to prevent the other from acquiring the startup.
Xiaohongshu has more than 300 million active users looking for restaurant tips, travel ideas and beauty advice, according to figures provided to investors. This number is expected to rise even higher after this week. It’s an important channel for consumer brands to reach shoppers through sponsored posts and influencers.
Those close to Mao describe him as a smooth operator who is proficient in Chinese and American business, with skills honed during his time at Bain Capital.
“There are two types of typical Chinese tech entrepreneurs. One is the geeky type who wears T-shirts and sweatshirts and is shy to speak in public. “He’s a battle-hardened wolf warrior type who barks orders,” said one longtime employee.
“Mao is neither of those things. He has the best fashion sense of any Chinese tech founder. He speaks with the clarity of a Wall Street elite,” they added.
When you visit Xiaohongshu’s Shanghai headquarters, you encounter a physical representation of an online community. In contrast to most modest Chinese corporate offices, this one is filled with attractive plants, a trendy coffee cart, and a stage for influencers to shoot videos.
On Fridays, staff bring dogs and cats into the office, part of a long-standing tradition advocated by Mao Zedong to “create a family atmosphere,” one employee said. Using a company nickname emphasizes an informal atmosphere. Mao adopted the nickname Seiya, a Japanese anime hero, while Ku was named after the historical folk heroine Mulan.
Despite the trappings of a progressive working environment, Xiaohongshu still has the kind of extreme work culture common in Chinese technology companies. Mr. Mao is known for interviewing prospective employees late at night, demonstrating the commitment he expects from them. Some point to high turnover rates as evidence of burnout.
This week, our employees worked harder than ever. In addition to the challenge of having sufficient data center capacity, there is also the delicate issue of serving as host to the unique interactions between American and Chinese users.
Many are happy to see friendly relations amid worsening geopolitical relations. Two investors said there was also interest from people looking to buy Xiao Hongshu stock at a valuation of $20 billion.
But others say the Chinese government is unlikely to allow Chinese internet users to be exposed to more Western content. While in the US, Xiaohongshu could be the next target of the same lawmakers who decided to ban TikTok. Given the tensions between the two countries, Xiaohongshu’s moment of global popularity may be short-lived.
eleanor.olcott@ft.com, zijing.wu@ft.com
Additional reporting by Wenjie Ding and Nian Liu in Beijing
