Photo: Wikimedia Commons
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair… – A Tale of Two Cities, Charles Dickens
IT WAS THE BEST OF TIMES, for entrepreneurial spirit to be spread over China, with Beijing, Shanghai, Hangzhou, Guangzhou, Shenzhen along with many other cities seeing bootstrap startups springing up. New terms are surprisingly effectively created to remove blockages and barriers and to foster companies in infancy. VC money is on table to be capitalised on for those with BPs or even merely ideas. Incubating programs like Innovation Works (Beijing), China Accelerator (Dalian) and Tisiwi (Hangzhou) are touting the young generation to start their own causes in a way that Y!Combinator, 500 Startups and TechStars work in the States. Cafes that couldn’t care less about coffees are proliferating in Beijing, Shanghai, Hangzhou and Shenzhen. Market size are growing as China Internet users has reached 505 million and is expected to surpass 715 million in next year.
IT WAS THE WORST OF TIMES, for both entrepreneurs and investors as the ferocious, endless, sometimes cheap-shot-like competition is exhausting without any positive yield and valuation of companies has been pushing up due to market mania and investment spree. Thousands of similar products/services could emerge upon the scene overnight, with totally no difference, at all. So many investors are keeping their close eyes on the same hot spots – one of the major causes why valuation for startups was soaring.
IT WAS THE AGE OF WISDOM, that new technologies and business models are quickly and adequately adapting to China to underpin the Chinese Internet infrastructure. Adoption of HTML5 enables cross-platform apps, thanks to companies like Leiyoo, organisations like HTML5 Chinese Interest Group among many other vision bearers. Inception of coding languages, tools, frameworks and philosophies like Python, jQuery, Github, NoSQL, Rails, DRY (don’t repeat yourself) and DRW (don’t reinvent the wheels) equipped Chinese coder with latest Valley practice to help them gear up for the startup wave.
IT WAS THE AGE OF FOOLISHNESS, where some people are fooled by appearance, constantly. Encouraged and single-minded entrepreneurs jumped into crowded red sea, be it group buying (5000+ at its peak in September 2011), liteblogging (less than 10) and the latest Pinterest fever (20 plus). VCs with heavy purses splashed money into startups in hopes of a 10% chance that one of their portfolio companies might make it – to go public or be acquired for a fruitful exit. China ecommerce forefront attracted more than US 1 billion in 2010 (1/3 went towards group buying), the number more than quadrupled to 4.7 billion in last year, according to the Beijing-based Internet think tank Zero2IPO.
IT WAS THE EPOCH OF BELIEF, that from late 2010 on, the successful IPO stories of bootstrap companies including Youku and Dangdang (December 8, 2010, NYSE), Renren(May 4, 2011, NYSE), NetQin (May 5, 2011, NYSE), Taomi (June 9, 2011, NYSE) and Tudou(August 17, 2011, NASDAQ) served as The Apocalypse for entrepreneurs or entrepreneurs-to-be. Some of them gave up big corporation job and cozy life to bury themselves into 12-hrs working day and cramped office space, with a simple belief that some day they’ll ring the Nasdaq opening bell to finally reap the crops.
IT WAS THE EPOCH OF INCREDULITY, during which counterfeit products can be found everywhere across the web, Taobao, Gaopeng (the JV between Groupon and Tencent), Amazon China among other big name B2C services. To some extent, the rise of Taobao should ascribe to its social rating system that buyer could rate the sellers. With the guard of rating system, online consumers can more or less rest assured when shopping online, which gradually leads to the more common online buying behaviours and give rise to the proliferation of Chinese ecommerce storefronts.
IT WAS THE SEASON OF LIGHT AND SPRING OF HOPE,that the spontaneous entrepreneurship and innovative thinking in the vast land of China motivated many to craft their products and to solve a problem, no matter how big or small it is; the convergence of cutting-edge technology and excellent human brain bringing in everything in an unparalleled way that we would never imagine before; and the ubiquitous of APIs, social platforms and talented people help startups gear up for a bumpy yet fruitful journey.
IT WAS ALSO THE SEASON OF DARKNESS AND WINTER OF DESPAIR, given the facts that none of Chinese B2C companies – no matter how much they raised and how many they sold – is making a penny, downsizing or even closing down news always made it to the headlines, and VC started stepping away leaving money-short startups in the chill winter. Winter sets in, people cried. On top of all these pitfalls, another reason for crying “winter” and “despair”, is that there’s none or little innovative mindset in creating workable business model. Giving away VC money to consumers isn’t business model, at least not a sustainable model. Imitating without changing layout or even colour isn’t business model. Blind expansion, meaningless competition price and PR war, of course are not a decent business model, though it did work sometimes in China.
As many Chinese founders stumbled along the path set by thorns, feeling the chill of winter and suffering from the hopelessness and despair, it’s the only entrepreneurial spirit that sparks in the long night to guide them through the journey, and inspire them to move on to probably a better time in 2012.