Cold Coffee On Startup Street
Text and photographs by Zou Biyu
An entrepreneur falls asleep on his laptop around 1:00 a.m. in a café on Startup Street in Zhongguancun, dubbed China’s “Silicon Valley.” It costs only 30 yuan (less than $5) to stay overnight in a café.
As Beijing’s chilly winter set in, the entrepreneurial heat emanating from Zhongguancun, known as China’s “Silicon Valley,” was put on ice. The colder atmosphere engulfing the dream catchers was set off by the aroma of coffee winding through the lanes.
Hallowed Ground
On June 12, 2014, the pedestrian street near Haidian Book Plaza at Zhongguancun was formally renamed Startup Street in reference to its resident entrepreneurial support agencies such as Garage Café, 3W Coffee, and 36 Krypton, where startups can incubate in low-rent offices, enjoy simplified procedures for government review and approval, receive discounted consultation, and meet potential investors.
Inhabitants of the street have dubbed it “Investor Café.” Despite length of less than a kilometer, the street has now attracted prospectors like the end of a rainbow even though its traditional brick-and-mortar bookselling tenants have been decimated by the emergence of e-commerce.
Startup Street never aroused much attention before Chinese Premier Li Keqiang visited the place in May and again in October of 2015. It has since become symbolic of the Chinese government’s new initiative to promote entrepreneurship across the nation. The street is now an iconic window facilitating a glimpse at the strength of entrepreneurship of China’s capital, and even the nation.
Early December 2015: An entrepreneur gives a presentation at a startup dialogue hosted by Garage Café, despite the fact that nobody seems to be interested. Regulars around this street know quite well that investors have become more cautious.
The 220-meter-long Startup Street at Zhongguancun attracts dream catchers from around the country: Many crowd into cafés, hunting for investors.
An entrepreneur shows his unmanned aerial vehicle at Startup Street, a hotbed for numerous start-ups and investors. According to the first list of makerspaces issued by the Ministry of Science and Technology at the end of 2015, most of the 27 Beijing-based makerspaces are found at Zhongguancun.
As reported in 2015, Dark Horse Club, a Zhongguancun-based online community for startups including many O2O enterprises like meal-ordering platform ele.com, obtained 835 investments totaling over 60 billion yuan. Travel agency Tongcheng acquired 6 billion yuan. 58 daojia.com, a subsidiary of 58.com specializing in classified information, received US$300 million after only one year of operation. Online education platform entstudy.com, known as “crazy teachers” in Chinese, rounded out the top 10 companies in terms of new financing received, with US$52 million.
Every successful story becomes a face masking the hard truths about the miniscule success rate of entrepreneurs. However, even when their original plans fall apart, many entrepreneurs eventually find a more agreeable path in Zhongguancun. Nothing was easy for the first group, which used surefire strategies to offset their unimpressive backgrounds.
The startup heat clashed with the chills of winter: “Coffee gets cold fast there,” many declared. “We’ve been seeing fewer investors than in early 2015,” revealed a customer of Garage Café. He has been hunting for investors for his medical project for almost six months.
Persistence Is Key
Despite any stagnation, Startup Street remains the top choice for those with big dreams thanks to service agencies in every office building on the street. Various campaigns launched by resident cafés can still draw dreamers from across the country to opportunities via sharing sessions, road shows and lectures, in addition to meetings with investors.
Some predict that the area will evolve into a mecca for outsiders to come and learn. “After a month and a half here, I can say that I learn something new here every day, whether or not I ever find an investor for my social networking software,” explained Mr. Zhang, an entrepreneur from Henan Province, as he attended a road show presented by Bingo Café.
Zhang Bin, another example, quit his office job to invest all of his time and effort into developing a social networking app with a partner. Zhang is in charge of delivering the business plan to potential investors, and has only received two replies so far. “Too many people are working on similar apps,” he sighed.
Luo Xianqi was lucky enough to win a “flash investment” for his program related to big data. He was extremely cautious compared to those seeking billions while citing their personal ideals and feelings. It took him less than a half hour to win over his angel investor, who offered several hundred thousand yuan and office space.
He never returned to the space he leased in Tiantongyuan, a residential community in Beijing’s northern suburbs. Instead, he rented a bed for 68 yuan a day at a bath center close to Zhongguancun, enabling him to work until midnight and get to his office at 9:00 a.m. the next morning, saving tons of time wasted on a long commute. He was fully aware of the hard work required to run a business: No pain, no gain. He also stayed at YOU+, an apartment catering to new entrepreneurs. Seeing so many people give up and leave inspires him to endure all the twists and turns.
Most plan to eventually leave Startup Street when that step of the journey is complete. But for some, especially the younger entrepreneurs, the street remains attractive longer thanks to its role as a hub for various resources. When someone needs tech support or assistance, it is usually found within an hour through posting on a bulletin board or shouting across a café.
Nothing is free, and anyone dreaming of success must prepare to face down stiff competition for years to come.
May 2015: Entrepreneur Hu Liangcai gives a presentation about his team and product, a smart-cloud heating device, at Garage Café’s 3rd anniversary celebration. The heater is controlled remotely with a movable device via WiFi. “It’s been six months,” grimaces Hu. “My heaters are still in the warehouse because we haven’t received a certificate for 3C authentication.”