Confessions of a China Entrepreneur.

Today I’m going to give you a quick overview of my short experience as a China entrepreneur for reasons you’ll soon discover. So lets start with the end, and then we’ll work our way to the beginning.

Recently, I was honored to be invited and take part in UC Berkeley’s Asia Business Conference; I was a panelist for the consumer panel; moderated by Paul Tiffany, Senior Lecturer of the Haas School of Business. There I was sitting with Dave Sessions, VP Global ecommerce at Walmart International; Jose Davila, VP Field Human Resources GAP North America, and Dan Harris, founder and partner of Harris & Moure and writer of the famous China Law Blog.

I had a lot of fun at the talk, and it reminded me of a typical client meeting, except I was presenting to 100+ people vs. 5. The nature of the panel spanned the gamut of the subject, and I was told by Professor Tiffany that attendees were very happy with the result; I’ve requested a video of the panel; I’ll post if on LRB if I can get it.

After the talk I was pleasantly surprised to be surrounded by students asking me questions on what it’s like to be a China entrepreneur. I’m sure I babbled out appropriate answers to the questions asked, but it eventually brought me back to pondering my own true situation as an on-the-ground, in-the-trenches entrepreneur in China.

So in the interest of fully answering the “China Entrepreneur” question, I’m going to take those of you not already bored with this article down memory lane, and reflect on how many times I got my assed kicked, punched, and handed back to me in a beautifully arranged gift basket during my journey through China’s “wild wild east” business frontier… from the street level looking up.

Getting my ass kicked.

First off, I never thought of myself as an entrepreneur. I thought of myself more as a survivalist. The history of getting my ass in gear started with my previous job at McCann Relationship Marketing (MRM); part of McCann Worldgroup; they had “headhunted” me from a relatively satisfying job at Acxiom. I went to MRM cause I was expecting new frontiers, excitement, and a chance to do something other than customer data management (which is exactly as exciting as it sounds).

Soon after joining McCann I broke my collarbone in a motorbike accident. Due to whatever reasons, the medical team at Pudong’s Dong Fang Hospital were unable to fix the problem quickly; I had to have surgery, hammering a metal plate into my collarbone to realign the broken fragments; and for some reason the wound didn’t heal right.

This didn’t fit well with MRM apparently, and they eventually decided to fire me due to “productivity issues”. I guess when you need to go to the hospital to fix broken bones it takes away from your ability to work, huh? My bad. The parting farewell from MRM’s HR Director was “This is the rat race”. That didn’t really help smooth the feelings I had for McCann, but then, what could I do? I was a tiny bug they decided to squash, and squashed they did, and squashed I was.

Making something from nothing.

So that’s how I started. In 2005 I was out of a job, broken collarbone, no way to make money in the near future until my body healed. I ended up renting rooms out of my apartment to European students rolling through town just to scrap together some rent; typical dinner was a bowl of ramen noodles… when I wanted to treat myself and splurge, I would have 2 ramen noodles packets instead of one… and added soy sauce!

You can probably understand after an experience like this; putting your trust in a 4A agency, leaving past security to work with someone new, and then getting treated poorly and unceremoniously dumped due to circumstances beyond your control tends to either severely destroy your confidence and bury you in doubt and fear… or it strengthens you, puts fire in your belly to overcome challenges and claw your way back to stable footing; back to a position where you can stand, your back straight, your eyes locked on your target; your pride and self respect intact.

This was the beginning. You see, it’s not about secret sauces to success; it’s not about this trick or that trick, easy money, fast riches; Willy Loman-esque fool’s paradise. Getting yourself going relies on centuries, nay, millennia old formula; determination, will power, belief in the self, burning passion, and burned bridges to the life past; to those that burned you unjustly.

So that’s all well and good, but how do we make money? Like a beggar, we rely on the generosity of our friends first, in any form we can get it. My former boss at Acxiom, Gabrielle Chou learned of my dilemma and gave me a freelance job for about RMB 2000 per month (near USD 300/month). She didn’t have to do it; I had left her company suddenly, and of my own accord. But she did, and that money got me through the beginning. I’ll always be thankful to her for her kindness.

Living on RMB 2000 wouldn’t last long (I was up to 4 ramen noodles per meal; fit for a beggar king). I started to put the feelers out and slowly built a small client base, mostly for English copywriting services. Over time, I built my monthly profit from RMB 2000 to 5000, to 20,000. I could fill my bathtub full of ramen at this point, but as you may expect I was getting pretty sick of noodles; it was time to do more with the little I was able to build.

Passion & Insight.

One key thing I learned over time was that clients just want things to be easier. They don’t want to worry about this or that, what they look for is a reliable solution to their problems, something that runs almost on auto pilot, with minimal micromanagement from their side. If you can provide that consistently with minimal error, then you’re on your way to a strong relationship.

