So welcome Chris. >> Thank you very much. >> Yeah. >> So I know you are an entrepreneur, could you tell us a little bit on how you started? And why would you want to become an entrepreneur? >> Okay. So first, in the very beginning I was studying in the UK And I was using a service called Zipcar. It was basically a b to c car sharing platform. And I was wondering, it was really, really useful for me because I was a student, I couldn't buy a car. But then I have the access to a car whenever I need it. So I was thinking this is a really great idea. I need to bring it back to Hong Kong. So it's kind of brewed the idea of starting my own business in Hong Kong. >> So it's something that you have used and experienced before. >> Experienced, yes. >> And you think it's a good idea to bring into another market, in this case, your hometown. >> Yeah, exactly. >> But why would you want to be entrepreneur? >> Well I have brief experience working for corporate. I think one of the main reasons I wanted to become an entrepreneur at this age or at this timing is because I think the opportunity cost of starting a business is the lowest when you just graduated. And when you grow older, when you have your own family, you probably need to have the security of supporting your family. So I chose to first experience on my own, to start a business first. There are actually pros and cons of it. The pros is you have the low opportunity cost, but it's also the con. It's that you lack of experience from the business world. But I think so far because of the Internet age everything is going so fast. >> I think everyone is just learning as they start their own business. I think it kind of make it more fair for younger people to also start a business compared to like experienced people. >> Because it's now easier. Because of technology, it's actually easier for younger people to also start their company. So, if I may summarize that. So, you have some corporate experience, and then you want to start your company because it is the right timing and technology make it now more feasible for young people to start in something. >> Yeah, exactly, yeah. >> I know your company, you started in company in Hong Kong, but then you also move to Shanghai for your next venture. Tell us a little bit about that. >> So, we all created our car sharing platform in Hong Kong for around two years and then, we thought that there are a lot of assets, some valuable assets, for example, like cameras, like expensive clothings or jeweleries. These are some assets that you don't often use but it's real expensive. >> So we were thinking how about we create a platform that allows people to share all these valuable assets. And that's when we think about that, we think Hong Kong may be a really small market. We want to tap into a city where when it expand it can go beyond many cities. So we chose to start this new venture in Shanghai. >> Why Shanghai as the first city outside Hong Kong? >> So first of all, it's a tier one city. It's very diverse compared to other tier one cities. It's quite similar to Hong Kong. And also because we want to focus on different verticals besides car. So some luxury brands or some, for example, expensive cameras. These brands, high quota, are also in Shanghai. So we chose to go to Shanghai to be closer to these people. >> But when you moved from Hong Kong to Shanghai, you already expand beyond the car sharing industry. So you already, but there's you also copy that model for Hong Kong? because I know in Hong Kong model you stick with just sharing cost. >> Yeah. >> Then to Shanghai, not only expanding in terms of geographic, but you also expand in terms of the range of sharable items. What makes you think of that you're not just replicating the model in Hong Kong. >> In also expanding. >> because at the same time you are actually trying out an expanded model. >> Yeah. >> So, wouldn't that be a little bit more risky or why wouldn't you try that first in Hong Kong and then expand it? >> Well, on hindsight it's definitely a lot riskier. And it turns out having your focus spread across all the different verticals make the team really difficult to find collaborations and to build the business. And what we learned is that, for example, the target audience for using cars is actually very different from people who may use a camera, who may want to borrow a dress. So it makes the marketing cost basically really high. >> Right, right. >> And also, so we basically have kind of like a rush. Because we wanted to tap into the China market. One of the main reason is that we found out that there were competitors starting to come up in China for the car sharing space. >> I see. >> So we chose that timing, okay let's go to China at this time. Enter the market and get some market presence first. >> because you said there are already people starting the car sharing in Shanghai. So that would have been a direct competing space. So you are expanding beyond that. Is that to avoid direct competition with that and then? >> I guess one of the reasons is, we wanted