From Beijing to Suzhou: Start-up companies are starting to flee north by cost pressures

Like Wu Lei, many founders of tech start-ups are facing painful choices: whether to leave Beijing, Shanghai, and move to a better, cheaper two or three-line city?

"Decided to move the company from Beijing to Suzhou, the equivalent of my invisible in the company for more than 30 young people made a major life choice, many of them in the future may be because of this choice has been living in Suzhou, so I am particularly afraid of this decision will be wrong." "Wu Lei said.

Wu Lei is CEO of e-commerce company Auristan, a few years ago the company headquarters moved from Beijing to Suzhou. Before moving to Suzhou, he carefully invited all the company staff to visit Suzhou, most of the staff immediately like the Jiangnan city.

He took his staff to Jinji Lake, Gong Dike, Suzhou Industrial Park and the new modern neighbourhood community, there is no Beijing sandstorm, haze weather, traffic jams are much less, the pace of life slower than Beijing, the most important is that house prices cheaper than Beijing, employees see the hope of life.

Since then, the company's headquarters from Beijing moved to Suzhou. Like Wu Lei, there are countless technology companies are facing such a choice, more and more expensive Beijing, Shanghai, traffic jams, air pollution, foreign account restrictions, most employees see no hope ... Many start-up companies are considering leaving Beijing and Shanghai.

So which startups are fit to move to the two or three-line city? What confusion have they encountered in moving away from Beijing and Shanghai? This newspaper conducted an in-depth investigation into this.

Cost account for a start-up company

Auristan is a main multinational e-commerce Internet enterprises, the original headquarters located in Haidian District, Beijing. Wu Lei that Beijing has the entrepreneurial essentials needed by a fledgling Internet company-new ideas, a complete industry chain, a concentrated investment company and a wide variety of talents.

In Beijing, Auristan spent nearly two years to complete the business running-in and financial integration. It has invested in DCM and German capital, and has expanded its cross-border electricity business from Japan to the US market.

As a reliance on traditional manufacturing suppliers of electric companies, as the business into the expansion phase, Beijing has gradually failed to meet the company's demand for the development of suppliers. "It's hard to see suppliers in Beijing, and many suppliers will feel that our company is far away, and often don't even know where the company's headquarters are." Wu Lei told reporters.

In order to meet the needs of the development of the enterprise, Wu Lei began to consider the plan to move away from Beijing, he needs to find a close to suppliers, near the location of the export enterprises, while there are reasonable commercial costs of the city. After inspection, Suzhou in Nanjing, Wuxi, Dongguan, Harbin and other cities in the fore.

Wu Lei led all the staff to Suzhou inspection, the headquarters moved to Suzhou. Now, Auristan moved to Suzhou for less than one months, and Wu Lei is carefully calculating the move's inputs and outputs.

After two weeks of running-in, Wu Lei and his company are on the right track, the relocation work is over, and they have recruited 15 employees in Suzhou. Wu Lei is very gratified that Suzhou close to the advantages of suppliers began to emerge gradually. He recalls that these two weeks saw more suppliers than they did in Beijing last year.

Wu Lei has recruited 15 industrial workers in Suzhou, with wages 20% to 30% lower than those recruited in Beijing. Therefore, for Auristan, even as long as the work, the rhythm of the changes in the work of employees reduced by 10%, for enterprises, is also affordable.

Wu Lei's family is still in Beijing, and he admits he will not have the guts to move to Suzhou without the high-speed rail because he cannot cope with his family's separation. And with the Beijing-Shanghai high-speed rail, Beijing to Suzhou only five hours, he communicated with his wife, decided to return to Beijing once a month, in Beijing for 10 days, in Suzhou for 20 days. Enterprises have entered the stage of steady development, even if he is not in Suzhou can be normal operation.

In Haidian District, Beijing, a very common office space per square metre daily rent is generally about 3 yuan, and in the Suzhou International Science and Technology Park, every square meters office space per day only need 0.5 yuan, in some parks in Wuxi, office buildings in the past few years even free for start-up companies to use.

The reporter in Suzhou Industrial Park, Jinji Lake, a lone villa to see a large number of government-built office buildings, such as Suzhou, the past industrial cities, there are few large chunks of land used to attract investment, so the government will be a large number of land used to create new offices, hope to preferential policies to attract technology start-ups

Wu Lei to his decision to come to Suzhou, he said: "Now the various types of enterprise competition is very intense, you can not tolerate in the development of the enterprise form there are any obvious flaws, the choice of the city to be cautious." ”

Lack of management and marketing talent

For the employees of start-up companies, the pressure of life in second-tier cities is much lower than that in Beijing and Shanghai. To buy a house for example, Suzhou City housing prices of about 10,000 yuan per square meter, and the Internet enterprises in science and technology park employees average wages of about 6000, so most employees in 35 years after work, with the down payment of Provident fund can buy a house in Suzhou City, and this is almost unthinkable in Beijing.

The lower cost of living, such as house price, transportation and so on, bring about the decrease of human resource cost correspondingly. Murong, the chief executive of the Bedouin technology based in Suzhou, predicts that the salaries of ordinary employees in Suzhou Internet companies are about 30% cheaper than those on the same terms.

But what bothers these startups is that once the company is moved out of Beijing and Shanghai, more than half of its employees will consider leaving, not everyone is willing to go to a small city, especially in an industry that likes to get together on the Internet.

"In some science parks in southern Jiangsu, there is no nightlife after 9 o'clock in the evening." "Not everyone likes the quiet life of a small city," said Lui, an adviser to the Dongtan investment consultancy, who once founded in a city in southern Jiangsu.

