Un monde à entreprendre

Among all the people we had to see in Beijing, Hortense was the first one on the list. She was also the first woman entrepreneur we interviewed so far, and the first one in the cultural industry. Besides, she was also the first European person we had seen speaking a perfect Chinese until that day. You have understood Hortense is a special person (in a good way, of course) and that is only the beginning…

Hortense fell into Asia when she was young. She spent 2 years in Japan followed by 7 years in Hong Kong where she started learning mandarin at school when she was young. She came back to France for her final year of high school and for her graduate studies in Paris. Right after her master degree, and after a few internships in China, she found her first job in China, working for Bongrain as a brand manager for two years. Speaking the language fluently, and loving the country (she is also currently married to a Chinese from Beijing) she could not picture her future at any time outside China. Even though she targeted Shanghai as she made a couple of internship there and really enjoyed the city, she chose to live and work in Beijing, as both the job offer and the company in which she was offered a job were better in Beijing, which made her pick the 2 years contract in Bongrain. As the company was getting restructured at that time, both parties agreed to terminate the cooperation.

As she always knew she wanted to do something related to events management, and with a passion for music, she considered looking in this direction. As many people were asking for help on such kind of projects, she started to help launching some artistic events. The more she was working on these projects, the more her network was growing and the more she then realized that there was some potential from an artistic and an entrepreneurship perspective and therefore recruited one trainee and subsequently 2 or 3 other people quite quickly to help her. A business partner joined her in 2007 while moving into bigger offices. Her friend had already registered a company in Hong Kong, which they decided to use for international clients, while relying on Chinese partner companies for local clients.

Even though the whole process of creating a company may seem quite natural in Hortense’s case, she was never intending to live such a life. Indeed, she worked in 2000 in Hangzhou for an entrepreneur and thought at that time this was a life she did not want as it is far too time consuming. But as she enjoys a lot launching projects, and being in a leader position, she quite inevitably followed this path as it gave her much more freedom. The kind of company she created allowed her to be in between business and arts which is a brand new concept in China. The purpose of the company is to offer artists opportunities to develop, as she needs to feel useful and create things. She provides services such as artistic content for events and incentive, corporate training via artistic methods, conferences on innovation, mediating strategic partnerships (sponsoring)...

4 years after she launched the activities of H!TANG& China Creative Connections, she confessed that she was very frustrated and should stop heading the company in January as she currently works part time for a corporation and expects to work for this corporation full time by that time. Her frustration arises from the feeling that she has not moved forward in the past 4 years as she has not learnt as much as she expected.In her opinion, it is easier to feel that you learn something when someone else is providing you with the knowledge, even though she recognizes that she did learn a lot while creating her own business. Having put the minimum level of financial investment in this company, she had to deal over the last years with unqualified resources (which were obviously cheaper, such as many trainees) and a high turnover among her employees who would leave the company after a few months. As a consequence, she and her partner had to spend most of their time training newcomers and could not focus on sales and more interesting activities. That gives her the feeling that she has been doing the same thing over and over again. The lack of financial investment was due to the fact that it is very hard to raise funds in a cultural industry for one thing, but also because this company was created for pleasure much more than return on investment which is why she did not invest a lot of money in the business. This lack of funds created some limits that she now identifies with the experience that she gained.

Hortense explained to us that she was to create a business again she would probably do it as it made her knowledgeable in many areas as she had to do everything by herself. She would however do things differently, such as hiring more qualified staff that can actually bring knowledge and expertise to the business. The business would have expanded more quickly and she would have had lost far less time in training people on the same tasks. She would finally advise to look for people who have different skills and personalities as these people bring more value to a company, especially in a small structure where having different people with a wide range of skills is required to perform well.

Thank you Hortense for this interesting dinner which finally showed us the “dark side” of entrepreneurship, and good luck with your new challenges!!

