This post comes courtesy of our content partners at TechNode.
Pony Ma and Jack Ma (not related), the entrepreneurs who started China’s two most successful internet companies Tencent and Alibaba, recently became the second and third wealthiest men in China according to Hurun’s annual rich list. Chinese technology companies’ stocks continue to do well. However, for the majority of the internet entrepreneurs working on building their companies to be the next Tencent or Alibaba, things aren’t so rosy.
In a report released by NetEase Cloud and IT Juzi (in Chinese), data shows that the average Chinese internet entrepreneur is likely to be a guy in his 20s working 12-hour days and 6-day weeks in Beijing. However, despite facing challenges such as a shortage of funding and talent as well as the stressful working life, Chinese entrepreneurs remain fiercely optimistic about the future of China’s startup economy.
The demographics
The demographics of Chinese technology entrepreneurs are what you’d expect: mostly college-educated men, concentrated in large centers such as Beijing, Shanghai, and Guangdong, and in their 20s to early 30s.
Eighty-four percent of the entrepreneurs surveyed were men and 16 percent were women. No category was provided for non-binary gender. Close to 60 percent have a bachelor’s degree, 21 percent have a master’s degree. A small portion (17 percent) have a technical college education or below. Those born after 1985 make up nearly 60 percent of the entrepreneurs surveyed.
Bentley Chen is co-founder and CMO at Coolhobo, a startup building AR/ VR shopping platform app targeting Chinese millennial consumers. She decided to join Coolhobo as a co-founder after meeting co-founder Loic Kobes through her previous job working for a food import company. Bentley saw the potential of Coolhobo’s platform and wanted to help bring the idea to market.
Chen is not surprised women internet entrepreneurs make up as little as 16 percent of those surveyed. She is in her 20s and not married but understands that the societal pressures faced by women to balance work and family life make it challenging for them to work in the industry.
“Even though as a society we are making progress, but for women, once they get married and start a family, they’re [expected] to devote more time and effort to their family and raising children. It’s very hard to truly maintain a balance between work and family,” Chen told TechNode during a phone interview.
Braving the challenges
Over half of the entrepreneurs surveyed decided to start their own internet company because they had a good idea and wanted to build confidence by taking the idea to market. The next most popular reason given was the desire to build one’s own business. Only a very small number of respondents chose the reasons of “purely for employment, as I haven’t found a job that I like or one that suits me” or “I earn more money working for myself than for others”.
So it seems that internet entrepreneurs start their own companies truly out of passion.
And passion is perhaps what keeps entrepreneurs going despite the many challenges faced by entrepreneurs in this fast-paced and high stakes industry. The report shows that only 1 percent of all internet companies in China make it to IPO, and only 14 percent of them survive beyond the initial stage to move onto the growth and mature stages.
Internet entrepreneurs cite lack of talent, capital and business partners as their biggest challenges. Others include management cannot keep up with the growth of the product and teams, high overhead, and technical bottlenecks.
Stressed and overworked
With so many challenges running internet companies, it is no wonder that internet entrepreneurs are stressed and overworked. 40 percent of respondents reported that they are working six-day weeks, at over 12 hours each day, 22 percent of respondents work 12-hour days, seven-day weeks and 7.69 percent go even further – they basically live at the office and work is their life. Only 21 percent of internet entrepreneurs seem to have a normal five-day working week, at eight to 12 hours per day.
“We ask our team to finish their work within the five-day work week because we don’t want them to work overtime or work six days, which would affect their productivity and mood. So we rarely have staff working on Saturdays,” Coolhobo co-founder Bently Chen said. “However as co-founders, it’s hard sometimes to avoid working on Saturdays as there may be events or activities that we need to attend. We always make sure we leave one day in the week to ourselves to relax and unwind.”
With almost 70 percent of internet entrepreneurs surveyed working at least six days a week, it follows that their stress levels are high too. Nearly 30 percent of entrepreneurs reported that they experience anxiety and stress frequently, 45 percent experience anxiety and stress from time to time. Only 27.56 percent of respondents reported that they rarely feel anxiety and stress.
Optimism
Even with all the overwork and stress, Chinese internet entrepreneurs are still feeling optimistic about the prospects of the industry. Almost half of them thought that the startup environment in China continues to develop and get easier, while no one thinks it is getting harder. Twenty-five percent thought that uncertainty has increased and 27 percent thought that the startup environment has no effect on the businesses – it’s the idea that counts.
“The macro-environment for internet startups is good, but entrepreneurs still face a lot of pressure. For us now, survival is the top priority. Success is still uncertain. But in this process [of building Coolhobo] we as a team can try changing the current shopping experience or let BAT [Baidu, Tencent or Alibaba] discover us. These are our goals,” Bentley Chen told TechNode.
One quote collected by IT Juzi sums up the spirit of Chinese internet entrepreneurs particularly well:
“There are no roads traveled that are wasted, every step of it counts.”
Images: humanresourcesonline.net, TechNode, Coolhobo