China Herald: Why most startups should avoid China

William Bao Bean

It sounds odd to hear from the managing director if the Chinaccelator in Shanghai, but William Bao Bean sees it as a success when startups decide to avoid the China market and explore other markets. "Interestingly enough, the greatest help that Chinaccelerator can give to start-ups considering China is convincing them otherwise," he tells Inc-ASEAN.

Inc-ASEAN:

“99% of international start-ups don't belong in China. Locals have a better market understanding and better ability to raise capital. China is the number two market in the world for VC investment—meaning no foreign company is ever going to be better funded, even UBER,” says (says William Bao Bean, the managing director of Chinaccelerator and MOX and general partner at SOSV.) Hence, it is important that the accelerator focus on international companies that have a competitive advantage in areas, such as adtech, education, fintech, and cross border commerce, and are difficult to clone...

Bao Bean also feels that a data-driven approach is crucial when expanding, if only because relying on our own skills can lead us astray.

“The biggest problem with international start-ups and even corporates is that what makes them a winner in their home market, their experience and domain knowledge, can be a liability when they go into new markets. Gut instinct and pattern recognition, developed over years of failing and succeeding, is suddenly more likely to send a founder in the wrong direction than the right,” he says, adding that their approach overcomes these biases and even leads entrepreneurs to make discoveries that hadn’t occurred to them previously.

Chinaccelerator is itself expanding, in a manner of speaking. According to Bao Bean, they are partnering with venture capitalists and accelerators in Southeast Asia and even South Asia to help recruit start-ups with an interest in China. Interestingly enough, the greatest help that Chinaccelerator can give to start-ups considering China is convincing them otherwise.

“Our biggest value can sometimes be to tell a company that it doesn't make sense for them to enter the Chinese market,” he says.

More in Inc-ASEAN.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers'request form.

Are you looking for more strategy advisers at the China Speakers Bureau? Do check out this list.