Tiny bubbles
In the China market
Make me unhappy
Make my firm bankrupt

As we struggle to adjust and overcome, lots of entrepreneurs are reaching down deep and searching out their inner child - that screaming, whining, fussy inner child who wants it all now. They’re seeing lots of shiny pretty things – or new business models - that they absolutely have to have right this very second. That may very well usher in the ugly final half of the financial crisis for some of China’s most vibrant young companies…

I’m all for entrepreneurs reinventing themselves in the face of environmental shifts – but let’s just make sure that we’re building a strong foundation on solid ground. China business leaders are bombarded with point data, and you have to be able to see the difference between important trends and little bubbles of potential.

Look out for these potholes on the long, twisty road to reinventing your China business:

1) Gee-whiz technological flavors of the month.
The line between ‘early adopter’ and ‘mass market’ can be long, twisty and broken. Be careful of reflexive applications of the newest technologies, a la the tech bubble-burst of 2000. Tweeting about how great twitter is, blogging about blogs, and rolling up giant memberships in Facebook groups celebrating the glories of Facebook are fun and busy – but they usually don’t put bucks in the bank. We did this 10 years ago and it ends badly. Every tweet-up, blogfest and Joomapalooza is just another testament to sad unrequited geek love. I’m with you y’all in spirit, but this ain’t gonna get your POTS phones ringing with paying customers on the line. No matter how cool the software is, it still requires a critical mass of paying users and a solid business plan to be profitable.

2) Headline trends that look great on CNN but lousy on the income statement.
I’ve seen those same 20 Chinese real estate tourists 50 times – but that don’t make ‘em 1,000 home buyers. It’s just 50 depressed, shell-shocked managing editors regurgitating up the same cool story – usually spotted on one other’s 6:00 newscast. It looks like a huge trend, but is it? I still haven’t seen a single report about anyone actually buying anything. Talk to me when Foreclosureville CA starts printing bus schedules in HanZi. The same goes for every other ‘major economic shift’. You’ve got to strike a balance between staking out a proactive marketing stance and chasing rainbows.

3) Merry-go-round approaches to new product development
I know of one struggling wealth management company that was a little late to realize that their cold-calls weren’t pulling the lambs to slaughter anymore. They started chasing every half-baked idea they overheard at M1NT while waiting for the cocktail modeltress with the drinks. They’ve thrown lots of stuff at the wall – low money-down luxury property scams, Chinese clients, business broking, corporate treasury schemes… Know what’s stuck so far? Nada.

Bad ideas fill up the days and make it seem like you’re being decisive and bold, but you’re actually just killing your reputation and undermining morale on the sales floor where it really counts. They call them Business Plans because it’s business. However bad things look now, your situation will be much worse in 6 months when you’ve cycled through half a dozen silly ideas that never stood a chance in the light of day. The last thing you want to do now is squander your cash, morale and reputation with a bunch of silly double-reverse, razzle dazzle nonsense that you didn’t stress-test in advance. Execution is everything in a down market. The little bubbles pop even quicker than the big ones – and can end up being even more damaging to struggling China businesses.

This entry was posted on Monday, March 2nd, 2009 at 8:25 am and is filed under Expatreprenuership. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.