Enterprise Ecology: Eric Schmidt of China Entrepreneurs

President and Founder of China Entrepreneurs, Eric Schmidt has been working with venture capital and private equity investments since 2005, as well as incubating start-up companies. Agenda caught up with Schmidt as China Entrepreneurs prepared to host The China Mega-Forum for Entrepreneurship and Innovation October 25 & 26 at the Kerry Centre.

What is China Entrepreneurs all about?
China Entrepreneurs is about trying to bring the ecosystem for entrepreneurship together. We work toward this mostly with events, but increasingly through other things that we do as well. At the same time we run some incubation and entrepreneurship centers.
This year’s incubation group is our second, the first started last July. The goal of these centers is to bring different groups of entrepreneurs together, to be able to work and rise up together as successful entrepreneurs.
Overall the organization began with the goal of trying to develop the right ecosystem for that to happen. We do this mostly by bringing people together with events, industry forums and conferences, which range in topic from RMB capital private equity funds to talking about what’s going on with the technology and telecoms (T&T) base.
Our events nowadays have been attracting anywhere from 300-800 people, but when we started in 2002 it was a much different scale – 20-30 people meeting at a bar or a restaurant around town.
We’re always looking at ways to get more information about service providers and what’s going on for the entrepreneurs.

What do you see as the elements necessary for a healthy entrepreneurship ecosystem?
A number of elements are important. You have to have government backing to support entrepreneurship.
That can mean anything from tax laws to labor laws, or even having financial investment backing, which is happening in China right now.
Obviously you need investors who are willing to take risks, who are willing to put money on ideas that they believe in, that continue to work through things, and are able to support early stage enterprises.
You need to have service providers that are able to provide resources to these companies, so that they can continue to grow, and give them good advice, whether in terms law or HR. We’d like to know everything, but unfortunately there is no realistic way that entrepreneurs can know everything and be successful in every aspect – from marketing to web to finance. There is no way.
So what we look at is: Is all of that happening? Is there a solid place for companies to build themselves and continue to grow successfully?

What inspired you to found this organization?
Back in 2002 when I had my first company here in China, I realized that there were a lot of things about establishing a business in China that I didn’t know and that were particularly difficult to deal with as a foreign entrepreneur.
A lot of things that are simple today, such as setting up a WOFE [Wholly-Owned Foreign Enterprise], were extremely bureaucratic, difficult processes for people to figure out how to get done and done quickly.
As an entrepreneur at that time you talked to other people and many of them had similar problems, but then you talk to another person who had solved these same problems.
So I wanted to create a group where we can bring these people together to share ideas, share resources, and as a community we could work together, learn, share stories and build our businesses together.
We started as a group of 20 to 30 people meeting at bars and restaurants around town – the Mexican Wave, in fact, is where we convened our first meeting, and met regularly for many years. Finally it started to catch on, as we started to grow beyond the foreign entrepreneurs, and started attracting some Chinese entrepreneurs. At that point we started to become more about entrepreneurship in China, rather than just foreign entrepreneurs trying to be successful in China.
Eventually we had to move out of Mexican Wave, and move into the Capital Club, where we could accommodate between 60 to 80 people at our monthly events. By 2006 we had already outgrown that and moved over to the Kerry Centre, where we were getting anywhere between 100 and 150 people to every event.

What is the China Mega-Forum for Entrepreneurship and Innovation? Who are the major partners involved?
The Mega-Forum is really one of those things that looks back to the foundation of China Entrepreneurs, what we started out doing – supporting entrepreneurship in China.
We analyzed it and asked: what can we do that really brings these people together, that really helps support the ecosystem for entrepreneurship in a way that we have not done before? How can we make the biggest impact from bringing all these people together in one place?
We decided to create the Mega-Forum. The first day is higher level discussions: Where is entrepreneurship in China? How is the government push for innovation and entrepreneurship continuing to succeed or not succeed? A lot of money has come into supporting these initiatives from the government. Of course, from the perspective of an entrepreneur money is good, but is everything else there that needs to be there as part of the ecosystem to drive innovation and entrepreneurship?
The second day is the nuts and bolts of building a business. Whether we’re talking early stage or growth stage companies, they have different issues but we’ll be bringing in experts who have done it before. They have set up employee stock-option plans, HR systems, accounting rules and regulations – things that a lot of entrepreneurs haven’t gone through yet.
We find that a lot of entrepreneurs in China have not had the formal training that typical foreign entrepreneurs would have had. They don’t know the details on how to do all these of things. We talked to a lot of the VCs [venture capital firms] that invest in these companies, and they have done a good job of analyzing the company and the market. They want to be able to support the company themselves, but they don’t have time to organize a program or a seminar themselves.

Who is involved in the Mega-Forum?
Right now we have about 70 media, 50 supporting organizations, ten venture capital firms, and we are adding everyday as people, everyone from AmCham to a tiny incubation center in Hebei, are rallying behind the event. Our goal is to make it a 1,000 person event, so that it can really be a Mega-Forum, not a tiny forum, all though we do those as well.

What are some of the highlights of the range of enterprises that CE currently has growing in the Incubation/Entrepreneurship Center?
We have entrepreneurs in our center who just want to be around other entrepreneurs. They don’t necessarily need much help from us, they just want to feel the vibe. They might be in here on a Saturday at midnight, you have other people down the hall who understand, who can relate. You’re trying to build your business, you’re doing everything you can.
Then we have other entrepreneurs we’re working with who have the same passion and energy for their business, but who might need more of the resources that China Entrepreneurs has to offer them.
With our platform we have contacts with all sorts of different folks, and depending on the needs of the company, we have the ability to help them out.
We have a company called VIP Store, selling luxury goods online, as well as a company called BDP Technology working with biodegradable plastics. These are the kind of companies we’re working with, and we are excited to work with companies with good ideas.

As an entrepreneur, what are the best and worst things for you about doing business in China?
This is the place to be to be if you’re an entrepreneur. I wouldn’t want to be an entrepreneur anywhere else in the world right now.
Unfortunately, on the flip side, people are running so quickly to get into the market here, and people work so hard, that you have keep up.

To find out more or register for The China Mega-Forum for Entrepreneurship and Innovation at the Kerry Centre October 25-26, see chinamegaforum.com