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5 Lessons Learned from Chinese Startup Failures

They say you learn more from failure than you do from success. And that appears to be the theory behind a new blog post from Sinobeat Capital managing partner and Fortune China columnist Ding Chenling. In his very long post, Ding lays out the stories of 17 Chinese startups that ultimately failed, and breaks down the lessons learned. The whole thing is a bit too long for our purposes, but here are a few of the most interesting startups (and lessons) Ding picked. Company: Fanfou
Lesson: Startups shouldn’t work in areas that could be politically sensitive.

Fanfou is actually still around, but these days it pales in comparison to its competitors Sina and Tencent Weibo, even though it was around long before either of those services. Fanfou was China’s first Twitter clone, and back in 2009 it seemed to have the world at its fingertips. 300,000 users and growing, the company had netted a big investment from HP. And although the company was doing its best to block “sensitive” words and keep political speech to a minimum, it was blocked (along with a host of other sites) following the Urumqi riots in July, 2009. Company: MySee.com
Lesson: Don’t get cocky, don’t waste money.

MySee looked like a company that had it all. P2P video services were hot. Investments were pouring in from all over the place. But the company burned money too fast. A few dozen employees were costing hundreds of thousands of dollars per month, and the company went all in on an expansive, ostentatious office that cost nearly $200,000 to decorate. But it also had to spend hundreds of thousands on video content, and in just a few months, it burned through nearly all of a $2 million investment.