Thank you Desmond for coming to speak to us. Thank you, Dominic. I know you are a investor as well as a mentor to many start-ups in China. (Yes) Could you tell us a little bit about entrepreneurship in China? Well, entrepreneurship in China is very popular in China. If you talk about the culture of entrepreneurship, actually in their culture in China they have it's very inherent in their ideology. So, most of the people when they're born, they are thinking about doing their own business starting new because it happens to be related to the culture. Because back in the old days where there’s not a lot of companies going in China, there's not a lot of employment opportunities as opposed to what is happening in Hong Kong because Hong Kong like the center hub of Asia, and so a lot of companies are coming to Hong Kong to build up their Asia hubs or regional hubs here in the city, which means that there are much more job opportunities. But in China, it's actually the other way round. And it's only because of the last past 15 or 20 years that there is a boom of new companies sprawling up in China. But in fact, the inherent ideology is still saying that a lot of the people they’re still thinking about doing their own business because there's not a lot of like satellite cities initially. So, like Tier 1 cities, there is just a few Tier 1 cities. So, most of the opportunities go to Tier 1 cities and it's very competitive. And so the people in the Tier 2 and Tier 3 cities are on the outlying skirts; they will still rely on okay, there is not a lot of opportunities around here. So, they have to become entrepreneurs. They have to become and build their own businesses. So, if you’re talking about the spirit of entrepreneurship in China, it is very very hot. It’s good to know. For foreigners who are thinking about going to China to start their company, are they going to expect a cultural shock? Definitely, there will be a little bit of a shock. As compared to where you're coming from initially … for non-Chinese, even for Hong Kong people going to China, they still face similar differences in terms of the culture, the social economic, political situation as well So, for entrepreneurs coming from non-China, coming from other countries, be much more prepared in terms of how you work well with the local people, work well with the local governments as well. And of course, if you’re doing consumer and retail, work well with your customers. What sort of help can they expect, for example, from the government or from universities or other sources? Well, because the current atmosphere is very supportive The government's very supportive of entrepreneurship these days. They are talking about reinventing and also redeveloping, strategising the entire economy in China. It is not just manufacturing anymore. It's more about building new things, more creative and more innovation. So, the government and the state is very supportive of this kind of new companies, new start-ups sprawling up. And there is a lot of, like, funding, there is a lot of government policies which differ from city to city to help in these new start-up companies. And many of the funding does go directly from the state itself - it actually go into, like, semi-state companies or semi-state organizations, like the universities, like other incubators, accelerators where the accelerators will develop more more programs and more more funding so that they will have more opportunities to actually build a lot a much more bigger set of companies for themselves. And we often hear that an idea that happens outside get copied in China. So, do you think China are innovative, or do you need creativity or innovative to start a business in China? Well, if you talk about copying or plagiarism, actually it happens everywhere. It's only that when most people think about, okay, just developing products or hardware, tangible products, it is much more easier to be plagiarised or copied in China because the cost of manufacturing is pretty low. But of course, not everything is that low in terms of manufacturing; whereas there's a lot of people, a lot of products are being manufactured outside of China these days. But in terms of the innovation, a lot of the mentorship I told to … I talk to the companies themselves. If it's that easy for people to copy you, it's … doesn't matter whether in China or in Hong Kong or somewhere in US, it happens everywhere. So, the strategic importance of your company being able to plagiarise by someone else is very critical. So, if you’re developing a hardware product, don't just think about the product itself. You have to think about not just the hardware but also the software and the services and everything that links in behind it Because that's pretty much where the uniqueness lies in terms of how you are providing. Because everyone is providing pretty much the same thing. If you talk about products like drones these days… flying in the air, so everyone makes the drones. So, certain companies make the drones earlier. So, they may sell like 3000 RMB or 6000 RMB per drone. But if you go to, like, online shopping commerce platforms, you can actually buy, like, small toys, like, for 20 RMB. So, the technologies is … catches up pretty fairly quickly. So, if you just rely on just the technological breakthrough at this point of a certain hardware, well, be prepared that by tomorrow someone else will be developing something even much more better and copying you overtime. So, my suggestions normally, like, if you are developing a hardware, you have to have something in behind that you’re developing services, maybe there is a software, maybe there's an app to link into your consumers or your customers that they will feel that okay I'm not just using the hardware but I'm also using a service behind just using that hardware as a medium. So, your advice is to build up extra, like, competitive edge, not just the hardware but