There are people who can offer better advice than I, but in general, you want to play very defensively and very calmly. Don't let Lao's mobility and pressure freak you out. If you're smart and patient, you can get out of any pressure he can apply with a combination of teleport, ground and air superman, and ex shocker/superman. My advice would be to practice getting out of his various pressure tactics, since when you get good at this, the options for counterattack and punish become much more obvious.
On the flip side, if you play the way the normal, undisciplined player does (blind rushdown and spastic button pressing), prepare to be destroyed repeatedly.
