Welcome Alex for coming to today’s interview. I want to ask why you wanted to establish your own business. In fact, I’m quite lucky. Why? Because I joined the IT industry since my doctoral graduation. The industry calls it System Integrator. It specializes in helping businesses to find solutions. My focus is on security and DR solution which is disaster recovery solution. At the time, I created one and was responsible for selling various products from, like IBM, CA, and various big companies… Sold their products? Selling the different solutions of different products. Whilst pushing new products out, we always come across promotions like magazines talking about different solutions. Once a magazine boss asked me, “Alex, you keep promoting other people’s products, why don’t you make your own? You see, every product carries its own name. Why not give it some thought?’ It was 2004 and I started to think about my own product. As I have obtained a doctoral degree, I should think about new things continuously and I have invented many new products before. I might as well create a new branding. Finally, we came up with a … called Business Continuity (Your own brand, your own product to launch to the market.) Yes, it’s called Biz Con, Business Continuity because our job was DR site (This is a natural development direction. It’s something that you have been doing.) Not at all, only a little. I was still working for others, working for my boss. After that the branding came out. Indeed, I was not an ambitious person. I feel I need to contribute and until I succeed then I shall ask for reward. (Because professionals in general want to be more certain, higher success probability before pushing further.) Not really, wherever I go and even when in teaching my children, I tell them one must contribute first, you really feel that you have been useful, then you think about reward. Reward is not a must (Not to get reward first.) But, first make sure that you have contributed. This is very important. Many people think they have contributed when in fact there are 20 more steps to go and you have just finished one step and you feel glorious and start to fight for something This will hinder your development. Even with new students or projects, I tell them the same. Don’t just feel that you have done well and are really fabulous! (Okay) You need to drill in to discover. Like our DR site, why can’t we recover even after one year? Because it is done only once a year. Every time you come across some problems, you feel that you have solved the problems and mark them now and just follow this next year In reality, you have just finished the first step. Therefore, your suggestion is to be pragmatic and conscientious in developing the products. Develop good products first before asking for reward. Because in 2004, we had in fact developed a lot of products. In fact, those products were not promoted so well. In fact, not successful. (Right ...) That is, you have more than 20 products; if one of them is good, it’s not easy. Therefore, I didn’t start my business. Basically, I helped my boss create a new product. But this product used a new branding called 'Biz Con'. This started my first invention, called 'Biz Con'. At the time, it was promoted ... promoted a bit more. Prior to that, there were a few other inventions, but this was relatively ... Up to that moment, you still have not started your business Correct. Started to move into the Mainland market, started to get into the market Began to realize … In fact, it was not completely our own product because half of the product was the OEM of others. Half of it was others’ and half was your own. I’d also suggest this route … it’s comparatively, comparatively, how to put it? Especially for those of us who are in comparatively hard core technology, it is difficult to wait 3, 5, 7 years for research and development to put products on the market. Therefore, the best shortcut is to use the OEM of others first. This is currently a popular method in the Mainland. I discover using others’ OEM to capture the market first and then in the meantime, you research and develop your own products continuously. In this way, it balances your own research and development [time]. This research and development time is probably comparatively long and product introduction will be slow. Now you are saying whether we could OEM some of the existing products in the market, but at the same time add in your own features (Yes) so as to reach the market more quickly. One more thing. For those of us in hard core technology, one is finished even if only unreliable once. To the clients, this is a very core and critical technology. No second chance. (Yes) The clients need reliability once job is done and every aspect must be robust. Yes, the time needed is therefore 3, 5, 7 years a cycle. You can’t do it. If OEM core is others’, e.g., at that time we used world renown American products, we added our own value. Because I am in SI which in itself is to add value. Reasons … not to go in details. To put it simply, I could get into the market immediately. Launched the product in 2004 and returned to the Mainland in 2005 There was a problem at the time. Because our product was an OEM, our power was not as strong as the vendor’s. Seeing we moved into the Mainland, the vendor went in to compete with