software and service that around it. Well, definitely I’m not asking everyone to build a lot of things. But when most people think about … especially products or especially creative, much more creative people … the artistic people, they will be tending to think about, okay, I’m drawing a picture on a plate, I'm doing a machine, I'm doing a robotics. And these are things that are pretty easy to copy because people can just buy a prototype or just buy something off from you and then they just copy exactly the molding in it. But in terms of the creativity or building a better robot, or designing something different, or providing that service that were probably certain of the designs cater to certain people of your consumer groups, and those consumer groups, those people, those customers are happy with how you are solving their problems, that's pretty much the key to how successful company should be. It is not just about the hardware it's always about how the company or the CEO of the business itself solve a certain group of people's problems And if you can solve that, then people will rely on you a lot more longer and give you … a little bit more money. Just think about … it’s pretty much like a doctor. You don't buy medicine if you don't go crazy. If you have …if someone's got cancer, you don't just go buy any medicine from a pharmaceuticals company You'll ask to consult the doctor, a professional. So, as a company a developing company … whether you’re just developing a hardware or software or some much more professional company, you have to be in all cases be much more professional in your field and also be able to solve your customers’ problems in a much more professional way. And in what area you think China is leading in terms of, like, technology development or service development? I think China has a leading area where number 1 the state is very supportive. So, the government is actually very support of very innovative kind of industries and companies. And, there is also and because of that, there is a lot of people who will be following suit for that in those areas. Just think about e-commerce before. Like 10 years or 15 years ago, when people are just beginning to think about e-commerce, and then suddenly there is a boom of e-commerce, state’s supporting in terms of e-commerce and then more and more people go into the e-commerce area and build much more better solutions and much more better technology behind. So, there is a lot of … the state helps in that area. There is also in terms of the people themselves, in terms of the willingness of how the local Chinese… the mainlander Chinese, they are willing to actually say, okay, I'm going to a new venture, I'm testing out a lot of things and if I believe in this area which will be the next area. Take, for example, drone industry, so they would dedicate a lot more be a little bit more committed because of that entrepreneurial spirit. They will be a little more committed in terms of that area. Of course, there will be people who will be looking at just money and say, okay, if you don’t pay me enough salary, I'll be leaving. But then again there are a lot of people who are thinking because of that entrepreneur spirit, thinking about new things, and they are thinking about new dreams to fulfil themselves And if those dreams are matching in terms of overseas company coming in, and if you can tap into their intrinsic needs, you can actually have them to help you a little bit more in terms of how they help you develop that business, and help you be much more creative in business. Because the creativity, actually it's all over the world. Creativity - it’s just a matter of whether you're finding the right person to work with you or to partner with you in that particular industry. So, as an entrepreneur from overseas going to China, I’d suggest that don't just look into, like, normal kind of a business if you’re doing entrepreneurship. You have to be a little more creative - the entrepreneur spirit, especially new companies coming in, unless you have a lot of money investing in China which can mean a lot of money especially in China because there are more than 600 cities in China. So, you do your picking. You will have to convince the right people and say, okay, this is something that's new, this is something that will be much more able to develop, much more creativity in terms of the industry. So and from there on, another way of enticing or attracting, appealing to the creativity of your people is say, that it is not just in China, but this solution applies to everyone else outside the world. So, you you have seen a lot of entrepreneur and you have invested in some of them. (Right.) Can you tell me how do you pick your winner? How do you pick your investees? Well … well … it's varies… from case-by-case. Normally, the first thing I'll look into as when I do my pitching events as well, is we look at two very basic things. First at the very beginning is number one - the business operational model Whether this model actually operates. Is that model business-ready for us? So, whether you can actually find the right customers? Are you actually talking to the right customers? Are your customers paying you or are they not paying you but they will be paying you later on? These are things that we will be looking at. If no one is paying you, then something is wrong with the model. And what… either you change it or you do something totally different. (But the business model in your mind …) And, that’s number one. That’s always number one, but it's not the only thing that we look into (Sure.) The second thing that we look into are the management team, the CEOs. Now the CEOs these days are fairly young It's not like … (How young are you talking…? ...) Well, we've seen like 20 somethings CEOs … well Facebook CEO is very young. And there are a lot of new CEOs are people who are in university or just graduated from university. There