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How To Run A Chinese Startup From Silicon Valley

Before expanding internationally, remember the cultural differences and logistic energy required.

How To Run A Chinese Startup From Silicon Valley
[Photo: Flickr user David Goehring]

Opening up an office in Silicon Valley made sense. PapayaMobile has been headquartered in Beijing since 2008, but we started to develop a growing client base in the U.S. If we planned to continue operating in the U.S., we needed a physical presence.

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I didn’t realize that opening up an office on the other side of the planet would be the easiest part. The hardest part would be running it. Not only is distance an obstacle, but culture imposes barriers as well.

Finding The Right Cultural Fit

A problem often faced by Chinese firms is that it’s in our nature to be hands-on and top-down managers, which can impose barriers to succeeding in Western markets.

Although imposing directives and micromanaging teams in markets like South East Asia and the Middle East can still lead to successful market penetration, these regions are developing markets where companies can afford to exert their top-down influence and experiment with limited risk. When entering developed markets such as the U.S., the approach must be different, and it’s outside the comfort zone of most Chinese managers.

I spent several years working at Google in both the U.S. and China, so I decided to take a different approach than expected from Chinese companies to setting up shop abroad. Where the U.S. is concerned, there’s little room for error in a market so competitive and saturated. A few missteps could result in ultimately being forced out of the region by competitors.

Although I had some experience working in the Bay Area, I knew I needed to hire a U.S. general manager who had lived and worked in Silicon Valley. The hire needed to have on-the-ground experience and fit the qualities we were looking for: Entrepreneurial, an inside-out expert in the market, and a professional who could be trusted to execute and deliver results. This is someone who’s more knowledgeable and better connected to the target market than I am, with years of cultural and industry experience behind him.

Although you might expect that this person would be required to have prior knowledge of the China market and a fit culturally within our company, you’d be mistaken. This was actually our last concern.

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As opposed to someone who was Chinese or had any exposure to China, I sought out someone whom I could trust to onboard a team of experts in the U.S. market and execute on the high-level strategy that I’d set for all our teams including the U.S., China, and Europe.

Coincidentally, the general manager that we ended up finding and hiring had experience working within Asia and the Valley, but more importantly, he also came from a background of having worked on his own startup in the past. After discussing the position with him further I felt confident that he was capable of delivering results.

Trust Your Local Team To Execute

With the exception of setting any high-level directives from headquarters, it’s paramount that you can trust that your GM will not only localize, but also strategize the execution of business strategies.

For example, the selling point for one of our mobile products to prospective U.S. clients might be different for Chinese clients. This means that the U.S. team needs to identify a selling point that works best for their market. The direction that the GM ends up choosing after testing must provide results–and this ultimately comes from the GM’s own experiences.

Our U.S. general manager had previously worked on his own company, which hit the entrepreneurship nail on the head, but he’d also worked in larger technology companies like Yahoo. He was a quick learner, which is a unique asset that ensures quick adoption and localization of our high-level strategy.

More importantly, he was responsible for strategically hiring employees that were experts in sales or marketing but flexible enough to wear several hats when needed in an effort to meet aggressive goals.

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Knowledge of the Chinese market, language, and culture is never a requirement. In lieu, we require that our international employees make regular trips to our headquarters for training and quarterly regrouping for all regional teams.

Inevitable Difficulties Will Arise

Of course, managing an office from abroad isn’t without its caveats. Although the majority of our employees have a minimum proficiency in English, communication barriers and differences in working culture tend to be recurring issues. While U.S. employees tend to be straightforward in their responses, Chinese employees can be indirect and skirt around direct answers.

For instance, an American might respond to a request with “No, I don’t have the time to finish that task,” whereas a Chinese employee will say “I’ll give it a try,” which leaves the request open-ended, not to mention unclear as to whether or not the request will be fulfilled.

Other situations might involve a regional team’s inexperience in another region’s market, resulting in the miscommunication (and misinterpretation) of a request, potentially causing misalignment on client accounts or even drafts of sales materials.

The geographical issues can pose logistical quandaries as well. With technical support and engineering teams based in Beijing, account managers and sales teams in the overseas regions can only receive full technical training and grasp the full extent of their account management responsibilities back in the China office, which is why we employ frequent training trips for some employees. Management is closely tied to international success

There’s a spotlight on Chinese companies that are seeing tremendous success in China, including Tencent, Alibaba, Baidu, and more. They’ve leveraged their domestic success as platforms to launch onto the international market.

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However, it isn’t just the cash flow fueling their efforts to break into developed markets. Strategy and execution in their respective regions are equally important. These factors will rely heavily on the management choices Chinese executives make, whether it means hiring local team leaders or micromanaging the regional team in Silicon Valley.

Si Shen is the cofounder and CEO of PapayaMobile, a global mobile technology company creating innovative mobile products that change lives worldwide.

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