Note from Shlomo: Around 2 months ago I had a message in my inbox, from Forbes inviting me to join their contributors network. After endless thoughts on what I should start my writing about as well as quite a few rewrites I decided to come up with a post in response to CYRIAC ROEDING on his visit in Beijing and how amazed he was from the startup eco system built there. Hope I’ll provoke some thoughts and interesting comments. Here is to many more to come! Enjoy!
Cyriac Roeding published the article “After three weeks in China, it’s clear Beijing is Silicon Valley’s only true competitor” (here is a video version of it), about his experiences during a 3 week trip to China learning about tech & entrepreneurship there. I share those same thoughts about Beijing from almost 5 years I’ve been involved in that community, I’ll further share my thoughts on the subject in this article.
Roeding points out that China’s work culture is more intense, citing the 9/9/6 principle. He also goes on to point out where Beijing is lacking however, saying that, “Another shortcoming of Chinese [entity display=”startups” type=”section” active=”false” key=”/startups” natural_id=”channel_4section_124″]startups[/entity] is expertise on how to enter markets outside China quickly and efficiently.”
I believe that Chinese companies are taking a different route by growing globally through M&As, therefore larger companies really don’t have this expansion problem. The small [entity display=”startups” type=”section” active=”false” key=”/startups” natural_id=”channel_4section_124″]startups[/entity] indeed still have it though. Chinese companies are still looking at the local market first, as there is enough low hanging fruit out there (This is vs. Israeli companies who look from day one to grow internationally as they have a tiny market size of 8 Million people).
But there is one factor that Cyriac Roeding in not mentioning in his article and this is the large foreign [entity display=”startups” type=”section” active=”false” key=”/startups” natural_id=”channel_4section_124″]startups[/entity] community in Beijing (and obviously in other major Chinese cities). These entrepreneurs are part of the startup eco system and are building companies inside the Chinese market, usually in mixed teams combining east and west.
These foreign entrepreneurs and their companies are in my opinion one of the keys for Chinese companies to overcome the expansion challenge employing their connections, previous experience in western companies and familiarity with the culture. Another factor is the growing number of Chinese nationals studying abroad, and later returning to work in China bringing with them a mindset that can help bridge the gap. The Chinese government is now also making its first moves in this direction.
The Chinese government is known for constantly changing its policy towards foreigners looking to work in China. Regulations change every year and sometimes even a few times a year. Usually, changes mean tightening of work permit regulations making it harder to obtain one. But the last change was different, it actually made it easier for students to remain in China after they graduate to find a job.
Until recently, students needed at least 2 years of experience after graduation in order to be eligible for a work permit. However this requirement no longer exists. This gives hope to many foreign students coming to China to study and also start out their career, and at the other end, Chinese companies can hire more international talent to grow internationally.
On the entrepreneurship side, it’s still not that easy, an entrepreneur visa which you can find in the UK and other countries doesn’t yet exist in China. This makes it harder for those building their own company from scratch, to stay in China at the stage before formally registering their company.
Image credit via storebukkebruse