they create their own companies. I’m not saying that it's not good. I'm just saying that what… they have a passion, they have the dream, they have the creativity as well. But they lack a little bit … certain people will lack experience. Now, I’m not saying that young not having experience is a sin. But I will be looking more into the mentality, the psychology of the CEO and the team itself. The flexibility of them being reactive or proactive towards the market changes. Because one of the biggest thing that we’re looking at these days is: can you … I use a very simple analogy … is …you are the captain of a ship. So, I’m not gonna takeover and then drive the ship off. So, I will be just a passenger and your investors will be just a passenger, your customers will be just a passenger. Now, if you are steering the ship in the right direction, then it’s all safe. But if you can't see there is an iceberg coming along next, for the next two months, and it will hit … because it is moving along in your path and will hit you after two months. If you can't see that, then there is a problem. So, and when we see that, we see that how professional the professionalism of the CEOs and the management team. How … how well-informed or knowledgeable they are in their own industry, knows the risks that will be coming or what the risk may change and the market’s changing so rapidly these days. But on that point, right, it’s hard to know the person that well because they are not yet in that situation, how do you kind of assess to see what this person is going to steer the ship in the right direction? Right, we test them up. We test them up with some very simple things. We use time. This is part of what we do in terms of due diligence. So, we use this methodology in terms of testing of the CEO. So, we go in, we actually talk to the CEO and tell them okay, what do you see the risk coming along, how do you see what your market is, what your industry is doing, what kind of competitors are you facing and what they are actually doing. So, if you know about what your competitors are doing and not just reading from the newspaper, then I can get a good sense in terms of, okay, you are actually doing some investigative work, you are actually much more aware and open-minded in terms of what's happening outside in the world what’s changing. And we will be asking about things that are totally different but related to their consumer audiences as well. (To test if they know …) To test how they understand the customers. Because the customers change every day and the customers today you will have may not be the ones you have tomorrow. Even though you have like a 20-year old customer today tomorrow they will become like 30-year olds and they will have a totally different mentality. So, we will be testing and say, okay, what’s gonna to happen if you go … keep on continuously doing this, do you actually talk to the customers. One of the simplest question I ask is when was the last time you actually talk to a customer. (That's a good question.) That’s a very good question (Do they often fail?) Most of them failed. Most of them always have. And it's not just start-up companies, even listed blue-chip companies, I ask the same questions. And then most of them fail. Because CEOs will, most of them, be the old style CEOs will think that "Oh, I don't need to talk to actual customers. I’m not the sales. Just have my own people to do my work.’" (And in a way, they become complacent.) Yes, they become very complacent and that's actually a very wrong mentality because sometimes if you just rely on people. I talk to a lot of CEOs and they say, okay, "my business is not working". I say, okay, "Are you actually talking to the business, the customers themselves". And they say "no". I say "go down and talk to them"’ and then suddenly they have their own business coming back. And they realise that, okay, if you rely on their own sales agents or their sales people, it doesn't get the same effect as a CEO going down and talking to the customers. Because Because the customers will be feeling the same way and say "okay, I'm a very good customer. Why am I not taken care of?" (Yes.) So, it's like, especially when we do luxury businesses as well. So, we work with a lot of luxury businesses and luxury brands and in some cases some of the start-up they work with high-net-worth individuals and they also have to talk to customers who are not paying like peanuts but they actually paying a lot of money. They want them to pay a lot of money, but they don't talk to the actual customers themselves. And so I tell them "okay, do you actually understand the customers?" So, that's one of the ways that we do diligence and testing out whether you actually really understand what’s the driving force, what’s the motivation behind someone purchasing, pulling out money from their own wallet, and giving you that money to solve a particular problem at a particular time. Because from that on, if that CEO or if that company can tell me in one line those answers (They are really getting it.) and then I know they’re really getting it So, which means that they know what is going to happen later on. If even if the market, we can't predict what’s the market happening, but we can have very good educated guesses. So, it's like what is happening in China in terms of political situation that affects a lot in terms of the retail, the consumer, luxury brand businesses that one very good example in terms of 20 years ago, 10 years ago, everyone is talking about luxury start-up company going in and say I want to do and build a luxury business. And then if they don't know what's happening, the government's suddenly anti-corruption, anti-graft policies coming along, catching all the people from overseas, catching it back coming back to China, putting them in prison. So, no one is gonna buy like luxury items any more. They have to switch to something else