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Being one's own boss

By Xu Xiaomin and Yu Ran in Shanghai | China Daily USA | Updated: 2017-01-06 11:35
Being one's own boss

Despite high startup failure rates, entrepreneurship is nonetheless fast gaining popularity in Shanghai, with a growing number of youths eager to start their own businesses even before they graduate from university

Chinese students have traditionally been told that studying hard and earning a ticket to a good university is a surefire way to guarantee employment after graduation.

In recent years, however, mindsets have changed. A growing number of students now aren't interested in the stability that a full-time job affords and have instead chosen to carve a career path on their own terms.

According to a report by the publishing house affiliated to the Chinese Academy of Social Sciences, which surveyed 250,000 college graduates between 2012 and 2015, the number of startups by university students has been rising over the past several years, though only half of them survive past the three-year mark.

Wei Kai, who graduated from the University of Shanghai for Science and Technology in June 2016, is one of those who have achieved success. His video studio, which was founded during his third year at university and counts major brands like New Balance and Costa among its clients, managed to generate an impressive turnover of 800,000 yuan ($115,125) after less than 10 months.

Wei, who has won awards for several of his works, has also shot several films for the university.

"I guess I am wild at heart. I just couldn't imagine myself being in school all the time. I spent almost half of my university life working on my studio. I was an independent camera man before I managed to form a small team," said Wei.

For Lu Peng, a postgraduate student in Shanghai University, the route to establishing his own startup was not as smooth-sailing.

As the only male in his impoverished family from Gansu province in Northwest China, Lu had to juggle studies and part-time work when he was an undergraduate student in Shenyang in Liaoning province so that he could support his parents. He arrived in Shanghai about four years ago to further his education.

In Aug 2015, he poured his entire savings of 300,000 yuan to start Shanghai Huazhi Information & Technology Co Ltd, an IT company that caters to the logistics community. The company has since created a food delivery app called Daolema, which means "has it arrived".

Lu said: "It is really difficult to start a company in Shanghai, especially for a student. The 12 people in my company have to squeeze in a capsule-like room provided by my university in order to pursue our dreams.

"The beginning of the business was rough. I had used up all my money. I curled up and slept in the corner of a FamilyMart located in an affluent neighborhood in Pudong for a whole week when I was looking for a sponsor," said Lu.

Lu applied for a loan with the Shanghai Technology Entrepreneurship Foundation for Graduates and succeeded only on his third attempt. The foundation granted him a 100,000-yuan interest-free loan and Lu also managed to secure a 2-million-yuan sponsorship from an angel investor in April 2016.

"I am optimistic about student entrepreneurship. It is something that is in line with the current national policy on mass innovation and entrepreneurship," said Lu.

Tapping into opportunities in logistics

Having experienced the inconvenience of having to collect delivery parcels from the centralized delivery point in his university, Lu decided to address the issue by creating Daolema.

"We aim to provide door-to-door delivery services, especially in colleges and universities as professional couriers are not allowed to deliver packages to the dorms due to university regulations," said the 24-year-old.

The app allows users to hire other students on campus to collect their parcels and have them delivered to their dorm rooms for a small fee. Besides solving the logistics problem, the app also allows students to make some money on the side by becoming couriers.

Yan Yi, a student from Nanguang College, Communication University of China, said that he can earn up to 3,000 yuan a month simply by helping fellow students deliver their packages.

Daolema was launched in April 2016 and currently has more than 10,000 users. But Lu doesn't just want the app to be a provider of delivery services for college students - the ultimate goal is to turn it into an interactive social community in the framework of a sharing economy.

Strong educational and government support

With entrepreneurship and innovation being heralded as the "twin engines" of development, the Chinese economy is now focusing on slower but steadier growth. Government agencies and educational institutes have as a result been keen to encourage the youth of today to become bosses of their own companies.

The State Council, for example, has sought to create a more conducive environment for new companies by lowering barriers to starting businesses. Local governments have been offering grants and enhancing social services in higher education institutes as well as providing internship opportunities in larger companies.

Being one's own boss

Shanghai had set up a foundation to aid local college students who have started tech companies, with 50 million yuan being dispensed in the first phase. Half of that amount went to students from Yangpu district.

This particular Shanghai district, where top universities such as Fudan and Tongji are located, is considered the birthplace of many student startups. The district authorities have also been actively supporting startups by providing financial assistance, training and internship opportunities. More than 200 startups by college teachers and students emerge every year in the district.

"We have big companies as well as small- and medium-sized companies here in the district. We support overseas talents who come back to start their businesses here and encourage local residents to come and fulfill their ambitions," said Li Yaoqi, Party secretary of Yangpu district.

Tongji University, one of the most reputed in China, had in 2013 set up the Tongji Venture Valley as an incubation platform for students to experiment with their ideas and share resources. The incubator is one of the country's first demonstration parks for student entrepreneurship.

The Shanghai Zhili Industrial Park at Baoshan district is another entrepreneurship hotspot in the city. Lu's startup, which was initially located in a 6-square-meter room sponsored by Shanghai University, is now situated in the park which offers affordable rental rates and preferential policies to a host of other companies.

"My company moved here four weeks ago. Zhili is a maker space. Many young companies are here and I can feel the passion and vigor of the staff at these companies," said Lu of the decision to move his office space.

The harsh realities that lie ahead

Startups around the world are notorious for having high failure rates. For Zhou Dichen, who gave up the dream of setting up his own company in 2015, failure was down to what he said was misguided ambition.

"The intention behind my startup ambition was not pure - I just wanted to win an entrepreneurship competition. As a result, many problems emerged and destroyed our campaign when it was still in the starting stages," said Zhou, a Tongji University undergraduate.

Yu Hai, a professor of sociology at Fudan University, offered a sobering piece of advice for aspiring student entrepreneurs.

"Starting a business is an extremely difficulty thing which requires experience and skills. Only a very small number of people have the required qualities," said Yu, whose own son had quit his job to become a startup founder.

"What college students learn in school is far from enough to enable them to run a business. They need time to build their social network and capabilities. I don't encourage every student to go about starting their own businesses. They should work and learn from others first."

According to Lu, support from professional business incubators is vital to entrepreneurs who are still in school because they naturally represent a high risk investment for sponsors.

"The process of setting up your own company will be full of challenges. You'll face pressure from limited resources and capital and issues arising from people management. The reality can be torturous if you aren't prepared for what lies ahead," said Lu.

Wei echoed this sentiment, saying that the management of staff, work flow and market exploration are the biggest problems for student startups.

"Starting your own business is a road of no return. If you take a break or slack off for just a short while, you will be surpassed very soon," said Wei.

"If you want to do this, sit tight and never lose sight of innovation."

Cheng Si contributed to this story.

xuxiaomin@chinadaily.com.cn

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