With China building the world’s largest innovation economy, corporates globally are leveraging emerging technologies by Chinese startups at scale in recent years.
Here are 4 ways corporates from around the world can work better with Chinese startups.
1. Referrals and networking
Whilst in other parts of the world, scouting for startups may be as easy as going to your local pitching event, in China, scouting revolves heavily around referrals and personal networks.
Built on the age-old concept of “guanxi”, it’s crucial to rely on personal connections to dive deep into the Chinese ecosystem to find the best startups to partner with. Personal connections are necessary as a lack of trust can ruin the business relationship.
2. Address mutual needs and expectations
When a foreign business partners a Chinese startup, expect differences in the cultural background to cause difficult communication and unmet needs, even if you speak Chinese.
Also Read: Understanding Chinas market as a first time traveller
To remove friction, both parties should be somewhat flexible to cater to changing needs, so that neither is left in the dark and the pace of movement is practical. In the eyes of a startup, a corporate may be slow to act due to established processes and hierarchy, and the startup may require more freedom to experiment than a corporate is used to.
It certainly helps to have a harmonious partnership when both corporates and startups cater to the needs of the other and are willing to do things differently; outlining realistic and achievable expectations from the get-go is the key to making the partnership work.
3. Establish common objectives
Just like working with a non-Chinese startup, don’t underestimate the power of a plan with clear objectives and realistic milestones that are attainable for both parties. Milestones are essentially small wins that break big, complex goals into more manageable pieces and help both parties refocus after each small win on the path to the finished product.
The methodology to achieve those milestones should also be flexible considering the different pace between corporates and startups. Regular meetings are also a must-have as both parties can be encouraged by new developments, adapt to and tackle new challenges together, and strengthen the trust and partnership.
4. Expect challenges that can stand in the way
1. Cultural Barriers: Apart from the obvious differences in work culture, cultural barriers can create distrust and a lack of communication – even more so for Chinese founders, where good business partnerships stem from close personal relationships
2. Decision-making: Home of the 996 work culture, Chinese startups are used to moving much faster than anyone who’s copying them, whilst corporates may be slower throughout the decision-making process
3. Risk-taking: It seems like a paradox that Chinese traditions emphasise frugality but at the same time, the culture lauds risk-taking. The Chinese are known to be hungrier than their counterparts and corporates not used to this culture should expect to compromise during negotiations in order to mitigate challenges in the partnership
Also Read: How China is outperforming the US and Europe in technology and innovation
4. Motivation: Along the way, both parties may lose motivation to continue the partnership, either due to a lack of effort or simply because the circumstances are not favourable
And if it’s just not working, it’s important to know when to walk away amicably. A failing partnership may be undesirable, but it’s more important to part on good terms and keep the communication lines open nonetheless.
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Image Credit: Jay
This article was first published as “4 Tips On Scouting Startups in China” on XNode and adapted for e27
The post 4 ways corporates can work better with Chinese startups appeared first on e27.