Digital Bootcamp Asia Podcast

Tips on doing business in China with Jon Newton, Co-Founder & Managing Director of Life Solutions

June 29, 2020 Natasha Fang / Jon Newton Season 1 Episode 1
Digital Bootcamp Asia Podcast
Tips on doing business in China with Jon Newton, Co-Founder & Managing Director of Life Solutions
Chapters
Digital Bootcamp Asia Podcast
Tips on doing business in China with Jon Newton, Co-Founder & Managing Director of Life Solutions
Jun 29, 2020 Season 1 Episode 1
Natasha Fang / Jon Newton

This episode, we invited Jon Newton, Co-Founder & Managing Director of Life Solutions, a growing premium water filtration services company, to share his lessons learned about working and living in China and tips on doing in business in the sophisticated Chinese marketplace.

Topics discussed include: What was it like coming to China 18 years ago? Was it more challenging to run the business during the financial crisis of 2008 or the COVID-19? Which phase is more challenging, the starting phase, maintaining, or the scaling? How much time does it take from starting to maintaining to scaling? Chinapreneur Business Insights’ vision and how it allows Jon to share experiences and lessons learned to those who are interested in learning more about China's market entry strategies. What were the mistakes Jon has made in the past, and what advice would he give to those who want to start the business in China? Connect with Jon on LinkedIn.

This show is powered by Digital Bootcamp Asia, sponsored by Tolmao Group. Natasha Fang is the Founder and CEO of Tolmao Group, a leading integrated marketing agency headquartered in Shanghai City, China. Recognized for original content, persuasive digital marketing strategies, interactive website designs, and influential event marketing campaigns, she has worked with a variety of clients. Connect with Natasha Fang on LinkedIn.

Facebook: https://www.facebook.com/DigitalBootcampAsia
LinkedIn: https://www.linkedin.com/company/dbasia
Instagram: https://www.instagram.com/digitalbootcampasia
Twitter: https://twitter.com/DB_Asia

Show Notes Transcript

This episode, we invited Jon Newton, Co-Founder & Managing Director of Life Solutions, a growing premium water filtration services company, to share his lessons learned about working and living in China and tips on doing in business in the sophisticated Chinese marketplace.

Topics discussed include: What was it like coming to China 18 years ago? Was it more challenging to run the business during the financial crisis of 2008 or the COVID-19? Which phase is more challenging, the starting phase, maintaining, or the scaling? How much time does it take from starting to maintaining to scaling? Chinapreneur Business Insights’ vision and how it allows Jon to share experiences and lessons learned to those who are interested in learning more about China's market entry strategies. What were the mistakes Jon has made in the past, and what advice would he give to those who want to start the business in China? Connect with Jon on LinkedIn.

This show is powered by Digital Bootcamp Asia, sponsored by Tolmao Group. Natasha Fang is the Founder and CEO of Tolmao Group, a leading integrated marketing agency headquartered in Shanghai City, China. Recognized for original content, persuasive digital marketing strategies, interactive website designs, and influential event marketing campaigns, she has worked with a variety of clients. Connect with Natasha Fang on LinkedIn.

Facebook: https://www.facebook.com/DigitalBootcampAsia
LinkedIn: https://www.linkedin.com/company/dbasia
Instagram: https://www.instagram.com/digitalbootcampasia
Twitter: https://twitter.com/DB_Asia

Natasha Fang :

You're listening to Digital Bootcamp Asia Podcast, where entrepreneurs and business owners share their real-life stories and lessons learned on how to start, grow, and excel in their business in the digital era. This show is brought to you by Tolmao Group, an integrated marketing agency. I'm your host Natasha Fang. This episode is the first episode of the Digital Bootcamp Asia podcast. It is about tips on doing business in China. Jon Newton has almost 20 years of China business experience ranging from multinational management, academia, and startups. In 2008, Jon co-founded life solutions, a growing premium water filtration service company five years ago, he also founded Chinapreneur Business Insights, giving advice on China business and start-ups through keynote speaking engagements and consulting projects. Jon, welcome to the show!