us… Therefore, small companies when entering a market will face direct competition from very big companies. Yes, therefore, it’s more difficult in the Mainland. But in Hong Kong, we were already well known. Because to the OEM vendor, they felt that Hong Kong was not a big market. Therefore, we did very well in Hong Kong. The best that we did was we provided value-added products. Even though we used our own branding, to the clients they would buy our solutions when they felt that ours were robust. It’s not necessary to be Biz Con, it could be other brands – be it brands of ‘I’, ‘E’ companies [big companies] I am an SI, I can definitely survive. As a result, in 2004 to 2009 the time before I came out, that was the most glorious time in my life. The most glorious time in life. But you still hadn’t started your own business? Right, it could be considered as working for others. Even if tsunami came, I was still very comfortable. Working for others still provides a secured safety net. Yes, having income, definitely. But in 2008, our product matured and had its own market. The vendor started to worry again because DR has a lot of foreign products, especially the well-known ones. They felt that we could steal their customers. I gave you Client A and you were selling your own products as well. You might steal my market. At the end, my boss felt: ‘Now we are doing quite well. Alex, why not consider doing SI only. Our revenue is from $40 million to over $100 million which is a very high growth, but your product is only worth several million dollars. In fact, because of this several millions, it stops me from changing it to $500 million or several billions.’ Therefore, it was the market that had kind of forced you to start your own business? I felt a little full of myself. In theory, it’s the peak. I had several apartments, two apartments. Could be quite happy and fortunate. Then I became egoistic. I felt my boss should respect me. In fact, SI is nothing special the value must be the product itself. My boss couldn’t understand this, I felt … we fell out. Okay, at the end, I left. In fact, my path could have been very smooth. If (not leaving …) In fact, I could leave and then go back to co-operate with him afterwards. Because I felt I had to take such a path, especially this is hard core technology. For those that really change the world like breakthrough, or business models, then there is no need to find these partners. But in real hard core technology, e.g., heart medicine, you have to find a hospital to pair with. Therefore, for hard core technology, never do what I did and just left. Especially I am not that kind of ungrateful person. You are those who are grateful for all your blessings. You would treat your ex-partners as friends. It’s being grateful. Even we had fallen out, I didn’t … My attitude is not to poach his customers. I finally changed my direction, changing Biz Con to Biz Con Line to another business model. This is something we always say ‘as a service, everything is a service.’ That is ‘cloud’. Because I think the biggest problem with DR is that we are A&E doctors. There are not many of this kind of professionals out there. DR needs to be contracted out. Therefore, DR as a service. This is a future world. But it was too early. 2009 was the biggest reason because I found a big client It's timing. A product, particularly the innovative ones, has to see whether the market is ready to accept it. You are now telling me that the timing in launching the product was a bit too early? Yes. The market was not ready yet. Correct. Today talking about ‘Cloud’, everyone will accept it. You said ‘Cloud’ in 2009, people just felt dizzy, ‘cloudy’. This innovative technology has a big … This is a risk. Because what you did was too advanced, you launched it well before the market did. Exactly. There was even a company that spoke to me in detail at the time. We reached the stage of getting married, 3 months’ trial marriage kind of status. They said, ‘To be honest, Alex, I acquire you because you are a talent.’ (It’s acquiring talent, not necessarily products.) He said market needed to be educated. (He also saw that the timing was a bit early.) Education was not our work. It’s the work of, e.g., Microsoft, the vendor’s; not ours. Therefore, we couldn’t close the deal l cos my direction has been to do my own thing, insisted on working … therefore … Can you talk a bit about any special difficulties or challenges in starting business in China? To be honest, China was not my direction at the beginning. Everybody knows that in the Mainland, DR at the time, I remember when in 2005 I signed a contract with a fund house to work on the company’s DR site, I asked, “Backup all done?” “No need. This is an IBM.’ This also means his mindset was not… his understanding of your service was still not adequate? Yes, therefore, I felt it was very hard to tackle the service market. Felt it’s still not mature. Therefore, in the first few years, I focused mainly on Hong Kong. But I felt not right afterwards. Because I was more like a hawker selling investment funds. You know, your company is still new purchasing investment funds must be done in HSBC. (Need the big ones.) Not buying on the roadside. Therefore, we wasted a lot of time then. Even … luckily there is Science Park. Science Park has taught us that we had to keep ourselves alive. Luckily I graduated, I found a job in CLP at Science Park. Which means when developing a company, one must keep … Core – at least survived. (Yes) Expanding the business to China market is also good, but... No, not reaching this step yet because I did not know which way to go at the time. Because the talk was just finished and even getting married, and it didn’t happen, it didn’t happen (Acquisition did not take place.) I was very seriously hurt. Because whether it’s being acquired or merged and if it finally didn’t happen, there had been a wastage of a lot of manpower, efforts, resources and time. That’s it! Even your branding would encounter problems. People feel that you are still selling. Do you still exist? It was planned to be sold but now the selling didn’t materialize. That is a big (Yes) negative impact on the business goodwill. Exactly! Therefore, we … luckily in our sharing at Science Park. Like eBook, it’s launched in 2000 but it’s when iPad came out in 2005 that it started to fly. Because a perfect match of timing, location and people is very important. Because the concept is too advanced. Needs to wait for the hardware and the whole market to work together. Yes. They taught me to do my best in creating revenue source and cutting cost. The timing isn’t right yet. When the time and opportunity haven’t come, one must find a way to survive. Then I went back to work for others. In fact, after graduating from Science Park in 2012, it was a big challenge. I cut all of my expenses, leaving only … I found a big company to help us called it co-operate … (Re-sell?) co-operate. Can I mention names? (Yes. Yes.) Okay, we co-operated with a company called JOS. JOS is a very big shadow company as everyone knows. It’s them who did the sales and marketing and it helped us a lot … I would like to sum it up. It’s a small startup selling a product to a market without well-established goodwill and trust But in your case, you found a company that had established goodwill and been operating in the market for many years and let it promote your products. This, to a customer, … his trust, he would at least trust the reseller and in this way removing his distrust because yours was a small company. Leveraging on their strength - leveraging on the branding of a big company to assist you. Correct. In fact, it’s not a reseller. In fact, the co-operation at the time was teaming Teaming is basically using his branding… use his branding. In fact, as soon as we finished talking, he went to see how many data centers we had, checked this and checked that, checking the whole clan! You developed the product but used the other’s branding. Yes. Used our products. Checking them all out and the products were not used at the end. It wasted a lot of time. This is a challenge faced by small companies. Used that company, we didn’t think any more, not even the security. Just took care of the company. (Yes.) Therefore, it was extremely good. At that time, I raised revenue and cut cost after the teaming, we didn’t need to do sales and marketing in Hong Kong. As a result, I got rid of all the people, only leaving behind the core research and development staff. I’d also like to share. In other words, the entrepreneurs you described just now at the start of setting up a company capital is not that substantial. You have chosen to decide which jobs that you must do by yourself and those that you don’t. Go for co-operation. Then you could reduce your cash burning. (Yes.) This is revenue generating and cost cutting. Fortunately, I had a chance in 2013-2014. There was a co-operation between Science Park and Foshan in the Mainland so we could directly … that’s after graduation could go to Foshan to settle down there. Because I was in the Mainlandin 2005, I concluded several deals but the biggest problem was I did not get paid. (So, this is a risk.) I was very worried in 2000s. But in 2013, when I returned to China, because it was a co-operation between Science Park and the local technology bureau, I felt relieved and happy. Talking about starting a company in the 2000s, out of nowhere you could have someone from the tax bureau demanding to check your company and in fact you could send him away by giving him several hundred dollars… So when entering the China market, no matter it is tax or customers’ co-operation, i.e., customers paying you punctually. Because to a startup, cash flow is very important for if the receivables are too high, a startup can’t really survive. Basically in 2000s, I heard a lot of failure stories. (Yes.) Therefore, I didn’t dare to get into the Mainland until in 2013 as I mentioned I had a chance to come under the protection of the government to have that confidence. I discovered that everything in there was very transparent! It was no longer the same as in the past. Mainland … including Foshan, Nanhai were like Hong Kong. Lots of Hong Kong shops, all spoke Cantonese. Ah, it was really quite good. Even though we applied for funding in 2013, we were approved in 2014 and were given $3m to work on the so-called startup fund. I mentioned before the biggest problem in starting a business is that I have to look for customers, but today they actually give you money to encourage you to settle in. As long as your technology is one that can be assetized, has an impact on the industry and