In October 2010, my friend and I recognized the problem of severe traffic jams in Beijing. We chatted for three hours and decided to do something about it.
Twenty five days later, I packed my 15-year-Seattle-life into two suitcases and bought a one-way ticket to Beijing. I arrived with no friends, little money, and no experience.
After two pivots, 24 months, $300,000 investment from 25 angel investors, 13 employees, partnerships with World Bank and several Fortune 500 companies, and eventually closing up shop, here are eight important lessons I learned.
1. Be local (本土化)
One common pitfall I see among expatriates is the “know-it-all” attitude. Some expats feel superior because we look different, speak fluent English, worked for reputable companies, and graduated from top schools. The “superiority” attitude is what hurts expats most.
The key is to unlearn what we learned in the west. Local Chinese often say “You must be grounded (接地氣)” and learn the local ways. “Be fast, precise, and ruthless (快，準，狠)” Understand that relationships matter. “Make friends first, do business second” (先做朋友，再做生意) is crucial. In China, if one cuts to the point without learning about the other person, one can come across as rude.
For carpooling, we had to figure out local carpooling law, cultural sentiment, where current carpooling happens, and the motivation behind carpooling. Our main push at one point was being “environmental.” Sorry, that just doesn’t jive in China to the general populous. But saving money and time does.
2. You’re guilty until proven innocent.
Between strangers in the west, you are innocent until proven guilty. Westerners believe people are generally good-hearted. In China, if you meet a stranger (not met through friends), you are guilty until proven innocent. This is why folks preach “relationships.” If you are introduced through a mutual friend, trust is established.
Therefore, try having your existing contacts (however few there are) introduce you to people you’d like to meet. Chinese locals are very open to making introductions as that’s the standard way of getting things done. It’s all about who you know. At the same time, be a “connector” to others also.
3. Is your innovation confusing?
Cloning gets enough of a bad rap in the west. But part of it has its merits, which is: execution speed, and usability. I was very against copying anyone’s idea and product design – until we learned our lesson. Our product’s usability was nothing like the local products. I thought it was “innovative.” I was proud this is very “western” and “Silicon Valley’ish!” This caused users to be quite confused about how the product worked. We spent six months building an innovative product that confused users.
Instead of copying, I recommend “referencing.” Reference successful products locals already use and at least ensure similar usability, concepts, and nomenclatures. This reduces the learning curve of new products. What Chinese companies does best is to copy first, then “micro-innovate” (微創新). Using the same strategy would be wise.
4. You make your own rules.
If you’ve always been obedient and follow the rules in the west, it’s time to unlearn. As long as you don’t mess with the government’s rules, most other rules can be broken and are frequently broken by others. The entrepreneurs in China are quite brave and think outside the box. To them, nothing is impossible. Don’t be afraid to ask if X is possible. If you know the right people, it typically is.
5. They know more about you than you know about them.
Just because most Chinese doesn’t understand English, doesn’t mean they don’t know the latest news. There are websites that translates everything TechCrunch publishes into Chinese within a matter of minutes. In other words, they know every project that’s on Product Hunt or is being funded in the U.S.. They learn fast and execute fast. But can we name other hot startups other than Xiaomi? And no, Baidu, Alibaba, and Tencent aren’t startups.
Despite its challenges, there are several advantages of being in China.
6. From book smart to street smart
If you think you are too nice or lack street smart, starting a business in China will expedite that transition. With millions of people competing for limited resources, you will learn how to do things the unconventional ways in order to reach your goal. Your integrity will be challenged. So hang tight on your values.
7. The energy
The startup energy in Beijing is quite amazing. There are startup competitions happening on a weekly basis, coffee shops such as Garage Cafe dedicated for startups with mobile devices for rent, strangers next to you in a coffee shop are working on their ideas and sealing deals.
8. Opportunities are plentiful
Given China is still at its growth stage. There’s a saying in Chinese “Chaos creates heroes” (亂世出英雄). China is far from chaotic now but there are plenty of problems waiting to be solved in every industry, especially in the B2B space. However, B2B is challenging due to again, trust issues (what will you do with my data?).
The most successful tech companies that have made it such as Qunar (American founder) and Tudou (Dutch founder) have one thing in common: a local partner. This is best team mix. The western founder typically jives well with VCs and the local founder excels at management and operations.
In conclusion, even though our startup didn’t work out, these valuable lessons have helped me with execution and being unconventional while building my latest startup.
To me, having built a business in China is akin to having gone through a boot camp.
But if you ask me if I’d do it again? I will, without a blink of an eye.
James Hu is the founder and CEO of Seattle-based Jobscan, a web tool that helps job seekers land more interviews by optimizing resume keywords. He’d like to thank Mike Lee, co-founder & CTO of Jobscan, and Guy Sivan, CEO of Vericant (www.vericant.com), a Beijing-based started that helps admissions officers find their top Chinese applicants with face-to-face video interviews, spoken English evaluation, and ID verification, for reviewing this piece. You can follow James on Twitter (@huisjames) and Jobscan on Twitter (@jobscanco) and LinkedIn (https://www.linkedin.com/company/jobscan-co)