Ben Joffe @HAX: “The Lone Genius Myth Doesn’t Work in China”

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benjaminjoffe
Ben Joffe, @HAX

The Chinese hardware startup scene is hot. If you are interested in taking your startup to the next level, you may consider Shenzhen, a thriving “Silicon Valley” of hardware in China.

I asked my good friend, Ben Joffe, a serial entrepreneur and Asia strategist, who currently works as General Partner @ HAX, to share his views on the startup environment in China. Here is what he thinks.


1) Is there one city in China that can be truly called the best version of SV?

Each city or region in China has its advantages and drawbacks. Beijing is strong on software. Shenzhen is strong on hardware. In fact, it has more resources than Silicon Valley for going from 0 to 1 to many.

I see 6 components to a thriving startup ecosystem (for more on this theme, check Ben’s interview on Techcrunch):

(1) Market size => the US is still No.1 in terms of GDP.

(2) Capital (early stage to M&A/IPO) => China now has a strong angel scene, there’s also growth capital. However, M&A still weak.

(3) Talent => There are many engineers and entrepreneurs in China, but there’s lack of connection between research and entrepreneurship.

(4) Culture => Entrepreneurship is widely accepted. Failure in good faith is less detrimental than it used to be.

(5) Infrastructure => Web/mobile are good. Better people info now with events, salons, clubs for entrepreneurs and investors. Lacking the legal / accounting for speed and low-cost transactions.

(6) Regulations => Could be better. Faster to register a company, difficult to hire from overseas, though easier than in US. Also problem of “gray” offshore financial vehicles.

2) What are some pros and cons of startuping in China? 

If you’re not Chinese and target China market, it’s very hard. It’s like starting in the US when you don’t speak English and don’t know the culture. If you want to leverage the Shenzhen ecosystem for a global hardware startup, it’s easier than ever.

3) What are the differences between Chinese and European/US startupers? 

China is more competitive, faster, wilder. The scale startups can reach here is bigger than in Europe (think about the recent $100m+ funding rounds)

4) Is there a specific Chinese startup culture?

Yes. It’s now supported by “first generation startup people” who made money with Tencent, Alibaba, Baidu, etc.

It’s not as “pay it forward” as Silicon Valley, but here, SV is more the global anomaly than the rule!

5) Is it cool to be an entrepreneur in China these days?

Yes. But my perception is that people are not impressed with “innovation”. They want to see numbers: users, growth and/or revenue.

The “lone genius” myth you find in USA does not seem anywhere as strong in China.

6) You’ve been working for HAX for a few years now. Can you share some success stories and failures?

Too early to tell, as HAX is just 3 years old (a typical exit is 8 years), but:

Success stories:

– A few companies with valuations between $10-$50m: Particle, Makeblock, Yeelink.
– A few spectacular crowdfunded projects: CHIP, the $9 computer and Electroloom, the 3D printer for fabric, Prynt, who turns your smartphone into an instant camera and Kokoon, the smart headphones for sleep. 3 of them raised over $1M on Kickstarter!
– Many more in the making 🙂

Failures:

– Some founder fights, some delays

7) Why are you doing this all over…again? 

It’s the right place, the right time and the right people!

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