can raise its level, they really encourage you to settle in. Can you talk a bit more about government resources? I want to hear about several things what government subsidy is available there, not just capital but also policies, and also want to hear your sharing about finding investors in the Mainland. My situation is comparatively special because my product is something called hard core technology (It’s called B2B) or even at the back of B2B – in other words it’s infrastructure, it’s backup. It’s not something sexy It’s very disadvantaged in competition because it’s difficult to impress the judges and therefore … Are you saying because there are a lot of startup competition events there are also a lot in the Mainland? (Yes.) You just mentioned that this type of B2B, but also something that work in the back stage … (Core ones. If problems arise after use, it’s all finished.) In competition, (In competition, it’s seriously disadvantaged). Because these projects can always get a lot of exposure, even monetary prizes. But you just said this one is not too suitable for competition. In fact, it’s not actually the case. In Hong Kong’s competition, no big prize won. In China, it’s really by chance and coincidence, if you met up with some knowledgeable judges, that’s super Like in 2015, we won a championship in a Shenzhen startup competition. The reason was a judge had knowledge in the area. The judge who knew led the others and they understood that the product was not a fluke, then we gained that chance But if it happened in Hong Kong, it’s very difficult. Because Hong Kong is relatively more conservative. Even if you said what you are holding is the elixir, they won’t take it. In other words, in dealing with startups, the Mainland is a bit more knowledgeable and more courageous to handle some more innovative things. Correct. Just mentioned about getting funding. Getting funding and competition are in fact quite similar in some respects Because they both use investors as judges to assess your products whether there are any development potentials (Competition judges are usually angel investors.) Yes. It’s not the case in Hong Kong. Hong Kong will find experts. Experts’ angles could possibly be different. Could this be because angel investors understand risks that startups are facing and what’s more their preference is in innovation. But if it’s professionals as judges, it’s inevitable that they … they are conservative (In addition they are the professionals in that area, they might not be on your side.). What’s more, it’s not in alignment. Yes, particularly my profession is not found in Hong Kong. They already felt that they were very happy … today, it’s difficult to find an IT manager as a judge … In Hong Kong, it’s comparatively difficult. But you mentioned in the Mainland the first thing is funding. Funding – they call it ‘Talent Scheme’. That talent scheme, in fact, is in all places The best is that they fight against each other they compete for achievement and fame This is talking about various provinces and cities having schemes of similar kind. But there exists intense competition. All of them are competing against one another. This is why they are snatching up talents. Therefore, there are a lot of opportunities for overseas Chinese. Chinese around the world can go back to the Mainland to begin their startups. As long as you are a talent. Previously they sided with doctorates or your titles, titles like the ‘Thousand Talents Plan’. But today, they focus more on industrial experience, three, five or ten years’ working experience. You are older, they still treat you as talents. The definition of talent is a bit broader. Yes, the definition of talent is getting broader, not just titles as before. Let’s say if you are a domain expert, you have one or two PhDs to help you to do R&D (That’s even better.), yes, the mix is even better. They basically assess assetized. whether your project is one that can be assetized Like my focus is very simple and it is: why does DR have so many problems? It is because drills are only done once a year. Why can’t it be done on a daily basis like building patrols? A drill on a daily basis, then it will be safe. (This is your innovative part.) Yes. After they listened to what I said, they agreed. Planes are safe because they are checked daily If checked only once a year, planes will have a lot of accidents. It’s a simple theory. They felt, yes, we in China should have people … Apart from competition, if one is really looking for investors, what Mainland experience that you could share with everyone? In fact, I have met several who wanted to invest but my circumstances were a bit special. I had gone out to try …. E.g., I had gone to talk to Langchao (It meant you had contacted many well-known companies in the Mainland and investors.) Yes … not investors, they are partners. Like JOS in Hong Kong, in Mainland I need partner companies that are on par to put my products there. But in the Mainland, big companies like Langchao if they find your solution a good fit, it’s like the merger I had before, they feel education is not done by you. Even if there is a very big client to come and help you they still feel that Alex you do it on your own! You felt that as you had to educate the users, did you feel that this in fact was a blue ocean strategy? It’s very