Building on this insight allowed me to build the company. From writing services came brochure design, from brochure design came printing jobs. As my design skills improved after landing clients like Porche, L’Oreal, International Paper; I started designing advertising, which led to placing advertising (ie: media planning and buying). This was Bloodyamazing, or BA360; my first venture. It was part business, part experiment, and through it I got a pretty good idea of China business, marketing, advertising, and the whole 360 picture of the China condition.

All of this I learned from nothing. At my source, I’m a writer, not a designer, or planner, or whatever. In fact, if not for tutorials on the Internet that taught me design, books from Amazon that taught me about advertising and marketing, I’d wouldn’t have grown as quickly as I did. But there’s a danger in that last sentence. While it’s true the wide availability of information helped me grow my business, it’s the burning passion, the centuries old formula of getting your hands dirty, getting the job done, and taking smart risks that produced success.

This burning motivation pushed me to create the Bloodyamazing brand, and if you’ve been following long enough, you probably saw all the different ways I experimented with the brand, growing and learning what worked and what didn’t from the ground up. The process was exciting, painful, and ultimately valuable.

Trust.

Perhaps the most important realization I’ve had going through the business gamut in China is the importance of finding those you trust. The first year of BA360 I was meeting a client at Mediaedge:cia (MEC), I bumped into a girl there; I noticed her, but she didn’t notice me. Soon, afterwards, using my ramen charms I got her out on a date; from there I eventually convinced her to leave her job at MEC and join my then 3 person staff at BA. Since then she’s been the backbone of my company, managing all my Chinese staffers and keeping us afloat; simply put, “I make the promises, she keeps the promises”.

Her name is Sherry, and I met her in 2006, we just got married February 14, 2010.

Sherry and I have been together through the trenches, and having a partner I could rely on, whom I could trust has allowed BA to develop as it has. In 2009, as our company suffered through the financial crisis and the sudden evaporation of client budgets, Sherry built missniuniu.com, which, with the assistance of littleredbook.cn, became the basis of a new digital social media agency, ZeroDegrees.

It’s this new business, an evolution from BA360’s general focus to a specific niche service in China’s social media space that has allowed us to take steps further and gain greater recognition across the industry. If I didn’t have Sherry supporting me through challenge after challenge, I’d likely have nothing, or at the very best, much less than what I have now.

China partnerships; buyer beware.

The creation of ZeroDegrees was done, in part, with Mailman China. In retrospect this partnership had its good points, but also many bad points as well, which were difficult to foresee at the time of agreement.  This was a stronger marriage, one that involved shared equity. Going forward with partners, should you share equity, or simply strategically unite for the purposes of project-based profits? Perhaps this story will shed some light.

As I may have mentioned above, in all things business, the most important asset is the ability to trust your partners; trust that they will come through in thick and thin, and will be able to support your efforts as you push forward. My experience up to this point and likely beyond is that China business is exciting, but it’s a constant fight, mixed with serious amounts of luck; either to find more clients, beat your competition, build a staff of skilled talent, manage and balance all elements together, it isn’t easy; it can grind you down if you’re not strong, or if you cannot find strong partners.

Due to Mailman’s slow disintegration, losing key members, and then poor hiring of new staff that further compounded the company’s problems, eventually there was no time for Mailman to partner with BA; it became a part-time partnership, that eventually ended up in complete voluntary forfeiture of all responsibility for the business in all areas including general management, client management, client acquisition, etc; though oddly equal equity and high salaries were still demanded.

“Over Sell, Under Deliver” is a term I often think of when dealing with newer entrepreneurs, there’s an excitement there at the prospect of gaining new clients that leads novices to promise more than they can deliver. I came across this several other times as well; I’ve discussed my ideas with other entrepreneurs who then turned around and pitched my ideas to my clients. I’ve had partners that have the best intentions, but in the end find that they got themselves in too deep. All I can say to this is know what you’re doing, and have what it takes to see it all the way through.

The relationship with Mailman ended, which I’ll formally announce on LRB in the near future. It was a spectacular ending in its own way. Having our money borrowed by Mailman without the intention of return produced a lot of tension (we sort of felt it was stealing, but gave Mailman the benefit of the doubt), as did having BA pay full rent down to the bottled water and miscellaneous maintenance costs, and sudden forfeiture of all responsibility, which thereby put full burden on BA, coupled with demands for equity, high salaries, and large severance payouts. With such great imbalance, lopsided value exchange, you don’t need a Chinese fortune teller to predict trouble in the future.