So, of course, people do switch. But whether you're switching early on anticipating it and getting more time to prepare or hits you at the very end and you're not prepared. So, either you flop down on the floor or you keep on moving. Yes. I often see entrepreneur come to me and say: “We are unique. There is nobody competing with us." No, that's the first line that … that’s a first line that I really hate and many investors I know - my friends - they hate it as well (That indicate that they really don’t understand the world.) Yes, exactly, we … I'm sure we’ve seen a lot, you and I, we have seen a lot of these things and say, "Hey, I’m the only unique company, I'm the only company." (Which by the way, we have just seen five of them, like, just before that.) No. Oh, my God, okay. Yes, I tell the story that even like if you're building rockets You're not the only company. So, Elon Musk is building SpaceX that building company and they are not the only companies that building rockets. (Even they …..) They have competitors. They have other companies that are building rockets. So, unless you’re telling me that you’re actually building rockets or building a spaceship, and … then don't tell me that you're very unique, that something’s very special. So, what else? You mentioned the business model and then the team. Anything else that you look at when you make your investment assessment? Well, that's the core basics that we’re looking into those two areas. And the other thing that the due diligence part is pretty much in terms of how we spend time together, to work with with these entrepreneurs and mentor them as they go along. Because it's … I use the same analogy like getting married. So, you just don't go to a pretty little girl and say, "hey, I want to marry you." Just by looking at you. (Some people do.) Well, good luck. Doesn't work all the time unless you have a few Ferraris standing around you. But we tend to see that we use the time to work out some of the problems with these companies. (After the investment or …? ) Before the investments (Even before the investment.) Before the investment because we have to test and see ... because in good… it is like getting married. Before you get married, you have the date first. And when everything is rosy, everything is good there is no problems, then everyone is happy. But if there's problems, if there's certain things that "Oh! I don't have time for you or whatever’, then conflict starts to arise And markets change. If the market is good and consumers or customers come in and pay you automatically, then it is a… then everyone is happy. But if the consumer or there's no business, like what we are facing right now, the economic downturn right down, so you spent much more effort in terms of finding new customers and even the customers are not coming back, then you will start to see, okay, what the problems arise. And we go in, they actually see, okay, we try to help you but we may have to tell you to steer to a little bit to the left or a little bit to the right, do something different, and you have to work out with the management team in terms of "are you moving in the right direction’ or "agreeing to together for new direction". This is an interesting point because I often hear there’s a conflict or dilemma. On the one hand, these are entrepreneurs. They are supposed to be opinionated because they are going to run their own company, have their own say. But on the other hand, as a investor, you want them to be somewhat coachable. So, these two are a little bit conflicting. Coachable and then they are opinionated Self-driving or you have someone to steer them. (Yes, how do you make a balance?) It's it's really the balance in terms of how the investor is. For an entrepreneur or a CEO controlling a company, of course, you’re controlling company, you can call the shots whenever you have. But we also look into how stubborn you are. So, creativity and stubbornness is really just a fine line defining it. So, if you are really stubborn and you can't see what's happening outside, and you can’t actually be more flexible, open-minded in terms of hearing other more experienced people telling you, "okay, there are different ways or what's the market is happening", then we see that as a red flag. Because from an investor, as an investor myself and I tell to other investors as well, when they asked me and say, "okay, how do you make the balance?". "Okay", I say, "as an investor, you should step back because you're not the capital of a ship. You are investing in a company that you believe the captain is capable of being professional in terms of sailing the ship. But you can be a spotter on the ship and tell them, "okay, I'm seeing … you may have a binoculars and see that there is an iceberg coming after two months. And you can help the captain spot this and you tell the captain "Captain, there is an iceberg coming along. There's market crash coming along. There's new political policies coming along It may affect you or it may not affect you So, tell them to the management team, the CEO and the CEO will decide on, "okay, should I take this information seriously." And if they take it seriously and … and analyze it and say, "okay, this is … this will not affect us or this will affect us", then they would make the right choice. But they will have to as an CEO or as an investor, we take in different information and analyze it in the most objective kind of way And that's one of the things that I tell not just to the entrepreneurs themselves, but also as the investors that they will have to step back and not take too much control. Because it’s like, as I said, using back the analogy of finding a girlfriend. You like the girlfriend as is You don't want to change her later on. If you want to change her, then your girlfriend will start getting angry and probably just ditch you by tomorrow. Because no one wants get … You think the investors not