Jon Newton :

Thanks very much, Natasha. It's great to be here.

Natasha Fang :

Jon, tell us a little bit about yourself. How long have you been living in China?

Jon Newton :

Well, I grew up in Cape Town. And after my bachelor's degree when I was 22 years old, I came to China initially for one year to learn to speak Chinese. But that spiraled into a second year, and things were going well, it became the third year. And I think eventually, after about four or five years, my family stopped asking me when I was going back to Cape Town. So now all together, I've been in China for 18 going on 19 years now.

Natasha Fang :

Wow, that's impressive. What was it like coming to China 18 years ago?

Jon Newton :

I think there are two aspects to that question, in the sense that one, I was much younger than I am today. You know, I said, I came in I was 22. I'm now, you know, 41. So I think as a young person, it was a much bigger challenge. And if I had, let's say, moved here now In some ways, so it was a great adventure. I mean, I didn't have a job at the time I was a student did a lot of time backpacking had a motorbike explored as much of China and Asia as I could. But it was also a great learning curve because it's so vastly different from where I grew up. And as a young person coming into an environment where your culture is different. I think I adapted and learn quite well. I know some people who, who don't, who didn't enjoy it, and some people who don't enjoy it to this day, but it was very different to what it is now, obviously, because I'm a lot more accustomed to China, but also China has changed a lot in the last, you know, 1520 years. It's quite different from what it used to be. So I think if somebody if the same Jon Newton arrived here today, it would probably be I think, in some ways you I think because of the developments that have happened, there's just a lot of familiarities, especially living in Shanghai. Now, there's a lot of familiarity with Western cities like Hong Kong and Singapore; it's all very similar. But then again, it also comes with challenges that it's more economically developed now before there were more opportunities. If you had an idea, you could run with it; it had a higher chance of succeeding because the markets are more mature and advanced now. There's a lot more competition and a lot of the ideas you would have brought 20 years ago have already been done. So there are differences from the economic side as well as you know how I would have viewed as a 22-year-old then and a 22-year-old now.

Natasha Fang :

Especially twenty years ago, the internet wasn't so booming China, I see you co-founded Life solutions in 2008. Could you share with us a little bit about what Life solutions do?

Jon Newton :

Well, we started in 2008 at the right at the end of 2008. And we were initially optimistic. We, obviously, we still are, but it was very funny because it was right at the time of the 2009 2010 financial crisis. And I remember questioning my decision and whether it was the right thing to do. In those first two or three years, it was quite difficult. But essentially, life solutions is a b2b business, where we cater to banks, hotels, large space offices, and provide them with high-end water filtration services. So it's now 12 years in, and we've managed to build a business that's stretching across more than 22 cities in China with five service teams and those cater for more than, you know, three to 4000 corporate clients who pay us the ten annual, monthly service or yearly or monthly service fee. So it's, it's had its challenges. But it's also been a great experience. You know, we started with just three people, myself, and our technician or engineer and an administrative person. And they're still with us 12 years later, but now we've got, you know, nearly 30 people working across the cities. So it's been a great experience. And like I said, we got through the financial crisis, when we started the business. But thankfully, being in China, the financial crisis didn't big an effect on the Chinese economy as it did in the West. So it was a very interesting time to start a business, and I'm glad that in a sort of a warped way or a sick way that I had to go through that challenge because it was probably more stressful than it needed to be based on the timing.

Natasha Fang :

Was it more challenging back then? Or Is it more challenging for you these days during the COVID-19 when running a business in China?

