The allure of starting a business in Shanghai is nothing short of captivating. From a pure numbers perspective, creating a solid footprint here can do wonders for your bottom line and make you look like an entrepreneurial genius.

Couple this with government efforts to boost entrepreneurship and homegrown startups, and you’re practically kicking yourself wondering why you haven’t already started a company here.

But the truth is Shanghai isn’t for everyone. And if you come here without a plan, you could definitely be left hurting. So, our team at Loop put together this handy guide not only to help you decide if Shanghai is right for you, but also who to look for and what to do to maximize your entrepreneurial efforts in the city.

Photo credit: Mike Behnken.

If a New York minute is a Hong Kong second, then a Hong Kong second is a Shanghai millisecond

Things in Shanghai move fast. How fast? It’s estimated that every 13 minutes there’s a unicorn built in Shanghai. Okay, you got me that’s a totally made up statistic, but you believed me for a second, admit it.

That being said, the pace at which things move in Shanghai can, at times, be nauseating. However, most of the time it provides numerous opportunities for the people that are hungry enough to move swiftly with purpose.

Within the Shanghai startup ecosystem there are a lot of people who are trying to get things done in innovative ways across a number of different industries. So if you’re in the right place at the right time, you could get more than a few at bats.

Because China moves fast, this aspect helps those who are keen on trying out new things and experimenting with original ideas.

What is different about Shanghai’s startup ecosystem when compared to other cities, is that the movers and shakers have created a very accepting and supportive environment that’s conducive to getting your ideas off the ground. This lets you access higher level people with more experience and expertise.

Because China moves fast, this aspect helps those who are keen on trying out new things and experimenting with original ideas. It’s fair to say that this is not ideal for those OK with chilling on the sidelines waiting to see how things will shake out. At the end of the day, the pace can help you learn quickly, move fast, and, ultimately, save a lot of valuable time.

On another more pragmatic note, Shanghai has a pretty good standard of living even for people working on a startup salary. Things are cheaper, so you can still afford a fairly enjoyable lifestyle while grinding away at starting your business.

Without getting into Shanghai’s expansive nightlife and plethora of extracurricular activities, just know that Shanghai has a very active startup community. Numerous events and meet ups are held, which are sure to keep you constantly engaged with the pulse of innovation.

It’s not all cupcakes and roses

Don’t get me wrong, I personally love Shanghai, but at the same time I don’t work for the Shanghai tourism board—didn’t have the requisite three to five years working experience.

The Shanghai startup ecosystem does have its downsides, and you have to be cut from a certain cloth to be able to handle what, at times, can seem like a barrage telling you the universe hates your guts.

And since I’m not pulling any punches, it’s critical to know that—aside from a few outliers—poor Chinese language skills is something that can remarkably reduce the resources that are available to you.

Another issue that you’ll come across is expensive all-around costs. This includes what you’re going to be spending on quality talent, if you can find it. There’s not a big cluster of specialized skill in Shanghai’s startup ecosystem, so you’ll have to do your best Jacques Clouseau impersonation if you want to have any luck at finding the right people.

If you’re a foreigner—and this shouldn’t come as a shock—you’re on-the-backfoot. In this situation, you really need to play to your advantage and find ways to overcome any cultural differences. This is important because you’ll be competing not only against big tech companies, but also local companies that will be trying to snipe your ideas.

Shanghai’s startup ecosystem

Accelerators

Chinaccelerator: This is one of the most recognized accelerators in the Shanghai startup ecosystem. Essentially, their group chooses a few startups with high potential twice a year and invites them to join their accelerator program in return for equity.

Chinaccelerator then invests between US$30,000 to US$50,000 via an optional convertible note. After this, the startup team moves to Shanghai for three months to build their company.

Mailman: Driven by entrepreneurship, Mailman has created a culture of innovation, passion, and service to people and clients, most of whom reside in the sports or tourism industries.

Although it is primarily a digital media agency, Mailman has also built an incubator within the company. This incubator is currently building and investing in several startups across its passion points of digital, sports, and travel.

XNode: These guys are creating an international platform for startups and entrepreneurs to accelerate their success, find their perfect product or market fit, or go to market strategy in China. Very much a bridge into China for foreigners, they have strategically located spaces throughout Shanghai, which kills two birds with one stone for the bootstrapped entrepreneur.

