Human Resources Is Still A Challenge For China Startups: ChinaNetCloud CEO

This post is part of our series Say Hello To China’s Expat-preneurs, where we will talk to a mix of foreign founders and tech veterans who have tackled China’s growing tech space and won. Stay tuned over the coming three weeks as we talk to foreign founders from Beijing to Shenzhen about what it takes to thrive in China. You can follow our updates at @technodechina, or check back here for new stories in the series.

One of the biggest challenges for startups in China is internet server management. Have you ever thought about how those internet and gaming companies are running servers to embrace so many users, different clients, performing all different tasks for them? ChinaNetCloud runs thousands of back-end servers and infrastructure for over 150 Chinese and international internet companies like Nokia, Dianping, ASOS, Xiaoshuoyi, ThePaper.cn and Wandoujia, so that they can manage at scale of up to 250 million users.

“Internet and mobile startups are extremely dependent on great servers and infrastructure operations, as it’s their mission-critical system, but especially in China, good people are hard to find and expensive,” ChinaNetCloud CEO Steve Mushero points out.

“Without world-class operations teams, startups have all sorts of problems in the areas of reliability, performance, scale, security, and cost savings.” It became the reason why now the company provides those five key values to its customers. 

“We have always been focused on server management, but were also the first infrastructure as a service provider in China, before Aliyun or anyone else,” COO James Eron says. “Now it’s much more complex in China with lots of players and they rely on the public clouds for basic infrastructure. Aliyun is still the largest player, but Amazon and Microsoft are here, plus lots of well-funded smaller players such as UCloud and Qingcloud,” Mushero added. 

“But they are not our competitors, Chinanetcloud manage them and place on top of them, so it’s more like we work with them like partners.” In fact, AWS, Aliyun, ChinaCache, UCloud, ChinaNetCenter are all partners of ChinaNetCloud. 

“We really don’t have any significant competition, other than a company’s internal IT/Ops team who wants to do everything themselves,” Mushero claims. “Even when they have teams, we are much better, bigger, more advanced, with the best tools, configurations, processes, and deep experience.” With offices in Shanghai and Beijing, the company received support funding from the Chinese government and became AWS Global Advanced partner and reseller in 2013.

Steve Mushero As An Expat-preneur

Mushero first moved from the U.S. to China in 2005, served as a full-time CTO at Tudou in 2007, China’s video sharing site. “China had a combination of being much larger, and more developed than other markets, also more open, and I was already here and very familiar with the market,” he recalls. 

Then he saw the opportunity in cloud computing and founded ChinaNetCloud in 2008. “Cloud computing and related services are really the future,” he says. “Despite lots of opportunities, there are still a few players in the market.”

“China is far more fragmented and still lacks many or most of the major ecosystems of Silicon Valley, but we are seeing more activity here,” Mushero says. According to him, the difference between the two markets is target customers. “China is still very B2C or consumer-oriented, with about 80% of investing going in this area, and less than 20% in B2B businesses. Silicon Valley is the reverse and has been for decades, so there is still an evolution to do as this market matures.”

He gives advice to expat-preneurs, saying that the first step in getting a grasp on the Chinese market is to actually experience it. “Get here early, study and learn, get help from experienced local and foreign managers for sure, as things are both mostly the same as the U.S. or other places, and also quite different,” he notes. “Especially in human resources.”

According to him, China had a shortage of skills in many professional areas at the time he started the business, and since ChinaNetCloud aims for world-class experts, it was the biggest challenge for the company. “Finding good people was challenging, especially to operate in international environments, on high-end systems, with English and service backgrounds,” he states. “So we developed dedicated recruiting teams, a dedicated careers site, an advanced recruiting process, materials, events, in addition to partnerships with key schools and intern programs.”

Mushero is optimistic about the future of the booming startup scene in China and sees how his company can contribute to that. “Startups are becoming more local and to some extent better funded, more diverse, and doing more things across more verticals, not just games or mobile. Smart phones, IoT, and the cloud help provide great channels to do new things at lower cost,” he states. “This is all great for us as everyone needs infrastructure and systems.” 

Quick Questions

What’s the most striking cultural difference when you first came to China?

Probably the focus on family, kids supporting the parents more strongly than in the West.

How do you get involved in the local startup scene?

I do less now than I used to due to time limits, but I do attend events, speak at things, do informal advising, etc.

What do you love about China?

The energy, change, and moving forward.

Image Credit: Shutterstock, ChinaNetCloud