Bildnachweis: StartSpace.
Xue Huang has worked for well-known start-up unicorns such as Uber and Mobike in China, as well as with start-up founders across various industries for over a decade before moving to Australia. She knows the Chinese startup scene well, and is getting to know the Australian one. A comparison.
VC Magazin: How did the Chinese tech scene develop in the past ten years, and which were key regions?
Huang: The Chinese tech scene has undergone a significant transformation over the past decade, evolving from the Internet era to the mobile Internet era. Today in China, almost anything can be accessed via phone. From the rise of Internet giants between 2000 and 2010 to new mobile Internet players around 2015 and a Fintech boom triggered by rapid adoption of mobile payment tools, key cities during those waves of start-up booms have been Beijing, Shanghai, Hangzhou, and Shenzhen. The online-to-offline (‘O2O’) business model inspired by the ‘sharing economy’ had benefited from the mobile Internet boom too – between 2014 and 2017, there were even digital services to share power banks, umbrellas, and wheelchairs! The various start-up waves were followed by intense competition backed by venture capital and early Internet giants, leading to industry consolidation typically within three to four years. Overall, China has become an emerging world leader in technology innovation.
VC Magazin: What are current drivers of innovation and key tech trends in the Chinese founder’s scene?
Huang: Among recent key technology trends, AI and machine learning are no doubt the
most popular. Other key trends include EV and battery technology, robotics and automation, medical/health industry and software as a service (SaaS). Drivers are tech giants and start-ups developing Chinese-based large language models as well as start-ups leveraging AI to develop AI-driven solutions. Robotics and automation advancements are driven by efficiency increases and the reduction of labour costs across manufacturing, logistics, healthcare, and service industries. With sustainability becoming a critical focus, innovations in electric vehicles, battery technologies, and renewable energy solutions are accelerated. Healthtech is experiencing rapid growth due to advancements in biotech, telemedicine, and personalized medical services required by an ageing population.
VC Magazin: How has the experience of working in different renowned start-ups in China shaped your perception of founding in the tech sector?
Huang: Working in different high-growth start-ups in China and with tech founders in various stages has profoundly shaped my perception of founding and leading a tech company. Some key insights and lessons I’ve gained from these experiences are: first, being number one (either the first one or the biggest one) doesn’t guarantee your success. Second, disruption often comes from outside your industry. Third, besides setting the right strategy, execution is key. Fourth, move fast.
VC Magazin: In Australia, you work in a public service, tasked with supporting early-stage business and start-up founders. What distinguishes Australian founders from Chinese founders in terms of their mentalities but also regarding the role technology plays for them?
Huang: Chinese founders often exhibit a high risk appetite and a strong drive for rapid growth, making quick and incremental steps of innovation and iteration in technology, product, and business models as they move forward. The highly competitive market environment in China pushes founders to move quickly and scale rapidly. In contrast, Australian founders tend to adopt a more cautious and deliberate approach. While they are innovative, there is often a greater emphasis on sustainable growth and detailed planning from the outset. The risk appetite is lower due to the smaller market size and higher start-up costs. The role of technology also differs between the two countries. Thanks to a well-developed tech infrastructure as well as China’s powerful supply chain and manufacturing strengths, building prototypes or developing business models on existing platforms can be much cheaper and quicker for Chinese founders.
VC Magazin: How does access to venture capital differ between Australia and China?
Huang: China’s venture capital market stands out as one of the largest globally, characterized by a significant volume of available capital driven by both domestic and international investors. The rapid pace of the market encourages investments in cutting-edge technologies and scalable business models. Investors eagerly support ambitious projects that can quickly scale with projection of returns at a later stage. Conversely, Australia’s venture capital landscape appears smaller. The market’s available capital and average investment are more limited, the domestic market is small, and there is a clear emphasis on sustainable growth. Venture capitalists tend to take a more cautious approach and primarily focus on tech sectors with the potential for global expansion, such as SaaS, fintech, greentech, healthtech, and agtech.
VC Magazin: Australia has the image of being far away from everything – how does that affect the proliferation of international tech companies, tech trends, and the strength of the start-up scene?
Huang: Australia’s geographical distance presents both unique challenges and opportunities for its tech ecosystem. The effort and cost associated with visiting and collaborating with other global innovation hubs are higher, potentially deterring some tech companies and venture capitalists from expanding into Australia. Additionally, the relatively small domestic market makes hiring top talent more difficult and expensive. On the flip side, Australia’s high quality of life may help attract international talent, and a diverse immigrant community fosters innovation and new ideas.
VC Magazin: Thank you very much.
About the interview partner:
Xue Huang currently leads StartSpace, a co-working space and community of founders in the State Library of Victoria, Melbourne. Prior, she dedicated ten years to working in and with fast-growing start-ups in China, and she holds an MBA of Melbourne University.