Some more accelerators to check out are: 23Seed, Innospace, and Shanghai Valley.

Investment

It’s no secret that there are a lot of investment dollars floating around China—albeit, in a way that’s unique to the rest of the world. If you’re savvy enough, it shouldn’t be too difficult to, at least, open the door to a conversation with one of the top firms. If funding in China is what you’re after, then Shanghai is a good place to start.

Here are few of the top funds that you can find in Shanghai along with a brief description. If you’re looking for more in depth information regarding industry specialization, fund size, and typical investment levels check out this helpful site.

Sequoia Capital: A name that should be known by everyone, this group is involved with companies in a highly diversified group of industries. It has since invested in past successes like Google, Yahoo, Paypal, EA, Oracle, Apple, YouTube, and more.

Vivo Ventures: Focusing on biotech and science companies, Vivo Ventures’ data expertise is to—allegedly—generate outsized returns for company founders and employees. The majority of Vivo’s investments are in U.S. based companies with therapeutic products in clinical development. These guys do everything from startup/seed all the way through to later stage funding.

Northern Light Venture Capital: This is a VC that targets early and early growth stage opportunities in China. They seek to partner with world-class entrepreneurs looking to build world-class companies.

You may also find your pot of gold at these other firms with Shanghai offices:

• APAX Partners
• The Carlyle Group
• Matrix Partners
• Steamboat Ventures
• New Enterprise Associates
• D.E. Shaw Group
• Redpoint Ventures
• OrbiMed Advisors LLC
• Kleiner Perkins Caufield & Byers – Shanghai
• Mailman Group

Work spaces

Although the temptation might be to “play” more than “work” while in Shanghai, at some point you’re going to want a place where you can retreat to to get your ideas off the ground. Over the last few years, Shanghai has seen nothing short of a cosmic boom of coworking spaces.

This rapid rise in spaces has led to the development of large chains throughout the city—and Greater China—as well as some spaces that are more boutique and personal in nature.

Photo credit: Startup Stock Photo.

In helping create a company that partners with coworking spaces on a global level, I’ve noticed that these spaces are the perfect gateway into the innovation scene in Shanghai. More companies are now choosing to work in these trendy lifestyle spaces over the traditional, bleak office cubicle.

So, you can either chill in a cafe with you Bang & Olufsen headphones, sipping a flat white while listening to the Spotify playlist of that one guy you met that one time who had better than expected music taste, or you can go to the spaces where the future is being shaped. Then again, don’t let me tell you how to live; it’s your world, we’re just livin’ in it.

Naked Hub: Where lifestyle meets work, Naked Hub shows us, in every facet, how “work” is changing. From game rooms to beer taps, they have all the amenities for the 21st century hustler.

UrWork: Co-founded by China Vanke Co’s vice president, Mao Daqing, UrWork is often billed as the WeWork of China. This is definitely a place with more local talent, which offers you an unreal view into some of the companies that are being built here.

WeWork: A big name in global coworking, and a group that has set the standard for others to follow, WeWork is actually relatively new to Shanghai–their first space opening over the summer of 2016. It is very similar to Naked Hub with a wide array of different people. Recommended for the casual working session and to meet new people over a beer.

If you’re looking for two to three times more space, have a look at these:

• Soho 3Q
• Impact Hub Shanghai
• People Squared
• Spaceyun
• Xindanwei
• Cowork
• Sandbox
• BaseCo.

Fun in Shanghai

Honestly, you could write a book–and people have–of all the stuff there is to do in Shanghai. From history and culture, to trampoline parks and an outrageous nightlife and F&B scene, Shanghai has you covered. If you avoid the tourists traps and some of the weaker top ten lists that exist on the internet, you should be pretty set.

Whenever you’re actually in Shanghai, I would recommend checking out Smart Shanghai, as they do a good job of curating events and reviews of places throughout the city.

Also, as a completely biased recommendation, check out Shanghai’s Power Station of Art or catch a show at YYT. I think these show parts of China and Shanghai that people don’t usually consider, but are crucial if you really want to understand where this country is headed as a whole.

Let me know if there’s anything you think I should add to the list in the comments below.