So my name is Luuk, I am from the beautiful city of Eindhoven in the Netherlands. I came to China a little under two years ago. So what I do now is lead the innovation unit at XNode powered by HighTechXL. We do a lot of activities in relation to innovation for startups, corporates, universities and government.
What we do here in China is a full partnership between HighTechXL and XNode. What is HighTech XL? HighTechXL is an accelerator investing in companies, helping corporations to build companies from scratch. I think we are good when it comes to the team. I think we have a good team, we have a very strong methodology.
When we came to China, obviously what we don’t have here is the network, what we don’t have here is the brand. So when we found XNode, we found a Chinese partner, that was privately owned, so not too much interference from the government, that had a brand and a network but that was lacking to some extent the content, the people and the quality to the service. So we could add that, while XNode had the brand and the network. And in that sense, if you look at the assets that both sides add to the equation that was kind of 1+1=3.
Partnerships are extremely important, so the right partner is essential for success, in our case XNode. And I would like to add something to that, partnership is almost like, it’s a verb. You need to make it work. It requires a lot of time, it requires a lot of commitment, it requires a lot of empathy to understand where you come from, on both sides of the equation, and if you’re able to do that, that’s also my experience and I have been working for two years with XNode by now, and believe me we’ve had our ups and downs, the relationship is so good, everything is much easier, and we can work together in quite a productive manner. But that’s also because we both kept investing in the relationship. Without XNode we would absolutely not be where we are today but the other way is also true. XNode would not be where it is today without HighTechXL.
We came here in 2017, we had one client, last year we had 18, I think this year we’ll do more than 40. So that shows the growth pace or our company and I think you can take that as a proxy for the innovation ecosystem at large. So that’s the pace, right? I think the important thing that comes to mind there is business, especially entrepreneurs are extremely opportunistic. In my experience they have the tendency to jump on every opportunity that’s there. To give you some context, every week we do at least 3 to 4 proposals for projects with partners or with clients. Every week we get at least 10 inbound leads of people wanting to do something with us. And I remember in the beginning, in the first months I was in China I was amazed at all these beautiful partnerships we could build, with all these different people. And I think its really one of the big challenges to learn how to say no. And to focus on the couple of partnerships that are actually representing a win-win, both on the short and the long term. This is something I had to learn myself as well, to manage my time properly and to really say no to certain things.
I think I have become a little bit more Chinese in the sense that I'm not always saying what I think. Also in the sense that, that’s something else that I really learned when it comes to managing a team. People will not speak up when there’s an issue. So its my job to find or detect the issues when or before they occur. So I need to develop kind of an antenna, if you will, for figuring out what’s going on in the team and solving the issues before they occur so that also a little bit more Chinese on my side.
Obviously Shanghai is one of the most international cities in China. That goes for the people that live her, the number of expats, that goes for the lifestyle, that also goes for the companies and corporations that are here. So if you are a foreign startup I would say this is a relatively easier market to penetrate. You will find many people that speak English, you will find many multinational companies that have their China HQ in Shanghai. There’s a big finance center here so there is access to capital. All of that makes it relatively more easy for a foreign scaleup to penetrate into the Chinese market. If you for example compare it to Beijing, that is very strong on the venture capital side, but it’s also very Chinese. Even though there is access to capital, the amount of localization you need to do, when it comes to product and team and cultural gaps, they are much bigger in those ecosystems I would say compared to Shanghai.
Most of the fast-growing technology companies when they think about expanding they almost automatically look at the US as there first primary market. Whereas China has one of the biggest markets in the world, has been consistently growing for many many years and is looking for innovation nowadays, so it is an extremely interesting market. What I have seen so far, if you are a company that is focused on business-to-business, and if you have a specific technology or IP position that’s differentiating then you should consider China. If you are willing and able to put a team on the ground in China for an extended period of time. That means if you are willing to invest in China as a potential market. If you have a product that has customers, that has proven itself, if you have this IP position that we have talked about before. Then you are ready to come to China. Then you can be hugely successful, but you need to give it time. You need to give it time to find the right partners, you need to give it time to find the right Chinese individuals. You need to give it time to adapt your go-to-market strategy. And what I often see going wrong is, some European companies are offered to come to China and they come on a kind of tourism trip. They come for 2 weeks and they meet many many different Chinese government or Chinese incubators or Chinese companies and then they leave and then they feel they’ve seen China. But obviously that doesn’t work. You need long-term commitment, you need to, in many cases to change your strategy, you need to, in many cases build your team here, build your relationship here, and that you cannot do in 2 weeks.
I very often go to dinner with my business contacts but those people also become my friends, so it’s very much linked and intermingling with each other and in my experience that’s also the way Chinese live their life. So it’s not the case that you go home at 6 o’clock and then your second life which is your personal life starts. It’s very much mixed with each other, it’s very normal to keep working in the weekend, to have calls in the weekend, or to continue discussions in the weekend or over dinner. And as a European you might see that as a disadvantage or as a problem. But on the other hand, I think the entire distinction between work and life, especially when you do something that you like and you have a passion for what you do it doesn’t necessarily need to be there. As long as you are happy with what you do on a daily basis and you feel that you have a purpose, I think that doesn’t need to be a problem.