Mix it, pour it, just don’t drink it

It’s important for entrepreneurs to believe in what they are selling — in essence, to create a field of distortion around themselves that makes it seem like anything is possible with their solution. They just need to make sure they don’t believe what they’re saying to the point of distorting their own view.

I often find myself saying to entrepreneurs “your job is to mix it and serve it, just don’t drink it yourself!” This usually slips out of my mouth when I’m talking to an entrepreneur who is pushing their idea so hard that it seems like they are trying to convince themselves of its brilliance, though in most cases I think they actually believe it, which is what concerns me.

This doesn’t mean it’s bad to serve the Kool-Aid to others (metaphorically speaking, of course). Really, as an entrepreneur that’s a huge part of your job: selling others on your dream. And while it’s absolutely critical that you make a case for your product or service that has people fighting to buy it, you have to make sure you critically assess the reality of your situation.

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Building your team of rivals

Do you get along with your co-founders really well? Do you feel like you always see eye-to-eye on everything? Then you would probably benefit from adding some “rivals” to your team.

I’ve started reading Team of Rivals a number of times and although something always prevents me from finishing it (the book is excellent, life just always seems to get in the way whenever I pick it up) one of the lessons I’ve drawn from it is that it’s beneficial to surround yourself with people who will challenge you with different perspectives. (This book is really about far more that just that, but cut me some slack here.)

I’ve certainly seen this in practice with founding teams, including some I work very closely with, and have witnessed the benefits of constructive and respectful disagreements that push the team to find the best answers to the problems they are trying to solve for their customers.

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The humble entrepreneur

I’m lucky to frequently meet with entrepreneurs as part of my job. Like many who work in the entrepreneurial space, I spend as much time getting a feel for the team as I do considering their idea.

I recently met with an entrepreneur who impressed me with his humble attitude. He didn’t try to convince me that he knew everything about his customers, or that he knew the industry better than anyone else — instead, we had an engaging discussion about his key assumptions and how he would like to try to validate them in the market.

That great discussion not only gave me confidence in the entrepreneur and made me interested in working with him, it also got me thinking about what traits I look for when considering working with an entrepreneur. Like many investors and partners in the entrepreneurial space, I spend as much time getting a feel for the team as I do understanding their idea and assessing its potential. Here are some of the traits that turn me on, and some that send me running as fast as I can in the other direction.

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Chinese studying abroad — an interview with Greg Nance (part one)

This is the second post in my series on Chinese studying abroad and the entrepreneurs serving them. I recently had the pleasure of interviewing Greg Nance, serial entrepreneur and CEO of ChaseFuture. ChaseFuture offers services like mentoring and essay proofreading for Chinese students aspiring to attend top schools in the US or UK.

This is the first of two parts of my interview with Greg, where he talks about how he ended up in China, his first startup Moneythink, and the lessons he learned from Moneythink that are helping him with ChaseFuture.
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Chinese studying abroad and the entrepreneurs serving them

Chinese students are studying abroad in droves. In this series, I discuss some forces behind this trend. I will also publish transcripts of interviews I conducted with two entrepreneurs serving this ever-expanding group.

The trend of Chinese students going abroad seems unlikely to slow in the near future. The International Herald Tribune cites Global Times research data showing that “the number of [Chinese] students wanting to study abroad has increased by more than 20 percent each year since 2008”. In addition to ample job opportunities for returning graduates, the reverence for foreign degrees makes the payoff for returnees substantial.

This flood of students means there are plenty of opportunities for entrepreneurs to provide value, and profit while doing so. I recently interviewed two serial entrepreneurs targeting Chinese students studying abroad — this series will include transcripts of those interviews.
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Competing in China’s e-commerce market requires a startup mentality

Xin Wang of Brandeis University International Business School and Z. Justin Ren of Boston University School of Management wrote an interesting article about How to Compete in China’s E-Commerce Market for MIT Sloan Management Review. They analyze why companies like eBay, Groupon, and Google have struggled in China.

They offer advice relevant to both entrepreneurs and large companies: understand your customers, make decisions quickly, and pay attention to your competition. As The Startup Owner’s Manual and The Lean Startup point out, the entrepreneur’s mission is to understand their customers’ needs, test hypotheses by gathering customer feedback, and iterate quickly based on their findings. When doing this, you’ll have to discover how to solve your customers’ problems better than your competitors do. And since you are testing and iterating, you’ll have no choice but to create a culture of quick decision making.