Every weekend in Beijing, there are countless internet industry salons, sharing conferences, gathering opportunities. One of the jokes is this: at the peak of the mobile internet bubble, a VC investor found 21 entrepreneurial teams in a garage café in Zhongguancun this afternoon.

Murong, a shanghai-based Bedouin technology CEO, has a deep understanding of this, he regrets: "Your company if it is in Beijing, Shanghai, market personnel take a business card mixed two months also at least mixed face ripe, but the atmosphere of Suzhou is much worse than Beijing Shanghai." ”

A well-known U.S. VC investor said that most of the investment companies will still first consider the internet companies to invest in the north, and then give priority to Chengdu, Shenzhen, Hangzhou, Nanjing, Wuhan, Dalian and other emerging internet companies gather, for other second-tier cities remain cautious and wait-and-see attitude.

Suzhou, a science and technology park officials told reporters that the current technical personnel in Suzhou are not missing, but high-end management talent and marketing talent is very scarce, because these people still like to congregate in Beijing, Shanghai.

In addition, second-tier cities often do not have a good entrepreneurial atmosphere, the staff's life and work rhythm and the acceptance of urban culture, the degree of habit and the first-tier city has a big gap. The slow pace of work and life inevitably leads to a decline in productivity.

Eurith Dan Beijing's old staff Tiandong came to Suzhou after the first feeling is that the staff in Suzhou to the office at Noon to eat hot, one to 6.1 dozen bell, employees like school ran away. According to the CEO of a Suzhou Science and technology company, the company's market efficiency is at least 50% lower than that of its peers in Beijing, under the slow pace of life and work in Suzhou.

To solve these problems, the local government issued a number of countermeasures, such as Wuxi launched the "530 plan", Suzhou launched the "Gu-su leader" program. For some of the core employees who have signed long-term contracts with companies, some local governments have also introduced incentive schemes to keep them.

Compared with other second-tier cities, Beijing Shanghai has the obvious advantage and attraction of talent. Of course, all over the world are trying to change this situation, Suzhou International science and Technology Park has set up a lone Villa lake higher Education area, Jina the domestic well-known universities such as the NPC, Fudan, south, east of the Institute, Software Institute, Computer Institute branch, trying to borrow resources from universities to build local talent pool.

How can a small city find its location?

Outside Beijing and Shanghai, in recent years many of the two or three-line cities in China have gradually begun to form their own internet industry clusters, forming their own characteristics.

"Hangzhou every week has a very high quality E-commerce salon, party, I will go to Hangzhou more to run." "The investment director of a domestic VC said.

Hangzhou is becoming a new business center for E-commerce, and Chengdu began to become the hot land of online game entrepreneurship, Wuxi is becoming the center of Internet Entrepreneurship, Nanjing is becoming a hot spot in the outsourcing industry, and Suzhou, Xiamen, Dalian and other cities entrepreneurial, also have their own characteristics, these places are forming their own characteristics of the Internet industry cluster.

For example, the Suzhou International Science and Technology Park Science and Technology Bureau invests about 400 million yuan each year to support the development of the industry such as software industry, it design, digital entertainment, mobile Internet, fusion communication and so on in the park.

Small cities also have a very special advantage, that is, local governments can strongly promote some of the Internet demonstration projects. With the development of O2O and IoT, the Internet is increasingly needed to combine with physical commerce. Many entrepreneurs find that it is too difficult to go to a company to find a real business on their own, and in some small cities it is much better to have a government.

Judging from the trend of international development, Japan has set up a model city for mobile phone payment in the small city of Fukuoka, while the United States has set up a demonstration zone for intelligent cities in some small towns in California, where cities such as Suzhou and Wuxi are consciously building demonstration cities for IT industry applications, which is a difficult advantage in big cities.

But Lui, who once operated a similar demonstration project in a southern Jiangsu city, believes such demonstration projects across the country are now facing deep waters, involving very complex management issues: first, such demonstration projects rely too much on government policy support, which is a small constraint for enterprises; This kind of demonstration project characteristic is Spadger spite, relates to the environment, the human settlements, the tax, the policy whole set of operating system, this to many township or the park management side's vision, the ability proposed very high request.

Lui that the practical problems encountered in the demonstration project require the government to make system innovation, the ideal way is for the government to devolve part of its decision-making and planning work to a third party consultancy, and to design a reasonable industrial development model based on the unique resources and endowments of the locality, which can also effectively reduce the over-reliance on the government of exemplary projects.

In fact, many of the technology companies relocated from Beijing to the two or three-line cities are attracted by the attractive preferential policies of local governments, and often after the relocation, many local government promises cannot be honoured, and if too much reliance on the government, it will be difficult to develop in the long run.

According to Lui statistics, in Wuxi, 80% plunge into the heat of the Internet industry small micro-enterprises are eliminated by the market.

Lui analysis, the second-tier cities themselves in the Internet such a new industry has no experience, but the government in the economic activity has an absolute strong position, the development of the park is largely dependent on the strong government's industrial design level.

If the park industrial planning does not carry out a perfect investigation, design, not fully consider the unique local resources and endowments, it will easily lead to park and Park, the industry and industry in the park highly homogeneous, so many new ventures died of vicious competition. And this homogeneity of the industrial situation will lead to investment in the academics, in the preferential policies attract swarmed, after the disappearance of preferential policies and hubbub, which to the local economic development, economic restructuring is a kind of injury.