Benoit

Five minutes after my interview with Julien and Ines (summary under review), I was in a library buying a book that I had seen there a couple of days ago (www.hutong-school.com) which is the moment Jérémie decided to call me to inform me that he had one hour and a half of free time… right now! This was an opportunity I could not miss and I therefore jumped in a taxi and let Jérémie give directions to the taxi driver over the phone… 30 minutes later, we were sitting in a restaurant where he could grab a quick lunch while I was having my first hot chocolate since we left Europe (and it was a good one!).

Jérémie graduated from a Bachelor degree in law and as his aspirations changed a bit as he wanted to become a diplomat, he followed a master degree from the IEP (political sciences) in Aix en Provence. During his studies, he made an internship at the French embassy in Beijing where he discovered the hutongs. After completing his master degree in France, he registered to a university in Beijing in order to learn the Chinese language and gave him the opportunity to meet businessmen in China. One of the first thing he had to do was to find an accommodation. As he had only budgeted 2.000 EUR for the whole year, he decided not to rent an apartment, but to rent a whole courtyard which he then refurbished and divided into 9 apartments that he sub-rented (keeping one for himself). That allowed him not only to pay for his rent but also to make an extra margin. Considering the profit he made, he decided to rent a second courtyard immediately after he finished the first one to do the same thing. He did not see at that time this activity as a business on its own, but more as a way to have a bit of revenues. In 2005, with 3 friends and 10.000 EUR, Jérémie creates the Hutong School, a unique type of school in Beijing which provides not only Chinese lessons, but also accommodation, traineeships and a 24 hours assistance to people who register to the program. It offers high value added journeys in Beijing not only to learn Chinese but also to discover China. Considering his experience in real estate, Jérémie was in charge of finding the proper place for the school. He found a well located building with a top floor made of 4 apartments which could be linked, which is what the Hutong School has done, taking three fourth of the building for accommodations and the remaining part for offices.

None of the founder of the Hutong School launched this project with an entrepreneurship spirit. They were all young and were happy to develop this school as a good place to work in, with a cool attitude and an opportunity to spend time with people from around the world. In 2009, Jérémie took one year off to Japan (as his wife is Japanase) which offered him some time to think and consider the actual business capabilities of the Hutong School. Before that, the positioning on the market wasn't clearly identified. When he came back to China, he therefore decided to focus on the Hutong School project with a clear vision in mind. Since then, he has launched a restructuring of the school which is now expanding fast. At the same time he launched the Hutong School, Jérémie developed as a side business the renovation of courtyards. He kept in mind the idea of protecting the cultural heritage of Beijing and is now renovating these courtyards for expatriate people (mainly journalists), which allows him to increase his profit margin while focusing on quality work from a protection of the original architecture of the courtyards. With growing demand, this side business has become an important part of Jeremie's activity, and together with his old friend Matt, Jérémie has created a company called China Courtyards to support it.

Currently, Jérémie has the feeling that even if he started these two activities five years ago, he is currently heading two brand new start up, as he only sees now their true potential. This is the reason why he says that if he had to do it again, he would start creating businesses sooner, and in a much better prepared way, with a true business view on his activities. Now that he had the opportunity to taje a step back when he was in Japan, he understood that to him, entrepreneurship is the only possible way as this is the way of freedom. He regrets that during his studies in France, he was never told that creating a business represents a meaningful alternative to usual corporations, as it may have lead him to chose this path before. Even though he is realistic and knows business can go bankrupt one day, he strongly hopes that he will be able to do this during his whole life, as now his work also is his passion. He said:”I do not spend 8 hours a day working but 16 hours doing what I like most”.

Jérémie recommends that one should do what he likes to do as this is the best way to become good at something. Doing what someone likes best will allow him to understand where opportunities and profitability may arise from, even if it is most of the time hard to see it. There is a part of passion in companies which makes liking one’s job compulsory in order to be able to have enough energy and support creativity. Jérémie also advises not be afraid to ask for advices from people with more experience as this may avoid big mistakes and can help in saving a lot of time and money. More experienced people are usually very keen on sharing their knowledge and help younger people which is something a new entrepreneur should consider. The last thing is said is to consider money as a tool and not more than this, which is a kind of logic that one needs to understand to aim large. He said that people should target as big as possible in order to be big one day.

