The tech founder’s guide to cracking China

It’s evening in Hong Kong. Just got back home from the first day of the notable Rise 2015 conference- probably the most pornographic celebration of startups that has ever happened in HK. Instead of getting high on drinks and networking on the startup tram, I’m stuck at home with a terribly sore throat and a glass of boiled ginger water. “Dude, you’re missing out a night of networking that would totally change your life”, the ghost of Rise founder Paddy Cosgrave whispers in my ear. I’m doing my best to ignore it (a skill I’ve developed after accepting no less than 22 emails from Rise over the last few months).

But seriously, can I do something productive tonight?

Yes! I’ve decided to make a long time plan come true and publish a series of posts for tech founders who would like to take their company into China.

The posts are based on my own experience moving to Hong Kong in mid 2014 to take my company’s growth and operations in Asia to the next level. China has been by far the most attractive (and least straightforward) market in the region. Soon after moving to HK I’ve realized that it’s not appropriate to target China as a market yet to have presence only in HK. So we’ve decided to start an additional branch in Shanghai. As a business step it’s delivered very well so far. As a learning exercise re China it’s been priceless.

Despite dozens of lessons learned (from technical details to deep cultural observations) I couldn’t find any “101s” for tech founders who try to break into the Chinese market. Over the last year I’ve spend a notable amount of time in China (Shanghai, Beijing, Dongguan, Shenzhen, Chengdu and other cities). I’ve started studying Mandarin almost immediately after setting foot in HK. I’ve started reading articles and books about China, trying to put the pieces together and make sense of a huge business/culture puzzle with no clear end. For an extremely analytical mind like mine, China is a never ending riddle. I was prepared to fall on my face and get confused many times, and I did. I’m a great believer in learning through doing, so it was no big deal. China isn’t something you can digest in an executive summary.

But at some point I did notice that the picture started to clear up. I got to know some secrets I wish I’d known before. While building up knowledge I’ve found myself sharing lessons with our HQ, my friends and fellow tech entrepreneurs- those who moved into China, those who had been just considering to… and those who failed. In the next few posts, I’d like to “open source” quick pointers and discuss the different aspects of building tech business in China: technology landscape in the country, product, growth, pricing, customer service etc.

Who should read these posts? Read it if you’re a tech company who has an established business, and is now playing the game of scaling globally (post round B as a rule of thumb). The post might be especially relevant to founders who relocate to China to make things happen from scratch. I highly advise overseas startups to stay away from China before they reach an epic product-market fit in other territories. China will challenge everything you know about your own products and users. As an early stage startup, get into China only if it’s the only market that makes good sense for you really. And if that’s the case, you should remember that you’re in for confusions and surprises 🙂

Posts in this series:

The tech founder’s guide to cracking China

2 thoughts on “The tech founder’s guide to cracking China

  1. Imagined Order says:

    Thanks for the first comment on the blog, Andrew 🙂
    I hope to give detailed answers in the coming posts. But I can start by telling that the lack of trust in the Chinese business environment will confuse and shock even the most paranoid businessmen. As a company owner, you will constantly be held guilty until you prove otherwise. You will be tested and tested again. Communication problems will escalate into brutal accusations, and they happen a lot in China. Products that “just worked” in your home country will fail in China because transparency is not built into them.
    There are also horror stories such as a key employee disappearing with your intellectual property and “re-opening” the company under a similar name. It happened to a big Israeli company in China. But these traumas won’t happen to most entrepreneurs.
    The good surprise is that once you develop trust, your clients and partners will treat you like family, and business will find you by word of mouth.

    Like

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