taking the captain’s role. The captain’s role belongs to the entrepreneur and then your investors’ role would be, like, make sure that they are well informed. Definitely, because as an investor we inject the money, we we inject the expertise, we inject the connections But of course no one wants to work extra time. Because it's a lot of work and because maybe it's not in our professional expertise in that area as well. So, you can't ask me, say, for example, there are a lot of cases where I see where investment houses invest in a, say, for example, a jewelry business in China. And it's big jewelry business, retail, very big retail first in China. And the retail market once happy, everyone is happy. No one touches anything. You left the management team just keep on working what you're doing. So, everyone happy, you can go sipping Champagne or cocktail whatever. (When all goes well.) Yes, all goes well. But the market changes and the consumer retail side, luxury especially luxury side it went pretty much bust, so which means that there's a big problem in terms of management team or how they are managing. And then the original investment team came in and started to inject their own people coming in. And by that I mean that they’re injecting their own investment people coming in. (Start replacing some management.) Exactly, top level management. When they’re replacing those people, those are probably, definitely number one, they are not jewelry experts, professional experts, they are not, they don't have the connections in this industry. This industry, in particular the jewellery industry, is very concealed, is very close connections. So, if you don't have those connections, you will never get what you actually want to do so. And so, on number three, they would use their own mentality to dictate what is going to happen in this company. So, if you're working in the luxury retail and for that particular case, they are changing a luxury retail, a consumer retail into a supermarket and try to sell a lower level of product line, which I wouldn't say it's a total disaster; but because of that massive change, what entrepreneur needs to understand as well because change is sometimes necessary, but how much change is necessary in that particular time. Because it actually disrupted everything. So, it disrupted the product development, it disrupted the channel, it disrupted the front-line sales, so which means that the thing went spiraling down. I can see the morale of the employees must reaching a low… But the reason for why the investors are using a supermarket kind of business model and injecting into this original model is: number one because the original model isn’t working anymore because of the market here But why do they choosing the supermarket model is because they invested in supermarkets before. So, they’re using that mentality and say "okay, this is my mentality. I think it's right. You should be using it." (Unfortunately, it’s not a transferable idea.) Yes, it's never transferable and when I say it like this, it it sounds ridiculous as well. But at that time, the management team, the investment team because they are investors, they decided "okay, we need something drastic." And they listen to certain people, they listen to their own management … the strategic investment management team and say ‘okay, this is something we could do, so, okay, go in.’ So … I think it may be like the analogy where if you are holding a hammer, then everything looks like a nail so they … (Yes, That’s a very good …That’s a very good analogy as well.) They know those supermarket model, they apply that to luxury model and it’s pretty … Exactly, well we do a lot of like consulting with the people as well, re-packaging companies making them much more strategic investor-ready. And when I go in and see this, I said "this is never gonna to work.' Not because I'm dismissing everything. Because I won’t say anything is impossible. Nothing is impossible. But the fact is how probable you are, considering the time you have, the resources you have. So, from my side, we work on very shoestring kind of resources and we do things very efficiently and effectively as well. But we also look into, okay, what’s the best way of not rocking the boat too much, making sure that the front-line sales … front-line sales, they are just people, they are just employees, they aren’t investors. So, they have an employee kind of mentality. So, as an entrepreneur from outside going in work in China, you have to be very careful in terms of that, in terms of yes, you are the boss, you are the investor, or you are the management team, but your people downstairs they are just employees and they are just thinking about - okay, can I get food on my table? Can I… will I have job security coming along? (So, you really need to understand the employees. What motivates them? …) Exactly, what motivates them… of course, people say that money motivates. Okay, that's one thing. (Up to a certain extent.) Up to a certain extent because if you’re going into China and if you have a really good person, then the other person or the company giving you much more salary, they will just take that, head-hunt that person away. And that was fairly easy. And like I said, it's nothing that is intrinsically that you would be appealing or motivating to that employee. It is just like motivating your customers. Only that your target audience is your your employee. I think that’s an interesting point. Let’s drill on that a little bit. So, on the point of finding talent. A start-up in China if it need talent, it’s very competitive. How can they attract and retain talent? Talent - well a lot of people say that it's hard to find talent. Actually, it's not that hard … to a certain extent. It depends on what kind of business you are and where you are looking for. It’s just like looking for the right girlfriend or the right customers. If you’re going to a men’s