Following the success of incubation programs like Y-Combinator, 500 Startups and Techstars in the US, China is setting up its own batch of start-up houses. A new acceleration program called Chinaccelerator (a member of Techstars network) based in Dalian is starting to generate buzz.
I’m a big fan of these programs because I think it’s fundamentally important for entrepreneurs and start-ups to be surrounded with like minded people who can support and propel you. So I interviewed Cyril Ebersweiler, one of the founders of Chinaccelerator to see how they are helping entrepreneurs in China.
Chinaccelerator based in Dalian in Liaoning province, is a 4 month startup accelerator, starting from June. In exchange for 4-8% equity, the program offers support in the form of:
- 10,000 CNY per founder (for 3 founders at max).
- Extra budget of 10,000 CNY per company (for research, sales, marketing, product development, etc…).
- Intense mentorship from the best.
- Free space, some extra electronics and even some food.
- Geeks on a train!
- A chance to pitch investors at demo day.
Originally from France, Cyril first came to China in 1998 to backpack. Later on he built the first ecommerce platform for Carrefour China as well as built the online infrastructure and service center for European airline, AF-KLM. After stints in China, he moved to Japan to work for ad agency, TBWA to work on major accounts like Nissan, Nokia, Adidas and Cartier as their marketing and technology advisor. Later back in China and after building another agency for TBWA from scratch, Cyril met his Chinaccelerator partner, Sean O’Sullivan (who went IPO with Mapinfo in the 90’s).
Dalian – less distraction, lowers costs and a big talent pool
When most people think of the heart of the tech industry in China, they think Zhonguancun in Beijing. Hence many people are surprised to learn that Chinaccelerator is based in Dalian, a city of sun and sea.
But since Cyril is also a mentor for Techstars and 500 Startups in America as well as a VC for SOSventures, he knows the importance of focus. “Sometimes location can be a distraction. We also want to put people out of their comfort zones.” Said Cyril. He believes that start-ups will be more inclined to live and breathe their start-up all day when living in Dalian, rather than simply going to the office and back home. “Coming to Dalian shows dedication to the summer program, plus enables constant peer mentoring.“
In addition to the lower level of distractions, Dalian provides a more comfortable climate for people to live and relax. But more importantly, the costs of doing business in Dalian are lower. There is also a large community of programmers in Dalian since many international companies have offices there such as Intel, IBM, Oracle and HP. Start-ups are able to tap into the talent pool to build their teams.
In this current batch, start-ups come from Shanghai, Beijing, Shenyang, Hangzhou and there are also two foreign teams.
Helping entrepreneurs take the risk and jump into start-ups
“In China, it is rare to find people that quit job and jump into startups so we help people take the risk and move forward. Chinaccelerator helps by providing a small cash injection as well as finding a place to live and building a team in Dalian. We are trying to disrupt how things are done in China by focusing on innovation.”
About the people
When selecting start-ups, Cyril says they first focus is on people who are talented and determined. Next is the demo and product because this separates the talkers from the doers. Lastly, they look at how interesting the start-up solutions are to solving big problems.
Making them fail early (if necessary)
The most valuable thing that Cyril feels the program offers is strong mentorship from seasoned professionals. “Many entrepreneurs are optimists and think things are easy but we give them a lot of reality checking and help them work through issues. We help them create a metric-driven company to show them where they are and where they’re going. We make them fail early if necessary and kick their ass to make them move quickly and get feedback from customers. They need to know they can’t automatically expect 1 million users straight away, it takes work.
Often companies will change their idea, or change parts of it and some entrepreneurs find it difficult to change. We prepare them to adapt – change is going to happen for sure, it depends to what extent”.
More start-up programs = more start-ups
With more and more start-up programs popping up around China, I asked Cyril if he sees the others as competitors or partners. “We are both competitors and helping each other because although we all want the best start-ups, the more programs there are, the more entrepreneurs and more momentum we have. Competition is marginal and depends on location and focus.
The biggest difference we have is that the program was built by entrepreneurs for entrepreneurs. The founders of this program have sold several companies and also gone IPO. Secondly, we are focusing on innovation. Thirdly we believe start-ups should be out of their comfort zone to evolve. Being in Dalian is a part of that.
We are noticing more Chinese teams targeting foreign markets because they are returnees, especially from America. Also more and more different nationalities are teaming up.”
Past and present teams
Last year three of the companies raised a combined $1.1m. Two companies are still working on their products and one died.
Helping entrepreneurs strive
“We simply want to help entrepreneurs strive. We profoundly believe in Chinese entrepreneurs and believe changing the world will be in their hands to solve problems of tomorrow and we want to be part of that.” Said Cyril.