new, you had to get into a new market? Perhaps share my … at the beginning I was like you … these two years I have been very assiduous in learning how to tackle blue ocean. I put my product in the market, did one promotion called ‘用災之城’, everyone will have to do backup! (You to educate the market.) Correct, but discovered that it’s really demanding. (Yes, this is the drawback of blue ocean. Because the market really has no knowledge about this you have to do both education and promotion at the same time.) I can’t be like ‘Didi’ etc., that can give money to the end users. Because B2C is easy. Because reward can be seen and is measurable. But B2B can’t. B2B has a lot … also a very important point is culture. The Mainland culture and Hong Kong culture are completely different. I once … I talked to the danwei. [department unit] You gave me so much money, why not use my products. He said, no way, two organizations, two departments. That is the funding was from one department, but the one (Purchasing.) using your service was another department. (Yes…) Therefore, can’t decide. Yes, and the culture of this department is not one that is familiar to Hong Kong people. Therefore, going back to the Mainland, this year I found a big breakthrough. A while ago, you asked how investors think In fact, some investors gave me money. E.g., we have obtained government funding, I have already taken eight million. And, if you invest tens of millions into me but I can’t find a breakthrough, it’s an arduous and thankless task and what do I do with your money? Therefore, I rejected several investors at the beginning. Instead you rejected some investors? Yes, because we couldn’t think of a way to tackle the market. The market in the Mainland is tough. At last, we thought of having a partner as in Hong Kong. Nonetheless, partners over there are different. We’d tried SOEs [state-owned enterprises]. Indeed, to SOEs, it doesn’t really matter whether you work or not. Once they meet their targets, they stop. They, therefore, won’t push either. Afterwards, we found another non-SOE … can be considered as an SOE. It’s Langchao. They are very aggressive. But they said education was not their job. At the start of this year, we had a breakthrough, managed to find a competitor (That’s interesting. You have instead found a competitor!) Yes. Because a competitor needs to educate the market. It wants to capture the whole market but it doesn’t have this technology. Therefore, I thought there was a match. (But it was originally a competitor and finally it becomes your collaborative partner.) Yes (Put in any investment?) Yes, invested. His investment is worth it. (That means your initial competitor finally becomes your investor.) Right. The key is I hope we have the same mission, even if I have to suffer losses. Because to me, I want to change the world. Just like ‘Didi’, to make you use it I could even give it to you free of charge. But, other tech researcher friends may not be like this. (Therefore, your idea is to move the world first, to change it before considering returns.) Therefore, we make it very clear. The whole of China is open to you, you give me 10% as a loyalty (sic) and that would be fine. Our work can be done in whatever way. In fact, this idea is very good. To co-operate with others to make a bigger cake When the cake is made big, then I shall have a share of it. The return in fact is possibly even bigger. To you, the return is even bigger. When he really succeeds, he knows that you will not leave and he will not let you leave. Therefore, I always think don’t ask for too much, especially branding. In the Mainland, branding is not that useful. (Therefore, you need to enlarge the market …) No brands (Work with the competitor to expand the market together.) even big enough to acquire my share, and even my company in Hong Kong. (You can do that too. He could be your exit partner, like he could buy …) Therefore, there is a lot of room in the Mainland. Just as you mentioned, the Mainland market is really enormous, it could be like Dell acquiring EMC, the market could drive your technology to such an extent that he has to acquire you. (So this is China’s edge. Because the market is enormous, it’s definitely an edge.) Exactly. Exactly. That’s why I mentioned there are a lot of investors. You only need to enter the competitions and if you have good projects, a lot of people will talk to you. (You could meet a lot of people through competitions.) Previously, like the B2C was extremely popular, I had seen many who immediately snatched your business cards and invited you to discuss. Recently, this has changed and even don’t … (This type is now out of fashion.) Now, they want B2B. Because B2B never ends, it has a value to be here. (Is it because investors are becoming mature and they pursue something more pragmatic?) Yes, that’s true. Today you won’t see them investing in projects that have nothing … That means it’s no longer ideas that sound good but not very pragmatic Because you said yours are very practical. Initially no one wanted to hear them They wanted to hear something that were more interesting, more innovative. (That’s right. That’s right.) Now they would consider the more pragmatic ones. Therefore, we have relatively more room, particularly when I co-operate with a competitor. That competitor was in a weak