Captain Hoff of Founders Space See China As Tempting As All-You-Can-Eat Buffet
Founders Space ranks as a leading accelerator for startups coming to Silicon Valley from overseas. Now, it’s moving into Shanghai, the accelerator’s first overseas location. Steve Hoffman, Founder and CEO, or “Captain Hoff” as he is known around the office, is excited by the prospects for Founders Space in China.
“There are so many opportunities right now in China, I feel like I’m in an all-you-can-eat buffet where I am just tempted to grab way too many dishes!,” says Hoffman, an angel investor and serial entrepreneur. This Q&A interview highlights his views on Chinese startups and plans for China.
What is the most undervalued personality trait for startup founders?
The ability to have fun on the job and get other people to really enjoy being with them. When I look at startup founders, many of them take it too seriously: everything is urgent and matters so much, but in the end, it really doesn’t. Most startups will perform better if work is approached in a more playful manner. When people are less stressed, they do a better job and everyone is happier.
Will Founders Space in China advise startups entering the Chinese or the U.S. market, or both?
In China, we will mostly be preparing Chinese startups for the Chinese market but we will also advise them on going into Silicon Valley. With overseas startups, we will help them enter the Chinese market. We have a batch of Korean startups coming over soon to Founders Space Shanghai, for example, and we are preparing them to enter the Chinese market by training and connecting them.
Are you adapting the Founders Space curriculum to accommodate Chinese business traditions?
Our curriculum will not be identical to the one we use in Silicon Valley. We will bring on partners that complement our program and understand the Chinese market and have relationships there. For example, in Shanghai, we are partnering with local VCs, accelerators and university alumni groups. The more partners we can bring in, the more we can collaborate, the better the results will be for everyone involved.
What role do you see Founders Space fulfilling within the Chinese startup ecosystem?
We place a big focus on educating investors on how to select startups for investment. A lot of times, Chinese investors will put capital into a startup that doesn’t have its key elements in place, and then the investors are hurting the startup because as soon as they give them money, they are validating their business model. An educated investor would first help founders improve their model or figure out their product-market fit before handing them a lot of money. Startups need that more than anything else. It’s best to dig deep in a startup and take them apart so the founders can see their shortcomings and address them as opposed to cover up their mistakes and push forward.
What are the most common struggles of Chinese entrepreneurs?
I went to Shanghai two times recently, and attended startup pitches to better understand and get a feel for local entrepreneurs’ needs. I noticed the quality of the pitch and the pitch deck for most startups was low. Chinese entrepreneurs need to learn how to pitch, how to put together a deck, especially if they are approaching investors in Silicon Valley or abroad. Even if these founders are pitching Chinese investors, by improving their communication skills, their chances of getting funded will go up.
Also, a lot of these China-based startups are taking ideas that are not innovative. I’m not sitting in the meeting being blown away thinking ‘oh wow, this is new!’. That rarely happens, and I would like to see more of that innovation and pushing beyond what everybody is doing.
What can American entrepreneurs learn from their Chinese counterparts?
Chinese are very good at grabbing an opportunity. When an opportunity presents itself, Chinese entrepreneurs will move super quickly and execute fast. I also think Chinese entrepreneurs have a real sense of how to bring the cash in the door. A lot of U.S. entrepreneurs are more idealistic, so they’ll focus more on the big picture, which sometimes is to their advantage and other times to their disadvantage.
Another factor is the outstanding work ethic in China. Chinese will work seven days a week. This is good in critical times when you need to get stuff done, but it is not so good when you want a balanced life.
Chinese entrepreneurs will often think of what is obvious business as opposed to what will be coming in the future. Whereas Silicon Valley entrepreneurs will take a chance on what they think is a cool idea. Most of these ideas won’t work out, but a few will become enormous.
Many markets are trying to replicate Silicon Valley. The Bay Area remains the world center of entrepreneurship and technological innovation, however. What are the key elements that help it maintain its place in tech innovation?
Silicon Valley has a history of people being dreamers, and by not being realistic, they can look to the future. They will try things that other people would discount as unpractical until all of a sudden it becomes practical because technology is here and society has changed to accommodate it. This goes all the way back to the 1960s and 70s with the hippies and to Steve Jobs. All these people were at the vanguard of believing they could do anything and were coming up with big ideas to change the world.
Because of this great legacy, Silicon Valley has a momentum that is hard for others to catch up on. There’s a concentration of VCs, technology and entrepreneurs that is a magnet for startups from all over the world. If you are in the Bay Area, you can do business with the whole world without ever leaving because anybody who is somebody in the tech world will pass by Silicon Valley.
After Shanghai, are you planning to open more offices in China?
We are in talks with possible partners in Hangzhou, Shenzhen and Beijing. These are our top cities that we are focused on, but we are also considering Chengdu and Wuhan later on.
— Francesca Martens, a writer for the Shanghai Daily, has recently moved to San Francisco from Shanghai. She is interviewing notable leaders in the Bay Area who are bridging the divide between Silicon Valley and the startup ecosystem in China.