How can start-ups in China get back on their feet? (13 Tips for Entrepreneurs)
Original article by LadiesWhoTech Author Kelsey Cheng or read the article in Chinese The coronavirus outbreak has shaken up China’s investing industry, forcing start-ups to cut wages, lay off workers and put deals on hold to make it through the cash crunch. Now that China is getting back to business, the rest of the world struggles to deal with the virus, facing an existential crisis. So while it seems China may have won the major health battle against the virus, the economic war against the virus is far from over. Data released by the Naon people in China lostional Bureau of Statistics indicated roughly five millit their jobs amid the outbreak in January and February. Fundraising by Chinese start-ups slumped nearly 60 per cent to US$1.79 billion and a six-year low of 168 deals so far this year, from US$4.18 billion in 440 transactions in the same period in 2019, according to data by Preqin quoted by South China Morning Post. The volatile sector was already suffering from a “capital winter”, as start-up founders face a funding shortage amid a slowing economy and the end of a venture capital boom. Not all hope is lost: Gearing up for a stronger comeback Thankfully, experts and start-ups founders who have walked the walk tell Ladies Who Tech that it’s not the end of the world. Shanghai-based entrepreneurial coach Fionn Wright believes that it’s very much possible for start-ups in China to come back stronger following this “black swan” event – but they’ve got to be smart about it. “In China, a strong comeback is likely as the business ecosystems recover over the next few months. This is a time when start-ups need to be creative to be able to retain employees, find new ways of making money and potentially even develop entirely new products or services. Business as usual is not going to cut it. What got you here, won’t get you through the crisis,” Wright told Ladies Who Tech. Shanghai-based entrepreneurial coach Fionn Wright Taking current trends outside of China into consideration, Wright believes businesses that are reliant on import/export are in for uncertain times and may want to find ways to leverage China’s relative internal stability to develop new supply chains or target customers at least temporarily. He urged start-ups to stop trying to figure out when things will get back to the way they were and accept that this is the new norm. “Start taking action to adapt to it. The winners of tomorrow are those who can see their long-term vision clearly at this moment and can use the new situation as a way to accelerate towards their long-term vision,” he said. Case studies: How FashionEx and RealWear thrived Amelie Mongrain is the co-founder of FashionEx, a Shanghai-based start-up which offers accelerator programs, relevant toolkits and industry expert support to fashion entrepreneurs and their businesses. Needless to say, her company was dealt a blow by the coronavirus – supply chains came to a halt and her team was unable to fulfill her normal sales and delivery. But being in the fashion and textile industry for more than 20 years, Mongrain was able to think outside of the box. And sure enough, new opportunities came knocking. “We shifted our focus. We took time to revisit our annual goals and worked on a new strategy. The situation we were in triggered our creativity and prompted us to build our brand and promote ourselves differently, and the goal was not money. It gave us a chance to re-imagine and reboot our business. At the same time, we wanted to help with battling the outbreak and we looked for what was needed at the time,” she told Ladies Who Tech. Changing her mindset and the direction of her export business lead to the creation of KandyMask, a stylish medical-grade anti-pollution mask that protects a person from smog, haze, allergens and airborne contaminants. The plan was originally to distribute the product in foreign markets, but Mongrain decided to sell them in China directly, which benefitted thousands of people who were struggling to get their hands-on protective wear at the time. At the same time, her menswear supplier underwent a repositioning of its business model and received a certificate to produce protective suits for hospital and clinic staff. Mongrain immediately jumped on board and helped facilitate the process, rushing supply to regions that needed help. “Most importantly, I started to give a lot more TLC (tender loving care) to our clients,” Mongrain reflected. “I did live chats with them and went through virtual product development sessions with them. We bonded and showed that we cared, and talked about how we can be part of their business development at a deeper level.” “Through this crisis, new roads opened up and stronger relationships were forged,” she said. “In times like these, I believe we all have the potential to rise to the occasion and achieve something that we never thought was possible. But if you give up now, you will fail for sure.” The biggest takeaway from this experience, Mongrain said, is realizing the power of community and empowerment to one another, and witnessing how the experience was built into the team’s culture. RealWear ChinaSimilarly, Vancouver-based augmented-reality headset maker RealWear also experienced a lucky break in China amid the virus outbreak, which created an unexpected demand for the devices in the health care sector. Through a partnership with Tencent, RealWear was able to immediately supply the headsets to frontline medical professionals, according to The Columbian. Thanks to the voice-driven software being compatible with protective gears, doctors have been able to conduct hands-free communication and transmit live feeds while out in the field. In the long run, it has opened up a potential new customer vertical for the start-up. “This is a compelling example of how tech companies can work together to fight coronavirus,” CEO of RealWear China Bo Li said in a LinkedIn post. “Startup companies like ours can also play a high-impact role in this crisis by empowering people with purpose-built technology.” Tips to help start-ups emerge successful So, what can