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Updated: Jan 20



By Jeffrey Cheng


Since the Occupy Central movement in 2015, tensions have been building up in Hong Kong. In 2019, pro-democracy supporters snapped into full action when the government pushed for the extradition bill. Millions of people took to the street to protest against the proposed bill. During the massive protests, the police and the government, the Department of Justice, in particular, have reportedly suppressed protesters through violent and unjust acts, raising concerns over an abuse of power. As protesters made major demands of the government, 'five demands, not one less' became their main slogan.


The five major demands are:

1) Full withdrawal of the extradition bill

2) Independent commission of inquiry into allegations of police brutality

3) Retracting the classification of protesters as 'rioters' 4) Amnesty for arrested protesters

5) ‘Dual Universal Suffrage’ for both the Legislative Council and the Chief Executive

Following three months of protests with alleged unlawful detainment and suspicious deaths of protesters, the government announced its decision to withdraw the controversial bill in September. However, Chief Executive Carrie Lam has insisted there is no need for an independent inquiry into questionable police conduct.

The proposed extradition bill was the trigger of the widespread anger in the city. As a result of that, the district council elections later in November was taken as a de facto referendum, where the pro-establishment (pro-Beijing) camp won only 60 out of 452 seats. This marked a victory for the pro-democracy camp and signified an acknowledgement of the five demands. However, the government's stance remained the same, dismissing the need to address the remaining four demands of the protesters.

The persistence of the protests led to the birth of the 'yellow economic circle'. It is an action, stance and punishment that reciprocate the level of anger, disappointment and frustrations people have towards the government and the pro-establishment camp. By economic definition, the ‘yellow economic circle’ is a discriminatory action against businesses that do not share the same political stance. Pro-democracy supporters have absolute preference over shops and restaurants that support the protest movement and boycott those that take the opposite stance. This behaviour soon became widely popular, and netizens began to create a directory of pro-democracy shops and restaurants, called the 'Michulin' guide.

Hong Kong has not seen such large-scale social unrest since 1967. In a tough time like this, we can see startups and SMEs are struggling to comprehend and adapt to these political stresses, which gives us the thought of sharing our two cents with you.

How does this affect my startup?

- The opportunity cost associated with the protests is real, and Hong Kong’s economy is already taking a hit. Hospitality and tourism are certainly the most affected industries. Next comes professional services whose clients come mostly from mainland China, for example, financial services and education services.


- Retail has also taken a massive hit due to the obstruction of public areas during the protests and travel inconvenience caused by early closure of public transport. Safety concerns over escalating violence also forced most retail outlets to close their doors.


- With difficulty comes opportunity, especially for online businesses that have gained promising tractions during the protest movement. For example, an education startup, and an Ooosh member, Protostar has told us about the increase in enquiries and revenue from their online courses that target local students.

-Due to the unpredictable mass transport service breakdown, the team might take longer than expected to the office. Instead of working from home, you will be able to get a 24/7 access to both Kowloon & HK Island spaces anytime day and night from joining the Contingency Office Plan. This alternative allows you to have a flexible work station and proper office facilities without delaying work process during difficult times. -The inevitable impact on team morale and productivity caused by disturbing images and videos of the protests means that you need to be more sensitive to your team’s emotions. As a leader, no matter which side you take, you need to give those who have been emotionally affected some room to breathe and someone to talk to. Even if you feel you are not the right person to help, allow them to talk about it with their peers and encourage them to let their emotions out. Do not suppress their emotions.


Inevitably, my business will have to take a political stance?


This is one of the trickiest questions and there is no absolute answer.


For startups, we believe one of the primary reasons for starting a business is to have the freedom to voice out and act according to your will. No matter which political stance you take, you have the right to take whichever stance as long as you are prepared to hold yourself accountable for the potential consequences.


The tricky thing is, co-founders and business partners are often caught up in a tangle of conflicting stances. We have witnessed businesses being boycotted by supporters of the ‘yellow economic circle’ after one of the partners openly revealed a pro-establishment stance, while other partners are indeed supporters of the pro-democracy camp. Some of these businesses eventually closed down.


The solution is simple but not easy to achieve - talk it out amongst yourselves.

As far as we have observed, it is not necessary for a business to proactively declare its political stance. Staying neutral is an option as long as you are off the radar.


What would get you onto the netizens’ radar, especially if you are a retail business, is the opinion and comments that your staff are sharing openly. It is important to establish a code of conduct and protocol to outline behaviour expectations for your staff.


What to do if you are on the radar?


Some businesses who support the pro-establishment camp attempt to rebrand themselves or even pretend to take the pro-democracy stance, but that can be risky as today’s netizens are very capable of background searches. If you are on the radar, hire a PR crisis expert to come up with a strategy for you. But if you are a supporter of the opposite camp, here is a list of some things you can do to show your pro-democracy stance:


- Offer discounts to protesters, especially students and journalists

- Put up a ‘Lennon Wall’ inside or outside the shop or restaurant

- Participate in strikes during the protests

- Share your political stance on the extradition bill on social media

- Hire pro-democracy supporters or protesters

- Provide shelter to protesters during emergency

- Stop broadcasting pro-Beijing television channel TVB in the shop or restaurant

- Donate supplies to protesters in need


Just a further note on this, pro-democracy supporters are very sensitive and they value actions more than declarations. Show them your genuine support, and they will reciprocate with their support for your business.