room, you are not going to find a female inside. If you are looking at the right place, looking for the right people and talking to them at the right time. When we talk about the basics of …in Mainland China, we just mentioned that a lot of people are willing or committed to becoming entrepreneurs or starting their own business. Now, if you can help these people to meet their intrinsic needs, maybe it's not just as a employee, but more like a founding co-founding partner or like a shareholding partner, then that’s something that they will be much more motivated. Mentality-wise, it is already there and everyone or every university in China right now these days are talking about entrepreneurship building creative innovation companies. The state is supporting it. The university is supporting it. Even the secondary schools these days I know are supporting it. And there's tons of incubators, co-working spaces that they’re building up. So, as a foreign company going to China finding talent, these are all the sources that you can actually tap into. (So, the supply side - that shouldn’t be a problem…finding the right match.) Supply side shouldn’t be a problem… Exactly, it’s a matter of how you sell your story to attract that particular person Because if your story … if your company is not ready yet, the line that I mentioned do you actually understand what your company is doing. If you’re just building up a hardware, fine. People say that ‘ okay, hardware. What happens after the hardware? Do I have something more? Does that appeal to me? Or hey, I just do develop the robot or just develop the new microwave and then I can just pop in or just take that thing and put it on the e-commerce platform and sell for like two dollars.’ So, there is a lot of these things happening around. Would a foreigner going into China would have the extra difficulty because of their culture and the language? I mean, where do they find the talent or to understand how to retain talent that would be … Would that be a challenge? Well, language is definitely one of the biggest challenge But then again if you're going to Tier 1 cities, there are a lot of incubators, there are a lot of, like, universities which have their branches outside in Tier 1 cities in China. There is a lot of of people who speak English as well and they are very welcoming to new companies coming from overseas to set up in China. Of course, how they connect to you, that's just the first step. The second step should still be the CEOs or the entrepreneurs, they will have to tell that story and attract the right people. So, if you're working with a hardware, there is like hardware incubators or in Shenzhen or Tier 1 cities that there's a lot of them. And there's a lot of people who can help You and I would…we’re here to help as well. And … there is a lot of opportunities, it is just a matter of realizing it If you're competing against salary and the amount of salary that you are giving you always lose because you’re start-up and there are like even small and medium-sized companies in China which have a lot more resources than you have. So, you can't just compete in terms of salary. You have to hit in terms of the intrinsic needs, in terms of what motivates them. So certain people will say, ‘oh, I want to develop something. I’m creative in terms of developing hardware. And you’re developing something. I have the connection in China, you have the connections outside, then it's a good match.’ It’s a complimentary match. And it adds value. So, when you think about … setting up a company around here in China don't just simply think about finding employees, think about finding joint venture partners think about finding co-founding partners … just for China. Because … that's because you don’t speak the language. If you do speak the language is still very difficult but if you don't speak the language, it’s hard for you to even read the contract You can’t expect the lawyer to actually protect you all the time. You will have to read it yourself as an entrepreneur as much as possible. So, it’s always good to actually read it yourself. (Yes,.. ultimately you are …) Because the case that I have just mentioned is a listed company and because the CEO didn’t actually read the fine print. (Was it because he was unable to read the language?) No, because most CEOs don’t like to read Most people don’t like to read the fine print in terms of the contract. (So, it's tedious) It’s very tedious. There's a lot of legal … legal jargons inside. But you will have to read it because if you are borrowing money, a large amount of money and you're saying that, okay, I just look into the money and I don't care about the consequences, then the consequences most likely will hit you very difficult. So, I would suggest that even as much as you could be much more proactive in terms of managing the company. Because in China, there is a lot of things moving along, there's a lot of … the market changes very rapidly. The people change very rapidly. And you can't just say I do this remotely. It's fairly difficult on that area So, if you’re coming in finding a good partner actually… employees will always be employees but if you've be able to find a good partner at the very beginning, and say okay, we will share the responsibilities. And it will give you some breathing room in terms of I don't have to like manage on a daily basis or by hour basis. I can, like, we meet out on a weekly basis or every two days just a call so that you feel much more assured And from there on, that person will be much more committed inside your company and will be able to think about ‘okay, ah, I'm helping you. What’s in it for me?’