Digital Bootcamp Asia Podcast

Journey to China with Marco Gervasi, Founder of The Red Synergy

July 04, 2020 Natasha Fang Season 1 Episode 2
Digital Bootcamp Asia Podcast
Journey to China with Marco Gervasi, Founder of The Red Synergy
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Digital Bootcamp Asia Podcast
Journey to China with Marco Gervasi, Founder of The Red Synergy
Jul 04, 2020 Season 1 Episode 2
Natasha Fang

We invited Marco Gervasi, Founder of The Red Synergy,  a company that provides legal and related-to-legal services for set-up or restructuring of investments projects in China, to share his journey to China.

Marco Gervasi is one of the world’s leading experts on China’s e-commerce and IoT. He is the founder and managing director of The Red Synergy where he provides management consulting assistance to leading international and Chinese companies, venture capital funds, and Internet platforms investing both in and out of China.

Marco is the world-acclaimed author of: “East-Commerce, A Journey Through China e-Commerce and the Internet of Things” the first book on China e-commerce and IOT now published in 3 languages (Hoepli 2015, Wiley 2016, Citic China Press 2016). Marco has over sixteen years of senior corporate management experience in China. He is a keynote speaker at international conferences on technology, a guest writer for various newspapers and magazines both in Asia and Europe, and an active technology blogger. Connect with Marco 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

We invited Marco Gervasi, Founder of The Red Synergy,  a company that provides legal and related-to-legal services for set-up or restructuring of investments projects in China, to share his journey to China.

Marco Gervasi is one of the world’s leading experts on China’s e-commerce and IoT. He is the founder and managing director of The Red Synergy where he provides management consulting assistance to leading international and Chinese companies, venture capital funds, and Internet platforms investing both in and out of China.

Marco is the world-acclaimed author of: “East-Commerce, A Journey Through China e-Commerce and the Internet of Things” the first book on China e-commerce and IOT now published in 3 languages (Hoepli 2015, Wiley 2016, Citic China Press 2016). Marco has over sixteen years of senior corporate management experience in China. He is a keynote speaker at international conferences on technology, a guest writer for various newspapers and magazines both in Asia and Europe, and an active technology blogger. Connect with Marco 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.

Marco Gervasi:

Hi, thank you very much. Hi, Natasha. It's nice to be here.

Natasha Fang :

Thank you so much. So could you please introduce yourself to us? And also let us know where you're calling from?

Marco Gervasi :

Yeah, well, first of all, my name is Marco Marco Gervasi. I am originally from Milan, and I'm actually calling from Milan right now, due to the COVID. I've been in a way confined to Italy, until China will be able to reopen its borders. So I'm based in China and travel back and forth between China and Italy, but for the last few months I've been based in Italy.

Natasha Fang :

Wow. How was it like living in Italy during the COVID-19?

Marco Gervasi :

I have to say that this is the longest period in my life. Well, in the last 16 years that I've been living and traveling between China and Italy, it's the longest period that I've been only in one place. And I think this is a common topic among all of us during COVID we have all experienced the longest time in our life for something. Maybe for couples to be together. Maybe for boyfriend girlfriends to be separated from each other. And, and, and then for some people to stay away from airports, or be able to stay home. And so for me, it's the longest time I've been in my country. And I have to say that sometimes in life when you are forced to do something because you have no other option, then there're also good things that come out can come out of it. For example, personally, in my apartment, I had a lot of boxes coming from different phases of my life where I've been traveling and living in different places. And I never realized that I got so used to having all these boxes piled around my apartment, that they just became part of the decoration. And I finally had time to open the boxes and then to unwrap everything that I had to clean my apartment from the things that we Were that I didn't want them anymore and to replace them with new ones. So my apartment as is now reflecting more the kind of person I have become rather than the person that I was when I left. So I have to say that it's been a process of discovery.

Natasha Fang :

Right. And this is also a perfect time for you to slow down, as you mentioned, reorganize and replan.

Marco Gervasi :

Yes, absolutely.

Natasha Fang :

So, may I ask, so why China? Why did you decide to come to China? in the first place?