position. Not that weak, in fact. He was in growth stage. Because the market was too big, it gave him a reason to steal a bigger share, to create a bigger cake, I could then work on my technology whole-heartedly, to invent more products. They did all sales and marketing. Until later, we came back to Hong Kong to expand into the One Belt One Road markets. This explains why Mainland is a very good reference … The most important point is if Mainland uses it a lot, your product will naturally rise. Previously, people said China copied others’ products That might be the case in the earlier years. (Okay.) You saw these … (It’s true in the early years, there were a lot of these products …) Shanzhai, ‘A’ goods, it’s true that there were a lot of this kind of goods. But today you see they have this ‘hardware innovation base’. Like planes, everything. They come to Hong Kong to tell us we only need to work on the software, and there is no need …. So you see … this is exactly what I want to ask. Because some thought that China has no need to innovate or traditionally it only needs to copy others quickly to succeed. But you see that this is no longer the case. That phase has now gone Exactly. You see China’s ‘wan zhong chuang xin, quan min chuang ye’ [mass innovation and mass entrepreneurship], this movement really has a huge impact. It causes everyone, every graduate, not like before to find a job and not quite sure what he is working in. I give myself to you. That’s it. Can’t solve the problem, then procrastinate. But if he comes out to start a business, he will realize being a boss is not that simple. Like what I said out of 20 steps, you move one step and you thought you are brilliant already. But after you have experienced it, you learnt and then you become mature. (So because of this, many Mainland graduates now have entrepreneurship experience.) It encourages students to drop out to start their businesses. Encourages him to drop out to start a business. The experience, in fact, can be very beneficial. Because he can … even if he is no longer a boss, he works for others. With this experience, he understands running a business is not easy. (It’s not simple.) In addition, he experienced running a business. He understands the boss’s situation and will suggest some changes to make the company more valuable. He knows that he can’t do it, he will not be so aggressive as to think that leaving could do himself good. He has experienced that already. He will steadfastly help his boss. Like me; if you ask me to go into China market, I really dare not because that sales and marketing, you can’t even handle that white wine. (This means you have learnt something. Learnt a few lessons.) Because in the Mainland you work with them on technology, you must find a partner. Must have a partner. Don’t just think that you could go alone … (Find a strong, suitable collaborating partner.) E.g., my collaborating partner, his office is opposite to that of this official’s. The door is very small but inside is just like a palace. In fact, this kind of thing, outsiders can’t do it. You can never figure this out when doing something like this in investment. But when my partner faces the officials, that’s how he serves. Something like this, we are outsiders and it is very difficult … particularly something we call in Hong Kong … like people of my age, Putonghua is not our special strength, they try to make a hint on something and we do not understand, it’s really very difficult to get into the market. So finding a local to do this is much simpler. (Understood. Therefore, finding a local to co-operate is …) They know how to make sense of the locals. I tried hiring a local by myself. You think this is very simple, just hire someone? He spends money even faster than you. What he is thinking, you won’t know. We can’t get into their world, won’t be able to understand them totally. (So, it’s necessary to understand the local market.) Yes, so it will make a difference if you can partner with them. They know who to trust, who not to, what is their interest and so it’s easier to talk Therefore, I feel the first thing is that the Mainland is an extremely good place, it is competitive, it wants to attract talents. You don’t need to invest a lot of money, might even be zero investment. You can join competitions. If you win, you have prize money. Apart from prize money, you will also have support plans from the local authority. They give you some money. Then you might ask what to beware of as they give you these many benefits. How do you repay them? (What do you need to pay them back?) You have to pay attention to the fact that tax is really heavy. (Yes. Chinese tax is very high.) Tax is really terrifying. Basically … when you succeed, like what I said… succeeded, you have no problem in paying back. (Succeeded. Paying tax is right and proper.) Correct. The most important thing is that China is a reference site and it sharpens your products. When you go to other countries next, you will be able to … (You meant that if you could make sense of it and achieve it in China, your products should be able to …) Yes, because the market is really very big. E.g. Hong Kong is talking about tens of machines; in China, it’s hundreds TB (it’s…) It’s in thousands. (Then the market is really very big.) Machine is counted in thousands, just one