10 weeks ago, we decided we needed to explore the Asian market while preparing our pitch for our latest venture BotBase at the RISE conference in Hong Kong.
Why the interest in the Asian market? Well because if you think about it (and its size), it almost feels ignorant to not be interested in a huge market with a lot of potentials. We decided to pitch BotBase at RISE and use the two weeks we are there to explore Hong Kong, Shenzhen, and Shanghai.
What we learned on our first few days there already: there is a LOT that is going on there. We got to see and understand many cool things happening in the innovation & start-up space. What exactly did we find particularly interesting there? Well, we have put together our key learnings, experiences of our trip, and the most impressive facts for you.粤港澳大湾区
Greater Bay Area – Market power & sustainability
Let’s begin with the famous “Greater Bay Area”.
Bay Area sounds familiar, right? But why “Greater”?
In 2017, during the 13th five-year plan for economic and social development, China announced to form a megapolis that consists of 9 cities and 2 special administrative areas, kind of a megacity in the already most dense region of the world.
The goal: to foster economic potential condensed in an area with combined 70 million people, nearly 5 percent of the overall mainland china population that occupies less than 1 percent of china’s land area but contributes 12 percent of GDP.
This really Is GREAT, right?
The government of mainland china takes innovation seriously. Politically, as well as economically a basis to foster entrepreneurship in all different kinds of areas Is truly provided.
Moreover, the entrepreneurial zeal of the Greater Bay Area is hard to compare with other hubs in the world. Even if you hustle hard!
Ever heard of 9/9/6?
China always had the reputation of putting work before life.
9/9/6 at a Chinese company means that the workday starts at 9 am, finishes at 9 pm, with an extended 6-day week.
One of the ex-pat founders from the United States who we met in China simply described the ‘brutal truth’:
“My engineering team works hard. There are some of the brightest minds in our industry and they grind daily. You still can’t compare it to a start-up driven by the Chinese 9/9/6 culture. If you work hard, they will work harder. It’s pure competition.”
Hong Kong – one country, two systems
We spent most of our time in Hong Kong and truly fell in love with the high energy of the place. What we heard almost every day during our time there was people referring to their constitutional principle “one country, two systems“. Within the People’s Republic of China, socialism is maintained, while Hong Kong can retain the capitalist system after peaceful unification.
If you look at the start-up ecosystem and take a closer look at the corporate innovation projects of established companies in Hong Kong, this difference to China becomes very clear.
Many projects revolve around Blockchain, Fintech, and other fields that require much more liberal conditions which are available in Hong Kong, more than in other parts of the world. Not without good reason, Hong Kong has been ranked number one among the economically most liberal cities in the world for several years.
Starting a business there Is very easy and only costs ONE obligatory Hong Kong dollar. Yes, we completely understand If you are now considering opening an office In Hong Kong. We were constantly playing with the same thought. They make managed to make It very tempting for entrepreneurs.
This is probably also the reason for the booming start-up ecosystem in Hong Kong. Last year alone +150% more startups settled in Hong Kong, over the last 5 years 300% more jobs were created in startup-related companies.
Shenzhen – A full end to end ecosystem
Now let’s look at one of the most interesting cities I have ever been to. Seriously!
Back in the 70s Shenzhen was a tiny fishing village with a population of around 30.000.
Around 10 years later Shenzhen became China’s first special economic zone, which made Shenzhen grow on an astounding rate year per year. The latest estimates count about 12,500,000 people living in the urban area of Shenzhen.
Basically, Shenzhen became the number one hub for serving the world with electronic consumer goods, the biggest hub for hardware startups, and the gadget factory of the world.
Although there is good reason to skeptically question the development of Shenzhen, the growth miracle “made in China” produces the highest per capita income in the whole of China, lifting (together with the whole economic development of China) around 800 million people out of poverty.
But Shenzhen is not only about economic growth!
Maker Spaces in Shenzhen
The advantage for start-ups from all over the world that drives them to Shenzhen becomes clear when talking to entrepreneurs in one of the in the city located Maker Spaces.
A hardware entrepreneur (start-up still in stealth mode) from California told us: “Compared to the US, we can make our products four times as fast with a tenth of the costs. The time of the ‘copycat stereotype’ approach is over – the Chinese ecosystem understands quality more and more as an advantage and focuses on increasing in this area.”
Learn more about Shenzhen in a nutshell here:
In retrospect, our trip to Hong Kong and China was very educational and really widened my horizon. We were able to bring back a very different mindset of some highly inspiring people we met there and are looking forward to maintaining the relationships we built there.
In numerous conversations, it became clear to me that China, also due to the strong influence of the government in economic topics, pursues a clear focus with a lot of power: Interdisciplinary collaboration and a stable infrastructure provide the basis for rapid growth, sustainable development and a perspective that may leave the West far behind.
China is creating a new sense of community on the road to an affluent society.
‘Don’t give a hungry man a fish, Give him your fishing rod.’