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Growth hacking in China with Steve Hoffman

By Junse Lee

Steve Hoffman, Captain and CEO of Founders Space, made his visit to Beijing, China on March 13, 2017. Before becoming to known as Captain Hoff, he wore numerous hats such as serial entrepreneur, venture capitalist, angel investor, mobile studio head, computer engineer, filmmaker, Hollywood TV exec, published author, coder, gamer designer, manga rewriter, animator and voice actor.

He shared his experience of coming into Shanghai to bridge the divide between Silicon Valley and the startup ecosystem in China. Founders Space is one of the world’s leading global incubator and accelerator with 50 partners in 22 countries.

TechNode, in partnership with Startup Grind Beijing, hosted a fireside chat with Steve on growth hacking strategies for startups in China and the US. The following are edited highlights from the chat.

Why Shanghai first? Why not Beijing, which has been called the Silicon Valley of China?

That’s what Shenzhen and Hangzhou say as well, that they are the startup hub of China (laughs). I knew Beijing is a really important startup hub and therefore didn’t want to mess things up in Beijing. I started out in Shanghai, and things have worked out there. I built more Founders Space in other cities, and we are almost ready to open a branch in Beijing, finally. Beijing is much harder in a lot of ways and Shanghai is much more international, making it a bit easier for us in the beginning.

What are some of the biggest difference you see between China (Beijing/Shanghai) and Silicon Valley?

There is more genuine competition in Silicon Valley than in China. Although China has lots of talents and skills, often times competitions are unfair or hindered by non-business-related factors. But there is little doubt China is outcompeting Silicon Valley in terms of innovation.

Why is it so important for larger companies to innovate?

Big corporates have their rigid structure and procedures to go through, and therefore it’s harder to bring about new innovation. Small enterprises, on the other hand, are less restricted and therefore have more creative ideas, but often times they lack the adequate funding. That’s why we focus on education – educating startups and corporates how to build products, how to be innovative, and how to acquiring funding, etc. And larger companies tend to be more traditional. People are averse to change when there already exists a solid structure, which took them years to establish. So “disruptive strategy” or innovation is nearly impossible to come across in big corporates.

When you’re looking at founders and CEOs, how can you tell if they’re going to be successful? What gets you interested?

My advice to most founders and CEO’s is to fail faster and to destroy their visions as soon as possible. You must be able to see the flaws in your product and business plans because everything you planned is going to go wrong. If a startup CEO’s can break out of their original vision, that gives a room for them to build something better. Recognizing and acknowledging their product/strategy is difficult, but is a necessary step. That is why disruptive innovation is hard. Change is inevitable, but often times painful. Psychologically, people are meant to fall in love with that they build. Doing things with your own hands creates attachment. But founders must learn to develop a keen and sharp eye for their products/business and learn to break out the attachment they build. If you can betray your business plan, then you are one step closer to success.

Another point I focus when accessing a business is what team members they bring into the team. A successful company cannot be established without the right people. Strong managers will hire and bring strong team members who will make things happen together as a team. Building products and establishing the right brand image, they are all important factors. However, in the long run, nothing can compare to having the right people to make an elephant fly.

We are seeing more and more large technology companies open their own VC and/or incubator divisions. Are those effective in creating the innovation they need?

From my past experience, building incubators within large companies does not work well. There may be some room for individuals to work on creative projects or products in the incubator, but to appeal that project to the higher officials in the company do not work very well. Some big tech companies like Google encourage creative contributions from employees. However, to cultivate that kind of culture within a corporate is immensely difficult. I still encourage people to always think outside of the box and be different. However, being different also requires tremendous grit and perseverance.

More of Steve’s insight into startups can be found in his new book Making Elephants Fly.

Source:: Growth hacking in China with Steve Hoffman

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