to stand out and basically absorb a larger group of audience. But then, basically after thinking hindsight it's basically we were kind of spreading ourselves too thin. >> So, if I understand this correctly, although the idea of sharing seems to be universal, but because of the items that are shared, it actually result in different customer segments and unfortunately there seem to be little overlap for some of the major category. >> Yes. >> And therefore it makes the marketing cost that much more expensive and it makes the whole operation a lot more- >> A lot happier and also I would say the timing of entering into the sharing economy business for all different assets. The timing is probably too early, because, unlike more sophisticated market like in the States, China actually they don't have a really centralized, they didn't really have a centralized kind of reputation system in place. I think it started to have a credit score for people around 2015 or 2016. But back then when we were there at 2014 I think, we basically don't have the infrastructure to support doing such business models. >> So I guess what you're saying, because in the center of the sharing economy there's a lot of trust, and therefore the kind of rating system becomes very important. >> Yeah. What people, when the people can trust each other, and test their very essence of sharing the economy. >> Yeah. >> So that's a little bit ahead of time. But I also know by the time you start kind of operating, you already see competitor also popping up, right? >> Yeah, so basically when we enter the China market. I think we were the second one in the market. And then basically every month there is a new competitor. >> Every month? >> For around a year so at the end there were around 12 business doing the same business model and all trying to expand to a lot of cities very fast. >> Right. >> I think that, that tightens to kind of like China culture of doing businesses. >> So if it seems like a good idea, then, very quickly a lot of people would try to copy that idea. >> So, yeah. It, I would say, I would say the Chinese entrepreneur they are very sensitive to watch the new trends. And once they think it's a good trend, everyone would pour in to the market. And also there's a, pretty interesting observation when I was doing business there is that they like to do marketing very, very heavily so they spend a lot of money trying to acquire customer. >> Right, right. >> It is very different from Hong Kong to China. I think one of the main reason is because a lot of businesses or industries they are actually pretty new in China and because of the size of the market a lot of investors or entrepreneurs they would think once they gained a whole pie of the China market. They would, >> Right. >> Be very like I would be very profitable. So they don't mind spending a lot of money at first to try to acquire customer. >> Right. >> And that ends up basically for its, >> Killing each other. >> Killing each other basically, yeah. >> Yeah. So I think I had this phenomenon in which invested in right? So basically they looked an industry or circle of fly they influence. And then, they just keep burning money, trying to built up customer base. But in such a way that it's not, it's actually not profitable. But they keep getting more and more customer- >> Yeah. >> On a not profitable basis, and so essentially just burning investor's money. >> Yeah, they- >> But in the hope that- >> Uhm-mm. >> In a hope that- >> In a hope, yeah. >> It will generate if they're the last man standing, then they will generate. >> Yeah. Profit in the future? >> So our example is that we figured out that our competitors, they spent around maybe 1500 ramen beef to acquire each car owner to share their car. And then maybe another 700 or 800 ramen beef to acquire a renter. So they basically just gave out money, gave out free rentals to everyone of them. And the end of the story was that out of the 12 competitors there I think around 10, 11 can have died out very soon like. >> That's almost no survival in fact, right? I guess in that case. >> Yeah. Yeah. >> But this is the reality, I mean this is how some [INAUDIBLE] start up in China are operating. And even encouraged by some of their investors. >> Yeah I would say this is actually pretty, I guess it's the type, kind of like a really cultural thing is China is that you- >> That market share. >> You want to grab, yeah, as fast as possible >> And become the last man standing. >> Yeah, exactly. >> But is that changing? I mean, you mentioned there are like 12 to start with, competitors. And then 10, 11, or 12. Surely the investor must have learned the lessons from that. >> Well, we stay there for around a year and a half, and then we kind of came back to Hong Kong to try to reposition our business. What I've heard from the investors, all the entrepreneurs circle in China is that invested are now becoming more conservative. One is because for a lot of platform businesses for example. They basically have the players already in China and the players