In this episode of The Negotiation, we talk with Kevin Worner, Head of Startup Acceleration @ Xnode in Shanghai. Kevin talks to us about the 3 business units of Xnode: corporate innovation training, startup acceleration and coworking. We talk about the difference between foreign and local Chinese startups and how impressed Kevin is with the ability of Chinese startups to adapt to market feedback so quickly, as well as how foreign startups can accelerate their growth to keep pace with the speed of China. We also talk about whether there is an opportunity to create space for startup tourism in China where startups can go to China not to enter the market purse but to develop a fast growth engine behind their product. Lastly, we talk about AI in China, both how the country is racing out in front due to the sheer amount and access to data they have to work with, as well as how startups can leverage the AI ecosystem in China to create leverage.
Show Notes
Today on The Negotiation, Kevin Johannes Wörner discusses his background in venture capital and the startup space in China. The German-born entrepreneur developed an “appetite” for the Chinese market at an early age. He studied at Tongji University before working for some time in Germany as a management consultant. Following this, he founded the business accelerator Properas in Berlin.
It was around this point, however, that he decided it was time he made the move to China. He got in touch with Wei Zhou, founder of XNode, and today Kevin works on the company’s startup acceleration practice. XNode does three things: 1) coworking spaces, 2) corporate innovation, and 3) startup acceleration (with a focus on cross-border acceleration).
One distinguishing feature of XNode’s two-month acceleration program is that the company works closely with governments. It is by building trust with these governments that XNode is able to bring in a steady flow of international startups to work with. Not only does this make working relationships easier, but it also allows XNode to leverage this worldwide network to find even more startups and entrepreneurs to partner with. The ultimate goal that XNode has for each and every one of its startups is a tangible business impact.
When asked about the difference between how Chinese and Western startups scale their businesses, Kevin says that the Chinese practice the Lean Startup methodology, which makes them practical, incredibly fast, and highly responsive to the market. This was the source of much cultural shock during Kevin’s first month working in China, having been so used to the more gradual speed of German business.
If Western companies wish to catch up to China’s speed, Kevin encourages cultural exchange. It is not enough to simply preach speed, pragmatism, or innovation—this will change nothing. Instead, Kevin wishes to have more Western companies and governments working together by “building bridges”. This involves reaching out to those already working in China—which include Westerners such as Todd and Kevin themselves who have developed a deep understanding and appreciation of the market over time.
On the topic of “mobile-first, mobile-only”, Kevin likes to differentiate between B2B and B2C. For B2C startups, it is difficult to create applications for Chinese consumers. Instead, it is better to use existing platforms to do sales and marketing. On the other hand, it is easier for B2B startups to create new mobile solutions simply due to their smaller ecosystems—there is no need to change a consumer culture shared by millions (if not billions) of people.
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.