After fulfilling his military service, this entrepreneur spent several years toiling away at one of greater China’s biggest manufacturing companies, learning the ropes and absorbing as much knowledge as possible before eventually venturing out on his own to make his Vision a reality, and turning his startup to a multimillion-dollar Series A venture. This is the story of China’s Huodongxing and its Visionary founder John Xie.
Like most fresh graduates, John Xie’s main objective was to find a good job, save some money to buy a house, and after a few years, maybe get married and have children. As a regular university student, a regular career path seemed to be destined for Xie. After graduating from National Taiwan University of Science and Technology in 2005, he enrolled onto compulsory military service, learning about processes of the army, and some strategy along the way.
Upon completion, Xie was set on becoming a software engineer and got a job working at Taiwan’s most famous company, Foxconn Technology Group, the sometimes-infamous component manufacturer for Apple. The reasons for working at Foxconn were largely pragmatic. The company boasts the largest number of employees in China, totalling to more than 500,000. The management systems at Foxconn is known to be very complete and rigorous, and it also encourages intrepreneurship within the company. The founder and CEO, Terry Gou, also had humble beginnings as an entrepreneur before becoming a corporate magnate with presidential ambitions. Gou’s fierce spirit of entrepreneurship and expectations of hard work from his young workforce was infectious.
It was around that same period that the rest of the world was limping to recovery from the dotcom crash of the early 2000s and the beginning of the steep rise of the Chinese economy. This upward trajectory was accompanied by a completely new internet revolution for China, along the burgeoning growth of the middle class that continues to this day.
It would not take long before Xie would be inspired by his employer. Spurred by the monotony of a salaryman’s life and fermenting entrepreneurial visions of his own, he would take matters in his own hands.
“I didn’t want my life to be limited to a stable job.” Says Xie. “When life follows the same pattern, day after day, I found that I was no longer satisfied with anything in my life. I felt that I could do better and achieve more than sitting in my cubicle watching the minutes pass. This was especially true after seeing so many successful cases of internet entrepreneurship. I decided that I would start my own business and affect some changes to people’s lives.”
At that time, the Internet and software industries in the Mainland were just beginning to bloom, unlike in Taiwan, where the hardware technology head start it had had was starting to show signs of a slowdown.
“I thought ‘what a great opportunity,’ and so I decided to start my own business focusing on the internet and software products.” Says Xie.
Finding his groove
It is hard to imagine that seven years ago, in 2012, the QR code was only making its presence known in China. The subsequent explosion of the use of these scannable codes has seen it become the backbone and enabler of so many Business to Consumer (B2C) technologies seen across China today. From food deliveries, to taxis, to electronic wallets, China’s digital economy – the envy of most first-world nations – relies heavily on the use of QR codes. It was this foresight that prompted Xie to take those initial tentative steps into the entrepreneurial world.
Realizing that QR codes were a great technology but not popular as popular as they could have been at the time. Xie wanted to promote and popularize it. He was well ahead of his time. Xie and the then yet-unnamed Huodongxing team, initially created apps that applied QR codes to the reservation and ordering at restaurants, which aimed to simplify customer’s ordering processes. But it was a case of right technology at the wrong time – the project just didn’t take off in Taiwan that year. Interestingly, the use of QR codes for this exact purpose has become widespread and prevalent throughout Mainland China today.
Xie then adapted their existing QR code software technology to apply to the registration and check-in processes of events. To their surprise, they found that both the organizers and the attendees liked it very much. Before long, the word was out in the events industry of this upstart company with a brand-new technology that provided both convenience and security at events. A strong following and interest gathered, resulting in increasing demand from event organizers.
“We surveyed many event organizers and found that they spent a lot of time selling tickets, printing tickets, delivering tickets and checking tickets. This process is complex, but it didn’t need to be with the help of technology.” Says Xie.
The QR code technology was the perfect solution to greatly simplify the processes, while saving time and money for the event organizers.
“After much market research and looking into user requirements, our product Accupass1.0 was released in Taiwan in 2012, and one year later the Huodongxing1.0 was released in the mainland.” Says Xie.
Moving into China
Myths about Huodongxing’s entrepreneurial success have already begun sprouting. One story tells of Xie’s partner browsing through magazines at the airport when he came across a business publication that filled him with inspiration, according to this story, he decided to purchase every issue of the said business magazine and thereby discovering Huodongxing’s secret sauce to success. Xie did not know about this story.
“A company’s business model doesn’t come suddenly.” Says Xie chuckling at the story. “It requires you to be very familiar with your field and market; you must have insights into the potential needs and pain points of your customers in order to help your customers to solve their problems. A good business model is one that helps customers succeed. We’ve made a lot of mistakes, but we have constantly adjusted to find the right business model and direction for our company.” Says Xie.
Huodongxing has always insisted on growing with their customers. They have taken a humble and cautious approach to their own growth too, trying their best to not emulate other company’s successes. It was during their fundraising activities that the company would ultimately be introduced to the Mainland China market.
“We obtained our first investment in 2012. As a representative of innovation projects in Taiwan, we were recommended to participate in the “Innovation China” competition in Hangzhou, where we ended up in the top three. Thus, we obtained the early investment from SAIF Partners, Qualcomm and DCM.” Says Xie.
One year later, they would introduce their namesake application Huodongxing1.0, to the Chinese market.
The move proved to be a boon for the company. At the time, events in China were clunky and cumbersome, with many resources from different parties required in order to even get an event to fruition.
