On 8th April, we had the privilege to host Leon Ge from Partech Partners in the new series of online events organized jointly by Startup Grind Chengdu & Startup Grind Paris.
Leon comes with extensive experience across borders, with his previous role at Google APAC, and AVP at ID Capital covering Greater China, Korea, Japan and partially Southeast Asia. He is currently a Principal at Partech Partners based out of Paris, investing across Europe and beyond, while spearheading Asia initiatives for the firm.
Here are the main insights from the discussion:
The European Advantage 欧洲的优势 ?
Talents: Europe has more STEM graduates than the USA (1.1m vs 0.5m on an average year; 9.7m vs 4.5m in the past 10 years). Paris is arguably the biggest mathematical talent pool in the world. All of these elements serve as an irreplaceable asset to be tapped into.
Early-stage Fundings: Europe overtook USA in number of early-stage deals (2625 vs. 2206, in # of deals <$1m in 2018)
Tough start, likely stronger expansion: Successfully scaling a company in Europe requires entering different markets very early in the cycle. While it remains a factor of complexity and challenges in European startup landscape, it does present a chance for the team, once they growth past the early expansion phase and beyond Europe. It is an extremely complex and painful process that eventually trains the leadership the skills of starting up new markets, catering products and services to local markets as well as managing teams across geographies and cultures. All this is evidenced by the numerous success Europe stories, most lastly demonstrated by ManoMano, a European marketplace for DYI and home improvement (launched in FR, IT, DE, ES, UK, but also working with Chinese suppliers now). .
Expanding across Regions 跨文化市场拓展 ?
Humility: Success doesn’t always transpose across geographies and cultures (at best). It’s hardly over-exaggerated to be always reminded to remain humble when considering entering a new market. At the end of the day, Deezer still remains largely significant in the French market despite the deep pockets of its behemoth competitor Spotify.
Cultural Differences: having lived in France, Singapore, China and Japan, Leon underlines that misunderstandings and miscommunications across cultures are still overwhelmingly present, despite much progress over the years. Taking a step back and getting a clarity in the basics of a framework one should operate under in a specific culture is paramount. Leon recommended reading “Culture Map” by Erin Meyer for a boost of ‘Culture Quotient’.
Deep understanding of the market: it is irreplaceable to gain unique insights and deeply understanding of local consumer behavioral habits and hence the winning strategy. Leon shared the example of Lemonbox that spent a tremendous amount of time finding the best go-to-market for the Chinese market. The company decided to build a DTC presence with WeChat ecosystem (through mini apps and it influencer platform), This bet seems to have paid off since their subscribers have skyrocketed since the launch.
文化差异：葛先生在法国、新加坡，中国和日本都生活过。他深切地意识到不同文化之间的误解依然广泛存在。花时间厘清特定文化环境之下的基础协作框架是非常有必要的。葛先生给大家推荐了Erin Meyer的著作“The Culture Map”.
Advices to Entrepreneurs 对创业者的建议
Early Stage, local VCs: Founders should feel comfortable raising local capital vs. international at early stage (typically preseed and seed, building solid fundamentals of the business and the team in the home country. For later stage (A, B and onwards), international VCs such as Partech could provide invaluable and sometime unparalleled support that are vital for scaling and expanding the business to the next level. Partech comes along a long history of supporting startups across regions since 1982, and boasts a network of LPs, global corporates and partners that are on a regular contact with the investment team and ready to partner with startups as clients, partners or even acquirers (e.g. the recent acquisition of DejBox by Carrefour would a case in point).
VC’s capital is expensive: this is a truth. As entrepreneurs, you are giving away a significant part of your business in exchange for an amount of capital, but more importantly resources, guidance and support beyond capital. If a VC’s capacity is limited at the capital on the table and a sporadic disengaged board presence, then cheaper capital such government grants and specific loans might not be a worse choice at the end of the day (especially if you’ve got your business up and running).
Strong opinions, loosely held: the best entrepreneurs (that come in all ‘shapes’ needless to say) often hold strong opinions and unique insights about a certain industry, but “loosely held”. Founders are to be sensible to direct advice but also minor nudges. Certainly without following all advice, but being receptive to hearing different ideas are extremely important. Effective feedback at the leadership level often decides to a crazy extent the caliber of a startup and hence the result delivered.
Finally, let’s conclude with a little career advice from Leon’s experience: if you have a curiosity of an intellectual, a drive to make the world a better place (no matter how small of a step) but also not minding being the supporting team behind the heroes, venture capital could be something for you.
Thanks again to Leon for spending time with us and with the Startup Grind audience.
Looking forward to our next Startup Grind Chengdu x Paris event on the 22nd of April, where we will interviewing David Baverez, yet another seasoned investor. We will speak about the relationship between Europe & China, Angel Investing & opportunities post-COVID19 for startups.