are basically getting more I would say getting more- >> because that's established [CROSSTALK]. The players are getting more established. >> So, in the platform play they are already players? >> Yeah, so- >> Emerging windows. >> Yeah, so in a >> Platform businesses they are already as you said emerging winners. So basically the investors are looking for new trends. >> Mm-hm. >> And they become less convinced by grabbing the market- >> So this grab market share fast is no longer encouraged or believed >> Yeah. >> By the investor. >> Yes. >> Which means of the market is getting a little bit more mature right and because that now the market is no longer at wide open because of some emergent windows. >> Hm. >> And so you either have work and this, so therefore you are the market dominant player of those who are not probably have fail on the way. Yeah I, yes it was so weird I agree on that. >> What was your experience with negotiating of finding investors in China? >> So as someone coming from Hong Kong. So Hong Kong is part of China but there's a really big cultural difference. >> Right. >> So I would consider myself maybe like an expat. >> It's almost like a. >> More like an expat. >> Yeah, more like an expat. >> And I'm going into the China market. And finding investors in China is actually pretty difficult for people, like for expats. >> Right, for non-Chinese. >> Non-Chinese, non-local people. >> Non-local. >> Yeah. One of the main reasons is that a lot of the investors, they understand that the Chinese culture is very different from a lot of the Western countries, even in Hong Kong. So they would Really look for teams with knowledge about the local Chinese market. How they spend their money for example. What kind of things do they like? So, when we first go to find investors in China we didn't have a Chinese partner, and we basically got rejected basically by everyone. >> So almost simply on the basis that you're not local. >> Yeah. >> They almost reject you- >> I think it depends on the business model as well. >> Sure. >> For our business we are a very consumer to consumer market. >> Yeah. So, it is basically a requirement for us to have a Chinese >> [CROSSTALK] Yes, since this is very much about consumer. >> Yeah. >> The local is a must. >> Is asset, yeah. >> Yeah. >> So, and there are actually a lot of ways to find investors. There are a lot of events to go. A lot of companies they would host some competitions for example or even government bodies, they would have a lot of invitations to start up. To pitch to the investors. >> So there's lots of events and pitch and competition for style up. >> Yeah. So the ways are there, the channels, there are abundant ways of to meet investors. But when you get to meet them, you basically have to convince them that you have the local knowledge, or the, >> Which is not easy to convince them. Because in a way, coming from the outside, to try and convince someone, you know the local very well. That's very hard. >> Basically, so that's why we end up, found a Chinese partner to, >> Right. >> To basically help us with understanding that. >> And for this Chinese partner, did you meet the partner from this competition or is it referral by friends or? >> So I met this China partner through like a business pitch events- >> Indeed. >> In Hong Kong, actually. >> Okay. But still through- >> Yeah. >> Through some sort of- >> Yeah >> Pitch events and things, right? >> Yeah. >> And once you have this partner, so then finding the investors, was that becoming easier or? >> So basically after finding the Chinese partners we got to, or actually in our case, because I know we didn't actually close a round in China. >> I see. >> So, I would say we got to a point where they were convinced that we have the knowledge about the local market. >> So, at least you overcome this first metal sooner that you know the market. >> And then its more about the questions on the business motto. >> Right. And what's the experience? Did you find the investor in general, very sophisticated? Or are they, how is their risk appetite? And just how was the negotiation process? Did you find it very professional or? >> I would say the range varies. Well, there are a lot of, I would say wealthy people in China. They may be an expert in their own industry. And they have some spare money they want to kind of invest into some startups. I would say they are more driven by their feelings towards how they like the idea or how they like- >> Right and these are like, so wealthy individuals who want to be enjoy better? >> Yeah and they- >> They follow their gut rather than. >> Yes basically, and they are less sensitive about the numbers They, especially for angel rounds or early rounds. >> So, they are fueled by the idea. >> Yeah. >> But, this idea is very unique, exciting or interesting. >> Yeah. >> And so okay, interesting, less about the numbers for this time. >> And there are another group of more sophisticated through investors. Maybe working in, maybe some big names FISIS. >> Right. >> So I would say, actually