As Blank and Dorf point out, “a startup is a faith-based initiative”. It’s important for large companies entering China, or other new markets, to remember they are also “faith-based initiatives” — even though they are market leaders at home, their approach is unproven in the new market. They need to think like a startup.

When entering a new market, make sure you understand the competitive climate and your target customers’ needs. Then, alter your offering to carve out your own piece of the market. Otherwise you may end up another example of large company hubris leading to failure in a new market.

Using extraordinary service as a competitive advantage at Hai Di Lao

Creating a sustainable advantage in any industry in China is difficult, especially when competitors promptly copy anything that works. Hai Di Lao, a hot pot chain, uses extraordinary service to draw large crowds to its many locations and offers lessons for entrepreneurs in China on how to create a sustainable competitive advantage.

Hai Di Lao was founded in 1994 and now has over 50 locations throughout China.[1] Due to their success in China, they are planning to expand into the US and Singapore.[1] They are renowned for their high levels of service and high-quality food, and for customers waiting hours for a table on most nights.

Hot pot around every corner

Hot pot restaurants are as abundant in China as Starbucks are in the US — or as Starbucks are in most other countries for that matter. If you’ve never eaten hot pot (you may know the Japanese version: Shabu Shabu), I can offer a simple explanation: they bring a pot to your table, put it on a burner, and then you order vegetables, thinly-sliced meats, fish, or anything else to cook in the boiling broth. The most common style includes a pot with chicken broth on one side, and chili oil on the other. It’s delicious simplicity, and comes in many forms throughout China.
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Amazon in China — an example of localization

Amazon’s entry into China is a lesson in understanding the local market and catering to its needs. The most obvious difference is Amazon delivering goods themselves, or at least making it seem like they are. Not only do they understand the local market, but they may even be using a lean approach.

I suddenly started seeing z.cn (Amazon’s URL in China) everywhere I looked. At the time, we were still living in Hangzhou — a second-tier city about 100 miles from Shanghai — so the ads on busses throughout the city donning Amazon’s smile stood out. Advertising is pervasive in China and I wouldn’t be surprised if I found babies with logos on their foreheads; but the sheer volume of ads with z.cn and the Amazon smile surprised me.

Amazon seemed to focus on books and a few other key categories when I first noticed them making their z.cn push, though the range seems to have expanded since then. The similarity between their approach in China and the US isn’t what I find instructive, rather it’s the changes they are making for the local market that should interest entrepreneurs and foreign companies.

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Old Chinese people in the park

Every morning at around 8:00am the small park we live above in Shanghai springs to life with music, dancing, Tai chi, and singing. If this post was about night-time in a park in the US, you would probably think it was a place where high school kids hang out and have parties. Not so in China. Our park is for elderly Shanghai residents, and all morning long they fill the park as they get out of their homes, socialize, and keep the rust from forming on their joints.

At about 11:00am the park starts quieting down as they all go home to have lunch, but then at around 12:30pm the senior center located at the park’s entrance springs to life with groups that sing, dance, and play instruments, usually as they recreate famous Chinese opera pieces. This boisterous activity continues until around 5pm, when the building suddenly falls silent and dumps the retirees out onto the street so they can go home to start cooking dinner. As long as it’s not raining or snowing, this is their daily routine.

While I find the senior center interesting — though, to be honest, it’s filled with a bit too much Chinese opera for my taste — I’m not writing this just to share a fun factoid. This senior center is just one of thousands throughout China that are serving this very large segment of the population. For the right kind of entrepreneurs, these retirees, along with the demographic shift they represent, are a great opportunity.
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Brainstorming with the introverted and critical

I recently read a thought-provoking article on the Harvard Business Review blog network about how to avoid groupthink while brainstorming. I am always interested in effective idea generation and problem solving techniques because we use a variety of these when developing mobile and web applications for China. While “classic” brainstorming[1] can be effective, I have learned that it’s often best to identify the specific challenges your team faces and tweak this template accordingly.

Our team is made up of over 20 Chinese mobile and web application developers who have limited experience with brainstorming, at least when compared to the average American employee. While developers are usually great at problem solving and are often very creative, they can also be somewhat introverted. In China, we also face a unique challenge in that, while our staff understands the benefits of brainstorming and other creative problem solving techniques, they are fighting the current of decades of schooling that focused on individual rote learning rather than collaboration and creativity. They also struggle with how to effectively and safely contribute their ideas with a group of often very critical peers. While the root cause of these feelings may be unique, I’ve been in brainstorming sessions with enough groups to know that having critical team members is certainly not unique to teams in China, and doubting your own ideas plagues team members everywhere.
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