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Why I’m giving up on Europe and moving my startup to China

maxkle.in

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Re: Why I’m giving up on Europe and moving my startup to China

#61

Post by xiaoma »

maxklein wrote: post #24
desigooner wrote: post #20

Earlier quoted context omitted.

while the Startup Visa is a good thing, it's still difficult for people (who are not born here or who don't possess a GC) to start a venture here. Even with the startup visa, there's a lot at stake and a lot of pressure to meet the demands about a certain $ of investment, turnover, operating capital, etc. Not every startup is going to fulfill those criteria right off the bat and the cost of failure is too high. That'…

Shenzhen is Hong Kong without the terrible apartment costs, but with slightly better internet.

I found the internet much better in HK. Facebook, Youtube, Dropbox, Twitter, Blogspot, etc... are accessible. In Shenzhen, they aren't. Sure you can pay for a VPN, but then performance suffers on other sites.

Re: Why I’m giving up on Europe and moving my startup to China

#62

Post by 3pt14159 »

9oliYQjP wrote: post #3

China's great until you have to go to court there and realize you're being totally screwed over because your opponent has an "in" with the government. There are countries like Australia and Canada that strike a nice middle ground between too much and too little regulation, have decent, stable economies right now, and solid relationships with China in the case you want to partner with a company there. But I've heard t…

Canada is a clear win. Set up a corporation in a single day. Fairly straightforward taxes (not the lowest around, but still fairly simple). Technical cities (Waterloo, Toronto, Vancouver, Ottawa). Zero corruption, unless you're in the construction industry, but effectively nothing. Easy employee termination (2 weeks pay without cause, 0 weeks pay with cause). Low occurrence of lawsuits, especially medical, and much smaller settlements (highest medical suit I've heard of in my personal circle was $100k, and it was clearly deserving). Technocratic politicians usually win elections. Only about 1% of GDP on the military (vs 2+% for most of the developed world, and 5% for the US). Easy access to American products and markets.

Re: Why I’m giving up on Europe and moving my startup to China

#63

Post by eklitzke »

There was recently an article on HN (sorry, can't find it ATM) about how to create a startup in China. The typical route is to create a business entity called a WFOE[1], which lets you operate your business in China as a foreigner, and has some tax/legal advantages. The gist I got out of the article and HN comments was that this can actually be very expensive and difficult; the application fee is inconsistent, and especially if you try to base the WFOE in a city like Beijing or Shanghai, in practice the cost can be in excess of $100k USD (of course the alleged nominal cost is lower).

This is from memory, so it might not be entirely accurate, but if you're considering starting a business in China you should definitely do some research into how much it will really cost to create and operate your business. There are some good resources on chinalawblog.com, and of course in the comments of HN articles about the topic.

[1] http://en.wikipedia.org/wiki/Wholly_Foreign_Owned_Enterprise

Re: Why I’m giving up on Europe and moving my startup to China

#64

Post by desigooner »

starkfist wrote: post #51
maxklein wrote: post #6

Earlier quoted context omitted.

I wish this were possible, but the difficulty in doing this is massive. If you are not U.S born, it's QUITE difficult to simply walk in and start a company in the U.S. And you'd spend a lot of time just solving those problems, and have a lot less time to setup your company. In comparison, I landed in china on thursday. Today is monday, and I have a fully furnished office (with furniture I selected myself), an assista…

I wish this were possible, but the difficulty in doing this is massive. If you are not U.S born, it's QUITE difficult to simply walk in and start a company in the U.S. How do all the Chinese/Korean/Indian people in the US do it? I often read on Hacker News about how difficult it is to start a software company in the US. But then I live in Brooklyn and people who don't speak english are always starting laundromats, bo…

I don't know about Chinese or Korean communities but a lot of the indians that you mention primarily come through via family ties.

One person gets here (alone or family) and files for immigration papers for their immediate relatives, starts working here (usually at an establishment of a relative or a person from the same community), makes enough money, transitions to setting up a new business and the someone else takes their place at the previous establishment. That's how the motels and 7/11,Dunkin etc. chains are run ..