Jon Newton :

Well, that's well, that's an interesting question.Yeah, I didn't even think about what we're going through right now, compared to the financial crisis. I think it's probably more challenging now because China is more integrated into the international economy than it was when we started Life solutions. And because of that, even though, you know, China went through the whole Covid earlier than the rest of the world, it went through lockdown earlier, and it reopened for business earlier, external demand has gone down. So there have been a lot of Chinese companies that have been affected. And, you know, one or two clients that have fallen off the radar. And it's, it's affected Chinese, let's say production, manufacturing and the whole economy because the international demand is decreased. So I do think it's had a more, let's say, It's a challenging effect for a business owner, purely because it's affected every single person, the financial crisis generally affected people in banking and the financial industry. And obviously, it affected people who have mortgages and home loans, but this has affected every single person, regardless of what stage you are in Life. The fact that countries are just shut down altogether. Was was was a big thing. And you can imagine if, you know, a company, a small startup is told they're going to shut out for two months. If they don't have enough working capital, they're gone, whereas the financial crisis affected a lot of foreign companies here in China back then. But you as a small startup weren't forced to shut down. You still had the opportunity to carry on building your business, whereas it's different now in the way coverts affected the whole world, right onto every single person. It affected their lives. So it's been more difficult, I think, to get through this little one

Natasha Fang :

for you, generally speaking, is it more difficult to start

Natasha Fang :

maintain or scale?

Jon Newton :

I think if you speak to any entrepreneur, the fun part is starting, even though it's incredibly stressful. I think that's what most people have an entrepreneurial drive is about starting a business and, you know, bashing down walls, getting into meeting rooms, the thrill of the chase, and getting that first deal. I think that's where I think anybody would say what they enjoy the most, whether it's what I'm best at. I think we've done quite a good job at maintaining, which I suppose is the boring part because we've been around for 12 years now. And then, I would say scaling is probably the biggest challenge for anyone, and We've done quite well in the fact that we have scaled in 22 cities, we started initially only in Shanghai, and we've moved across the 22 cities. But I do think that you know if you look at it, if you want to e as successful as you can be, you can always scale more. And the fact that I've been in the business for 12 years now, sometimes taking on other people with fresh ideas, r people who understand tech better, and platforms that could help you scale, we might have, let's say, gotten to a stage where we might need to start getting a little more creative. Because naturally, you know, I've been 12 years in the business, you get into a routine, and, you know, you need someone to come in with innovative ideas and sort of disrupt the processes or disrupt the normal trajectory of how you're scaling to try any, you know, increase that curve and higher. So, you know, to catch your go straight back to your question. I think all entrepreneurs enjoy the startup phase and, I think The fact that we're still around for 12 years means that I was reasonably successful in the startup phase. But maintaining generally is quite boring. And I think that's what most entrepreneurs, whether they start to lose motivation, or they either hand over. And then we've been doing pretty good over maintaining and steadily scaling over the last 12 years. But I think there's more scope to scale. But that also requires research and resources.

Jon Newton :

But there's more scope for us to scale

Jon Newton :

where I think we could improve on.

Natasha Fang :

So how much time does it take from starting to the maintaining to the scaling?

Jon Newton :

Or ideally, you'd like it to be stopped scale and then maintain because then it's nice to maintain something you've already scaled. But China's a funny one. Because if you go and look at most of your you know your business school type textbooks, and they're always going to tell you are if your business hasn't made Many are broken even after three years, then it's not going to work. If you look at the most successful companies in China, they invested right upfront. And it's not just investment in,

Jon Newton:

let's say,

Jon Newton :

you know, equipment or office space, it's they invest in people that almost sort of overcompensating for your headcount versus revenue, and then pay to take a loss for three to five years.