client only. (If you can get the business, you are really awesome.) Correct. Soyour product will have reached versions 3.0, 4.0. A while ago, we mentioned that the Mainlanders copy you. Right, at version 1.0, it was copied. But once it’s launched into the market, because users will give feedback to him and he will know how to adjust it. (This is the continuous innovation part, the time for improvement.) When improved to version 2.0, it’s already something not just your overseas version, it starts to have something special. As the demand in the Mainland is so long-term, reliability is even higher and it could meet very exceptional needs. (Therefore, in the long run, people can’t just copy …) Yes. Once reaching versions 3.0, 4.0, you overseas … e.g., like Alipay, you overseas are not as big. Everyone [in China] uses it. Because you have freedom, China is different. Because it is national policy, everyone follows it. Therefore, it can achieve something that can’t be done elsewhere. China is in fact another world … (So following China’s national policy is necessary.) Of course! So, you could say it’s good, or it’s not, or say it’s not democratic… (So, in terms of business development for startups, if you can align yours with national policies, it’s comparatively more advantageous.) Or on the contrary, if your innovation could make the nation better, it [China] will encourage you to continue to develop. (Will also give you subsidies, support you.) Yes. This way to promote a change. So, in overseas countries, I find this kind of move relatively rare. It’s difficult for you to find a government to promote this kind of thing. (This is China’s characteristics.) One more important point. Why did I go back to the Mainland? Back in 2014, I went back to China. I asked a friend about BYD, a friend close to the Chinese government. He said cars made by BYD, ‘They make cars at $100,000 per car. We in China $80,00 a car. Will there still be a chance to make cars if we decide to make our own?’ China is determined to make its own products. Today, China needs national security, it needs to develop its own software … This is it … especially its own needs. Yes. Therefore, we have considerable room and the only thing needed is they think your products have potentials. They will surely support you. So, for products where there are huge demands in the Mainland, they hope that they are locally made Yes, so it is different from Hong Kong. Hong Kong is more like a mature person. Asking him to change is very difficult. Hong Kong is very mature. The Mainland is like a small child. He can do whatever he likes. They can be as free as they want. (So, it’s highly flexible.) Yes. For them, it’s to try it out first. If it doesn’t work, then change. Hong Kong is different. I have to test it out fully and introduce it only when there are no problems. (Two different concepts.) Correct. So if you want to innovate, basically it is very difficult to do it in Hong Kong. (On the contrary, China will allow you to try.) Also there are a lot of opportunities. (Allows a lot a lot of failures, and at the end something really good will come out of it.) Therefore, they said mass innovation and mass entrepreneurship. You can see there are a lot of apps. In Hong Kong, probably nobody would use them. In the Mainland, there are different apps in different places. These are developed very quickly. It doesn’t really matter because they are students. Students treat them as final year projects. If they fail, that’s it. But if the apps are good, they will be used everywhere. That will become a new method. So, they are developing very rapidly. Finally, do you have any suggestions to foreign friends or Hong Kong friends if they want to enter the China market. Any key advice for them? To put it simply, I’m more down-to-earth. Normally, hardcore technology is more academic. Academia has no burden. Successful or not they still get paid. They will still be happy. Therefore, it’s difficult to have any breakthrough. Ours are down-to-earth. Usually we would suggest something that needs the least investment but could still test the market. The first is to join competitions. This is really a good one. They exist in every district, every city in the Mainland. They are held every month. Every month in different places. For instance, it’s Dongguan, Hangzhou next month. Different places have different kinds of competitions. You can try them. You may not succeed. To succeed is not that simple but you must try as many times as you could. Many people asked me how come I got as much as eight million. In fact, I employ a girl whose main job is to get me into competitions. Getting into competitions has become a fairly interesting channel. You might have to do ten. There are judges who really don’t understand the product. (Met the ones who don’t understand, then forget it!) Just like Choi Yat Bong. I got into it, in fact to him B2C … that year. It was last year; he didn’t know what’s B2C. All judges didn’t know. The Amazon judge didn’t know what that was either. So, it’s very difficult. But must try continuously. There must be someone who knows. Particularly, now China has different cat., there is e-deo, there is new manufacturing, so … (This is one of the methods where competitions can be used as a start in the Mainland.) There is also subsidy. Say if