“Leaving the Nest” Part 1: Hong Kong
And So… after ~16 long and tedious months of R&D we had finished our 1st product
The most dreaded time for us engineers had come… where we actually need to go out from our cozy offices and labs and start SELLING to real clients, So… what is the most obvious place to start selling – Israel – our local incubator:
Convenient, Close, Native speaking, Great pilot, Lots of colleagues that promise to purchase, multiple startups and companies…
… and many other clichés …
No big surprise that we Israelis (including yours truly) are not THE best clients. Sales reached a staggering number of ten units. (And we promised our investors hundreds… 🙂 )
Common feedbacks we got during our sales attempts –
“Give us free samples…”
“Just working with us is an opportunity for you…”
“Where is the innovation?”
“We can do it better…”
And my favorite for generation of hope:
“Looks great, We will buy soon…”
You get the picture. Very frustrating.
Mind your resources – many fail to realize or consider the cost of pre-sale. Each meeting costs >2000 Shekels in travel expenses and time. With B2B, it takes lots of meetings to close even the basic deal. Hence cost of customer acquisition is extremely high – especially for a startup in it’s infancy with no brand name.
And then we decided enough is enough and started searching for other opportunities. Came across Hong Kong Trade Development Council – HKTDC (http://aboutus.hktdc.com/en/#home). An organization which assists SMEs (Small and medium-sized enterprises) in HK to succeed by providing necessary services. HKTDC has decided to open an office in Israel (http://wolfppr.com/wp/index.php/hktdc/) and offer Israeli companies the chance to buy a booth (in a ridicules price of $450) at the innodesign tech expo convention and market the company.
Hong Kong is one of of the world’s leading international financial centres and the gateway to China. It has a major capitalist service economy characterised by low taxation and free trade .It is an important centre for international finance and trade, with one of the greatest concentrations of corporate headquarters in the Asia-Pacific region.
And so we went… And it was eye opening ….
The convention was held at the Hong Kong convention and Exhibition center – a Huge 5-story complex that housed ~500 exhibitors.
Met Companies from all over mostly from APAC but also from Europe and America; Exhibition of latest practical technologies and design solutions to help trading, manufacturing and service sector to enhance their capacity to supply world markets. Products from food to Hitech, services in all fields; Makers, developers startups, Universities. You get the point…
and Gemsense – the only Israeli company presenting. 1st time we’re the only Israeli in the house – Made us feel so proud 🙂
Guess what – they actually loved our technology and products. Lot’s of contacts and connections and most importantly initial sales.
You wouldn’t believe how good it feels when clients actually think that what you are doing is great; when they are impressed from your product; when they give you positive feedback; and most importantly – when they actually purchase and pay.
This became the first milestone for a company – MARKET VALIDATION
And I was invited to a traditional launch organized by HKTDC – Really interesting cultural event – and YamY …
Bring your products with you if you can (For large quantities or for high inventory cost – need to clear up with customs or import / export first) . You probably will be able to sell on the spot. HK and China like to pay cash… Western Wire transfers methods – e.g. Paypal / Visa are a problem – in many cases locals and even companies will have a problem using those means paying to an offshore account.
If you wish to be really prepared for sales – support Alipay or Wechat; Open a subsidiary in HK (it can be a virtual office) open a local bank account… You get my meaning…
And yet another tip – install Wechat – a great app that far exceeds WhatsApp and used in HK and Mainland. A great replacement for business cards with a huge benefit of tagging the contact – important form separating the wheat from the chaff when meeting hundreds of people.
In my next post “Leaving the nest”: China the mainland I’ll share my impressions from our trip to Shanghai and Beijing.