5 Things You Need To Know To Successfully Do Business In China, With Tilo Bonow, CEO of Piabo PR

“Everyone should have access to the internet. In the age that we live in, technology is the central driving force behind economical and social developments. Therefore, governments should aim at enabling people to have access to technology, to the internet and thus to global information and communication opportunities. Otherwise, people are restrained from participating in, and shaping, the global conversation about their and their children’s futures.”

I had the pleasure of interviewing Tilo Bonow, founder and CEO of Germany‘s leading tech public relations agency, Piabo PR, headquartered in Berlin. Tilo Bonow helps global tech entrepreneurs such as Google, wework, Evernote, Stripe, and Silicon Valley Bank to recognize potentials, achieve growth opportunities, and gain ownership of the market. As value-adding investor at Cavalry Ventures, 500 Startups, Nest.vc, and Capital300, he accelerates the growth of upcoming business stars with his experience, network and capital. Tilo is a keynote speaker at international tech conferences such as NOAH and Mobile World Congress.

Thank you so much for doing this with us! What is your “backstory”?

I come from a marketing and PR background, and support upcoming and established technology companies, both as a PR specialist with my PR agency, Piabo, and as a value-adding investor. For example as investor at the Hong Kong-based Venture capitalist Nest.vc.

Twelve years ago, I founded Piabo — an agency focused on supporting digital pioneers in entering and leading markets. Our client list includes big names like Tinder, wework, Google, GitHub, Silicon Valley Bank, Evernote, and Stripe. After doing PR very successfully in the European and North-American markets for over 10 years, in 2015 we began to expand our services into China due to its constantly growing position in the worldwide economy. Since then, we have established very successful procedures for covering the specific needs of our international clients in the Chinese market. We are currently strengthening the positions of our American and European clients, Pivotal, and Metahash, in China, and supported the Chinese company, Huawei, in transferring their services into the German market.

At the Mobile World Congress in Shanghai in June, I was invited to attend 4YFN (4 Years From Now) and serve as one of the panelists to evaluate the best startup projects and share insights on the ecosystem differences of startups in China and Germany.

We know that it is not always easy for a foreigner to do business in China. Can you share an interesting story about a challenge that you faced, and how you overcame it?

The Chinese culture differs a lot from that in Europe. That is a challenge in itself. In order to reach growth targets, one first has to understand the specific mechanics and conditions of the local market, as is the case with every new environment that one wants to enter. For being able to serve the needs of the Chinese market and operate according to the expectations of the Chinese economy and media landscape, we have teamed up with excellent local PR specialists who have an in-depth knowledge of the local conditions. Furthermore, we share the same business values, which are based on always delivering high quality results and focussing on quality instead of quantity. That helped us to quickly overcome the challenge of adjusting our business model to the Chinese market.

Are you working on any new or exciting projects now?

Our work is centered around supporting future technologies. Due to its huge tech-startup-scene, the Chinese economy offers endless exciting possibilities for us. And this is a two-waystreet: On the one hand, we help Chinese companies, such as the mobile phone company Huawei, to expand into the European market and to build up brand awareness, market knowledge and a business network in Europe. On the other hand, European or American clients such as the Software provider Pivotal, or the blockchain company Metahash, ask us to support them in building up a business presence in the Chinese market.

What advice would you give to other business owners who do business in China, to help their employees to thrive?

I would advise others doing business in China to acquire a cultural understanding of both the Western and Eastern work standards and ethics. That is central to establishing a successful business in the Chinese market. The Chinese work culture differs significantly from the German. In Germany, for example, the labor laws are very strict and forbid working extensive overtime. In Asia, working very late is considered normal. This is where acommon ground needs to be established by defining standards that suit both sides. In this case, limit the working time and show your employees appreciation when they overperform. Give employees the chance to present their skills within a frame that offers good working standards. Another aspect is the differing concept of hierarchy: In Germany, employees are often encouraged to express their own opinion, whereas in China, employees seek approval or leave the decisions to be made by the supervisors. We have to understand this gap to encourage our employees to express their opinion and empower them. Speaking in general, understanding the local mentality, but at the same time building a bridge to international standards is critical to establishing powerful business connections.