Marco Gervasi :

I have to say that I have prepared my move to China very carefully. It's not something that happened. There are some people that for example, when you are an executive working for a multinational, you are used to be sent around the world during rotation. Of course, when you get a career promotion. And so you might receive a call from your boss or from someone in your company say in six months, there's an opportunity, there's an opening in China, would you like to go? And this is something that happened to some of the people that I met. Some people decide to go to China because they see there's an opportunity there. So they decide to go to China and learn the language and then eventually they stay. But in my case, I've built it very carefully. In a very, I would say organized way, I decided to study. I have a double degree in law and Chinese language. So my first contact with China was when I was in the university, and I decided to study Chinese. And the reason why I decided to study Chinese is back then this was 20 years ago, actually 25 years ago. In my early 20s I had a feeling that I needed to learn something that will give me an edge, something that would that would make me stand out. And 25 years ago, there were not so many people learning Chinese. So I had a feeling that China would become a very interesting place in the future. It wasn't sure yet how big and how and what an opportunity it would be. But I had a gut feeling that it would happen and this is how I've left I have how I've lived my life. Until now, I treasure a lot of gut feelings that I get both in business and in my personal life. And I use a lot my intuition and back then I had the feeling without having a real evidence that there would be an opportunity in China so I studied Chinese at university together with law and I decided to go to Fudan to do my my Chinese language studies. So during the year I was in Italy, but then in summertime, I was in Fudan. And then I started to work as a lawyer in Italy and China all of a sudden became a very distant place. It was completely out of my life. It was dormant, it was silent. And then all of a sudden, there was a I would say, a very important crossword in my life, I wanted to move. I wanted to do an MBA, which for a lawyer can be quite unusual. Lawyers normally go for masters in law, which are called LLM, or and or JD, but in my case, I wanted to add business to my skills. And I worked very hard to do an MBA in the US. I did all my applications, my GMAT and everything. And when it came to the moment of really deciding To put down the money and an angle to study in, in the US, absolutely, by chance, and I see and I really believe in this thing. So I think life sometimes puts you in front of situations, or opportunities where it's up to you to understand

Marco Gervasi :

what this event is going to mean for you. And one night over dinner at my parents' house, they invited a friend. And he broke it down to me in this way, because I explained to him that I wasn't sure whether to go to the US or whether to go to China. And he said, Okay, what is your end goal? And I said, my end goal is to go and work in China. And I'm thinking that with an MBA, it would be easier for me to find a job in China. And he said, Well, you have two options. The first one is of course to go to the US get your MBA, and then look for a job in China. And the second one is to go to China right now, and look for a job right now. And he said, Are you sure that in two years' time, you will find the same opportunities that you can find now? And most of all, are you sure that in two years time when you have when you will have accumulated around over $100,000 of debts, because of your MBA, you will be free to choose any type of opportunity that you want to you need in China without being influenced by the fact that you have to repay your loans. And it really got me thinking, because I wasn't really sure what would be my answer. On one side, I was really sure that I wanted to go to the US and get my MBA and then find a job in China. But on the other side, I wasn't really sure that my opportunity would still be there in two years time. And this was right after SARS in China. So at the beginning of the big wave that most of us caught at the beginning of 2000 When I say wave, I mean the opportunity. And so I thought about it. And eventually I decided that I wanted to go to China. So I did not pursue the MBA. And I went straight to China. And this was almost the end of 2004.

Natasha Fang :

Wow.That's quite interesting story. And when you mentioned the opportunity also, the end goal is I understand China really like developing rapidly. So looking back, do you think you have made a right decision?

Marco Gervasi :

Yes, I think it was one of the best decisions of my life.

Natasha Fang :

Yeah, and then so I also understand you are very running like a very successful business in China. Being an author of the book, founder of the company, keynote speakers, so can you share a little bit more How do you handle working in so many different positions?

Marco Gervasi:

