China is no longer a Dream for Nor­we­gian star­tups thanks to nHack, a startup ac­cel­er­a­tor.

Nor­we­gian star­tups can now find suc­cess in the world’s largest econ­omy in terms of pur­chas­ing Apower.

Norway-Asia Business Review - - Contents - CHEYENNE HOL­LIS

It was once im­prob­a­ble, but thanks to nHack, a startup ac­cel­er­a­tor and in­vest­ment firm, small ideas from Nordic com­pa­nies are now grow­ing in China.

There is no short­age of star­tups in Nor­way. As Mr Pål Thorvik Næss, Di­rec­tor of En­trepreneurs and Star­tups at In­no­va­tion Nor­way, pointed out dur­ing the Nor­way-Asia Busi­ness Sum­mit 2018, there were more star­tups cre­ated in Nor­way than ba­bies born last year. And it’s not just Nor­way. A rapidly in­creas­ing num­ber of star­tups are be­ing es­tab­lished in all Nordic coun­tries.

The key for Nordic star­tups is get­ting out into the world. Ac­cord­ing to Mr Jon Eivind Stø, Co-founder and Part­ner at nHack, the sooner they look over­seas, the bet­ter chance they have of thriv­ing.

“There is a great in­ter­est for Nor­we­gian and Nordic tech, de­sign and so­lu­tions in China and Asia. By com­ing to this re­gion at an early stage, we be­lieve that the star­tups will be bet­ter equipped to take a larger share of the mar­ket,” Mr Stø stated. “It’s about get­ting to know the mar­ket, at­tract­ing the best tal­ents and es­tab­lish­ing the right part­ner­ships in Asia.”

nHack only in­vests in Nordic com­pa­nies with the aim of bring­ing them to China and Asia. The in­vest­ment firm’s main fo­cus is on as­sist­ing Nordic com­pa­nies in lo­cal­is­ing their busi­ness, pro­duc­tion or de­vel­op­ment as well as find­ing pay­ing cus­tomers and rais­ing cap­i­tal in the re­gion.

“We op­er­ate ac­cel­er­a­tors in China and will soon ex­pand to other coun­tries in Asia. Our in­vest­ment ex­perts and men­tor net­work ac­tively as­sist the com­pa­nies se­lected,” Mr Stø ex­plained. “We are sec­tor neu­tral, but have a spe­cial fo­cus on ocean in­dus­tries, soft­ware as a ser­vice, edtech, health & medtech, hard­ware and gam­ing.”

In some of these in­dus­tries, Nordic com­pa­nies al­ready have an ad­van­tage on the com­pe­ti­tion. For oth­ers, the net­work other firms have al­ready built in Asia can help pro­vide the ground­work for their po­ten­tial suc­cess.

“Nordic com­pa­nies have an edge in some of these tra­di­tional in­dus­tries while be­ing Nor­we­gian in other sec­tors will make it eas­ier to do busi­ness,” Mr Stø said.

For many Nordic star­tups, there is some trep­i­da­tion when en­ter­ing a mar­ket as large as China. De­spite these con­cerns, Mr Stø is bullish on their chances in Asia.

“It is ab­so­lutely pos­si­ble for Nor­we­gian star­tups to suc­ceed in China. The coun­try has the largest econ­omy in the world if you ad­just for pur­chas­ing power and the mar­ket here is huge,” Mr Stø re­ported. “We brought our first co­hort of Nor­we­gian com­pa­nies to China last fall and most of the com­pa­nies took huge steps very quickly. We have com­pa­nies that have achieved sub­stan­tial sales in the Chi­nese mar­ket, we have com­pa­nies that now pro­duce in China and we have com­pa­nies that have raised cap­i­tal in China.”

Su­per­fi­cial dif­fer­ences On the sur­face, there are nu­mer­ous dif­fer­ences be­tween Nor­way and China. Lan­guage and cul­ture are ob­sta­cles that must be over­come, but these can ob­scure sim­i­lar­i­ties that many com­pa­nies don’t re­alise ex­ist.

“The startup scene is boom­ing in China. In many ways, it is sim­i­lar to Nor­way. It is now pop­u­lar to be an en­tre­pre­neur and more and more peo­ple are start­ing their own com­pa­nies in China,” Mr Stø pointed out. “We also see that the best tal­ents now flock to tech and star­tups. Whilst state-owned en­ter­prises used to be the pre­ferred place to work for Chi­nese tal­ents, they are now mov­ing into tech and en­trepreneur­ship.”

Once Nordic com­pa­nies set up in China and other parts of Asia, they are of­ten shocked to find that it isn’t as dif­fer­ent from home as they imag­ined. Ac­cord­ing to Mr Stø, all most firms need to hit the ground run­ning is a lit­tle sup­port and a few con­nec­tions.