This book had a nice description of this phenomenon. http://www.amazon.com/Dhandho-Investor-Value-Method-Returns/...

Re: Why I’m giving up on Europe and moving my startup to China

#65

Post by mhd »

Is the speed of hiring and firing programmers really that much of an option? I know that Germany has some rather old-fashioned laws about that, so it's hard to get rid of someone fast. But when we're talking about the usual startup fare, the legal ramifications and a few months of pay are probably the least of your problems.

Or to put it another way, if it isn't a problem, it's likely that your product sucks.

Re: Why I’m giving up on Europe and moving my startup to China

#66

Post by garply »

maxklein wrote: post #7
jacquesm wrote: post #5

When in China, do as the Chinese do. If you want to really get off the ground there you'll need to partner with a local that knows the ways things are done, which is not always intuitive from a 'westerner' point of view. A friend of mine is currently going this route and there are a few other HN'ers that are doing this, maybe you guys should get together somehow and compare notes. That might save everybody both hards…

I would certainly love to meet other HNers that are going this route, perhaps you could set me up. I've got two close and old friends of mine that are locals and are collaborating with me, so that's good.

I'm an American running a company in Beijing. I may email you some time.

You have some things right and are too optimistic about some things. There are certainly freedoms here that you do not enjoy in the West - at the same time, relationship maintenance is an extremely time-consuming and expensive, never-ending process.

Whenever you brush up with a bureaucratic organization, the experience can be hellish. I own, for example, a ~600 USD receipt-printing machine (fapiao machine) because the gov't forced me to buy it for my business. I also need to buy a new one every 5 years.

Trust is a huge issue. You need a Chinese partner, or you're going to get your ass kicked. You need a Chinese partner you really trust (I recommend you consider finding a Chinese wife), or you're going to get your ass kicked. I know very few successful entrepreneurs who built their businesses here who do not have a Chinese spouse.

I hope you're not building a business where IP is an important competitive advantage. Your code is not safe - safety lies in creating smaller products that are approximately as easy to copy from scratch as to steal. Alternatively, a good business model is one that uses very simple tech but makes heavy use of sales and relationships (for example, a Groupon clone).

Good luck, and remember that people eat people here.

Re: Why I’m giving up on Europe and moving my startup to China

#67

Post by richcollins »

mattm wrote: post #32

I lived in China in 2008 and while I'm no expert on China, you will learn quite quickly that some of your perceptions about China are not true: - In china, you can pay a programmer 600€ a month Sure, for average programmers. For good ones, you are going to be paying the same as elsewhere. A friend of mine there told me her brother was earning nearly $500 US/day working as a programmer for a company and they even gave…

This is in Hong Kong?

Re: Why I’m giving up on Europe and moving my startup to China

#68

Post by mattm »

richcollins wrote: post #67
mattm wrote: post #32

I lived in China in 2008 and while I'm no expert on China, you will learn quite quickly that some of your perceptions about China are not true: - In china, you can pay a programmer 600€ a month Sure, for average programmers. For good ones, you are going to be paying the same as elsewhere. A friend of mine there told me her brother was earning nearly $500 US/day working as a programmer for a company and they even gave…

This is in Hong Kong?

I lived in Suzhou - just outside Shanghai.

Re: Why I’m giving up on Europe and moving my startup to China

#69

Post by SoftwareMaven »

yardie wrote: post #22

Is it at all possible to change the title from Europe to Germany. Most of his complaints are German specific and don't apply to everywhere in Europe. Bureaucracy: I've heard regularly bad things about the German bundes. I've heard good things about UK, Sweden, Romania, Hungary. Labor: Whether you get it here or there the price of labor is only going up, but in China it's going up faster. Programmers are expensive. I'…

I had the same thoughts on the travel. That part just seems like "somewhere else has better places to travel." I live in the western US, which has some of the most beautiful scenery in the world. Yet when I think about traveling, it is not around here.
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