there's an interesting story about finding FISIS or finding investors in China. One of the lessons that I learned finding investors is that, actually it can be quite dangerous when finding investors in general, I would say. So one of our experience was that we we're approach by several venture capitals in China.And then they came and express their interest in investing into our business. >> Right. >> And after we talked about all the models, the numbers and projections. And it turns out that after a week they say on the news that they have invested into our competitor. So, there are cases like that when venture capitals, they basically use this as ways of understanding competitor >> I see that's what you mean by dangerous. I see at least two potential problems there, right? One is that they just basically using you as a due diligence, means of due diligence for their potential investment. And then the second one is actually, they are in a way rather cunning, getting information. Sensitive information. >> Yeah. So I think it is a more for entrepreneurs to be aware of. >> Yeah. >> Because this process must take place for them to ask you about the numbers and everything. But you also have to do diligence to the investors as well. >> Right. So that's something that they should- >> Yeah. >> Watch out, right? >> Right. >> And coming from outside, going to China, what other pros and cons if you want to be as an entrepreneur into China? Are there any advantages being foreigner or are there any, I think you already mentioned some disadvantages. What are the pros and cons in that case? >> One of the cons is basically what we mentioned. >> Yeah, about- >> About the knowledge in the local market. >> It is a relatively undeveloped or underdeveloped market. Are there really the potential that we all think, that it's an exciting place to start because so much potential? Is that true? >> I would say China is actually Picking up the speed of catching up with the whole world. Back in 2014, probably if you found a new idea in the states, then maybe half a year later. You have this six months window to develop this business model and try it in China. >> Right. >> But I would say now the gap probably shortened a little bit. So I would say there are certainly advantages of foreigners going in to China brings in others perspective in terms of culture. But I would say overall a foreigner definitely needs to have a local partner. >> Yeah, that's- >> To really do business in China, yeah. >> So that's still on the con side? >> Yeah, I would more lean towards the >> Yeah. >> Because I think that it's pretty- >> That's pretty important, yeah. >> Important, yeah. >> In that case, apart from that, what other challenges do you see? The local knowledge and the fact that whether they know they can find a partner. And then, can they talk to the investor knowing all these potential pitfall or things that they need to watch out. Is there any other challenges you see? Let's say for example, is it easy to find talent? When you and your co-founders going there you have a partner but still when you expand the business, is it easy or difficult to find the right talent to join your company? >> Finding talent is actually pretty difficult in China because there are a lot of A lot of companies trying to attract talents into their company, especially there are there interesting stories that actually people would camp outside the companies of Baidu, Alibaba, and Tenzen to try to meet the people and working inside to attract them to their company. >> These are the more established big names? >> Yes actually the startup will go into those big companies and try to attract talents out of there. >> Right, right, right [COUGH]. >> A lot of companies are fighting for them so yeah, finding talent is actually a pretty big challenge. >> But I want to draw on that a little bit. The difficulty lies. Is it the short of supply or is it just simply because there's so many startup or even established company are competing for? Or is it also because like finding a good match is difficult? >> It's more about the number of companies. I would say that there are definitely a lot of supplies in terms of- >> Graduate. >> Yeah graduates, and also talents. I agree on you is that finding the right match, it's pretty difficult. >> All right, and what about for graduate in China? Would they want to work for big company or would they find it more interesting to work for startup? >> For local Chinese graduates I don't have enough knowledge about all the local Chinese graduates. I would think that it's definitely a growing trend that a lot of young people they want to join new companies in the hope that these new companies would kind of skyrocket some time and they could benefit a lot from it because working for corporates, they basically just get a fixed salary, not a lot. >> Right. A lot of young people, they are attracted by the hope of. >> The prospect. >> The prospect of. >> You think the trend is kind of like getting more and more young graduate thinking about working for