“What I of­ten hear from our com­pa­nies is that they are sur­prised how many sim­i­lar­i­ties there are be­tween the Nordics and China. With some good guid­ance you can thrive in China. How­ever, meet­ing the right part­ners is key,” Mr Stø said. “This is where nHack can pro­vide the most im­por­tant help. With op­er­a­tions in dif­fer­ent parts of the coun­try and deep ex­pe­ri­ence and know-how within dif­fer­ent in­dus­tries, we are able to both as­sist our com­pa­nies in set­ting up pro­duc­tion with qual­i­fied part­ners and ac­cess­ing cus­tomers, clients and cap­i­tal within a wide range of in­dus­tries.”

As great as this sounds, not every­thing is sun­shine and rain­bows. China and sev­eral Asian coun­tries can be dif­fi­cult to nav­i­gate for for­eign com­pa­nies. As Uber, Groupon and many more over­seas firms have found out, it is im­pos­si­ble to sim­ply show up in China and think suc­cess will fol­low.

“There are many chal­lenges in China whether you are a startup or an es­tab­lished busi­ness. We like to say that ‘every­thing can be dif­fi­cult’ but ‘any­thing is pos­si­ble’,” Mr Stø noted. “There are, of course, lan­guage and cul­ture bar­ri­ers and there is the chal­lenge of nav­i­gat­ing the share size of the coun­try which is more like a con­ti­nent with dif­fer­ent cul­tures and busi­ness tra­di­tions.”

On the fast track Speed has been one of nHack’s call­ing cards. De­spite for­mally launch­ing in 2017, it has al­ready hosted its first group of star­tups and now has of­fices in Beijing, Shen­zhen and Shang­hai. Plans are in the works to open another of­fice in Alibaba’s home­town of Hangzhou later this year with other cities in Asia also on the firm’s radar.

While Mr Stø is quick to ad­mit that nHack is a fairly young com­pany, this hasn’t pre­vented it from help­ing sev­eral Nor­we­gian star­tups find suc­cess in China.

“We have seen some of our com­pa­nies en­ter­ing into sales and dis­tri­bu­tion agree­ments with ma­jor play­ers at Chi­nese com­pa­nies. We have also seen com­pa­nies en­ter­ing into part­ner­ships with lo­cal busi­ness and firms within our co­horts co-de­vel­op­ing prod­ucts with in­dus­try lead­ers in Asia,” Mr Stø de­tailed. “In a very short time, we have seen some of our com­pa­nies de­velop pro­duc­tion ready pro­to­types and roll out pro­duc­tion with spe­cialised man­u­fac­tur­ers in China. We’ve had busi­nesses raise cap­i­tal in China on sub­stan­tially higher valu­a­tions than what they had pre­vi­ously done.”

All of these suc­cess sto­ries are con­nected by speed. Every­thing was done quickly. This is some­thing nHack stresses to the star­tups it ac­cepts. Ul­ti­mately, there is no time to waste.

“We be­lieve speed is crit­i­cal for a startup to suc­ceed. We are not great be­liev­ers in spend­ing month af­ter month in an of­fice per­fect­ing a busi­ness plan,” Mr Stø pro­claimed. “We be­lieve that the quicker you get your prod­uct to mar­ket, the quicker you will learn what the mar­ket wants.”

This isn’t dif­fer­ent from many other startup ac­cel­er­a­tors. nHack urges the com­pa­nies it ac­cepts to get go­ing quickly. With a deep ros­ter of men­tors and sup­port staff avail­able to help, it isn’t as daunt­ing as it sounds.

“Since speed is the fo­cus once a com­pany is ac­cepted to nHack, we ex­pect them to have meet­ings with po­ten­tial cus­tomers, clients and part­ners with a strong fo­cus on get­ting the first pay­ing cus­tomers in the mar­ket,” Mr Stø said. “We nat­u­rally as­sist them in this process and our net­work of men­tors in var­i­ous in­dus­tries plays a key part.”

Nor­we­gian star­tups sit­ting at home shouldn’t be slow in mak­ing a de­ci­sion on com­ing to China, ac­cord­ing to Mr Stø. With nHack’s as­sis­tance, they can tap into a mar­ket that they may have thought was un­reach­able in the past.

“Beijing is the uni­corn cap­i­tal of Asia. Shen­zhen is the ‘Sil­i­con Val­ley’ of hard­ware. In Hangzhou, we’re set­ting up a land­ing plat­form for Nordic health and medtech com­pa­nies. There are a lot of ex­cit­ing op­por­tu­ni­ties to en­ter the Chi­nese mar­ket if you act quickly,” Mr Jon Eivind Stø urged.

PHOTO: NHACK

PHOTO: SHUTTERSTOCK

Above left: The China Knights event is a free tech and VC fes­ti­val or­gan­ised by nHack. Above: A view across Shang­hai’s Huangpu River. Shang­hai will host Nor­way-Asia Busi­ness Sum­mit from 24 to 26 Oc­to­ber 2019.

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