Additionally, BA moved office to Mailman’s office to help their team get up to speed, training key members in Mailman on our experience and know how. As things disintegrated, Mailman suddenly gave BA 2 weeks to find a new office stating problems with “work culture”; this was at the beginning of February 2010, right before my wedding to Sherry in California and in the midst of handling Mailman forfeited client workloads as well as new client pitches and business development. On top of this, Mailman wanted to retain the clients BA had developed and managed, and then outsource execution work to BA; basically they wanted all the cream and none of the crap. All of this happened over 3 months; it was the equivalent of a business-bitch-slap.

These sudden 180 turns remind me a lot of what I experienced at MRM 5 years ago.  It reminded me of how important trust is, and how important it is to keep secure. Change happens quickly in China, and even quicker in China’s entrepreneurs. The only real security in this world is having plenty of options, and the flexibility to quickly switch gears when the need arises.

Marriage is hard, so I’ve been told. I can’t help but think had I entered the partnership based on value-for-value strategic alignment, rather than shared equity, it would have been easier to protect my assets, and pull out of the relationship when problematic issues became clear. However, I worked up until the end to come up with a reasonable balance of equity and benefits, which made the sudden ending all the more surprising. Were I to do it over, I certainly would have played more distant; but sometimes things move fast and it’s hard to determine good from bad decisions.

Sometimes we learn through curiosity, sometimes we learn by getting slapped across the face. I’m not sure which method is more effective, though I am sure the former is more pleasant. My impression of partnerships? Go for it; but keep your distance… and protect your ass, or in this case, your assets. From what I’ve heard, my experience is one of the lighter cautionary tales; far worse has happened to better, more skilled people than I. This is where luck factors in; and where a diversified pool of options shows its ass-saving value.

Onward.

The ending goes back to the beginning; I’m right now at this moment sitting in a plane flying back to Shanghai just after serving as panelist at UC Berkeley (though I’ll post after I land, of course) to very positive reception. I’ll also be flying on down to Singapore in a few days to judge the first round of the Effie awards; which I’ll report on LRB so readers get an idea of the process of judging effective global advertising.

As ZeroDegrees was my creation, it stays in my ownership; and we move forward with our clients, American Airlines, 3 Suisses; and recently Unilever Knorr. We’re looking at even more clients, though still need to build our company strong to service them well and are, by necessity, very selective on what we can take on.

We maintain stable strategic partnerships with several large global agencies, one of them being SapientNitro, of whom we’re honored to work with moving into the future. The lesson I’ve learned, or rather have had beaten into my head with a large stick is to maintain partnerships on a strict “value for value” basis; in that respect I hope our humble partnerships to these global giants will mutually benefit all in the coming years.

Oh ya, and I got married to the most beautiful girl I’ve ever met.

So to you, dear readers who were able to make it through this column of babble, perhaps you’re fellow colleagues in the industry, perhaps you’re a blogger like me, perhaps you’re one of the UC Berkeley MBA students, or maybe you just randomly stumbled upon this site. If I were to pick a few nuggets of wisdom from the spam that are my thoughts, I’d suggest to always be ready for great challenge, be ready to fight; the only way to survive is to love and believe in what you’re doing and have the balls of steel necessary to turn your goals into reality.

But my advice is lame; cause you’ve heard it all before. It’s the ancient rules, perseverance, diligence, passion, trust, faith; looking past fluff-filled words to pure action instead. It’s all that old stuff that forms the backbone of any entrepreneurial business; superior character, tempered steel; the ability to always do that which you are most afraid to do.

But don’t fret, it’s easy to go off course, these past few months have had me doubting as well; sometimes things pile up, less time, more responsibility, and the prospect of a single tiny misstep leading to unrecoverable failure; sometimes the challenges seem too great, overwhelming, daunting, overpowering.

Writing this is partly for you, but it’s also for me, to remind myself of what’s important and what’s not, and to take out my mental samurai sword and hack off the useless baggage of the past, so that I can move, full throttle, into the unknown, mysterious, seemingly bright future, with it’s partly-cloudy question-mark’d skies. How will this China entrepreneur story end? Will it all go down in spectacular failure? Or will Lady Luck favor me a few more times again?

I guess we’ll find out together.

Related articles from around the web.

• Need for business leaders in China (timesunion.com)
• enovate 2010 China Emerging Consumer Trends Report (slideshare.net)
• Berkeley Asia Business Conference: Glass Ceilings, Clint Eastwood, Nice People, And Vietnam Over China. (chinalawblog.com)
• Backpacker Likes China So Much That He Launches A Startup There And Becomes A (Profitable) Minor Celebrity – by Dominic Johnson-Hill (mixergy.com)
• Social entrepreneurs grin ear-to-ear at peer-to-peer (marsdd.com)

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