Inside Chinaccelerator: the eight-timezone virtual accelerator hunkering down in Shanghai
Oscar Ramos, a managing director at SOSV’s Chinaccelerator program, had big ambitions for its 17th batch. It’d be the biggest, boldest batch in the program’s history. It’d also mark Chinaccelerator’s 10-year anniversary, a long way since SOSV airdropped a few tech rebels into Dalian for an unheard-of experiment: building the first startup accelerator in Asia.
Batch 17’s schedule was planned down to the minute in December, before Shanghai became a hotbed for the coronavirus. As the outbreak spills from China to the rest of the world, massacring aspiring unicorns, startup programs like Chinaccelerator also struggled to adapt to the new reality.
“In Chinese, the word weiji means crisis. It’s made up of two characters: wei, which means danger, and ji, opportunity. In danger, there are always opportunities,” Ramos tells his team over Zoom.
A tale of two venture worlds
For an American investor, opening shop in China seems to be an act of operational masochism. When Y Combinator bowed out of China after nine months without a demo day or much explanation, the renowned accelerator’s failure to dig its root into Chinese soil is rather more expected than surprising.
Chinaccelerator, operated by the US venture capital firm SOSV, has been striding both realms of China and Everywhere Else since 2010. Hunkering down in Shanghai, it’s among the few US-operated programs with a ringside seat to the most exciting, most cut-throat tech arena. Inside the Great Fire Wall, Chinaccelerator has housed and accelerated once-scrappy startups from around the world including the crypto exchange platform BitMEX, Asia’s first unicorn to have gone through an accelerator or incubator program. For three months during the program, founders from Europe, the Americas, and the rest of Asia move here to absorb China’s breakneck speed of iteration, its obsession with customers, and the art of guanxi for sales & partnership.
guanxi (n): a Chinese social concept based on the exchange of favours, in which personal relationships are considered more important than laws and written agreements. Word origin: “relationships” in Chinese.
— Collins English Dictionary
The venture capital firm SOSV has been investing in China’s unfair advantages for years. Cyril Ebersweiler, SOSV’s ‘visionary punk’ who founded Chinaccelerator, later went on to found HAX, the world’s largest hardware accelerator, in Shenzhen—home to DJI, Tencent, Huawei and other hardware tech giants. While other firms put the brakes on its operations, SOSV has even ramped it up big time. Among the top 20 VCs with more than US$500M AUM, SOSV is among the only five with increased investment activities.
Sean O’Sullivan tells Jason Calacanis about funding companies that are enabling inexpensive testing for COVID-19, growing blood in bioreactors, developing cell-based meats, breathing the Promethean fire into hardware, and generally making our planet a more humane, better place (YouTube). No time to stop now.
Cockroach-ing through COVID
Batch 17 kickstarted, on schedule, at the beginning of February. On that first night, 32 founders spread across eight time zones dialed in from Barcelona, New York, San Francisco, Chicago, Zurich, Amsterdam, Moscow, New Delhi, Shanghai, Taipei, Bangalore, and Melbourne. William Bao Bean, a general partner at SOSV, welcomed the new cohort from his hotel, drink in hand.
Bao Bean’s favorite way of describing his founders is cockroach entrepreneurs: faced with disasters, cockroaches “may lose a leg or two, but they’ll survive.” Long after the pandemic, they’d still be thriving.
Cockroach entrepreneurs (n): founding teams with ruthless efficiency and operational athleticism, making use of whatever resources on hand to survive, turning enterprise garbage and feces into food.
— Chinaccelerator Disaster Preparedness Playbook
“It’s a shitstorm out there, but cockroaches eat shit and turn it into life. Welcome to the fellowship,” says Bao Bean.
Principles as your north star
Ramos’ number one principle, which cascades to the staff, is that “with principles comes freedom.” In high noise-to-signal environments, guiding principles will serve as your north star. Against the hazardous flux of uncertainty, principles will become the backbone of the organization, vertebra by vertebra.
As VC-cum-accelerator, Chinaccelerator counts on these following principles:
- Stand on the shoulders of giants. Extract and document first-hand tacit knowledge from battle-hardened mentors.
- Internal over external audience. Community first: build strong, mutually reinforcing internal relationships so that each founder can benefit from peer-pressure, alumni support, expectation and motivation from others.
- Operational over optical. Get down and dirty with startups instead of posing for the optics.
- Profitability over valuation. Strive for positive unit economics.
- People over products. Invest in people and our human capital.
With those principles fought over and agreed upon, Ramos starts to program the curriculum. First, there’s the calendar problem. If he stretched the definition of working hours from 9–5 to 6-midnight, the founders would share one hour of functional awakeness per day. Second, the startups are so diverse that a fixed curriculum, together with its one-size-fits-all approach, seems to do more harm than good.
Ramos puts the last batch’s schedule to the shredder and goes back to the whiteboard. No, Batch 17 won’t be a broadcast version of the residential program, but a new kind of accelerator, making virtual of necessity.
Acceleration in the Virtual Valley: less friction, greater force
Here the ji in weiji comes in: instead of having entrepreneurs-in-residence and mentors come to Shanghai, Chinaccelerator will bring The Virtual Valley to the startups, an experiment involving its hundreds of mentors and an army of VC investment associates.
Building two parallel curricula to accommodate the timezones, Ramos — a biomedical engineering PhD dropout and executor extraordinaire — takes to the tasks of layering the virtual sessions. Founders can attend either or both curricula, sleep be damned. Apart from the training sessions by high-profile founders, Batch 17 also includes dozens of hands-on workshops by builders at Grab, Rotten Tomatoes, TikTok, Ctrip, WeChat, to name a few.
While the program is modular and tailored, once a week, everyone convenes for an informal jam session to reflect on their progress. Here are the tried-and-true lessons that the Chinaccelerator team has learned:
Over-communicate. It pays to repeat yourself, especially when people are not in the same room. LinkedIn CEO Jeff Weiner is a big fan of repetition: “If you want to get your point across, especially to a broader audience, you need to repeat yourself so often, you get sick of hearing yourself say it. And only then will people begin to internalize what you’re saying.” Reinforce your messages in different ways so that people are on the same page.
Fuckup Friday: A highlight of the program is the weekly jam session, during which Batch 17 founders share their fuckups-of-the-week (the record is currently at 25) and commiserate. Many lessons learned, and many laughs earned.
Founder Story: This is the occasion when a founder tells the group an exhaustive account of their life story, starting with an obligatory baby picture. Many stories touch on major life-changing milestones as well as hopes and dreams, fears and demons. In knowing someone intimately, we are ultimately reminded that one is not just their startup, and beyond the screen there’s a magnanimous, “multivariate human being,” as SOSV Managing General Partner Sean O’Sullivan puts it. Watch O’Sullivan’s founder story here.
Know a great entrepreneur making the impossible inevitable?
Refer them our way. sosv.com