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New insights on business in China
February 15, 2009, Sunday
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Print Edition
Print Edition
MANY contemporary books on China focus on how to do business in the Middle Kingdom, assessing and analyzing the cultural, political and regulatory processes, pulling them apart and reassembling them in a way to aid operators.
Another China business book, "China Entrepreneur" co-authored by CEIBS colleagues Juan Antonio Fernandez and Laurie Underwood, was launched last week at an American Chamber of Commerce function in Shanghai.
It is the pair's second book and, while following the same structure as their first, "China CEO," it examines through anecdotes, best practices and first-hand advice, the key challenges of starting a business.
"In the first book we interviewed CEOs of international firms in China, mostly European and American," Fernandez explained.
Yet the lessons they imparted weren't relevant to another sector of the foreign business market.
"People would say, I'm not one of those guys," Fernandez recalled. "I don't have that much money so what about me and my problems? The CEOs were talking about the China business environment but it's a different matter for other business people."
And so the writing duo set out to interview foreigners that had started a business in China, building a compilation of case study experiences.
They interviewed a total of 52 people, including 40 entrepreneurs, double the number of CEOs in "China CEO." This entrepreneur pool was asked about their challenges, their problems, how they responded and their solutions. "We talked about how to deal with the Chinese government, how to get your licensing, how to get paid, business negotiations and human resource challenges," said Underwood.
The "how to" literature on China is not hard to find, so why this book? Fernandez pointed to one of the interviewees, Susan Heffernan of Soozar, as fundamental to its essence.
"She told us simply that people should talk to other entrepreneurs, that there was value in hearing real stories from people in the same situation," he said. "She said if she had known all these things she could have prevented many headaches and learnt from them. So that was our main goal - to help people like Susan who want to start a business to learn from the experiences of others."
The entrepreneurs in the book have an average tenure in China of 12 years - longer than the CEO book's average of five years - and a total of approximately 500 years of China experience. Most of the businesses featured are in the service sector.
"There are very few in manufacturing," Fernandez said. "Most of these people don't have the capital to open a factory so the typical businesses are in the area of services, like consulting."
One of the first people Underwood interviewed was a professor of entrepreneurship at CEIBS, Ge Dingkun, who broached the concept that China is a paradise for business initiators.
"He spent a lot of years in Silicon Valley so I thought he would be a great person to judge how China compares as an entrepreneurial environment," she said. "I expected him to say that China is decades away from California because there is no history of innovation in the school system, there is no support system for entrepreneurs.
"But he didn't say anything like that. Instead, he thinks that China is a better environment and the reason has to do with supply and demand. He explained that if you are an entrepreneur in California, everyone is an entrepreneur; you can't go to Starbucks without hearing the person next to you talk about a new business they're starting.
"As a result, consumers are very jaded, you have to really do something amazing to catch their attention let alone get them to buy something. But in China he said there's very strong demand and there are still a lot of mediocre services and products - you just have to be better and that's not as hard to do."
So with all the challenges that await the entrepreneur in China, what is the lure? Steven Ganster, a profiled entrepreneur summed it up as follows: "To do business in China you have to really want to be here otherwise you'll just get tired and frustrated, and even if you do want to be here you'll get tired.
"On top of the traits you have as an entrepreneur, you need a genuine affection for China."
Another China business book, "China Entrepreneur" co-authored by CEIBS colleagues Juan Antonio Fernandez and Laurie Underwood, was launched last week at an American Chamber of Commerce function in Shanghai.
It is the pair's second book and, while following the same structure as their first, "China CEO," it examines through anecdotes, best practices and first-hand advice, the key challenges of starting a business.
"In the first book we interviewed CEOs of international firms in China, mostly European and American," Fernandez explained.
Yet the lessons they imparted weren't relevant to another sector of the foreign business market.
"People would say, I'm not one of those guys," Fernandez recalled. "I don't have that much money so what about me and my problems? The CEOs were talking about the China business environment but it's a different matter for other business people."
And so the writing duo set out to interview foreigners that had started a business in China, building a compilation of case study experiences.
They interviewed a total of 52 people, including 40 entrepreneurs, double the number of CEOs in "China CEO." This entrepreneur pool was asked about their challenges, their problems, how they responded and their solutions. "We talked about how to deal with the Chinese government, how to get your licensing, how to get paid, business negotiations and human resource challenges," said Underwood.
The "how to" literature on China is not hard to find, so why this book? Fernandez pointed to one of the interviewees, Susan Heffernan of Soozar, as fundamental to its essence.
"She told us simply that people should talk to other entrepreneurs, that there was value in hearing real stories from people in the same situation," he said. "She said if she had known all these things she could have prevented many headaches and learnt from them. So that was our main goal - to help people like Susan who want to start a business to learn from the experiences of others."
The entrepreneurs in the book have an average tenure in China of 12 years - longer than the CEO book's average of five years - and a total of approximately 500 years of China experience. Most of the businesses featured are in the service sector.
"There are very few in manufacturing," Fernandez said. "Most of these people don't have the capital to open a factory so the typical businesses are in the area of services, like consulting."
One of the first people Underwood interviewed was a professor of entrepreneurship at CEIBS, Ge Dingkun, who broached the concept that China is a paradise for business initiators.
"He spent a lot of years in Silicon Valley so I thought he would be a great person to judge how China compares as an entrepreneurial environment," she said. "I expected him to say that China is decades away from California because there is no history of innovation in the school system, there is no support system for entrepreneurs.
"But he didn't say anything like that. Instead, he thinks that China is a better environment and the reason has to do with supply and demand. He explained that if you are an entrepreneur in California, everyone is an entrepreneur; you can't go to Starbucks without hearing the person next to you talk about a new business they're starting.
"As a result, consumers are very jaded, you have to really do something amazing to catch their attention let alone get them to buy something. But in China he said there's very strong demand and there are still a lot of mediocre services and products - you just have to be better and that's not as hard to do."
So with all the challenges that await the entrepreneur in China, what is the lure? Steven Ganster, a profiled entrepreneur summed it up as follows: "To do business in China you have to really want to be here otherwise you'll just get tired and frustrated, and even if you do want to be here you'll get tired.
"On top of the traits you have as an entrepreneur, you need a genuine affection for China."
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