. Because it’s the same thing on the other way around. You are ... you going in and someone is helping you, what’s in for for yourself or themselves as well? I know you also run some competition and demo day and trying to help the entrepreneur and give them a stage to meet investors and ... Can you explain a little bit on that front? What sort of Okay, we have a competition, a series of investor platform, event platforms - it’s called ‘pitch perfect’. It’s It's pitchperfectevent.com. It's now become a major … is one of Asia's top investor entrepreneur funding platform. And what we do is actually I use the same mentality because we see a lot of pitching events outside. But we only see that many of the pitching events, they only just sort of like have the companies come in, pitch for 10 minutes or five minutes and then after that it is gone. (That’s typical one.) We don't like … we don't dismiss companies immediately because, like I said, nothing is impossible and you just telling me 10 minutes, I don't know what's happening inside. I just can just skim the surface. But if you can attract me for the first 10 minutes, then I will give you a little bit more time. So, we do the due diligence part immediately after. So, the due diligence part is the time where I really go in and sit down with the company and tell … and talk to them about, okay, what really is the problem. It's pretty much like I am a strategic advisor going in I don’t dictate anything but I would know I do my own homework. I will know what's happening in the industry. I understand what's happening in your market. How the social, economical, political situation is. And I will look into what kind of customers you have. And I will start molding and say, ‘Are you business-ready? To what degree? Are you getting enough recurrent revenue coming in? What sort of profit margin? What’s your cost of goods et cetera et cetera?’ And what what I can do for the next six months or the next 100 days, these will help you mold and I will also help them in terms of one of the due diligence part that we do it’s not just talking, we actually introduce customers to them as well. So, the best way of due diligence is to test out by giving you customers. If you can fulfil that customer, then pretty much that I know that you’re rea that you can actually deliver, that you can actually deliver a professional solution that people will be willing to pay for it. (Yes, that’s the real test.) That's the real test. That's a real on the ground test. If you can't do that, there's a lot of reasons. I won't dismiss that. It's all your fault. It's sometimes it's the market falls. Sometime it's not exactly matching to what the customers’ needs. So, there're a lot of reasons. I'll go in and I actually look into, okay, what the reasons are. And I say, okay, the CEOs you have to turn a little bit to the left, do something a little bit we molded - repackaging in a way. We might have to find a new batch of customers, not this this group of customers, we have to find new batches, how do we find new batches of customers using different marketing, and sales and marketing techniques etc. etc. and we do the next round. So, we start going along this path, this sort of like a evolution path with the companies themselves. Because it's it's it's very hard when we don't … we don't want to dismiss any good ideas. Because initially the 10 minutes that we do is that 10 minutes of you attracting us. But we don't just normally look into, okay, do you have revenue? If you don't have revenue, I'm going to dismiss you. No, we don't do that. We look into like … like drones before as well, under-water marine drones, but these are zero revenue things. But it's very technological breakthrough. They are very… they’ve got a lot of intellectual property inside; there's a lot of assets in terms of what they're thinking, in terms of the creativity, the technology behind. So, we're thinking also in terms of, okay, how can we match customers - the right customers or companies or the companies to match with with these companies. Even though they are zero revenue. There are companies that have a lot of revenue. We don't look at them as well. So, it totally differs in terms of how the industry is how that market is, and also how … that's the business-ready side. The other side, like I said, is the management side If I talk to you and I use it in a very objective manner, and tell you what's happening outside and I’ll tell you, okay, from my experience, I do have a lot more experience than a lot of the other startups and I'll tell them, okay, I would suggest you do this and do that. I won't say you have to do this; I would suggest you do this and do that Because when we suggest someone to do something, we also have to understand how the resources these companies have. If you don't have the resources or if you don't have the time, it … you you can’t tell them, okay, you have to do this because, ‘hey, I can't build a rocket. Of course, if we build a rocket, I get a lot of customers. But I don't have the resources, I don't have the connections." ’ And I’m going to analyze what kind of connections you have, what kind of connections I have and see how we can complement that and use the best method, the best resources that we have… we have and use it efficiently and effectively in a very short period of time. And also we look into, like I said, the CEOs and the management team together because it's not just CEO anymore it's the core management team and decide and say that, okay, we believe in this, this is happening, there's an iceberg coming along, we should turn a little bit to the left, we should change the logo, we should change these service offerings, we should change the pricing. And it's something that everyone agrees upon. If someone doesn't agree, which normally happens, then the CEO and the management team will have to convince that person. I, as an investor or as an outsider, it's not for me to actually go in and convince your people because if I do, I should be running the company itself. So, I was … normally look into how these CEOs interact within their team, how strong they are in terms of controlling and managing a strong-minded