Judging by the success of a few, entrepreneurship is the new gold rush. The mere mention of the subject and you will generate a plethora of opinions as diverse as the people giving them. Throw in China and the subject moves unto culture, food, politics and human rights very quickly.
This book is about both (China and entrepreneurship) in equal measure and somehow, I hope to conflate the two subjects into one enjoyable piece of story-telling, mixed in with advice, tales of caution, research findings, and recommendations.
In the last 20 years, the innovations of entrepreneurial companies e.g. Facebook, Twitter etc. has ignited revolutions in countries most people don’t know what main language is spoken. Products of entrepreneurship have even defined the way we work from Riyadh to Rotterdam to Rio de Janeiro. Suffice to say, entrepreneurship is the hottest talking point at the moment.
Like the gold rush of the 19th century, the possibility of untold riches has drawn prospectors to the arena. And like the gold rush, few will find gold. The rest will either make an alternative living or return to where they came from. Lessons from that part of history have shaped this book and it will try and do two things; first, provide a guide and second, provide a commentary of entrepreneurship in the world’s largest gold rush, Chinese entrepreneurship.
Definitions of entrepreneurship and particularly entrepreneurship as it pertains to China are difficult to describe. Therefore, at the end of reading this book, you will have your own definition, maybe two or three with various qualifications. That is one of the reasons I put the Entrepreneurship Research chapter at the end of the book; and because I did not want to bore you with theory at the beginning of my story.
Stories of entrepreneurs abound in every media one can think of; particularly social media. In fact, the commonest of all, Facebook, comes immediately to mind. The success of Mark Zuckerberg often denigrates the failures of thousands of other entrepreneurs who have tried to follow his footsteps and replicate his business model. An example in point is China with over 6000 social network platforms all trying to emulate the success of Zuckerberg. But replicating his model, or the model of others in the western hemisphere is unwise for China.
After all, China has managed to transform its economy from an agrarian monolith in 1949 to the largest in the world by 2017 (in terms of purchasing power parity). All of this has been based on principles honed over 60 years of communism! Maybe the West needs to learn entrepreneurship from China? Two analogies might best explain the premise of this book. The first comes from the title and the second from Florentine painters.
A fat cow in China……….. was coined from the African saying; ‘If you want a fat cow, feed it yourself’. African sayings, like proverbs, conceal a truth in metaphor. A man’s wealth in Africa was often exemplified by the amount of livestock in his possession and cows were the largest domesticated livestock one could possess. Obviously, the fatter the cow the wealthier the individual. The saying, in other words, extols the requirement to constantly feed one’s cow as the only prerequisite to real wealth.
Not just to let the cow wander in fields with the hope it will find greener pastures but to deliberately and constructively make efforts to overfeed the cow. This metaphor signifies more action than reaction. It resonates the need to go all out to make something happen. If one were to live in China for any length of time or have any exposure or immersion to the culture, the desire to get rich is more than just a desire; it’s a religion.
The second analogy comes from the notion often held that entrepreneurship cannot be taught but merely courted. Entrepreneurial flair is nature and not nurture or so the argument goes. Now let us look at the Florentine painters and sculptors in the 14th century. Art was considered a gift, a natural talent that was honed and perfected under a master. It was more than an apprenticeship, first beginning as a pupil then moving unto assistant, then artist and eventually master. It was a calling; few were called and even fewer were chosen.
Art was not taught but practiced. Eventually the apprenticeship scheme gave way to formal academies in Florence in the 16th century. Masters believed that art was not just a calling but could be taught even with modest or mediocre talent. Artists were taught to demonstrate their learning and proficiency in their chosen skill. It wasn’t necessarily implied that they would go on to become great artists but they were adequately trained and versed in the rudiments and principles of their chosen discipline. That was true then and to this day. Just like art, entrepreneurship can and should be taught.
This book attempts to set out a road map for beginning a start-up in China. The fundamentals can easily be applied to any part of the world but the contents have been geared towards China, using Hong Kong as the preferred starting point. No knowledge of the region is assumed and the reader is expected to use this book as a springboard for further investigation – particularly as Chinese laws and regulations can change overnight.
With few exceptions, English is used entirely in this book and where there is a disparity or contradiction between English and Chinese, the English meaning will be supported with additional synonyms for clarity. Given the potential to step into a minefield with respect to the political ramifications of acknowledging Taiwan, every attempt will be made to treat China as three entities; People’s Republic of China, Hong Kong SAR and Macao SAR although a brief explanation will be offered to put the Taiwan conundrum into context. I briefly touch on the subject of race and discrimination in China by accepting the official line;
All ethnic groups in China are equal and no racial discrimination exists
Instead, I look at Hong Kong where the official line is different, data does exist and address the elephant in the room.
Additionally, this book was written at the same time I was conducting research on my doctoral thesis Foreign Entrepreneurship in China: What is the case for British entrepreneurs entering the Chinese market through Hong Kong via the Agreement on Trade in Services under the Closer Economic Partnership Arrangement (CEPA)? Given my position, I had to wear two hats; one as a somewhat experienced China professional who lived in China and started a business from scratch and the other as an academic in training.
As much as possible, I tried to let this book convey the latter than the former. Too many books on China are based on anecdotal evidence and not real research. Many of the assumptions and findings are based on research where I got entrepreneurs in China to give me their thoughts on a range of subjects but primarily subjects that correspond with the contents of this book. To convey the thoughts of actual entrepreneurs, I conducted a survey asking entrepreneurs in China on various topics. The results are analysed and published at the end of the book. Some of the responses contradict my own findings while a lot of them corroborate the many assertions in this book. Their validity and usefulness will be left to the reader to decide.
In other words, what you will find in this book will be a mixture of various sources but supported by what REAL entrepreneurs in China think on the subject. The tone will be conversational in the most part but supported by heavy academic referencing. Please bear in mind that the heavy referencing is to justify some of my assertions and not to interrupt the flow of the book.