The Negotiation

In this episode of The Negotiation, we chat with Marian Danko, Founder at weHustle and TECOM. Marian is originally from Ukraine, and we talk about startup community reverse culture shock, given the speed of the ecosystem in China when visiting startup communities outside China. We talk about the investment landscape in China, especially for foreign startups trying to raise money from Chinese VCs. We talk about how the success of startups in China over the last 5 years has drastically changed the impression of the career choice of becoming an entrepreneur. We also discuss the “investment winter” that arrived in China and the reasons behind the drop-off in the number of investment dollars being deployed. We also talk about the state of the VR/AR industry in China, and why we should expect China to emerge as a leader in artificial intelligence technologies and applications. We also discuss some of the second and third-tier cities whose startup ecosystems are doing very well, like Chengdu and Hainan, and the levers that are making them so successful. Enjoy!

Show Notes

Today on The Negotiation, Todd speaks with Marian Danko, founder of the tech innovation platform weHustle; and TECOM, a conference for tech entrepreneurs. A native of Ukraine, Marian experienced culture shock upon arriving in China, particularly when it came to the rapid speed that defines the nation’s startup ecosystem.
Speaking on Shanghai’s tech startup landscape, Marian says that “the ceiling is very high and the floor is very low”. That is, while Shanghai can be regarded as “an expensive city”, from an entrepreneur’s perspective, it can actually be a wellspring of highly lucrative investment opportunities compared to Silicon Valley, London, Dubai, or Singapore.
Secondly, if a business owner wishes to put together an international team, the visa process is easier in China versus in the US. This means fewer costs and hurdles to have an international team based in one location.
Asked about the investment landscape in China, Marian notes that a distinction should first be made between local and foreign early-stage startups as each has very different challenges to the other. Foreign companies will not be able to avail of bank loans as easily as local ones, simply because they cannot be trusted to remain in the country after a few years.
With this context in mind, Marian says that venture capitalists are beginning to experience a “capital winter” in the country. He attributes this to the market becoming more mature. In the early days of tech startups in China, investors would actually lose money by banking on every trend that came their way. Having learned the hard way, they are now more savvy to the types of startups that are worth investing in. In other words, today’s investment landscape is defined not by quantity, but by quality.
Next, Marian discusses “mobile-first, mobile-only”. 90% of startups in China create apps and mini-programs. Some startups do not even have websites; instead, their first and primary focus is mobile solutions. He adds that there is also a lot of reliance on WeChat nowadays, adding to this culture of “mobile-first, mobile-only”.
China will lead the way when it comes to VR and AR. A lot of startups today are focused purely on VR and AR solutions. More than one startup is incorporating these technologies into marketing and advertising, and they have already created successful and cost-effective campaigns as a result.
Likewise, a lot of Chinese startups are focusing on AI. Much of that influence can be attributed to the government. This is because, in order to dominate the market, China’s government is pouring funds (i.e. for grants, incubators, etc.) into AI-related ventures, giving startups the opportunity to constantly innovate in this industry.

What is The Negotiation?

Despite being the world’s most potent economic area, Asia can be one of the most challenging regions to navigate and manage well for foreign brands. However, plenty of positive stories exist and more are emerging every day as brands start to see success in engaging and deploying appropriate market growth strategies – with the help of specialists.

The Negotiation is an interview show that showcases those hard-to-find success stories and chats with the incredible leaders behind them, teasing out the nuances and digging into the details that can make market growth in APAC a winning proposition.