they are returning from overseas, they will get 6,000 RMB for airfare and boarding. Unlike Hong Kong, there will definitely be a compensation for you. In Hong Kong, you might have done a lot, it's possible that you won’t get anything at the end. (This reduces the cost of an entrepreneur.) Correct. (Particularly foreign friends getting into China. They have such a scheme.) Of course, they can join many of these … Of course, you need nevertheless find a Chinese … maybe I am more aware of Chinese and so I have not … but I do feel that it is opening up. Because they know talents are very important. Talents will increase our GDP. When your products succeed, my city will become great. (Correct. That’s how China sees it.) Like what I said before, it started with 3 million [money], then topped it with an additional 1.5 million subsidies to me. Their city, then followed by their province will look at your products. It’s elevated from one level to another. If the nation knows yours is something good, the nation will subsidize you. So … (It can be from city to province, and then it’s possible to go to the national level.) Yes, it’s a very good way for development. Of course, I have not mentioned previously that the key is to be clear about what’s innovative in your product. It must have a value. To be honest, I shall first consider patent. Patent might not be able to help you but patent can make you understand whether or not your product is unique. Besides unique, we have something called horizontal patent. This one is not special. It’s more or less similar to other patents with only a few twists. This kind of patent is not useful. It has to be one that’s forward-looking. Something that future people will go to. (Going for patent, then it must be …) Extremely good patent. You can see that it’s something the world needs in the next two to three years. It’s very simple. (In other words, it needs to be forward-looking. What’s more it’s something that can actually solve a problem.) Correct. You have to think. If you start your own business, how will your products be changed in two years’ time? That must be something in the future. As you are the domain expert, you must know it. (If you have to get a patent, you must compete for a patent that is forward-looking.) Exactly. With such a patent, you can see the value in your product better and you can succeed more easily. The patent you mentioned - it sounds like it is not used to protect your business but rather it’s used to get you involved in the process so as to force yourself to look ahead and to look further. It’s more than using the patent to bring protection. To bring protection with patents? At the moment I don’t feel it. Because I have been there for six, seven years and I have got many patents, more than 10. (Patent protection is not really dependable?) Correct, but patents will definitely make you see whether or not your market is unique, whether there is room for your future development. Also one most important point, many experts are not experts. They don’t understand. If you have a patent on hand, they will exclaim in admiration. It’s very much like fund raising, they will consider this too They feel their investment will be protected. It helps … To investors, it helps if you own some patents. True. It even applies in talent scheme. They consider this too. They put emphasis on how many patents you produce every year. One more point, if patent is applied in Hong Kong or overseas, the expense is extremely high. In the Mainland, it’s very low only several thousands and it’s all inclusive. (Applying patents in the Mainland is comparatively cheap.) Several thousands and it’s all inclusive. Hong Kong charges you even for a conversation (This one is interesting.) It could be in tens of thousands. In the Mainland, it’s several thousands and it includes everything. One-off. It’s really good. There are some who even help you consider, consider how your patent develops, how to write. (The service you mentioned is by lawyers who specialize in patent?) It’s agent, correct. They will help you. If you are able to spell out your uniqueness, they will help you search. They might not be able to find something forward-looking, but they can help you avoid some … (These are really professional lawyers’ services.) Hong Kong is not like this. You have to rely on yourself to find everything. Maybe I know not many lawyers. The one at Science Park is very good. That lawyer has packages for clients to choose from but all in tens of thousands [dollars]. (Cost-wise – applying in the Mainland is relatively more reasonable and cost effective.) Correct. Everyone can think in this direction The most important point is if you can’t even get a patent, you have to re-consider clearly whether yours is a hard core technology. Going in the talents’ path, you must be in this direction. If it’s business model, it is difficult in talent education. Talent education won’t be classified like this. Because it must be core technology that changes the industry if not, it’s very difficult to walk this path. Of course from beginning till end, I’ve been talking about my business which is a hard core technology company and is not some new business model. Those model innovations, those to me, I don’t have enough experience in. Thank you very much for your sharing. Thank you. Thanks.
