Expat entrepreneurship. Cultural differences and expectations can be the hardest to overcome.
By MICHAEL PARK
Entrepreneurs the world over would agree that building a business from scratch is grueling. And each region has its own unique set of challenges, including the most obvious: language.
But cultural clashes can be the hardest to overcome, especially in Asia.
Tiger Fang, general manager of Uber Chengdu, is fluent in Mandarin, but as an entrepreneur his biggest challenges were not language-based at all, but were cultural. “You and your team should get used to having hard conversations and challenging the status quo. At Uber’s China offices, this means I have to enable employees to feel comfortable challenging my ideas with their own.”
Cultural barriers can present opportunities, too. Thomas Graziani of Walk the Chat, a WeChatency, worked to bridge the cultural gap: “We quickly discovered that copying marketing strategies from platforms like Facebook would be ineffective for WeChat. Successful digital marketing in China is ultimately both a technical and cultural challenge. By tackling this problem from both angles, we were able to develop a unique competitive advantage and take off.”
There’s no one-size-fits-all solution for product expansion from the West into Asia, and that holds true for moves from one Asian country to another. Countries such as Korea, China and Thailand all have distinct cultures, languages and levels of development. Thus, while it’s obvious that what works in Silicon Valley might not work in Seoul, it’s often equally true that what works in Beijing will not work in Bangkok.
Ulf Waschbusch, director of mobile at Agoda—a hotel and travel booking site—in Thailand, faced both technical and cultural challenges: “For example, default map solutions on iPhone and Android have proven ineffective for our customers in mainland China. As such, we have built and recently launched a custom mobile map for Chinese customers looking to find a hotel abroad.”
Due to its size and myriad dialects and ethnic groups, China is a prime example of the vast differences in culture, language and economic development that many expat entrepreneurs encounter. Development has traditionally been concentrated in China’s coastal cities, which also has resulted in a sharp disparity in income further inland.
Steve Henri Devos is a Belgian expat and the development director for Vandergeeten, the second-largest importer of Belgian beers into China. He says: “People often think they understand China because they’ve figured out Shanghai. However, you’ll find that Yunnan, Guangdong and Sichuan represent dissimilar ecosystems, cultures and market opportunities. Expat entrepreneurs should understand that China is like a continent unto itself. Do not assume that what worked in one province will be effective in another.”
The fundraising environment in Asia can also be a challenge. Kuan Hsu, a venture capitalist with KK Fund in Singapore, says: “There are very few startups in Asia that can compete with the likes of Google or Facebook on a global scale, and the investment terms reflect that. However, with the right amount of encouragement, support and patience, Asian startups will some day be able to compete with Silicon Valley startups.”
While it may be easier to find investors in Silicon Valley, there you would also be paying well over $100,000 for each engineer hired. Basing a company in Asia can mean a dramatic reduction in the cost of living and employee salaries. Jon Myers, an expat designer working with banking startups in Asia, agreed with this sentiment: “Having lived in Ho Chi Minh City for the last four years, I’ve witnessed the rise of Vietnam’s startup scene and a dramatic growth in the supply of cost-effective technical talent. Moreover, the growth of coworking spaces such as Dreamplex has made recruitment and collaboration easier in the startup community.”
Ultimately, many entrepreneurs get the best of both worlds by having a presence in the U.S. and a back office in Asia. It is possible to source investments and senior employees in the U.S. while managing a remote team with lower operational costs abroad.
David Foote, a startup co-founder and CEO based in San Francisco and Manila, supports this idea: “For a global tech-driven business like Zennya (a ‘spa on demand’ service), San Francisco provides access to a talent pool of innovators and savvy investors, while Asia offers business opportunities in emerging markets and cost-effective outsourcing.”
While the challenges can be great, the rewards of East meets West can be even greater.
Michael Park is the founder and CEO of LipSync, an on-demand translation startup, currently in beta-testing, based in Hong Kong and San Francisco.