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China / Startups

To achieve success, the timing's got to be right

By Zhou Li (China Daily) Updated: 2016-06-01 10:32

I began working with China Daily as a copy editor on the night desk; and to fill the long hours of the day I would seek interview assignments from editors who were short of hands.

By then China was in the throes of the first wave of startups. When the Chinese leader Deng Xiaoping revitalized the process of economic reforms in 1992, hundreds of thousands, if not millions, of government officials, university faculty members, researchers and other public sector employees gave up their "iron-rice-bowls" to set up private businesses.

The prospect of making big money or just to be one's own boss was a big incentive. The mass exits spawned a new profession - entrepreneurs. Their stories would be covered extensively by the Chinese media.

I too got the opportunity to write a few news features on entrepreneurs. I had begun to think I wasn't too bad a reporter after all, and would have asked my boss for a transfer to the reporter's section, were it not for a senior colleague who poured cold water on my aspirations saying I was yet to figure out what the term entrepreneur really meant.

"What you call an entrepreneur is almost always a businessman." he said wryly.

"Does it matter? Aren't the two the same thing?"

"No. They are quite different. You are yet to meet an entrepreneur in the true sense."

I realized what he meant only after I met Xiao Helong. In his early 50s, Xiao quit his job in research and set up a health drink manufacturing company based on his own patented formula. After my interview with him was published in China Daily, several companies, including a South Korean conglomerate, called me. They wanted to either buy the formula or start a joint venture with Xiao and I helped set up the meetings for him. I was quite curious to see how he went about making deals with a foreign investor.

He once told me emphatically that the venture was his "baby". He didn't really want to sell it to a stranger. "Being an entrepreneur is the closest a man comes to giving birth," he said. Years later I read an interview in which a top foreign business leader made the same assertion. At the time, Xiao was desperately in need of new funding to scale up, but never budged from his position. If he did not have the funds, the "baby" wouldn't grow the way he wished, but that was not good enough reason for him to sell it off to a richer adoptive father.

Whenever Xiao visited Beijing, he would find time to see me. I helped translate a few company profiles for him. He would consult me on media relations as well. His businesses, however, declined steadily for lack of fresh investment and went bust in two years.

Today as China is focused on transforming itself from a world factory into an innovation hub, more and more young people are encouraged to go the startup route, and entrepreneurship is the buzz word, I'm reminded of Xiao and his short-lived enterprise. Among the many who ventured into new businesses in those years more than half were failures. Xiao has stayed in my memory not because of his achievements but his refusal to let go of his dream as long as he could.

US-based research organization IdeaLab studied 200 cases to arrive at five factors - idea, team, business model, funding and timing - that determine the success of a company. The most important and decisive among these turned out to be timing.

At times I can't help wondering: Would Xiao have better luck if he started his company now?

The writer is a member of China Daily's editorial board.

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