Huodongxing saw the power of technology to connect experiences, using its SaaS technology to avoid repetitive development time for event organizers. By applying their software, the company linked the upstream and downstream of the event industry to find vendors, enhancing user stickiness and boosting the whole event industry, and lowered the threshold of organizing an event by offering a one-stop solution for customers, from event hosting, management, promotion, ticket purchasing and online registration services.
Xie believes that most event organizers in Mainland China overly focus on the pre-event promotion, and neglect the post event data analysis, which can yield immense value in terms of information and insights into the long-term success and sustainability of an event. They have taken it upon themselves to analyse user data and blast out EDM and SMSs based on their users’ interests, making sure they are targeting the right audience, the result is an open rate of their EDM of over 20% – compared to an industry average of just 3-5%.
Taking cultural differences in stride
Before becoming an entrepreneur, Xie had lived and worked in Shenzhen for four years, where he learnt a lot about the entrepreneurial environment in the Mainland.
“I like new things and can quickly integrate into various environments. It helped that I have many friends in the mainland. But there are some differences in the entrepreneurial environments of Taiwan and the Mainland, especially on the Internet.” Says Xie. “The entrepreneurial atmosphere of the internet in Taiwan lags behind the Mainland. The market is smaller, so it is easy to see the ceiling and become disheartened. However, with such a large population in the Mainland, there are many opportunities for internet entrepreneurship, and many people have found success here.”
There are differences in culture and business models in the Mainland too. The people in China are accustomed to using free Internet services and are generally unwilling to pay a premium. As far as business cooperation, people tend to exchange resources with each other.
“Enterprises in the mainland runs fast. As soon as the business model is verified and feasible, and once financing is obtained, Mainland businesses will expand rapidly, staking out their turf. Taiwanese are more conservative. They are accustomed to improving their products to be relatively perfect before they start to expand. While there are obvious benefits to this, their development tends to be more moderate, and sometimes they will miss some opportunities.” Says Xie.
At first, the company focused on the first-tier megacities such as Beijing, Shanghai and Shenzhen where there are many TMT, entrepreneurship and media event categories, putting huge efforts into polishing products, establishing public praise, and gradually accumulate customers. With the number of active users constantly rising, and event organizers heaping praise on their products, Huodongxing knew that it was time to expand their services to more cities and more categories.
“There is no shortcut to provide SaaS services. We need to be down-to-earth, attentively providing services and constantly optimizing products. The successful experience of other companies is not necessarily suitable for our field and the current stage of our company, and it is impossible to immediately imitate others’ successful cases from magazines.” Says Xie. “Conversely, our path is one that may not be suitable for others. We must take a path that suits us.”
Show me the money!
No one would argue the enormity of the Chinese market, this applies equally to the startup scene. Some of the world’s largest startups in recent years have arisen from the Chinese market, these include Xiaomi, Didi and ByteDance – the owner of TikTok, to name but a few. But for every successful unicorn, there is a graveyard of unfunded operators. For start-ups who want to get early investment in China, it is necessary to participate in more entrepreneurial roadshows and innovation competitions, according to Xie.
“It is not merely an effective way to find money to fund your business, but it is also one way to make your presence felt to those investors who focus on early investments. At the same time, this process can help you to verify your project ideas.” Says Xie. “You will face various queries and many challenges. These problems will make you think more comprehensively and will force you to constantly improve your products. It’s very worthwhile for start-ups.”
Compared to their competitors, Huodongxing provides more comprehensive services indeed. The company plays companion to its customers from start to finish. From finding venues, promotion and registration, on-site check-in, to backend data analytics, Huodongxing is there.
“We integrate high-quality event service providers into our platform, this is the biggest difference between us and our competitors. At the same time, we have accumulated more and more users and high-quality organizers, and the effect of scale is revealing a competitive advantage.” Says Xie.
Xie stresses the importance of always paying attention to development trends in your industry. For Huodongxing, that means digging deep into the needs of event organizers, and providing more complete services to help them succeed, in order to always stay ahead.
Courage, co-founders, community and content
Starting a tech company is no easy feat. The early partners of Huodongxing were colleagues at Foxconn. Collectively, they gave up their high paying jobs to join the company because they believed in the ambitions of the company, and equally because they believed in entrepreneurship.
“We have deep friendships with one another. We trust each other and believe that we will all succeed, which is very important in the early days of a startup.” Says Xie. “This can repel all kinds of difficulties.”
As the company developed and grew, more outstanding people joined Huodongxing.
“Excellent people need a sense of achievement and respect.” Says Xie. “For our core business leaders, I let them fight among themselves. They have more discourse power, while I am responsible for providing general direction and resource support.”
Finding the right working environment is also important. In addition to providing a comfortable office space, Ucommune provides many business services, communications and networking opportunities for entrepreneurs. It is a community before it is a co-working space.
“Ucommune is the best partner for entrepreneurs in China,” says Xie. “It is not merely an office space, it is also a community of entrepreneurs. With its inhouse Entrepreneurs Club, Ucommune benefits startups by giving them more resources, this is not available in other office spaces. The decoration style of Ucommune is fashionable and young, and it provides complete support services, such as coffee room, library, gym, reception room, printers. The location and transportation of Ucommune is convenient, and that is an important factor for us.”
As humble as ever, Xie doesn’t consider his business a success yet, although he acknowledges that his team has successfully completed a number of goals at its current stage and are well on their way to success.
Entrepreneurship is a game of endurance. Market opportunities are ever changing. Temporary success can easily seduce the novice entrepreneur, as it never guarantees continued success. Vis-à-vis, temporary failure doesn’t eliminate future successes. Entrepreneurs must have enough courage, patience and determination. It also takes a special kind of Visionary to seize upon those opportunities.