New Orientals Startup Journey and Conflicts | Generated by AI
New Oriental’s Startup Story
New Oriental Education & Technology Group (often just called New Oriental) is one of China’s most iconic education startups, born out of the early 1990s boom in demand for English language training and overseas study preparation. Founded on November 16, 1993, by Yu Minhong (also known as Michael Yu), a former English teacher at Peking University, it started humbly in a small rented space in Beijing. Yu, who had failed the TOEFL exam three times himself while trying to study abroad in the 1980s, turned his personal frustrations into a business opportunity. He began as the sole teacher, offering classes in English, TOEFL, GRE, and visa consulting to help Chinese students chase the “American Dream” amid China’s opening up to the West.
The company quickly expanded by tapping into the pent-up demand from ambitious young Chinese eager to study or work abroad. Yu recruited star teachers—often charismatic Peking University alumni—who became “tutor kings” drawing massive crowds. By the late 1990s, New Oriental had grown into a network of schools across China, emphasizing not just rote learning but motivational, humorous teaching styles that made English fun and accessible. It went public on the New York Stock Exchange in 2006, becoming China’s first education company to list overseas and turning Yu into a billionaire. At its peak, it served millions of students and symbolized the entrepreneurial spirit of post-reform China. However, the 2021 government crackdown on for-profit tutoring forced a dramatic pivot: mass layoffs (over 60,000 employees), delisting from NYSE, and a quirky reinvention into live-streaming e-commerce selling agricultural products, where Yu himself became a folksy online seller.
The Founders and Their Conflicts
Yu Minhong didn’t build this alone; the core team was known as the “Iron Triangle”: Yu, Xu Xiaoping (a fellow Peking University alum handling visa services), and Wang Qiang (who brought marketing savvy from his U.S. master’s degree). They pooled their skills—Yu on teaching, Xu on operations, Wang on promotion—to bootstrap the school from a few dozen students to a national powerhouse. Early on, they traveled together, even crashing at Princeton dorms to recruit Chinese students as fans.
But tensions boiled over in a dramatic power struggle around 1997, just as the company was scaling. Xu and Wang, feeling Yu’s leadership was too erratic or centralized, allied to oust him from the board. Wang became chairman, and Yu was demoted to CEO—a humiliating blow for the visionary founder. This internal coup mirrored broader startup pitfalls: clashing egos, unequal contributions, and fears over control as success brought outside investors. Yu fought back fiercely, using his personal brand and teacher loyalty to rally support. By 1999, he had regained the chairman role, with Wang stepping down but remaining an advisor. The trio eventually parted ways amicably in the early 2000s—Xu and Wang left to co-found ZhenFund, one of China’s top venture capital firms (backing hits like DJI drones), while Yu steered New Oriental solo. No lawsuits ensued in real life, but the episode highlighted how fragile founder dynamics can be, even among close friends. Yu later reflected on it as a painful lesson in trust and resilience, crediting it for forging his tougher leadership style.
The Movie Adaptation
Yes, their saga inspired a blockbuster: American Dreams in China (2013), directed by Peter Chan and starring Huang Xiaoming, Deng Chao, and Tong Dawei. Loosely based on the Iron Triangle’s real journey, it follows three broke college buddies in 1980s Beijing who bond over failed U.S. visa dreams, then team up to launch an English cram school amid China’s study-abroad frenzy. The film amps up the drama for cinematic flair: one friend (mirroring the betrayal) defects to start a rival academy, poaching students and sparking a bitter lawsuit that tests their brotherhood. It grossed over $100 million in China (a record at the time), blending humor, heartbreak, and nationalism—framing their success as a “Chinese Dream” triumph over Western allure. Yu Minhong endorsed it, seeing echoes of his ouster in the plot’s conflicts, though the movie softens the edges for inspiration. It’s available on platforms like Netflix in some regions and remains a cult favorite for its rags-to-riches vibe.
Overall, New Oriental’s story is a rollercoaster of grit, betrayal, and reinvention—quintessential Chinese entrepreneurship, where personal drama fuels empire-building.
References:
Yu Minhong - Wikipedia
American Dreams in China - Wikipedia
Transformational leadership style and small business growth (PDF)
Capitalist Fantasy Tops China Box Office (WSJ)
Netizens in China debate: Are Chinese entrepreneurs all bad guys? (ThinkChina)