We concluded the visit by going to his brand new office in which he was supposed to move in a few days after the meeting (cf picture!). Thank you Jérémie for your precious time and good luck with moving everything in your offices!

A few days before reaching Mongolia, Christopher sent us a message telling us that he had to fly to Paris for business purposes and that we would not be able to meet him in UlanBataar. We therefore scheduled a Skype video call from Siberia to Paris in order to talk about his experience as an entrepreneur in Mongolia… I guess this is what we call globalization, right?

In spite of his Belgian nationality, Christopher has never actually lived in Belgium. As his parents were working as diplomats, he has luckily spent a huge part of his life travelling the world, especially in the ex-USSR countries, as well as Asia and Africa. He graduated from Oxford Brookes University in the United Kingdom, and has since been working in many different countries, mostly in Asia (China, Japan, Mongolia, Hong Kong). Based on his international experience and the knowledge he acquired abroad, he made up his mind in order to decide in which country he wanted to settle/invest, based on the main followings points:

· Political stability of the country (i.e. real democracy)

· Under developed / developing country (as these are the countries in which the growth rate are the most important)

· Possibility to invest on his own name (i.e. no restriction for foreign investments)

Considering this, and evaluating the different markets, Christopher shortlisted a few countries and decided that Mongolia was the one presenting the most benefits, as China has strong needs for minerals that Mongolia has in big quantities (i.e. gold, copper, uranium).

Even though Christopher felt into travelling when he was young, entrepreneurship was not a path he had chosen long ago (he describes himself on his personal website as being an “accidental entrepreneur” http://www.degruben.com). Christopher arrived in 2004 in Mongolia, where he started to work for an American real estate company. He spent four years working there, until he decided that he had to work differently. Indeed, he did not fancy the way some of the business and its clients were handled. Quitting his job made him lose his Mongolian visa. The only possibility for him at that point to get another one was to create his own business; which led to the creation of M.A.D. Corporate Services (MAD stands for Make A Difference). Following the creation of M.A.D. Corporate Services, he decided to start a sandwich business (roughly based on the same business model as Subway) with an initial capital of USD 20.000. He therefore set up two businesses… in order to get a visa!

He trained himself as being a founder and a CEO of a company with the sandwich business, and after around 6 months, he decided to actually do something with M.A.D. Corporate Services. As aforementioned, Christopher wanted to do business in a more transparent way than it was usually done in Mongolia. He thought that transparency and honesty were values that not only would help to make this country a better place for business, but were also values that clients would look for. Big foreign companies are usually very reluctant to pay bribes as it could potentially damage their reputation, and overall Mongolia is changing which makes this approach to business more and more sustainable. The fees paid by his clients are always fixed fees for example as he does not want the interests of his company to be in conflict with the interests of its clients (i.e. with a floating fee, Christopher may be looking for bigger offices than actually needed by his clients in order to increase the amount of the fees).

Christopher first started to produce a few clean reports for international companies on the Mongolian market. Thanks to his growing reputation, he won new clients, and decided to start another activity for M.A.D. Corporate Services. He started to create business plans and developed market studies for his clients. As they were happy with the quality of his work, they asked for help to start their business in Mongolia. Christopher would for example help them to find offices to rent, write the work contracts for them or help them with the administrative paperwork. Helping companies to get implemented in Mongolia and listening to people around him, Christopher realized that they were no relocation services company in the country. He therefore decided to expand his services to include relocation. He now owns the only relocation services company in Mongolia, and is currently considering expanding in China (in 2011) as he feels that there are interesting market opportunities. As a matter of fact, it appears that Mongolians and Chinese do not trust each other, and therefore a person like him who would be neutral could work as a broker between the two counterparts. His business currently employs 8 people and should reach 10 or 11 in 2011.

When he looks back at his experience as an entrepreneur, Christopher does not regret having chosen this path as it taught him a lot from a business perspective (i.e. it helped him to understand all the underlying between all the aspects of a business and to think to all options before making a decision) and gave him more freedom than he ever had before in his career. He however believes that this is not something that everyone can do as you have to be ready to live with risk, especially in Mongolia where the assets of your company are your own assets. Living as an entrepreneur therefore leads you to accept working without a safety net. It involves a great sense of responsibilities as you are somewhat not only responsible for all the strategic decisions of your business, but also responsible for providing a salary that will allow your employees and their families to live.