group of people. Or, things get better planned and say, okay, we we don't we don't work anymore and then the company's suddenly fractures. And I know there are a lot of, like, accelerators, like… in… a mentor, right? Do you think it’s a good place to start? Cause for a lot of entrepreneurs whether it's starting from within China or from outside, should they go through some of these accelerating program? Is that a good place to start? There are a few schools of thought in this area. The first step is actually for an entrepreneur or for a person outside of China trying to go into China, they should be thinking about what kind of business they’re doing for us. Now if you go to an accelerator, you can just go in as a visitor and just join into some of the pitching companies or go to the seminars or go to their courses and training courses or etc. etc. As a participant, where you will also be able to connect with the right amount of people. (So that’s for those who don't have a solid idea yet.) Not really. Even if you have a solid idea, it's good because you… what the main objective of going into an accelerator, your purpose for. So, are you going in and just meeting up the right people? (Networking.) Are you networking? Networking, you have to have a very specific resaon for what kind of networking you're looking for. You're looking for investors. You're looking for partners. You're looking for staff employees. Or you're just looking for suppliers. Those are totally different things. So, just normally generalizing it, going to those accelerators, looking at the the market what it is - those are resources, those are your resources. It depends on how much time you have You can visit some of the good ones and maybe you meet up with the good people which may become your next start-up or your next investor. (The good ones are also very competitive.) Everyone is very competitive. (Everyone.) Every accelerator is very competitive, especially when you're asking them for money. So, the fact is, but still … the purpose of you or a company going into accelerator as a visitor or as a really participating person, company inside accelerator. Those are two different things because each accelerator functions differently And they gave out resources differently as well. (It's also have some sort of specializations… hardware…e-commerce …) Yeah, very different specializations, very different backers as well because of the funding themselves. They don't have the funding. They are looking … they get their funding from different things. So, some of them are funded by universities, some of them are funded by the state, some of them are funded by private investors and these funding have strategic core focuses as well. So, if you match those focuses, then of course you will get a much more high likely probability of going inside those accelerators. But of course, when I say going to those accelerators, you have to find the purpose in terms of talking a little bit more, in terms of which ones are right accelerator or the incubator you should be talking to. And go into some of these seminars. They always have these seminars free seminars, free courses or whatever. Go in and take a look at the people. And know what your objective is. If your If your objective is ‘hey, I'm just networking, just to find the next employee’, then you don't have to be too involved in applying as a resident inside the accelerator. You can just be someone that's just visiting, just joining one of the seminars and you can make … maybe you find the right person. (That sounds like it is a good idea if you know clearly your purpose.) Yes (It's a good place for networking.) Exactly, it's a good place for networking. But of course there are like tons and thousands in … even in Shenzhen. The last time I talked to the Shenzhen government and they were telling me "guess how many incubators or accelerators that there are in Shenzhen?" and my initial reaction was probably like 200, 300 something; no, there's over a 1,000. (A thousand.) Of course, there are the genuine ones and there are the ones that claim themselves to be accelerators. (So the quality could be … quite …) Quality can vary very very drastically and some of them can close down overnight. So, you just have to be very aware of what's happening. So, there's a little bit more, talk to a lot more people, and very clearly know what your objective is. And when you go in, there's … these are the companies or the places where at the very least you'll meet up with the right people. If you're coming from overseas and you have absolutely no idea what it is, join in. Of course God is fair, you have 24 hours a day, I have 24 hours a day. (Just choose carefully) Choose carefully. Use your time. Because as an investor I will also check how much time you use. (Right) Because if you're using 24 hours a day sleeping, then I know that, okay, what are you doing in case there's a real iceberg coming at you by tomorrow. So, if you're using some of the companies, the pitching companies themselves, we we talked about, they're going to pitching events. How do I feel about that? I will feel that it's a matter of give and return. So, if you're spending like 24 hours a day, I will be asking about the return on investment of your time. So, if you're getting like two million dollars back, then I say, okay, go for it, no problem. But better make sure how guaranteed you are. But if you're saying that "hey, I'm using like 24 hours a day or 24 days in a month to just make a proposal and get reimbursements or just get things that are not actually giving me any actual business returns then I will be saying that are you using your time effectively, when you can actually use that time to actually talk to the customers and find customers outside who are actually willing to pay So, thank you very much for you sharing. (Thank you.) We've learnt a lot today Thank you for your time. (Thank you.)
