Yeah, this is particularly true for, of course, consumer product. (Exactly.)

Yeah, so, what other advice would you

give to, you know, if someone coming from foreign places?

Do pay attention to the policies.

Because on one hand even if the

policies are not hindering you,

they might be helping your competitors.

So, you better take the same advantage.

Secondly, I think just be local, you know.

Try to be local. (Yeah.) Take away your cultural privilege.

(Cos it is a very different market.) It’s a different market.

And the third one is speed. Speed is everything (Speed in China is …) today.

I mean maybe 6, 10 years later it’s a different world, but today in China, everything.

Because so many people are entering this startup market,

so many people will try to do something. Okay, and there's abundant of funding.

There is a very warm welcome culture for… both from the

government and also from media and the education sector on startup.

So, if you are not moving fast,

chances are somebody else

is going to, you know, take advantage of that

What’s the selection criteria for entering the accelerator program in Qianhai?

What do people … Well, I mean, officially,

there's a scoring sheet. Basically what you need to do is the …

first of all you have to be sustainable and scalable.

I think these are the two

main areas what we see.

But my requirement

to my … we have a judging committee,

okay, I got a chairman but there’s

actually a few others who are experienced investors.

And my, you know, when I

said okay well, yes, do fill in the marks

because well it’s a government program;

but what I want from you, I said, is that

if you need to take out half-a-million

Hong Kong dollars or half-a-million RMB

and invest in this company … of your

own money, not the government money,

not, you know, a fund.

(So, you want the entrepreneur to be committed…)

Do you or are you … no, no, not the entrepreneur, the judging panel (The judging panel!) …

the judging panel. I say … I ask that the panel judges, I said, if you were

to take out half-a-million dollars and

invest in this company, will you do it

with your own money?

(That's the ultimate test!) That's the ultimate test.

(If you invest your own money.)

Exactly, then I think we'll give them a chance

I mean what we’ll do is we now change the program

originally was a one-year free rent,

now we change it to six months.

So, what I want to do is six months later, we'll review the situation.

So, we say we will welcome your company, will

give you a chance, we give you the flexibility.

But you need to prove yourself within a

very short period of time. But I… I think

all startups are like that.

If you're not successful in the first two years,

chances are you’re never gonna fly.

But the six-month limit or sometimes I hear

three months (Yes.) in overseas programs … (Yes, ‘500 Startups’. Yes.)

There are three months and six months. They are very brutal, in fact.

It is very brutal.

But, you know, I was originally wondering why.

But then I understand is that

unfortunately the world is brutal. (Yes.)

It… that's why it's called accelerators, right?

They want you to work fast, and

they want you to work hard, they want you to ….

because even if you six months

… in six months’ time, you still haven't

figure out how to get your first revenue,

how to pull the market, then maybe something's wrong or maybe somebody else

is already working on an idea similarto you.

And if you launch it, you know,

that the worst thing that could happen

to a startup or an investor is, you know,

when you’re beta-testing, somebody launches a similar product.

(Yes.) So, I mean that is something we don’t want.

And if they do well after six months, is that

… do they get a renewal? Well, we do allow them to renew, but most of the

time they won’t. (Right.) Because, well if they are successful, they gonna get

their first funding … they get angel round or seed round, and then they want

to move to a more decent office instead of sharing it. (So, in other words, if

they become successful, you want them to graduate.) They graduate. But they will

still probably maintain a name in our center. We haven't figured out really

the long-term way of doing it. We don’t want to create a cumbersome thing but

right now what happen is, they still say,

‘Oh! I'm one of the incubatees.’ But the reality is … like one of our incubatees,

he's already expanding into Shanghai

(Excellent.) cos he's telling me, he said,

‘Well, Witman, sorry to tell you; but I'll probably keep my R & D here.

But my biggest market is in Shanghai, so I'm going

to move my headquarters there.’

(Which is actually great cos they are expanding their …)

Good and bad, that means we do not collect taxes from him, but … (I see.)

But the good thing is is yeah, I want him to succeed, right? And and so

so … but he said ‘I still want to maintain

the link because I want to see if there is any new ideas, I want … I'm proud

of being one of the graduates.’ (Yes.) Okay, so so I think we try to maintain

this good balance and also we will invite these incubatees to come back and

share with the others. You know, how how …

what, you know, what makes you successful.