Jon Newton:

And even some of the big multinationals that,

Jon Newton :

you know, it took between five and ten years to become profitable in China. So I think China is a different example. And I think if your idea isn't, let's say revolutionary, like them to Alibaba was or look at the really big China companies, Alibaba, Tencent, etc., who scaled quickly, but that's because they had something unique. It'll give you big tech companies and automotive companies. A lot of them often after entering into China took five to 10 is become profitable until the market trusts your brand and your reputation. That's actually when you can start scaling. So I would say, to be honest, the startup stage, whether that startup stage mixes into maintenance. Still, from from that start beginning to when you start scaling takes quite a bit longer, I think in China, because the markets here usually are quite happy to experiment and try a new brand. But they very, very quickly change. If they're unhappy with it after one or two bad experiences, to get people in China and to get the market to be loyal to you takes time. And it means you have to be present on so many different platforms. I mean, I know this is what you're involved in, engaging with all the different social media and digital platforms in China. To be quite honest, I don't even know the names of all of them because there are so many. You look at the West. You're prominent; you're prominent handles our Instagram, Facebook, Twitter, LinkedIn. And it's sort of, that's your sort of your big fall. In China alone, there are so many different platforms that you know; you've got to go even invest in being on all those platforms if you want to be a big business in China, people want to know that you're on all the platforms, they can find you wherever they are. And this takes a lot of time. And then also, at the same time, with the culture, it's very important to make sure that your message is right. And it's not just a direct translation of your, you know, your your, your messages overseas, and then very trusted and Chinese you have to have culturally centric messages. And you've got to consistently be out there and bold that, and that takes years. From my experience.

Natasha Fang :

I agree with you completely by running integrated my agency headquartered in Shanghai, China. We have helped companies over the years entering the Chinese market; I noticed a lot of companies have a lot of expectations coming to China wanting to succeed in China in a very short period. I agree with what you just said that there are so many new media platforms, many new approaches to business in China. This market does take a lot of time and patience in order for you to succeed, from starting to maintaining to scaling. Jon, I see that you started the Chinapreneurs five years ago. Can you tell us a bit about what Chinapreneurs do?

Jon Newton :

or trying to, you know, it's something that sort of came about by accident, I was asked to give some keynote, speaking engagements with the universities that were visiting China, many business schools And then it became quite a regular thing, which then spiral into lecturing cross-cultural negotiations, and intrapreneurship, in China at the University of Fudan and the most sort of junk Professor now at schema Business School, which is a French Business School, just outside of Shanghai. So, the China printer became a sort of business insights for people trying to build or do business in

Jon Newton :

China. And then, you know, outside of just

Jon Newton :

speaking events and lecturing, then I also worked in consulting projects for clients who are looking to do a market entry, or, you know, understand the prospects of building businesses

Jon Newton :

in China. So that's, that's been going for five years, and to be honest, it's truly a side hustle in the sense that it's something that that I normally get approached to do outside of the fixed University lecturing. But it's just also a platform for me to sort of share my experiences,

Jon Newton :

you know, 20 years here, I've got a lot of crazy stories and a lot of funny stories, but I think there's a lot of value in it as well, especially for people who wanted to come in now and being able to share how I've perceived the journey and how I perceive that to the changes in the economy in the market and business. So so that's essentially what China printers it's, that's why it's called China print business insights. But it's something I really enjoy doing so, and that's actually how we met. Yeah,

Natasha Fang :

yeah, that's how we met is through offline events. Also, it's interesting is we have been thinking about running this podcast for the past few years. And we get your head like so focused on offline events doesn't allow you to have so much to establish online channels, which you should be doing in China, which is integrated solutions. And, of course, we are so glad to have Jon today in the show, doing this podcast today. And also last week, which was a couple of weeks ago, we ran a webinar together, which was also quite interesting. So among all the past mistakes, you have made, what advice would you give to the entrepreneurs and business owners who want to start their business in China or want to expand their Chinese market.

Jon Newton :

We spoke about it earlier, but the fact that it takes longer here and your timelines are stretched out and possibly your investment might need to be higher. So bearing all that in mind, I would say patience.

