Two young entrepreneurs based in Songshan Lake's Xbot Park have proven that with a lot of guts and the ability to humbly change direction quickly, success is possible in this promising industry.
Change position
During its initial development from 2016 to 2018, the company poured all its efforts into the parking robots. It became what is known in the tech industry as a "learning experience." Although Wei and Jiang believed their initial idea was "life-changing," the company struggled to bring the product to market. "August 28, 2018, was our company's third anniversary, but it was, in fact, the darkest moment for us," Wei says, looking back. "I knew we would run out of money within a few months, and investors weren't responding well." As CEO, he had to make a difficult decision and accept the harsh reality: the product didn't have a market fit. "I wasn't seeking new investment because I couldn't persuade myself to bring a product I didn't believe in to investors." Looking back, Jiang believes he can see what went wrong more clearly. One reason was the limited environment. “Although our product sounded amazing, there were very few fully automated smart parking lots that would allow for the adoption of our parking robot.” Another was the cost of cultivating user habits and developing a complete support system. “This wasn’t affordable for a startup. It had to be done by at least a medium-sized company.” It was like “having a small horse pull a heavy truck,” Wei concluded, acknowledging that parking robots weren’t really their passion. “If you take a look at those successful tech companies today, the founders are usually their first customers. For example, DJI founder Wang Tao had been a big fan of model airplanes since he was a student. But the parking robot was a completely new field for us.” Wei and Jiang quickly switched to UGVs. Their thinking was based on three reasons, Jiang says. “First, it’s something that sounds easy to do, but it’s not that easy. Second, the product can be deployed in various industrial environments as a basic facility.” Jiang felt that his “small unmanned vehicle” had to be “like rice,” meaning something essential that could go with a wide variety of dishes. Third, production costs were much lower. AgileX’s UGVs currently sell for tens of thousands of yuan, with the most expensive just over RMB 100,000, while parking robots were priced at RMB 700,000. “The lower prices gave us access to a wider market, and we were able to bring it to maturity in less time.” Scout’s precursor was a semi-finished product that Wei put together with an intern. “I just launched this product to a small circle of my acquaintances, and surprisingly, someone sent me a prepayment the same day. More orders followed.” With RMB 60,000 left over from the first version, Wei began focusing on an upgrade. “I had to let others handle production. All I did during that time was try to sell like crazy.” The semi-finished "small vehicle" has now been upgraded to AgileX's flagship product, Scout, a fully-featured UGV. Featuring an automated chassis, wheels, and general-purpose interfaces, it is used for industrial purposes such as agricultural pesticide spraying, inspection, and industrial logistics.
Survive first before innovating
The sales, needless to say, were welcome. The company can now afford to move into mass production and is already selling 50-60 units of different models on average each month. Although AgileX primarily sells standardized products, the company also designs custom products for specific deployment environments, with clients such as consumer goods giant P&G. "There are three levels of UGV business," says Wei. "The first is a high-end remote-controlled vehicle. The second is adding GPS and all the unmanned functions. And the third is the vehicle in a specific industrial environment." Initially, Scout was intended for the widest possible range of customers. Features were carefully selected to serve only the essential purposes that would be needed most frequently. Now, Wei notes, the current product aims to meet the basic needs of both industrial and non-industrial customers. Rather than putting its eggs in different baskets, Wei emphasized the importance of focusing on a single product and making it the best, which is essential for attracting customers and ensuring the survival of a tech company. "I saw some companies investing in two or three different products aimed at different markets. But I only focused on one and made it the best in my target customer group." Wei has a strong development team to give him confidence. All have previously participated in the Asia-Pacific Robot Competition, also known as ABU ROBOCON. Jiang was a member of a winning team as a college student. Both members of the post-90s generation, Jiang believes the keyword for their generation is "change," but he also believes young people should learn the survival spirit of those born in the 1970s or 1980s. "Wei always tells me stories about many entrepreneurs in Shenzhen who had to sleep under bridges when they were building their businesses from scratch. Many small businesses established by the post-70s and 80s generation are very resilient. They can survive for more than ten years with only a small production plant for a single product. This is much better than many startups today." Startups should aim to survive the first three years and earn "the first bucket of gold"; from then on, they can expand, says Jiang. Wei also emphasizes that survivability is essential for a company to attract investment. "Nowadays, many investors who used to invest in 'concept stocks' feel insecure. They came to us because we can make money and do things step by step. Investors are becoming more low-key and discerning these days." The two founders' cooperation and strong bond have also been essential to the company's success. Wei says Jiang is able to "understand what I mean before I finish the sentence," and Jiang views his working relationship with Wei as the chief petty officer and captain of a ship: "He's the one who makes the decisions and takes responsibility. My duty is to give him all the advice I have and execute his orders."
What's next?
Of course, there's no time to rest on the success. The company is now moving to the next stage, which is developing more customized products for niche markets, as they have enough money for research and development. "Industrial implementation is the real deal. We can decide if the industrial environment is large enough or worthy enough to develop a specific model." Like any startup expanding beyond its initial stage, AgileX is shifting from a highly motivated but rough-and-tumble management style to a more systematic one. Jiang admits it's a challenge. "We can't just copy the ways of large companies, but we can't stay the same," he says. "As we expand, management will become more like neurosurgery: you need to give specific instructions to the right person in the right place." Nevertheless, these changes are necessary to drive the business forward. Wei is setting up a new office in Shenzhen's university town focused on sales and marketing, to be closer to the market. "On Songshan Lake, it takes a lot of effort [to get here] for those who really want to do business with you." Although sales are currently driven primarily by word of mouth, Wei intends to gain more market insight in Shenzhen. "It's inevitable that a company makes mistakes during development, so we need all kinds of information. I'm here to learn in Shenzhen." As the mainland city most closely connected to Hong Kong and Macau, Wei also hopes for greater communication and cooperation with the two SARs as part of the Greater Bay Area plan. "I think it's definitely a trend for Pearl River Delta cities to cooperate with Hong Kong and Macau," he says. Wei believes the mainland and Hong Kong should do their best in their own fields. "Hong Kong is very strong in finance, as well as high-level talent, while the Pearl River Delta is good at industrial implementation and supply chain." Good idea. And sound advice for aspiring entrepreneurs on both sides of the border.
