MaHui Founder | Mech-Mind's Tianlan Shao: Some of My "Grassroots" Experience

源码资本源码资本··0·0

#MaHui Entrepreneurs Resilient and Bold, Exploring Without End

By Tianlan Shao, Founder & CEO of Mech-Mind Robotics.

Not long ago, I was invited by Source Code Capital's seed-stage investment arm, Source Code Capital, to share some "experience" with several dozen founders who had just raised early-stage funding about how to get a company through its initial phase.

At first, I refused. Because I went through the angel to Series B stage during 2017–2019, a market environment unimaginably hotter than today's. I asked myself honestly: if we were in today's harsh, frigid market, could we even pull this off? Would we even dare to start a company? That's a big question mark.

To the entrepreneurs who are still resolutely climbing the glacier amid the current widespread pessimism, I give a huge Respect.

But they said I seemed the most grassroots and approachable, that I could give people confidence. So I reluctantly shared some "experience" for what it's worth, hoping it might help even one brave founder.

Value Validation and Course Correction, Avoid Excessive "Stubbornness"

Choosing and validating direction comes before hard work. As the saying goes, "circumstance prevails over individual effort," or in more literary terms, as The Art of War puts it: "seek victory from the terrain, not from demanding more of your people."

From the late 1990s when BAT emerged to the past twenty-plus years, very few companies grew to dominance with a uniquely original direction. The reality is usually that promising directions produce multiple companies across different countries, and some grow large through competition and mutual learning. For investors too, the pattern is typically: pick the direction (the track) first, then the specific company. If the direction itself is wrong, individual effort alone rarely overcomes the odds.

Nearly all large companies went through direction adjustments in their early days. Alibaba, founded in 1999 as a B2B platform, only gradually became the Alibaba we know after launching Taobao (C2C) and Alipay in 2003. DJI, founded in 2006, initially made professional flight control modules; it didn't enter the consumer aerial photography drone market and rapidly become the dominant player until launching the Phantom in 2013. Meituan, founded in 2010, started as the name suggests with group buying; it only became today's O2O giant after launching food delivery in 2013.

A pitch deck at the angel round that perfectly predicts everything and scripts a path to IPO in five years is an extremely low-probability event. Constant validation and adjustment of direction is the norm for startups. Therefore, early-stage companies should view their direction objectively and rationally, seeking ways to validate it. When circumstances differ from initial assumptions, consider whether adjustment is needed rather than clinging too "stubbornly" to the original plan.

I want to specifically highlight "demand-side" versus "supply-side" problems. For startups, fully validating product-market fit is extraordinarily rare; almost everyone stumbles through numerous issues. At this point, you need to determine whether this is a demand-side problem or a supply-side problem. If it's demand-side (customers don't need it, willingness to pay is too low, market space is too small, legal or policy restrictions, etc.), you generally need to adjust direction sooner. If it's supply-side (costs too high, product performance/appearance/reliability poor, customers insufficiently aware of the product, etc.), assess whether the problem is solvable and what resources solving it would require.

Focus on a Few Critical Points, Break Through There

Startups always have many problems waiting to be solved; customers and investors can find flaws with ease. For early-stage companies where resources (especially time) are extremely scarce, it's unrealistic to demand that every problem be solved perfectly at the early stage. If someone could actually do that, Huawei and companies like it should charter a fleet of planes to recruit such founders as CEOs.

For early-stage companies, you must focus on what most needs validation or proof right now. Avoid spreading yourself thin trying to cover every base.

For example, the problem most needing validation might be a certain customer segment's needs/willingness to pay, some advantage over existing technology, the reliability of a particular technology, etc. Validating these few critical points well will greatly help the company's subsequent development, including fundraising.

Clarify Strategy and Fully Align the Organization

When markets were hot, running blind might work (in the short term); but in today's era of scarce resources, a strategy that is thought through and internally aligned matters more. To use an analogy: exploring where water and grass are abundant, a general direction suffices—you don't worry about going hungry; but on barren plains, you need to plan your route more carefully.

For early-stage companies, with few people and little money, it's hard to fight on multiple fronts or run internal "horse races" like large companies. Concentrating all time, energy, and funds on priority matters, racing against time to reach the next stage before cash runs out (for very early companies, usually the next funding round; for later-stage companies, profitability) is extremely important. The organization carries out strategy, and effective strategy execution requires the entire organization to be clear on the broad strategy and goals, pulling together in one direction. Not the founder having a plan while everyone else is in the dark, unable to apply their energy effectively.

Fundraise Proactively, Find the Right Institutions

Today's capital market is frozen, especially at the early stage, where it's extraordinarily difficult. Unless you're a well-known big name or in an extremely hot direction, be prepared to talk to many institutions (dozens at minimum)—this is something many successful companies have gone through. So don't be discouraged even after dozens of rejections, though reflection and iteration are still needed.

On fundraising advice, I'll make just one point: I sometimes find friends doing early-stage startups overly focused on the present, lacking deep thinking and论证 about their company's future development goals and path. But logically, early-stage investing isn't buying a small company now—it's buying shares of a future large company at a low price early. If the vision and path to this "large company" are unclear, merely describing the current "small company" state makes things difficult for investors too. This process is often not a simple proportional scaling—selling 10 buns today and 1,000 tomorrow—so very deep thinking and论证 are required.

Once again, my respect to the courageous early-stage founders who are still starting companies in today's harsh environment. May you blaze trails through mountains and ride the wind and waves.

Finally, a word on how this article came about: Source Code Capital — recently, Source Code Capital formally launched the Source Code Capital business, making its seed-stage operations independent within its investment system. The Source Code Capital business is led by Source Code Capital Director Xingchen Zhang, heading a dedicated investment team with a "bet on people" philosophy and decision-making mechanism to discover, support, and accompany technology entrepreneurs going from 0 to 1.

Click "Read Original" to view more MaHui members