Is Asia the best place in the world to launch a start-up? Quite possibly. We guide you through the ins and outs of starting a business in the continent, with some expert help...
When we wanted to learn more about the start-up scene in Asia, we spoke to Wood Egg, which publishes annual guides for entrepreneurs looking to relocate their businesses to Asia. Janet Chang, President of Wood Egg, discusses everything from the best and worst of start-up culture to advice for budding relocators.
How would you describe the start-up culture in Asia compared to Europe and North America?
For start-up culture in particular, I haven't seen the start-up scene in Europe so I can't generalize there, but Asia can be quite similar to North America, actually. Entrepreneurs anywhere could have an open-minded and creative attitude towards creating new ventures and experimenting with different technologies and business models or a very conservative approach focused on tried-and-trued strategies, or something in between.
As for business culture in general though, there are some key differences.
For example, those of us accustomed to European or North American culture might think of people we interact with as somewhere along the spectrum of "stranger" to "family", with friends, acquaintances, and business contacts in between. I can't vouch for all of Asia, but for places like China and Japan, there seems to be a hard line between "strangers" and "family and friends", with not much else in between.
This means three things: First, people only do business with their "friends". Second, it might take several "getting to know each other" meetings before you are considered a "friend" worthy of a mutually rewarding business relationship. Lastly, people are very loyal to the people in their "family and friends" circle. Once you are "in", you really are "in" for life.
What's the best aspect of starting up in Asia?
The differences in Asia, as described above, allow for certain advantages for entrepreneurs and business owners who are patient and persistent. Learning to the language, adapting to the local living environment, and navigating the unfamiliar regulatory environment all take patience and persistence.
Above all are the relationships. Advantages of having formed relationships with highly loyal business compatriots come to those willing to invest the time and energy into a relationship for the long term, and conversely act as a major barrier to entry to those focused on quickly capitalizing on opportunities.
What's the worst aspect of starting-up in Asia?
We often hear entrepreneurs mention their challenges, the least pleasant of which is navigating legal and government regulations, including those related to visas and staying in the country. Additionally, there are three other common challenges we see:
(1) language learning
(2) adapting to cultural norms
(3) finding and managing local talent
Where was the most interesting or surprising start-up hub you've come across in Asia?
There are startup incubators and communities in places one would expect, like Singapore, India, China, and Japan, but we are constantly blown away by the enthusiastic energy of some of the entrepreneurs we've seen in places "off the beaten path". For example, the 25-year old living in Miri, Malaysia who organizes local events with support from the local startup hub, MAD, or the tight-knit community of hustling entrepreneurs working out of a startup house in Bali, Indonesia, or the many others that come out of the woodwork as we work to build resources for entrepreneurs and business owners to develop their ventures abroad. It's a really exciting time!
What sort of start-up's tend to fare best in Asia?
A large proportion of the successful entrepreneurs I've met tend to run one of these types of companies:
- Companies serving a clearly defined market in B2B.
- Companies selling to the entrepreneur's home market, utilizing the power of either (a) local talent or (b) manufacturing from Asia.
- Companies acting as a platform connecting people or resources in the entrepreneur's home country to those in Asia (e.g. recruiting, education consulting, foreign investment strategy).
On the flipside, the number one type of company we've seen have the most challenge getting off the ground are those catering to the Asia consumer market, as a foreigner-run enterprise. The exception is mobile game application development companies, such as HappyLatte in Beijing, China. It was founded by an expatriate from Norway, and enjoys 13 million downloads as the most popular app from China, with a large fan base in Singapore and Hong Kong.
What advice would you give to a start-up thinking of relocating to Asia?
The advice depends on if the start-up is relocating to cut operational costs and plans to continue selling to customers at home, or expanding their offerings to customers in Asia.
For the latter, understand the factors contributing to the failure of other, similarly successful and well-intentioned companies in expanding to your target country.
Plus, get to know the story behind the few success cases, even if they operate in another industry.
For both, here are three generally applicable principles:
1. Expect to spend six to 12 months building strong relationships with potential business partners and suppliers before deciding to do business with them. Even with good relationships, verbal agreements, handshakes, and the honor code are insufficient in most cases. Get everything in writing.
2. To attract a good team and retain employees, cash is king. Employees don't put as much value on personal autonomy in work schedules, work-from-home arrangements, or other "perks" commonly valued by employees in North America and Europe.
3. When miscommunications are surfacing with local employees and you're at your wit's end, over-communication to the point of becoming a "micro-manager" may not be the expected solution, but can turn out to be the simplest antidote.
-This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details.
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