startup in the hope that it will strike bait. >> The traditional model working for corporates is now less attractive. >> I would say so, yeah- >> It's a trend, right? >> Because a lot of startup companies, they would actually provide a lot of benefits, not only salary based but a lot of perks, they get free lunch, dinners, free transportation. >> [CROSSTALK] Right, right. >> Even housing allowance. >> In addition to the salary and probably the stock option- >> Yes, the stock options. >> They also get a lot of these company. >> Yes and also a lot of young people they would think that because when you work for a startup company, it's a group of young people and the cultural fit seems pretty interesting for them to work in. >> Interesting, so there are more people working there. And I know eventually you decide to exit the market. How was that decision? Was it difficult? What prompted you to make that decision? >> Basically we stay in Shanghai for around a year and we build a team of around 20 people up there. Basically the end signal is that we have allocated a sum of money to be used in the China market and we need to raise another round of money to sustain the team. But then, by the end of that time we couldn't close the round. >> Timing and the running out of cash? >> Yeah running out of cash was essentially the major reason why we have to just shut down everything and came back to Hong Kong. >> All right. >> But, which is a little pity because we see a lot of our competitors. They actually raised close the round. >> Right. >> Doing the same business model. But definitely it was a lesson learned, yeah. >> Yeah it's good, it's so good. Last thing also. >> Yeah. >> And during that time, do you get a lot of help or assistance from let's say government and other programs and. I mean would you advise people to go through these accelerator program or can they apply for government funding? >> I would definitely recommend them applying for government funding. For example, in Hong Kong, there are several government funds that actually helps you expand your business in China and provide a lot of referrals and investor pitch meetings to these companies. >> Yeah. >> Which it's really hard for you to find yourself, so it's always good to rely on these government support and accelerator supports. >> Right. And they're quite and there are lots of them you said in China. >> Yeah, there are quite a lot of them. >> Of them as well. >> Yeah. >> How do you select? Because I know there's so many accelerators these days. I mean if government funding probably it's good to have the extra grant. But what about accelerators? How would you choose? >> There are a lot of accelerators with different focus. Some accelerator focus on hardware stream, and some on platform businesses or some of the accelerators are actually a subsidiary of like a conglomerate and it is important for you to choose an accelerator based on what they want. If your business actually fits in to what they can offer you. You can always check the accelerators maybe the managing team or the background to. >> What theme they are running in an industry or general theme like B to B or B to C, that kind of. >> Yeah. >> Right. And so, having moved back to Hong Kong, would you consider, or are you considering expanding your business in to China again? >> I would say it's for our business, we now focus back into the car space. And the car space is actually becoming really crowded in China within one or two years. >> Running similar model? >> Yeah. >> Okay. >> Basically we are all more looking towards the Southeast Asia sector more that China now. >> And what about the expanded model, because when you are in Shanghai you run the model which is wider, not just sharing cost. Would you run that model in Hong Kong? >> In Hong Kong? >> Yeah. Since you now focus back in Hong Kong, would you also expand beyond the car sharing model? >> I think we have kind of fitted our business to focus in one vertical maybe because the reason that the lesson we learned in China is that we don't want to spread ourself too thin. >> Because there's no overlapping sentiment. >> Verticals. And also, we think that within the auto industry, the market size is big enough to sustain a business in maybe just one or two cities. Yeah we basically more focused in the car space now. Yeah. >> Right. >> And do you have any other advice for people who want to be entrepreneur in China, any other advice you would give them. >> First of all, I would say, get a local partner [LAUGH]. >> [CROSSTALK] Yes. >> It need someone with the local market knowledge. >> Yeah. >> I would say that the second advice is you probably face a lot of hurdles and basically just one of the major criteria of starting a business is the persistence, especially in the China market there are basically a lot of competitors would just come up in a very, very fast pace. You have to be agile and persistent. >> Now, those are very, very important factors, yeah. Great, thank you very much, thank you Chris. >> Thank you very much. >> Thank you.
