How I interviewed the PM in China
ChinaTech: The PM in Shanghai with TripLocal's Jemma Xu and Rahul Koduri from Eora 3D
As part of Australia Week in China (AWIC) 2016, I was invited to launch the Australia startup landing pad in Shanghai with Prime Minister Malcolm Turnbull, followed by Tech Talks where the Prime Minister interviewed me about Tripalocal and the broader opportunities in the Australia - China startup and venture capital space.
This prompted me to reflect my own startup journey, most of which has been in China, the sole target market for Tripalocal, an online travel platform for customised itinerary of local experiences targeting Chinese outbound travellers.
As a founding team of bilingual, bi-cultural Australian-Chinese, it made every sense for us to focus on China from Day One. Fortunately, China is also the biggest market for many sectors, including tourism.
When I first landed in China for Tripalocal in late 2014, many Chinese wondered why anyone would do a startup in (Australia), a country with the population of Beijing. Over the subsequent 18+ months, I met with hundreds of Chinese investors, partners and peers. We closed our angel round of capital, formed partnerships and grew across China.
It has been an exhilarating rollercoaster ride as we tackled the biggest market in the world. I can spend days discussing our experiences but there are three key learnings that apply across most verticals:
- Entering China is a binary decision: you are either all in, or do not go near it. Spending a few weeks here is not enough - need long term on-the-ground commitment from the founders. Meetings are often at short notice; my meetings with some of China's most famous super angel investors have been for breakfasts where I had one hour's notice. Some of the most useful people I met was simply because I was in the right place at the right time. Spending a lot of time away from China would make all this very difficult.
- China is not one market: China is the sum of 34 unqiue markets (23 provinces, 4 municipalities, 5 autonomous regions and 2 special administration regions). Understand the customer base and initially only focus on the markets of interest. Our analysis showed that our core target market is in the Tier 1 cities (Beijing, Shanghai, Guangzhou) so initially we are only focussed on these areas.
- Set up an advisory board: we knew no one in venture capital, travel or the internet space in China. For our first 2 months, we formed an advisory board with a group of investing individuals. Without them, we would not have had 20+ meetings lined up in our 3rd month. Everything else snowballed from there.
As cliché as this sounds, there has probably never been a better time to do startups in China. The Chinese government alone will be setting up a US$6.5 billion guidance fund to support innovation and startups.
Mature technology companies like Alibaba, Baidu, Tencent, and Ctrip are producing top quality founders everyday. Despite a 'capital markets winter', plenty of capital remains available for proven teams in large verticals.
Ultimately, China is undergoing a mass entrepreneurship and innovation movement, the scale of which is still yet to be properly understood by Western media.
Sitting in China and reading Australian news on startup and venture capital, I feel like I’m crossing into a parallel world where some discussions are still stuck in the past, where there is little focus and understanding of what China is doing.
Most Australians have completely missed the huge shift in Chinese technology, consumer behaviour and related government policies that have been going on over the past decade.
Is it not bizarre that most Australian startups have made little attempt in exploring what is perhaps the most important market of the 21st century, particularly when Australia is the most China-dependent of Western countries?
One key reason that many startups give for avoiding China is ‘we do not have a Chinese speaker on the team’. We are lucky because the entire founding team is bilingual and bicultural. But we are only three of over a million Australian-Chinese of which a significant proportion would speak very good Chinese
I never understood why mainstream Australia startup ecosystem is not better engaged with a portion of the population who potentially have an unfair advantage for our most important market. Such engagements are already happening in parts of Sydney through events and forums but it is far from reaching a critical mass.
In my time in China, I have come across a small number of highly successful Australian entrepreneurs who truly appreciates the risk and rewards of playing in a big market. But they are little known in Australia.
Similarly, there is little attention paid to Chinese-Australian founders, and more generally Asian – Australian founders in mainstream Australia. These founders have a much better understanding of and connections back to their respective Asian markets, yet currently they are underutilised as most of Australian startups and venture capital investors do not know them.
AWIC 2016 serves as a great first step for Australian startups and investors to explore and better engage with the China market. I congratulate the Austrade team for organising an excellent set of weeklong events and for their huge efforts in moving 1000+ delegates around China for a week.
It was a privilege to launch the Australia startup landing pad in Shanghai with the Prime Minister and subsequently have a discussion with him covering some of these topics.
On behalf of Tripalocal, I would like to thank our lead investor Euler Capital, as well as Telstra muru-D, individual angels and advisors, for their continued support.
Ultimately, China is a land of opportunities for the tenacious and curious who enjoy the fast pace and constant change. Plan ahead, go big, go to China, you never know what you will find.
This article was first published on LinkedIn.