Again, this is not something that you that you happen to to become overnight. My experience with China is that whatever you do, if you want to be successful, you have to earn it. No one is going to hand it to you. And even though you work hard, there will always be huge obstacles in your way. So what I've experienced firsthand is that passion in life is everything. You really have to have a burning desire of achieving something, and be willing to overcome many, many kinds of difficulties. Sometimes they seem impossible, and sometimes they drive you crazy. And sometimes you lose sleep. And then you ask yourself, how am I going to do this? But the truth is that you need to have faith and I give you two examples. The first one was when I came to China and I was looking for a job. I found a job in two days. And that job gave me enough money to to be able, I work for one month, and then the job, the opportunity wasn't there anymore. I was working as a lawyer to help foreign investors establish and invest in real estate fund. So they were raising money to basically build the facilities. So they needed a lawyer and they gave me some money to help them to build the document, to go around and raise money. But they eventually they did not raise the money. So I found myself without a job in one month. And it took me three months to find another job, a real job. And during those three months, basically, I I went back to live like a student. I left a job in Italy where I was a very well paid and successful lawyer. But eventually I wasn't sort of really successful if I left and the reason why I left is because I, for me success was something different not just how much money I was making or which company I was working for. I really needed a little bit of adventure in my life maybe more than just a little bit. And so when I went to China, I went back to living wit two students and I was 29 at that time, so I was living like a student again, and I didn't have enough money to live the kind of life that I wanted and sometimes I had to skip some meals so I mean, I went back to be like a real teenager and and that was hard at the beginning but it took me three months to find a job but those three months really crafted my my my willpower. How badly did I want to find job in China, how willing was I to compromise and give up everything, all the comfort that I have accumulated thanks to my hard work to find a job in China, which, by the way, I wasn't sure what type of job it would be. But eventually I found this job. And I was so desperate to find a job and I had no money that I, in a way accepted a job that three months earlier I would have never accepted for as a my salary was one third of the salary that I had in Europe. And the position was nothing compared to the position I had in Europe. And the job was far from what I wanted. But it was the only offer that I received and I was running out of money. And sometimes in life when you are put into a corner and you are forced to take a decision and you have no other choice. Sometimes that decision can be one of the best decisions of your life. So, in my case, that job was one of the most important decisions I have made in my life, because it turned out to be the best job that I could find they tripled my salary in three months. And I have to say that I was very, very successful in the job. So, if I did not have this incredible drive and passion for trying to find a job, I would have given up and go back to Italy and find a job similar to the one that I had before. So this is one example of how important is to have passion in life even though the world around you is telling you otherwise. And the second one was when I decided to become an author, and basically, I decided to approach and interview some of the biggest CEOs of Asian tech companies in the world. And I approached them as an individual. I wasn't working for the Financial Times or for the Wall Street Journal, or for the economist, I was working for myself, so I was no one to them. So I went, again back from being a famous lawyer among my clients, successful to being a Mr.No One, in front of these people, and to get an interview from these people was incredibly, incredibly difficult, very, very challenging. And most of the time when I was interviewing them, they were doing something else. They were not even listening to me. They were answering the phones or they were talking to the staff. I repeat the questions many times. And if I was, I felt really I felt very humbled, but at the same time, I felt very frustrated, because I had given up something good for a big uncertainty. And I asked myself many times, what am I doing? Why have I decided to do something like this. Why have I decided to put myself into such an uncomfortable position. And eventually, it worked. I mean, the book came out and the interviews went really well, were really good. And a lot of CEOs who saw that their competitors were being interviewed. And then they were mentioned in a book, all of a sudden decided that they want to be interviewed to mention the book, too. They didn't want to miss the opportunity. So that opened the door to many more interviews. So again, and I not have that burning desire of really being successful in something that I truly believed it would be meaningful to me. It would have never worked. I would have simply given up and just abandon the idea of writing the book.

Natasha Fang :

Yeah, it's thanks so much for sharing the story. I think this is definitely very positive energy especially during this very challenging time to use our podcast to share with the audiences, as a lot of people may be losing their job, maybe their business are suffering, or maybe they are uncertain about the future. This is definitely the attitude also the persistent as you shared entrepreneurs and business owners or working professionals have through these very challenging time. And so can you tell us, how do you become so successful? What are the top Secrets you think coming to China, starting from looking for a job to light becoming the author of your book, "East-Commerce , A Journey Through China e-commerce and the Internet of Things" also running your own business the Read Synergy?

Marco Gervasi :

I don't know if successful is the right word. What I can say is that have been able to realize some of the dreams that I had. And, and to be able to do that, it. It's a combination. I've learned that in life, luck plays a very, very big role. And you should not live, just let

Marco Gervasi:

Luck

Marco Gervasi :

decide for you. But if you don't have luck, then you can work as hard as you can. But certain things will not happen. So it's a combination of many factors. and hard work is very important. But luck is also a very important element. Sometimes, so let me give you an example

Marco Gervasi:

