Risk-taking and persistence make successful entrepreneurs, says Sequoia’s Shen
Entrepreneurship is all about being willing to take risks and doing so continuously, Neil Shen, one of the most successful venture capitalist in China, told a conference in Hong Kong on Friday.
“Doing start-ups is not a short sprint, but a long-distance race, or even a long march,” said Shen, founding and managing partner of Sequoia Capital China, which has invested in tech and e-commerce giants such as Alibaba and the world’s largest drone manufacturer DJI.
Shen was ranked the 11th top tech investors this year by Forbes and has a personal net worth of over US$1 billion. He also cofounded China’s top travel website Ctrip and the country’s biggest budget hotels operator Home Inns. Both companies are listed on the Nasdaq.
I thought, if internet companies can succeed in the US, they can in China too, even as copycats
Being adventurous and taking risks made Shen who he is today, he told the InnoTech Expo forum. He used to work as a banker on Wall Street and later in Hong Kong before launching start-ups.
Recalling his decision to give up a stable job in banking to found Ctrip, Shen said he was inspired and motivated by the success of Silicon Valley firms.
It was July 4, 1999, and he was visiting Los Altos Hills in northern Silicon Valley, where he witnessed spectacular fireworks shooting out of every surrounding county and lighting up the night sky. He was amazed that the rise of internet firms in Silicon Valley had seemingly made all counties nearby well off enough to afford such elaborate firework displays.
“I thought, if internet companies can succeed in the US, they can in China too, even as copycats,” said Shen.
Being adventurous is not enough, however, if you do not take on risks persistently in the face of difficulties, Shen said.
In the most difficult time for Ctrip around 2000, it took him six months and more than 10 trips to close a cooperation deal with China Eastern Airlines that would at most take two months now.
“Sometimes you have to go through hardships and even failures a few times before succeeding,” he said.
Shen raised the example of Wang Xing who, following two failed start-up projects, later founded China’s largest group-buying and food-delivery platform, Meituan-Dianping, which Shen has invested in.
After Wang followed the model of Groupon in the US and successfully made Meituan a top player in China’s group-buying market, he did not shy away from taking risks and ventured into the delivery market, which was a move met with some scepticism, Shen said.
But in just eight years, on-demand delivery has become a mainstream option for Chinese residents on top of cooking at home and dining out.
“Meituan copied Groupon to be successful, but it then surpassed its US counterpart with food delivery services, which is unique to China,” said Shen.
When asked what Hong Kong can do to foster an ecosystem for entrepreneurs, Shen said the key is to encourage young talented people and provide them with education that prompts innovation.
The government could also consider setting up “guiding funds,” as some mainland Chinese cities have done, he said.
“After all, Hong Kong’s fiscal reserves are quite considerable,” said Shen.
