In the frigid embrace of winter 2020, while engrossed in my Ph.D. fieldwork in the bustling southern city of Shenzhen, an unforeseen twist of fate landed me in an audacious new role: that of a startup founder.
A mere three weeks prior, whispers of an upcoming three-day “entrepreneurship competition” in the nearby metropolis of Guangzhou piqued my curiosity. Such competitions, frequently underwritten by state support, abound in urban China, beckoning young, ambitious entrepreneurs to showcase their innovative ideas to potential investors. Cities, in turn, chase the luminous sheen of entrepreneurial relevance, striving to bolster their startup ecosystems. A poignant illustration lies in the evolution of the Musical.ly app into TikTok, a transformation catalyzed by a Shanghai competition.
With a mix of apprehension and intrigue, I signed myself up for this venture. Surrounded by 35 other aspirants — many seasoned in the labyrinthine world of startups or equipped with engineering and business acumen — I initially envisioned a role as a keen observer rather than a participant. Yet, in a twist of fate, my nascent idea—a rudimentary concept aimed at linking Chinese university freshmen abroad with mentors—was plucked from the crowd, landing a coveted spot among six ideas poised for further development.
However, as the reality set in, it became glaringly obvious that my fledgling concept was teetering on the brink of collapse. An initial mentorship session yielded favorable comments but little actionable guidance. Each discussion with my team, comprised of fellows whose pitches had faltered, sapped my enthusiasm further. We contemplated pivoting to a travel app designed to assist middle-class Chinese navigating life abroad. Yet, our transition occurred so perilously late in the game that even fundamental market research eluded us.
Thus, we approached demo day armed with naught but a hastily assembled slide deck. As I absorbed the pitches from teams around me, a stark realization took hold: they had seamlessly internalized the entrepreneurial ethos harped on by our mentors—an eclectic mix of investors, local dignitaries, and esteemed business professors. Their presentations danced with buzzwords like “AI-enabled” and “IPO within five years.” After a session of overarching praise and slightly optimistic viability assessments, the judges retreated to deliberate.
To my astonishment, they crowned our pitch as the victor.
The ensuing days spiraled into a frenetic whirlwind of meetings with prospective business partners. Encouragement flowed from various corners of the competition, even as I clung to my original intent of returning to academia to finish my doctoral journey. Yet, as the days wore on, the thrill dissipated. The promised investments that had seemed irresistible remained elusive, and doubts began to creep in. Why had my pitch triumphed when I was arguably one of the least seasoned contenders? And what had led us to this fruitless precipice?
With each interview I conducted among entrepreneurs in Guangzhou and Shenzhen, the veil began to lift. A tapestry of shared experiences emerged, revealing that many, like myself, had ventured abroad for their Ph.D. pursuits before returning to China to stake their claim in the business world. The common thread binding these winners? A privileged background, a well-honed education, an adventurous disposition—traits coveted by China’s talent allure programs.
Yet, in a stark revelation, these individuals often lacked substantive industry backgrounds, proven entrepreneurial track records, or tangible product development strategies. Indeed, numerous winners lamented the chasm between victory and viable execution, awakening to the harsh truth: the skills that illuminate competition success do not always translate to the unforgiving terrain of the startup landscape.
The discerning investors appeared acutely aware of this dynamic. Days following the competition’s conclusion, I was stunned to learn of another team’s triumph—a pitch centered on an “AI-driven beauty consumer product” had secured pre-seed funding from one of the judges, despite not winning any accolades during the demo day. The founder, far from an elite entrepreneur, had racked up over a decade of experience in Guangzhou’s beauty sector.
In stark contrast, the judges who had supported our endeavor never extended an offer of investment. When I later probed the beauty startup’s backer about her decision, she revealed that the team’s two years of product development had disqualified them from the competition’s prizes, yet rendered them a prime candidate for investment. Ultimately, it boiled down to domain expertise: we were devoid of the industry backbone or valuable connections, whereas the leader of the AI beauty startup wielded both.
The dissonance between the judges’ initial accolades and their subsequent investment choices painted a vivid picture. Our team, while basking in the glow of perceived excellence, found ourselves vulnerable to the missteps characterizing many elite-educated founders—initial miscalculations often stymying our path. Ironically, the real triumph resided with those entrepreneurs possessing industry know-how and networks that transcend competition parameters.
Across the landscape, grassroots entrepreneurs from South China offer a contrasting narrative to the “excellence” celebrated in governmental talent programs. Often hailing from humble backgrounds, they grapple with formidable barriers in resource acquisition and networking, stymied by their exclusion from elite circles.
Thus, the fundamental aim of entrepreneurship competitions may not rest in uncovering the next groundbreaking idea but rather in nurturing dreams amongst a select pool of eligible aspirants. As noted by scholar Lilly Irani in her examination of India’s tech incubators, “hackathons may sow the seeds of technology, yet they consistently cultivate entrepreneurial identities.”
Four years have slipped by since that fateful competition. Now entrenched in the world of venture capital, I am beginning to grasp the wisdom echoed by a fellow Ph.D. graduate who successfully navigated the entrepreneurial labyrinth. He emphasized that state sponsorship, while beneficial, is not a prerequisite for success; what truly matters is a continuous commitment to delivering value to the market.
Steven Kaplan and Per Strömberg further elaborate that investors prioritize management quality above all else. A magnetic value proposition is paramount for startups vying for investor interest: if a pitch fails to evoke a resounding “Wow!” it simply does not resonate. While credentials may dazzle, the real art lies in persuading even a casual acquaintance of one’s vision—a skill that becomes increasingly crucial in winning investor confidence.
But in the realm of state-endorsed competitions, a compelling value proposition does not always hold the keys to success. Often, these competitions privilege pedigree over practical experience, illuminating a paradox where privilege can morph into a double-edged sword. True success, it seems, is reserved for those brave enough to navigate the tumultuous waters of the market economy.
The tech CEO who once triumphed in a similar competition aptly summarized the reality for many: “These competitions are commendable, yet they feel somewhat detached from the grit of true entrepreneurship, which is rarely glamorous.”
In light of China’s relentless push for mass entrepreneurship, it may well be time to reassess how we acknowledge talent, directing our efforts toward nurturing those with genuine business acumen and viable proposals from day one.