Jon Newton :

Even just let's say,

Jon Newton :

the sub the cycle, the sales cycle is longer in China, I find, especially in b2b business, for business to make up their mind, it might take three to four months before you get a decision. People are quite used to their own, let's say a home business practices in the economies that they grew up in where a sales cycle might be typically three months. Whereas in China, it's just it all depends on when people feel the need to re-approach you, and I've worked on deals I've taken 11 months I've worked on deals currently working on a deal. That's it's 14 months of negotiations. But again, because of the scale of some of these deals, they're worth taking, taking time, making sure that everything's you know, clear, and that both sides of the negotiation are sort of aligned. So I would say patience. I've made a mistake quite a few times earlier where people have taken a few months; they've not been back to me. And I've taken that stance over, oh, they're not interested. So I'm not going to contact them again, and we'll move on. And, you know, I'll hear later on that they went with a competitor or their way with a similar solution, because it's up, you know, the touchpoints had sort of fizzled out. So I think patience is the number one thing, but not just patients in your sales cycle and your market development plans. But patients also in terms of

Jon Newton :

the cultural differences and the biggest mistake I think that a lot of foreign people do when they come here is they assume they come from a sort of a binary perspective of the world where things are black and white things are right and wrong. One of the concepts I've always I refer to in my lectures is the yin and the yang. I think in things are not so much about its left or right, or it's black or white. It's more about how to, and it's a very problem-solving culture. And that's why things take a little bit longer, but it's more about finding a way, then knowing the process. So that's why things take long, it's about an understanding. So, you know, on the cultural side, and on learning to understand how China works, you also need to be patient. And I would say that, for some the reason, I've I think in my experience, one of the reasons why if you look when you reverse it, because of the way Chinese people sort of view interactions with other people and the fact that it's not black and white, and it's not left and right. Chinese people tend to go and live overseas much easier than Western people tend to come and live in China because they're more flexible. They have an approach where they're able to adapt to certain things almost on a daily bit daily basis. So it's very flexible, but because it's very flexible, there's a lot of uncertainty. You don't know what to expect tomorrow. You don't know what someone is going to tell you tomorrow, someone he'd been working with on a deal for months, might come with a problem that you thought you'd solve five months later, five months earlier. So there's always this very fluid, flex, flexible approach to everything in China. And I find that if you're not prepared for that, you know, it might become very, very frustrating. So, patients, I think, on all levels, but in the long run, and you know, I'm like I said, I'm 1819 years now I'd rather regret it. But I've, I've had to be patient. I didn't particularly have a great first couple of years of business. It was very difficult, but I'm glad I wrote that out. So that would be my number one piece of advice, but if I can add Another one, I would say something that I regret not doing earlier on in my life was learning to say no. Because China is so big, you know, if you and I are sitting here in Shanghai in the city of 28 million people, which is bigger than some populations of countries in the world, because you're going to meet people all the time, and you've got people who are all trying to get ahead; they're going to be so many opportunities to people who want to do things with you, or come up with an idea, or, Hey, why don't we do this? And I found myself my first three or four years saying yes to everything and achieving very little because you're spreading yourself so, so thin. And the best thing I could have I could have learned, which I wish I had learned earlier, was to sort of pick your battles and pick the right opportunities. Do you know the same De Jong Yoshi being Lee? Mm-hmm. Yes. So basically, it's a what a mouse philosophies towards military warfare, whereas you know, you gather all your soldiers and put them and concentrate them on one line of attack. So it goes to say with your energy, how much you can invest. So I think I said yes to many

Jon Newton :

things that didn't work out and didn't succeed, where I probably could have, you know, focus my energy and my time on things more if I learned to say no to people. So I think that's something that that, you know, especially as it as interpreters, when they start up, they're very open to opportunities to collaborate, very open to opportunities to work with people and partner up. And if you're doing well, people will approach you on a regular basis. And it's not about saying no to everything; it's about saying no to the opportunities are not that good for you. And as opposed to the skill, there is learning to decipher who's genuine who's a value, and when is there a prospect of success? So I'd say patience and learning to say no would be the two things that I've evident.

