Shanghai right for business starters

The city has the environment and mindset necessary to launch new technological businesses

For Fan Ling, a 34-year-old lecturer at the University of California, Berkeley, Shanghai is the dream city to start his Internet business.

"Shanghai used to have many impressive Internet companies such as Ctrip, Dianping.com, but no big-name companies emerged in nearly five years," he said.

Many factors could be blamed, such as lack of talent, inadequate policy support, and people's life attitude, but Fan insists the timing is ripe for the next big e-company.

Compared with other cities, Shanghai is more efficient, and it has higher maturity of entrepreneurs, said Fan.

Up to 60 organizations in Shanghai provided incubating services as of the end of 2013, according to the Science and Technology Commission of Shanghai Municipality, and nearly 40 of them jointly established a union for sharing resources, communications and cooperation in March, granting them more subsidies from the science and technology commission.

In the city's eastern Pudong New Area, there are 33 enterprises incubators by the end of last year, which accounted for 21.8 percent of the city's total amount, local Wenhui Daily reported.

The city's environment for business starters is improving greatly, which encourages more young people to become entrepreneurs.

Fan is one of the Internet business starters in Shanghai.

At the end of 2014, Fan decided to start his own dot-com business in China.

"The idea is to set up a platform to link designers with high profile projects," said Fan.

His company name is Tezign, which combines tech and design.

According to Fan, they did a survey among 1,000 designers in mid 2014, finding that more than 90 percent of the designers are young people, about 70 percent of the design companies are small-sized with an annual revenue of below 1 million yuan ($160,000), and 99 percent of their design projects ended unpleasantly.

Fan believed Tezign could solve the problems. To date, his company has promoted 60 projects domestically. In February, Tezign received more than $1.1-million angel investment, and the company is prepared to launch its website soon.

Supporting startups

Xu Fei, co-founder and CEO of Keewe, is working against the clock with his team for a public test of their project.

As a tailor-made knowledge-sharing platform, Keewe is to provide professional consulting service.

The 29-year-old Xu said he enjoyed the experience of starting a new business, because it is interesting and inspiring.

"Working on our own project gives us a lot more space for creation and imagination," said Xu, who used to work as a consultant at Deloitte.

But Xu also realized the difficulties of working on something without knowing exactly what the customers need. "We do not know it for certain, but it must be right."

Xu is still looking for investors for his project, but he is confident of his choices. "Even if the project cannot be as profitable as hoped, I will continue to start my own business," he said.

Many incubators, technology parks and organizations are scattered in Shanghai, providing a good environment for business starters. SOHO 3Q is one of the places offering such services.

After visiting co-working space in the United States, Pan Shiyi and Zhang Xin, a couple who jointly founded SOHO China, opened SOHO 3Q in Beijing and Shanghai in February. The co-working space is aimed to attract business starters as well as creative companies related to Internet, life service, designing and environment protection to settle in.

The project offers two-month free leasing for new business start-up teams, and to date, more than 30 teams have enjoyed the free service in the co-working space in Shanghai.

Fan Ling and his team were offered three-month free leasing by SOHO 3Q in March, and he said they would stay there even after the free trial period ended.

Ideask, or Chuangkebang in Chinese, is one of the organizations that give support to business starting in the city.

Ideask started operation last August, and now it has two sites in Zhangjiang of Pudong New Area and Baoshan district.

"The two sites have a total space of 2,000 square meters, and they have supported about 60 new enterprises in the city, with 20 percent of them receiving between 500,000 yuan and a hundred million yuan social investment," said Li Weichao, operation director with Ideask.

Angel investment organization Shanghai Jichuang Investment Management Co Ltd has so far incubated more than 200 projects and invested in more than 60 of them with a total investment of millions of yuan since it established in July, 2012.

"We look to help innovative business starters that are associated with the Internet at their early stage of starting a venture," said Ma Tengjiao, vice general manager of Shanghai Jichuang. According to him, their company examines about 800 projects every month to decide which project to bankroll.

"Quite a few business starters who won investment from us have further received a large sum of social capital, and they now grow into bigger companies with more brilliant performance," said Ma.

More players

The environment for starting a business has improved a lot from five years ago, when it was only the game of very few people.

With the backdrop of economic transformation and industrial upgrading, more and more people decided to be an entrepreneur, Ma said.

"It is impossible that every business starter will succeed, but even failed business starting experience is a treasure for one's life," he added.

Compared to the last generation of business startups, Fan said new technologies enable business starters to try their best.

The environment is ready in terms of funds, place, market and people, and the only reason for a failed project is it is not good enough, added Fan.

A survey towards 2,071 graduating senior students from 16 universities and colleges in Shanghai showed 28.6 percent of them have plans of starting their own business after graduation, local online news service provider The Paper reported.

"We have noticed most of the business starters are those born after 1985. They do not have much experience, resource or capital for a business, but they are full of inspiration and creative ideas," said Ma.

Capital is the most vital problem for most business starters, but the appearance of angel investors means the golden age to start a business is about to arrive.

The domestic angel investment market developed slowly since it started in the 1980s, but such situation has greatly improved this year. In the first quarter alone, 349 angel investments were made in China, involving about $260 million in capital, increased by 93.9 percent and 214.2 percent year-on-year, the Xinhuanet.com reported.

In the process of building a technological innovation center with global influence, Shanghai would need more open-minded talent, and require the government tapping into the Internet plus era by innovating its management mode, and to build up an environment for various people to start their own business with innovation.

"I was struggling to start my own business back in 2010 and 2013. During that time, it was extremely hard to find investment or any support service through incubator organizations," Li said.

"My business did not succeed, but the business starters at the moment are much luckier than me," Li added.

wang_ying@chinadaily.com.cn

(China Daily USA 07/10/2015 page8)