“Change the world. Even relatively small things, like our solutions for the business office, can change the world. My goal is to help other small startups in Eastern Europe to do just that. It is the underlying mission of our company and of the venture firm we started, Y Soft Ventures, a few years ago. We only invest in companies that have the possibility to change the world with their product or solution.”
I had the pleasure to interview Vaclav Muchna, CEO and Co-founder, Y Soft.
Thank you so much for joining us. What is your back story?
After the Velvet Revolution in 1989, the word entrepreneur didn’t exist since the concept of private property was not allowed during communist rule in the former Czechoslovakia. But from an early age I was tinkering with computers and writing code. I think I was destined to start my own company even though my parents wanted me to finish university. Myself and my partners tried several things and it took a few years before we found success doing what we are doing today. Now we are a global company providing print management and document capture solutions to some of the world’s largest companies.
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?
Our first foray into China was a disaster. We were trying to sell software with consulting fees. Firstly, the company we were dealing with had never heard of our solutions, we had zero awareness. But more than that, to Chinese, the idea of buying software was unheard of. And trying to bring software and hardware into the country was difficult. Everything is controlled by the government and there were no regulations for doing this. Today of course, that has changed but even regulations between the different Chinese provinces are different. We learned that to be successful we had to partner with a known Chinese company.
Are you working on any new or exciting projects now?
Once we learned that we needed to work with a local partner, we have a lot of opportunity. And because the Chinese economy is the 2nd in the world today, in a brief time, it can easily become number one. The Chinese are investing outside of China as well. So, companies who have invested the time it takes to do business in China — and it is a lengthy process to do so — will see a lot of opportunity in doing business with Chinese companies elsewhere in the world. Now that we have established a good relationship with a local partner, Aurora, who is a well-known brand and trusted company in China, we see a lot of potential to bring other kinds of IT related technologies into the country.
What advice would you give to other business owners to help their employees to thrive?
Spend time to learn the local mindset. Even after one year, we are still working through cultural differences. This is after we spent years to develop relationships and really learn the market. You cannot learn this through reading books. Make sure the local employees really understand the value of the partnership. To be honest, a foreign company will not be successful without working with a local partner who is known and trusted by other Chinese companies.
None of us can achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
There was a group of us who began in the 1980’s doing different computer projects. Many of them failed miserably and some were somewhat successful. Still when things were bad one employee stayed and became my partner, Martin de Martini. When I was ready to throw in the towel, he convinced me to continue. Eighteen years later, he is still my partner and the company’s co-founder. We complement each other very well.
What do you think are the new untapped markets that may become the next “big thing”?
As I mentioned, China is a very rich country. More than 150 Chinese companies are on the Fortune Global 500. These companies are in banking, finance, chemical, aeronautics — a wide range of industries. The Chinese government has a strategy for growth and is investing heavily in IT and IT infrastructure around the world. They are quickly moving outside of China. It’s an exciting time for the Chinese people. Although the government controls many aspects, at the local level, there is room for people to have their own business. Many Chinese are returning to the country as they see the potential and they are proud.
What are your “5 Things You Need To Know To Successfully Do Business In China.”
#1 — Study the market
This sounds both easy and obvious, but it isn’t, and it takes time. Business in China happens at a much slower pace; therefore, patience is required. Expecting to rush or push things through will not be received well. Established processes, particularly regarding legal or government, will proceed at a pace that may seem glacial, but they do move forward.
#2 — Understand if the time is right for your product/service. As I mentioned our initial attempt in China was not successful. Eventually things changed, and we had some success by selling to non-Chinese companies who had locations in China. Through these relationships we learned a lot.
#3 — Establish relationships
Once you have identified companies in your industry that you may want to do business with — whether that is potential customers, partners or related companies that also are in the industry — spend time to build relationships with them. Trust is key as business is conducted through mutual trust. Understand their business, what they offer and where there is common ground. This requires patience.
There are many companies who aid with expanding into China. I would view this as a last option. Chinese companies value the time and effort shown in doing the work yourself; building relationships cannot be outsourced.
#4 — Local staff is key
As mentioned in #3, China is a country that does business based on trusted relationships. It is quite normal that Chinese companies want to work with Chinese people. This means it is required to have a local office with local staff.
#5 — Local website
A website that is localized in Chinese is also recommended. Also, it is necessary for the site to be optimized for the Chinese search giant, Baidu.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I’m not sure that I would call it my favorite, but I’ve learned that you should never give up. That is not to say that you should not try something else if you are not successful, but never give up trying.
When we started the company, I was not very sure about what we were going to do. In the beginning, it was more about software development, it was what I knew so it was the origin of the company; and we were a very small company. We worked in several projects and we were primarily paid in cash. They all failed. Our last project before what we are today involved hosting websites on servers. Right before we were to sell this company for a nice profit, for instance, the servers were stolen, so it was a huge disaster.
This was the only time in my entire history when I thought of giving up. I didn´t know what to do, and my partner, who played a key role, told me: “wait a second, we didn´t give up until now, we can´t give up now, we have to try again”. So, this is what we did.
If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be?
Change the world. Even relatively small things, like our solutions for the business office, can change the world. My goal is to help other small startups in Eastern Europe to do just that. It is the underlying mission of our company and of the venture firm we started, Y Soft Ventures, a few years ago. We only invest in companies that have the possibility to change the world with their product or solution.
Originally published at medium.com