It all comes down to having the right team.
Opportunities abound for entrepreneurs in the burgeoning Asian market. A good idea, the right connections, solid financing and a first-mover advantage can all make a difference.
But according to the entrepreneurs who took part in the HABC panel "Starting A Business in Asia," nothing is more important than having the right people to make it happen.
"I thought I had everything I needed," said YiBo Shao (HBS MBA '99), founder and CEO of Eachnet.com, one of several online auction sites vying to become the eBay of China. "Learning, networking, easy access to capital, access to people, an idea I'm enthusiastic about. I thought I was in pretty good shape to start a business.
"But if I had to do it over, I would build a team first."
"Recruiting is the toughest thing — and the most important," said Chih Cheung (HBS MBA '99), Co-Founder and CEO of HelloAsia.com, an e-commerce and community portal focused on Singapore, Taiwan, Korea and Hong Kong. "Pick people who compliment you in a business sense, not just your best friends."
"It's not really an obstacle of capital [in Asia]," said Larry Wang, Founder and Managing Director of Wang & Li Asia, whose firm recruits bilingual, bicultural candidates for companies in fast-growing industries in China. "It's an obstacle of human resources. We're focused on trying to bring the right kind of business and management skills to our clients."
The right people even count when going after financial backers, according to Cheung. "You really shouldn't be focusing on valuation," he said. "I would rather take a lower valuation to get a better partner than to take a higher valuation for a partner who's going to run away when things hit bumps."
"Look for value-added investors," added Shao. "You need people who can give you advice."
At the same time, advised both Shao and Wang, it's important not to underestimate the amount of capital you'll need. "For the angel round, always think you're going to run out of money," said Shao. "Always overbudget. Get double the money you think you're going to need. When you get to the venture capital round, they can kill you if you come in saying 'I'm going to run out of money in two weeks.'"
A good idea for a business is important, said the panelists, but, in the wide open spaces of Asia, it's not enough. "Don't be a copycat," said Shao. "Do something you feel passionate about. But no matter how original your idea is, assume there are five other people working on it. At the end of the day, it's execution that wins."
Cheung agreed: "In any business, there are three types of risk: market risk, strategic risk and execution risk. In Asia, it comes down to execution."
Wang and Shao both advised the overflow audience of would-be entrepreneurs that starting a business is not as easy as may appear. "I understimated the timing it took to get a business started. I thought we were going to be rich in a year," said Wang, adding that "maybe it's different in the Internet business." Shao, who started his business in May of 1999, while still in school and having already accepted a job offer, said, "I thought I could start a business in the summer and then go off to my job," he said. "But that was naive."
Despite the challenges, the panelists agreed, for those who want to start their own businesses, Asia is the place to be. "The opportunity has not been better," said Cheung. "There's more money in the market. There's a first-mover advantage. I encourage you when you think about business to think about Asia."
"It's a great time to be out there," said Wang. "East is moving West, and they need people who can operate with one foot in each place."