Forecast cut on weak sterling

THE PREMATURE death of the 44-year-old founder of a prominent mobile health app start-up has spurred a bout of soul searching in the Chinese tech community, where working long hours in the hope of making a quick fortune has become a way of life.

Zhang Rui, the founder and chief executive of the start-up Chunyu Doctor, died from a heart attack on October 5. Heart attacks can have many causes and Chunyu spokesman Tan Wanneng said there was no evidence that Zhang’s death was due to overwork.

Yet as tech executives mourn his passing, that has not stopped some from wondering about the deeply competitive nature of their industry and the potential health burdens they face.

“The stress and loneliness that start-up founders feel cannot be comprehended by normal people,” Leon Li, the founder of Huobi, one of China’s largest bitcoin exchanges, wrote on his WeChat account in response to Zhang’s death.

“Especially in the internet sector, where entry barriers are low and competition is fierce; it’s like stepping on thin ice.”

Inspired by the rise of Alibaba Group Holding, which raised $25 billion (R356bn) in a 2014 initial public offering, China’s new generation of entrepreneurs have been engaged in a fierce battle for capital and talent. Constant flux The country saw the start-up of 1.2 new internet companies every day in the second quarter.

While Silicon Valley is also renowned for its competitive culture and lengthy hours, China’s entrepreneurs face a unique set of challenges because the industry is more nascent, and regulations and funding are in constant flux.

“The China start-up community is under a lot of pressure, if not as much but even more than in the valley or in the States,” said Dave McClure, the founding partner of California-based venture firm 500 Startups.

McClure said that among the more than 3 000 founders that he had invested in globally, at least six had passed away, with one committing suicide.

Zhang died at a critical juncture for Chunyu. In June, it completed a 1.2 billion yuan (R2.5bn) round of Series D fund-raising at a valuation of about $1bn and was planning to go public, according to Tan. Start-ups with a valuation exceeding that mark are known as “unicorns”. – Bloomberg RYANAIR said a further drop in the value of sterling had forced it to cut its forecast for full-year profit by 5 percent. Europe’s largest low-cost airline, which depends on Britain for around a third of its revenue, said an 18 percent slide in the pound against the dollar would cut fares by between 13 percent and 15 percent. The chief executive, Michael O’Leary, said the reduced forecast “remains heavily dependent upon no further weakness in secondhalf fares or sterling from its current levels”. Ryanair said it expected net profit for the year to March 31 of between 1.3 billion (R20.3bn) and 1.35bn, down from a previous forecast of 1.375bn to 1.425bn. The mean forecast of 16 analysts polled by Reuters was 1.383bn. Shares declined 0.6 percent and have dropped about 14 percent since June’s vote to leave the EU. – Reuters