of how luck plays out but how also hard work plays out. As I was mentioning to you when I found my first real job in China, I work as a head of the legal Department an accounting firm in Shanghai which had offices in some other cities in China, sorry, they still have offices. And I find myself being the first foreign employee in Shanghai. And, and it was, it worked really well. And I had a lot of success beyond my expectations for the first three years, and then I had a feeling that I really wanted to do something on my own, I really wanted to set up my own business. There was not an opportunity to become partner of the firm that I was working for. So I decided to set up my own firm, but again, to set up your own firm, and I was working on in a very central area of Shanghai. So I was used to receiving clients in a very nice office and then and dealing with a certain type of clients. Most of them were multi-nationals. So when I decided to branch out on my own, I didn't want to borrow money from my family or my friends. And I didn't have much money. But I needed an office and and I needed the office to be nice if I wanted to retain the same clients that I was helping, my image had to be good. And at that time, there were no shared spaces or share office, wework there was nothing like that. So you really needed to rent an office, pay the deposit, and then you had to compete with multinationals. So I ended up finding an office in the very same building where my company, previous company was working, was based and it was a very expensive building. And when I signed the lease agreement, they asked me three months deposit and they asked me three months rent, six months in advance, and six months rent All I had in my bank account. So I signed the lease agreement knowing that in two months, I would run out of money. So I took a huge risk. I remember I woke up in the middle of the night looking at my Excel file to see how much money I had left in the bank account. And I remember when I did the decoration in the office, and I sat in the meeting room on the table next to my table. And and I looked around and the office was completely empty. I had no staff, it was just me. And I said to myself, in this meeting room, there will be a lot of meetings and there will be a lot of contract signs and a lot of businesses will be built here. So one day, this room will become very, very busy. So I'm sure that things will come. And I have no guarantee that they're sure that this would happen and I only Add again two months of rent that I could afford and I had back then no clients, but then slowly business started to arrive and in two months I had enough money for another two months. And then after one year I had enough money to pay the rent for three years. So, that those I call them the defining moments, you can let those moments of incredible insecurity crush you and tell you Okay, you will not work you have nothing that guarantees that you got you can be successful, this will be a disaster, or you can listen to a voice inside yourself that is telling you things will come. You just need to be patient and you just need to be positive. And then something magical will happen. And it worked. So I have to say that. I mean, I had to work really, really hard. But the kind of positivity that I felt when I was sitting in that meeting room that was completely empty, is something that I will never forget for the rest of my life. It's something that really helps you to navigate the most, most difficult times, and the times of the biggest insecurity in your life. I mean, this is what happened in my case.

Natasha Fang :

Yeah. I'm very fond of your stories. Also, just imagine you're sitting in the office picturing the future that's very inspiring, and thanks a lot for sharing that with us. So what will be your advice for those who want to start their business, especially start coming to China to start their business and entering the markets.

Marco Gervasi :

Oh, the China that I see now. Or wait the China that I saw before COVID because I haven't seen China. COVID is completely different from the China that I experienced when I arrived 15 years ago in terms of opportunities in terms of competition, in terms of, market dynamics. It's a very ifferent place. When I arrived 15 years ago, 16 years ago, it was a place where companies would delocalize, would set up their own business will set up their own factories would set up a unit that would conquer the rest of Asia. After COVID what I'm seeing now is the the offshoring, so a lot of companies are now thinking that they cannot afford to have supply chains so stretched, so they're bringing back some of the factories to other countries closer to the headquarter and they are Not giving their China office so much power over the entire supply chain as they gave in the last 15 years. So the role that a business in China plays now is completely different from the role that he played until, I would say the end of last year. So it's a very different landscape. And also the role that digital plays in everyday's life and in a business now in China is completely different from how it was even five years ago or so. Definitely the the advice that I would give for someone who wants to deal with China now is that the key to is to understand what is your role within this huge forces that are happening around us? Until I mean, even at the end of last year, it was basically one way. You would go to China as a foreigner foreign companies will go to China to sell in the local market, but also establish a presence to basically have a more efficient supply chain. And in the forces were very clear, they were there that I would say the current was very, very clear. I would say that now you have different currents. And then in some of these currents sometimes are are clashing. So you have to be careful in understanding how to navigate the current because not only going in one direction. And first of all, that the digital current is incredibly strong. Everything that needs to be digitized is going to be digitized and it has been digitized. So if you want to set up a business in China now, it has to have a very strong digital element. That is absolutely something that if you don't have it, it's not going to work. The second is that you need to have something truly valuable that the you don't have any in China yet. And when I say truly valuable means that maybe a product, or maybe a service, something that has a history, something that cannot be replicated, something that has value, real value that is not in China yet. So for example, I'm working a lot now in the food supplements sector. And what is happening now is that you have, of course, Chinese consumers, they are living a much better life than they were living before and especially after COVID. They want to have a better quality of what they eat, and the way they live their life. And most of all, now that people cannot travel yet they Still want to be able to feel international and be exposed to the rest of the world even if they are staying home. And this can also mean buying products from overseas that can give you a special feeling also can can be better than the local products. But of course, Chinese companies have been catching up in the food supplement sector. So a lot of products are also made in China are also made by Chinese companies. But for for example, what I'm seeing here with Italian companies that certain types of production, certain types of ingredients, or certain recipes cannot be replicated. So the product itself as an intrinsic value, and I'm not talking about fashion products, I'm talking about food products that cannot be replicated. And that value is something that is unique to the product. These are the types of products that Definitely a market in China. And it's a type of business that can really do well in a market like China. But everything that can be replicated or that is already there just by saying that it's a foreign product or it's something that it's better because you think it's better it's not going to work, it is is not going to work anymore. So what I'm seeing in terms of Chinese companies, Chinese companies are now looking for Italian factories that are able to produce this type of products, and that they are buying these factories and the brands because these gifts to the Chinese company the image of quality that you cannot replicate within its borders. But at the same time I see the Italian companies or the European companies or the American companies having something of big quality that has a future in the Chinese market, so this is definitely one of the currents that I would follow in setting up a business. The second thing is that you and they always say this. You know, it's so trendy now to say that you can raise money, and then you can ask investors and that you know someone who's going to give you money. The truth is that you should always only rely on your own money. And if you don't have enough money, then you should do something that can be done with your “not enough” money. Because, first of all, you're never sure that you will really get the external money or the financing even though it sounds very cool to see that you're doing around or financing to raise some money. And the second bootstrapping really helps you to understand what is really core to your business. What is important to keep alive Then to just basically ignore everything else. I've seen a lot of companies and a lot of young entrepreneurs coming to China, maybe from the US or from Europe, being so arrogant about being able to raise money or having raised money overseas, and trying to do something in the Chinese market. And they, all of them, or most of them fail, because they don't understand the importance of bootstrapping, of not having enough money to pay for your dinner for your meal. Because that is what really makes you decide, is this thing worthy or not, is this thing, something that we really want to develop? And it's really gonna fly in China or not. And and this is definitely a trap that a lot of young entrepreneurs are falling into the trap of thinking that you can raise money from outside and that money will allow you to realize your dream in the Chinese market. I think that to realize your dream, you have to be able to do it on your own terms with your own money. And then once the model is proved that you can use external money.