He therefore advises people who want to create their own company, and in particular abroad to be sure to have a great idea to start and to be sure that you are ready to work hard as the learning curve will be sharp. The second advice (I like that one) is to start spending other’s money before you start spending yours. That basically means that you should probably start working for someone in the country in which you want to start a business in order to feel the market and make the first few mistakes in the country at someone else’s expense. A funny anecdote he told us was that you do not sign a contract or make an important decision on Tuesdays in Mongolia, which is a good example of things not to do that you only learn once you are in the business. As he has seen many people who did not have enough money to wait for their business to be profitable, he advises not to spend all your capital at once, but to keep a safety mattress which would allow you to overcome the first difficulties and make your business sustainable.

Thanks a lot for you time Christopher, and thanks a lot for lending us your apartment (and what an apartment!) for a few days. It is a pity we did not have a chance to meet in person, but I am pretty sure we will fix this sooner or later.

Benoit

Having scheduled and postponed the appointment twice, we finally managed to meet Yann in the Australian coffee of Moscow. We have found in this bar a very friendly and outgoing entrepreneur, who not only made us discover some Russian specialities but also told us a lot about him and his 4 years experience as an entrepreneur.

Yann arrived in Russia around 10 years ago, after having spent almost 3 years in Uzbekistan, as a lecturer and as vice president of the Alliance française in Samarkand. He had formerly performed studies in the faculty of languages, studying mainly Russian, Bulgarian and other similar eastern European languages. He was sent in this town as part of his cooperation during his military duty, and made quickly his mind up when he had to choose for his destination as he had already traveled a lot in the region and knew he wanted to live in this area of the globe for a while.

Married to an Uzbek/Tatar/Russian wife for 10 years and deeply in love with the culture and the country, he first found a position in Moscow in the Club France (which has now become the CCIFR). He worked there for a little bit more than 2 years, helping French companies in Russia and expanding the number of members in this network. He was then poached by the CEO of the local subsidiary of an American company specialized in relocations services. After once again a little bit more than 2 years in this Company, the local CEO changed, and he therefore decided in 2006 to start his own business of relocations services. Being experienced in the real estate business and having developed his network in Moscow for the past 6 years, it appeared to him quite natural move to create his own company. However, he never planned on being an entrepreneur as he would have wanted to pass state exams to work in a diplomatic mission. He only saw a great opportunity and was pushed in this direction by his friends and above all by the co-founder of Wellcome Abroad relocations. The business expanded very quickly as well as the services provided which now not include only home search but also Immigration services (visa, registration) handyman services, tenancy management, temporary accommodation, Internet and Sat TV installation, etc. mainly for French-speaking expatriates as the core of Yann’s network is made of French people. His company now employs 10 people as compared to only 2 in 2006, and his currently investigating in expanding internationally (ie. Ukraine, Kazakhstan).

Standing back on his experience, his main regret is that it did not start earlier his own business as the opportunities were much greater couple of years before he started. He would of course do it again, as he sees Russia as a land of opportunities for people who understand and like this country. As he said, everything is possible in Russia. Everything is easy as long as one is ready to pay for it. Yann would probably not have launched a business in Europe as he believes the administrative system and the tax rates (he currently has the option between paying 6% of his net result or 13% of his turnover in Russia) does not encourage to be an entrepreneur.

If he had to advise people who would like to follow his path in entrepreneurship, Yann would tell you that he recommends it, but one should take first the time to understand his motivation in doing so. You have to love the country in which you want to settle, and you have to understand and like the people who are leaving in this country if you want to be successful. Therefore, he would advise everyone to take the time to spend around a couple of years in the country chosen to actually feel it and build a network. That is key to a well adjusted life as an entrepreneur.

Thank you Yann for your time (and for an excellent dinner), and good luck!