None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story about that?

I am particularly thankful to our partners and team members on the ground in China. Without their excellent expertise and knowledge, it would not be possible to lead a successful PR business in the Chinese market from our headquarters in Berlin, Germany. Thanks to them, we can combine our longstanding PR experience in the western markets with their knowledge of the Chinese media and economy and do outstanding work together while meeting the specific requirements of the market.

What do you think are the new untapped markets in China that may become the next “big thing”?

The tech market is emerging rapidly in China. One central aspect is the development of artificial intelligence in general, and face recognition technology in particular, which is moving quickly and will only increase its importance in the future. That has recently been proven by SenseTime, an AI-based face recognition technology start-up, becoming the highest valued AI-startup worldwide through receiving a funding over $600 million from the Chinese e-commerce giant, Alibaba. The face recognition technology can be used in various ways and bears huge potential of altering commerce and other branches.

We keep hearing about the “Trade War.” What are your thoughts about it? Given the unknowns, how do you plan to pivot?

That is a topic we definitely have to address with our clients who are active in the Chinese market and maintain business relations between America and China. We have come across the issue recently, when a client needed to work out a communications strategy regarding how to publicly comment on the topic. And that is where we can help: We support our clients in understanding the complexity of the issue, since the discussion about is not only relevant for the mere business transactions, but also affects the public image of a company that is directly involved and affected by possible trade restrictions. We not only have to brief our clients properly about all needs and risks, but also to issue a crisis management plan for how to react in possible critical situations and help to navigate through them from a communications point of view.

What are your “5 Things You Need To Know To Successfully Do Business In China.” (Please share a story or example for each.)

1. Recognize and embrace cultural differences:

Without doing so, one has no chance of succeeding with a western business model in the Chinese market. You really have to understand which differences divide you and which similarities connect you. That is the central and first step for defining a successful market strategy.

2. Knowledge about the market

You have to know the people you are selling to! Strategies that worked well in America or Europe might fail in China. Therefore, team up with local experts who can introduce you to the specific conditions of the Chinese market and can help you navigate through what might be unknown territory.

3. Foster good business relationships

Just like in Germany, knowing the right people is extremely important to succeed in the Chinese business world. In Germany we call it “Vitamin B,” in China the central social currency is “Guanxi.” Building up a local network is crucial for the success of your business. Before entering, for example, strategic partnerships, or doing transactions, Chinese business people want to build up a personal relationship. Also, the principle of returning a favor is key to fostering good business contacts.

4. Collaborate with local partners with a long-term vision in mind

Once you have found trustworthy and competent partners, think not only short-term, but have the bigger picture in mind. In order to be successful in the long run, all participating employees should understand the vision of your company and share your values. That way, you can influence and learn from each other.

5. Understand that no company in China is disconnected from politics.

This is a central aspect of doing business in China. The state has a strong influence on the economy. In its five-yearplans, the government issues central aspects for the economy’s development, sets growth targets, and launches reforms on a regular basis. You have to be aware of these conditions, especially as, for example, in Germany the economy operates more independently from the government. In order to work with an impact, you have to align your business and communications strategy with governmental expectations.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Patience and Persistence equal success!” I have experienced this quote to be true many times in my professional and private life. None of the biggest leaders in the world reached their success without trying hard, standing up after they experienced setbacks. You have to accept that failure is a part of moving forward. In Germany, there is a tendency to condemn flaws and failure. But only by accepting the fact that everyone fails once in a while, reflecting and then improving yourself or your product, can one ultimately work their way up to the top.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

Everyone should have access to the internet. In the age that we live in, technology is the central driving force behind economical and social developments. Therefore, governments should aim at enabling people to have access to technology, to the internet and thus to global information and communication opportunities. Otherwise, people are restrained from participating in, and shaping, the global conversation about their and their children’s futures.