New Documentary on Chinese Startups Flops at the Cinema as Key Figures Fall From Grace
"Foreign companies see startups as a competition, whereas Chinese see it as a war,” one VC investor says in an eye-opening new documentary
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5:20 PM HKT, Tue January 22, 2019
4 mins read
As we near Spring Festival, the time has come for Chinese companies to hold year-end parties celebrating the past year’s achievement, to raise a glass and raffle off prizes before employees head home for New Year festivities. But following the January 11 release of a documentary called Startups, quite a few bosses have opted instead to take their employees to the theater as a new kind of team-building event ahead of the arrival of the Year of the Pig.
There might not be anything more encouraging, or even inspiring, for those in startups than seeing how much anxiety, confusion, anger, but also excitement, happiness, and fulfillment other founders have experienced. Yet the film has struggled at the Chinese box office, failing to connect with a wider audience as some of its most prominent protagonists go through very public struggles with their companies.
Startups (Chinese name 燃点, “Burning Point”) is directed by Guan Xiu, who previously directed CCTV’s Win in China, a Dragon’s Den-like reality show for Chinese startups that aired over a decade ago and featured Alibaba’s Jack Ma and Lenovo’s Liu Chuanzhi as judges determining which contestants would win venture capital. Following the latest wave of China’s startup boom, Guan spent 14 months capturing representative moments in the work and lives of 14 founders from completely different industries, showing the everyday reality behind these newly-made business stars.
Luo Yonghao, founder of mobile terminal device company Smartisan, has attracted tens of millions of fans since he started pursuing his dream of making his own cellphone, the Smartisan T1, in 2012. Though he had little starting capital, he’s since become a symbol of dream chasers. In Startups, besides giving a humorous speech at a new product release conference, we also see a darker side to his work and fame, as Luo says at different times: “I’ve thought of suicide”; “The anxiety is lifelong”; and, “I hate public speaking.”
Luo Yonghao throwing darts at a target with his own face on it in his office
If you’ve ever visited a big city in China, you’ve probably seen or even ridden a yellow Ofo shared bike (or until their recent troubles, you may have ridden one outside of China). Ofo’s founder and CEO, Dai Wei, then a graduate student at Peking University, founded the company with four other PKU alumni in 2016, raising four rounds of financing in four months. But in Startups, Dai is seen eating a delivered lunch, recounting how hard it is to decide “when we should go fast and when we should slow down.” That statement feels especially timely given Ofo’s problems at present.
Papi Jiang (Jiang Yilei), one of China’s most successful internet celebrities, made her name with a series of phenomenal short videos on Weibo starting in 2015. The following year, she sold her first viral video ad, with a pricetag of 22 million RMB (about 3.2 million USD). Afterwards, she and her partner Yang Ming raised 120 million RMB and founded a multi-channel network called PAPITUBE as an incubator for online influencers, often referred to in China as KOLs or Key Opinion Leaders.
PAPITUBE has signed over 60 content creators active on Weibo, Douyin, and Bilibili. But in Startups, we see Papi Jiang still living in her parents’ old house in Shanghai, saying, “I’m not as rich as people might think,” and “The reason why I started making videos was because I wanted to express myself. But when it comes to a startup, there are so many things that you’re forced to do.”
There are many more such stories throughout the film. Other, less famous characters include Jin Xing, the founder and CEO of the medical cosmetology community and micro-plastic surgery platform SOYOUNG, whose mission is to “let the world be without ugliness,” and An Chuandong, a country boy who graduated from a top college in Beijing and looks to “reverse the unfair situation of people like me” through his startup projects. An comes in for particular criticism in the film from David Zhang (aka Zhang Ying), founding and managing partner of VC firm Matrix Partners China.
In fact, quite a few of the business leaders featured in Startups have received funding from Matrix Partners, including Fu Sheng of mobile developer Cheetah Mobile (the company behind livestreaming app Live.me and ubiquitous Android disk cleanup app Clean Master) and Tang Yan of mobile dating app Momo. “American and other foreign startups should feel lucky that they don’t need to compete with Chinese startups,” VC investor Zhang says in the film. “If so, they would be wiped out by Chinese rivals in the end. [Foreign companies] see startups as a competition, whereas Chinese see it as a war.”
Another important interviewee in the documentary is Xu Xiaoping, co-founder of angel investment firm Zhen Fund and the New Oriental Education & Technology Group. He sees “the same flame in every Chinese startup’s eyes,” adding that “building startups is a lifestyle and a mindset.”
After the documentary was released earlier this month, the stories of their subjects have continued to progress in the real world. Some haven’t worked out a successful exit, such as Ofo, which had millions lining up for deposit refunds in December, and Smartisan, which seems to be faltering in its attempt to challenge WeChat’s market dominance.
On January 14, three days after the release of the film, three new social video platforms were released online: Duo Shan (created by ByteDance/Tik Tok), Liao Tian Bao (by Kuairu Tech), and MT (aka Ma Tong, or toilet, by Ringle.AI). All of them are also aimed at dethroning WeChat, but Tencent’s dominant social app blocked QR codes and links for the would be competitors on their platform instantly, showing just how heated and cutthroat the Chinese startup world is at this stage of its development.
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“Within three years, 93% of startup companies fail,” the film states. Be that as it may, more and more young Chinese seem eager to take their ambitions, dreams, and passions into the cruel business world, where everything comes down to money. Startups gives an interesting insight into this fast-moving world, thought it doesn’t seem to be connecting with audiences: the film earned just 80,000USD on its opening day, perhaps due in part to the “fall from grace” of Ofo and Smartisan’s erstwhile rockstar CEOs. The film currently holds a lukewarm 5.9/10 on film rating site Douban.
Nevertheless, as the Chinese economy continues to be a topic dominating conversations around global trade, the millions of startups competing in the Chinese space — and the dark stories underlying their celebrity founders — are an integral part of the bigger picture.
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