Jon Newton :

Yeah, for me, I think focus and persistence is the key, especially with all the news and updates all the social media platforms you have on your phone with the constant interruptions and living in China, you're kind of being trained and want everything to be happening at the same time, but though some things do take a lot of time to happen. So, and a lot of intrapreneurs living in China, they also in the mindset that oh, I want to try everything. I also want to try everything as long as it gives me a very quick revenue. Especially, you know, in this new normal era post-COVID-19 Yeah, also we are kind of just paddling in the water, don't know what's going to happen, but it's this as it was always the same, you know, you're just always dealing with uncertainty entrepreneur. So Jon, looking at the future. What expectation you have for the business and yourself? I think everybody wants their business to grow. We've, you know, you've just spoken about COVID. We've been given some opportunities now in the last couple of months that we never were considered for before. And, you know, whenever there's, whenever there's a disruption like this, there's an opportunity or creates new opportunities, or which I believe in our case is relevant. It creates new awareness that people didn't realize they needed to be aware of before. So we've been in lab solutions. We've been Talking to the hotel industry for four years. And trying to get them to understand that they put filtration in the hope throughout the hotel, they wouldn't use all this waste for plastic by putting two bottles in every room every single day. And naturally, we were always ignored because getting people to change on that level; it's a whole building that's not being filtered. It's quite a challenge to get them to actually change over to that idea. But now because of COVID, and the hygiene concerns and you know, points of contact on bottles of water and delivery, and then obviously putting them in the rooms, along with last year's new legislation on waste recycling. It's meant now that high rise buildings and hotels have now seriously considered getting rid of those plastic bottles. So we're working on some really exciting projects even with the gun To the moment on some infrastructure projects, so my expectation for the businesses, I hope that we'd be able to pull those across the line, it will mean that we've pivoted slightly into a different direction. We've done predominantly we've done corporate offices, and, you know, some residential space. But pivoting into big infrastructure projects would mean that we need to build a whole new arm of life solutions, sort of maintaining our base and scale with this whole new infrastructure projects. So I'm hoping that comes that that comes right. And we'll only know within the next couple of months, but it's an exciting time even though we're in this chaos, in this very uncertain period of post lockdown and the rest of the world right now is still in lockdown. It's exceptionally interesting to see that. From these strange occurrences, then new awareness is created, which creates a new market,t and thankfully, we've been around for 12 years. They're talking to us in what is essentially a whole new market now where, before hotel operators and government infrastructure pros didn't consider putting our systems and our services in their project. So that's what I would hope for. You said what would,I hope wouldWell, you and I discussed this many times, I used to travel almost every month. And it was one of the things that kept me sane. I used to work that out for three weeks. And then make sure I was spending one week a month in either the UK or Canada or South Africa or somewhere in Southeast Asia. And this COVID situation has been really strange because it's the first time now in the years that I've I've spent what three to four or five months in the same city constantly. And I'm not going to lie, I'm quite worried that we won't be able to travel for For a long time, so I hope the fact that I've got family spread out all over the world in Cape Town in Canada and the UK, that I'll be able to travel again soon and get that freedom back. But otherwise, you know, yeah, I'm generally happy. So I don't have any major wishes for myself personally. But I would like to get international mobility back whenever that's possible. I think that's quite important. And then naturally, I'd like my business to keep growing, and I'd like what everyone but my friends, family, and loved ones to stay healthy and safe. It's quite, you know, broad.

Natasha Fang:

Thank you, Jon, so much for joining us today on the show. And so Jon, tell us listeners how they can find you online.

Jon Newton :

Well, if they want to have a look at our business, that's www. Life. loosens.com.cn there's some more information on myself and our team there. And then if they want to get in contact with me directly, the best platform is probably on LinkedIn. I'm the only Jon Newton in China. So if you on LinkedIn, if you search Joe and Newton, Shanghai, I'll be the first one that comes up. So that's Joe, and there's no h. Jon Newton, showing how you can search via LinkedIn or be more than happy to connect with people and share some ideas and insights on LinkedIn. Okay, thank you so much. Cool.

Natasha Fang :

Thank you for listening to the show. Until next time,