Natasha Fang :

Right? It's definitely specially in China is considered as post COVID-19. As I see many business closed cashflow is definitely the number one issue needs to be solved, as you mentioned is making money making sure the business model is generating the revenue enough to cover the employees' salary, the rent, also to make sure you have the food on your table. Something truly important when it comes to starting and running business in China. So Marco, what do you want to achieve next? And I was gonna ask, how do you see yourself in next five years but because of the COVID-19 I'm gonna rephrase the question. How do you see yourself in the next few months?

Marco Gervasi :

Well, the first thing that would like to achieve again is to be able to travel back to China. Because until now I cannot. So in the next few months, my first one of my first goals is to be able to travel back to China and get a pulse of the market, what is happening where the opportunities are, and and then so it will also help me to understand what type of clients are my clients for the next five years. I've been thinking about writing another book, but you cannot write anything from distance you have to live within the environment that way that you want to tell to other people. So writing a book from here about well, first of all, you see a lot of China US tension. You see a lot of digital wars between China and the US. You see a lot of developments. I'm sure that in the last three months, four months during COVID the China digital landscape has evolved dramatically. And the results, I mean, the seeds have been planted. And the results will be more obvious in the years to come. But I'm sure that some new trends are already there. And definitely I like to observe. So I would definitely like to observe and study these new trends. And my five year goal is to build an online business. So for sure, I'm really working hard for something that I would say I can do anywhere in the world. It has definitely to do with China and the rest of the world and Europe. But it doesn't force me to be in one specific place all the time. So it gives me flexibility but at the same time, it's something that can be truly global. So I think these are my goals for the next five years.

Natasha Fang :

It sounds awesome. I'm really looking forward to your next book. So please tell our listeners how to reach your online.

Marco Gervasi :

Yes. They can reach me on LinkedIn. Of course, they find me under my name Marco Gervasi and oh they can reach me at my company email, which is name dot surname. So Marco dot Gervasi je r VA si at the red synergy.com. Natasha, thank you very much for this opportunity. It's also good for me because it gives me time to reevaluate certain things and to think out loud. So it's also an opportunity for me.

Natasha Fang:

Thank you so much for joining us today. And I look forward to meeting you face to face when you come to China.

Marco Gervasi :

Sure, it will be my pleasure.

Natasha Fang :

Okay, so please stay safe.

Marco Gervasi :

Yes, of course. And you too.

Natasha Fang :

Thank you for listening to Digital Bootcamp Asia. Until next time,