And that is, I think, a very good… (Still it is a very good success story.)

It is. It is. And how closely do you work with the investors?

Um, reasonably. And personally I do because I am

one of the investors circle people. So, I kind

of … and what we do is we create, for example,

recently we have a competition -

what we call Shenzhen Hong Kong Youth Startup Competition.

So, we…what happened is I invite … all my judges are basically Master’s. (Yes.)

Okay, so they will do the judging, they helped me to select

the winner but at the same time they got the chance of seeing these people;

and then at the final judging day, what we’ll do is we’ll invite people like IDG

and those big fund houses. So, we may have five judges but we have 25 other

investors sitting in the room. And then you

see the finalists present their ideas. I keep telling these people I said,

`all you need to do is make it to the finals.’

Because you don't have to be number one to get a investment.

(Yeah.) Chances are … if you’re number six but …

you kind of suit … because every investor have

their own forte, right? So, if you, kind of, suit a certain investor’s interests,

you might get an investment. So, you don't have to be number one. And like

school exam, you want to be the number one whatever.

But here, yes, a number one, you got a glory, you got a certificate,

you may even get some prize money; but

even if you’re number nine, as far as you

make to the final, you get a chance for presenting to all these 30 very famous

investors who, you know, took out a large piece of

their precious times, sit there and listen to you. Okay, so I think

what we do is we organize these kind of events. Sometimes is a competition.

Sometimes it’s a presentation day. And sometimes a sharing session.

Sometimes what we call a road show.

So, we're going to have booths of these startups.

(They can demonstrate…) They can demonstrate their product.

They can demonstrate their ideas.

And then we’ll invite investors to come in and look at them.

This is a good way to connect the entrepreneurs to the investors.

Well, you have to. You have to.

I think that’s the only way, you know.

It's no … it's really not much help

to entrepreneurs if all you're

providing is a free rental space. (Yeah.)

Because I mean you can always find it,

you can’t find a garage, but you can always

find a coffee shop table. So, really

money and I, money-wise, it doesn't cost

that much for a startup to, you know, to get a small space.

But to get a chance of mingling with other startups

mingling with investors, connecting you

with what's happening in the market,

for example. Sometimes we have speakers to

come and talk about the market.

Oh, what's going on in FinTech or what's going on in IOT,

what's going on this. And that we

hope is where area we can stimulate

thoughts from the idea to the startup, so

they can think about it.

So, it's the synergy of … (Yes.) that you would create among the entrepreneur.

We call it the… it's a circle … it's it's an ecosystem.

we call the ecosystem. So, you have

investors at different stage - all the way

from angel to VCs. And then, you have

different startups, and then you … we even

have some incubatees who are …. in China,

this is something … which I think is really … positive and negative is …

some of these large Internet companies are

also creating so … they call it the ecosystem

– eco chain – they call it.

So what happened is, for example, Xiaomi they will invest,

they have invested like in 40, 50

companies that they think these startups

might either gonna to be complimentary to their products (Yes.)

or it's gonna be destructive to them. Okay,

the same with Tencent. The same with Alibaba.

(So, they’ll craft out a particular area that would be useful… they think that…)

They have people who … they actually

create funds and they specially …

A very good example is WeChat.

WeChat was not a Tencent product. Tencent product was called QQ. It is called ‘mobile QQ’

which didn't work that well.

But they had invested in a small company in Guangzhou.

You know Tencent is in Shenzhen, right?

They invested in a small company in Guangzhou which had developed WeChat

and then they like … they like it.

Then they put a huge investment on it and

then acquired the company and then …

(It’s a good combination … investor …

strategic and they have the ability to make it.)

So, I said the good thing is -

that means for a lot of entrepreneurs

or startups, you don't have to think about IPOs.

All you need to do is you have a good product, you have a good market,

you can have a trade sale to some of

these big guys. The best things, of course,

they control everything, right.

Some people will say, ‘oh, I don't want to sell it to Tencent;

I want to go all the way to IPO.

(Yes.) We will have the chance.’

(But, the investor or their acquirer

actually bring bring in a lot of networking

and expand…) And make you … make it

much easier for you to be successful.

(Yeah. So, it's a give-and-take.) Yes.

Dr Witman Hung, Principal Liaison Officer for Hong Kong of Shenzhen Qianhai Authority (www.szqh.com.cn)

Entrepreneurship

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