SCANTRUST, a new-born start-up with headquarters at EPFL in Lausanne has grown fast ever since it entered into the China market in 2013. This CTI (The Commission for Technology and Innovation) coached company recently announced a successful seed round of funding from investors to help scale up operations and build up products. On one hand, the market is so massive, more effort is required to extend the client pool, on the other hand, competition seems unavoidable, with a handful of new entrants who are aggressively working on their own technology solutions.
ScanTrust has been supported by many programs and won a number of startup prizes, such as: CTI Startup, VentureKick and venture leaders, Swisscom Startup Challenge, IMD Startup Competition, TOP 100 Startup Award, SPECO and Innovaud, FIT, Prix Vitoz, 1776 startup, Beijing Challenge Cup.
Who is Scantrust
ScanTrust Secure Codes contains a unique fingerprint, which even the best counterfeiters are not able to reproduce. Authentication is made with a mobile phone without the need for a special optical reader. Furthermore, ScanTrust’s cloud-based solution gives instant traceability and allows full control of the supply and distribution chains. More info on Scantrust product could be found via the video
As a China-based start-up founded by Swiss and American entrepreneurs, we’re interested to know how ScanTrust survive and adapt in this challenging but alluring land. We have interviewed Scantrust co-founder Nathan Anderson as below, who is in charge of China team operation and global marketing&sales
- As a start-up established by expats, is it easy to raise money in China?
Although China-origin seed funds and later stage VCs are in an early phase of development, some leading investors are getting more sophisticated and turning their attention to early-stage technology-led companies and projects. With access to Euro and USD funds, these investors are willing to invest in foreign entities, under the condition that the start-up has set up a physical base and team in China, or that it is targeting the China market.
With Scantrust co-founder Nathan Anderson based in China, the startup has a strong local position and it expanded the team to 15 engineer employees . With its compelling tech catering to China market demand, it didn’t take long for Scantrust to gain the funding from SOS Ventures as lead investor and from Angelvest, a business angel funding group.
- Is it true that culture shock always exist or language is a barrier for business development ?
As we always say here “Nothing is easy, but everything is possible in China “. Some fears are sometimes exaggerated, as Nathan shared, it’s possible for Scantrust to communicate with their clients since most of them are internationally active. But if you would like to expand and reach more local clients, or your business is service-oriented, learning to adapt and localize is crucial. Local partners will be very helpful to develop into the market thanks to the networks that otherwise would require years to build.Even though we were working with multinational corporations that have a mix of foreigners and a number of not only bilingual but also bi-cultural Chinese citizens, there are only certain things that a foreigner can do in China. As Nathan said, who has been in China for nine year: I can never be Chinese, no longer how long I have been here. Although initially we have done a lot of work, because we have established connections, because we know what is happening in the market place, we are able to make some progress. Without having a local team in place for certain key roles, such as sales, marketing and client services, we just won’t be able to get to the next level. So in China, having Chinese staff, competent, capable Chinese staff, is critical, otherwise, things won’t move forward.
- Are you not only competing with Chinese rivals, but also facing pressure from international opponents.
Some Swiss start-up ask themselves “is it too early for me to come to China ?“ In most cases, it’s never too early to learn and experience. If you wait too much, then you’re shocked to find your market full of aggressive players from the States, Israel, other countries. Taking anti-counterfeit tech for example, many start-ups dedicated in this field have appeared. First-mover strategy may enable you to grab and lock up the big clients fast. These first business cases will be valuable as reference and to scale up.
- How do you manage a ” global start-up” at such early stage of development ?
ScanTrust is really a multi-national team in China with talents from US, Netherlands, China, Switzerland, India. With regular communication and open sharing, the squad is keeping the momentum. Taking internal communication for example: we make sure that we have a daily stand-up meeting in the morning, where everybody working on project team talks for 15 minutes and talk about what you did yesterday, what you will do today, so everyone knows what is going to where and what is other people doing. We share barriers and blocks we have as well. It’s just short little 15mins, but it really helps a lot, it sets the tone of the day. Besides this one in Shanghai, we also have one team call in the afternoon with the five employees based in Switzerland.
- How do you explain you already develop the market in China at such an early stage? How will you continue to expand here, with some strategic initiatives?
We have a vision that we are a software based company.we now mainly focus on our products instead of watching the others. The major core of our business strategy is to offer the most secure, cost-effective and easy-to-use solution to address counterfeiting. With fragmented market, our main focus is on protecting products that can have serious health and safety consequences if their integrity is not guaranteed. Our efforts are also aimed at the South East Asian market as we know that the need is high for consumers who want to verify the authenticity of their purchases and for product brands who want to gain greater transparency on the region’s complicated distribution networks. The end -users in emerging markets, usually have no power or tool to protect themselves. We are working to empower them so they can make safer choices for themselves and their families.
- What do you think of the current innovation climate in China?
To some extent, I think the innovation in China is the way that people are using the technology. Wechat is an example. Wechat is a platform unlike any in the world. There are a lot of innovations going on in terms of how it is being used. In fact, you can see some of that innovation being copied in the US. Snapshot just introduced a system where you can add friend via a QR Code. And the speed is another amazing aspect. You see how many years has that been going on in China? Three or four years? There is innovation going on here. It is perhaps different from the innovation going on in the Silicon Valley, but there are some characteristics, and I think innovations that are happening here will affect the market throughout the world.I have been here for 9 years and I am learning new things every day. I call it an artichoke market. Artichokes have many layers. But when you peel off one layer, there is another layer, but it goes in different direction.