Perhaps you are wondering if taking a neutral stance is an option?

Unfortunately, when you are called upon, declaring yourself as neutral is now taken as a pro-establishment stance.


Is it still safe for expats and foreigners to run a business in Hong Kong?


In terms of running a business in Hong Kong, the government has dismissed rumours on its intention of placing Hong Kong under curfew. They have also reassured the business community that there will be no change in Hong Kong’s financial policies. On the other hand, there is no sign of Beijing revoking the ‘one country, two systems’ framework either. Hence the rule of law is still intact when it comes to business activities.


This leaves us with operational risks in Hong Kong, where we share both challenges and opportunities in an unstable environment like this. If your business has foreigners and expats in the target audience, you will likely take less hit on the ‘yellow economic circle’ radar.


In short, Hong Kong is still a safe place to run your business, considering its rule of law remains intact. It is still the financial centre of the world and Asia’s business hub. One downside about living here at this time is perhaps the inconvenience that comes with the protest movement, but Hong Kong is showing a whole new side of its face in the past seven months, which is something worth witnessing if you support human rights and democratic values.


Conclusion


Politics and current affairs go hand in hand with our economy; hence we thought it might be useful for us to share our observations through these seven months with you. We hope this article can give startup founders and SME owners a glimpse of what has been happening in the market and demystify the worries you may have in these unsettling times.

by Ooosh Coworking X Happyer



Economic recessions, like expansions, pose unique challenges for startups and small- and medium-sized enterprises (SMEs). What to prioritize? How to adapt and transition? How to make the right tradeoffs? These are questions that all small business leaders need to wrestle with in times of economic downturn.


Given this is the global context in which we find ourselves today, it is the right time to talk about the kind of paint points startups and SMEs are facing. Two of these pain points surround employee morale and wellbeing, and cost-cutting and layoffs. Before diving into the details of how to approach these issues during periods of economic stress, there are three important principles to keep in mind.


Profitability is important and necessary, but good, productive employees are essential to sustainable growth. As the old song goes, “you can’t have one without the other.”

Cost-cutting, a common tactic for weathering economic storms, mustn’t come at the expense of culture. The people who will help a company maintain, if not thrive, until bluer skies will be those who sense that their employers are looking out for their best interests.

Don’t hit the panic button. Keep a clear head and look for possibilities. Lean into your team, seek to build community, and work to strengthen the collaborative bonds between members.


For companies navigating through economic downturns, there is thus an imperative to preserve a culture that will inspire more and not less commitment among employees, encourage collaboration and ideation, and position your company as an employer-of-choice. These are precious outcomes, given that human capital is a company’s greatest asset.


That said, it is understandable that layoffs do occur. They may not be desirable, but sometimes they are necessary. When they are, it is important to approach them responsibly, taking care to communicate the “bad news” in a way that respects the dignity of the person being let go.


The rest of this article will cover in detail how companies in economically challenging situations can manage employee morale effectively and to their advantage, how they might perceive and understand the need to lay-off staff, and how to approach lay-offs in way that is respectful, if not mutually beneficial.


Staying super-charged: How to manage employee morale


Here at Ooosh, we believe that there are unique advantages to co-working environments during times of economic downturn. And although the material benefits of working at one may come to mind first, it is really in the connections among members where the magic happens. In contexts of uncertainty, touch points with others in similar circumstances who are trying to figure out their next steps is invaluable.


This is because recessions affect everyone. They put a big question mark over the job market, the competitive arena, and the consumer environment. Uncertainty, at least in the beginning, reigns supreme. Which can and does have negative psychological effects on employees. If sales are down or margins tighten, will your job be around next year? What about next week? The possibility of employee spirits dampening is real and can pose major headaches for owners and leaders, given that they are often dealing with their own stressors and challenges. Co-working environments facilitate connection and strive to create contexts of optimism and engagement. This can be especially helpful for those running companies, given that part of the process of company culture development and management is supplemented by the co-working space itself.


Speaking of culture, what are some of the community activities that co-working spaces provide that can keep spirits high and wills strong during challenging financial periods? Imagine regular happy hours, where friends and colleagues can relax over a drink and some casual catching up; imagine festive celebrations, where members come together to rejoice and give thanks and wish well the person or team or community being celebrated; imagine table tennis and similar games that more often than not end in bouts of laughter and hilarity; imagine, imagine, imagine. These activities are meant to build community, strengthen connections between professionals, and soften the edge of oftentimes stressful workloads.


If a leader decides to invest in a co-working set up for their staff, in view of the benefits as well as to communicate a gesture of goodwill, the returns may be many-fold. Ask yourself: What is the real value of taking good care of your staff?


Facing the inevitable: When layoffs are necessary


Although co-working spaces may not prevent lay-offs as such, we are convinced they offer a life-giving environment for doing so. And we aren’t just speculating; we’ve seen it, one example being where an employee of one member company was let go only to be hired by another. These are the kinds of stories that we want startups and SMEs to hear. Below are three benefits that co-working spaces offer companies facing lay-offs.


A co-working environment is full, to varying degrees, of employers. If you are facing the necessity of letting someone go, be the #bestbossever and network a little on their behalf; maybe other member companies are hiring and need the skillset of the person being laid off. It is a small gesture that could have a major impact on your ex-staff’s next steps.

For those companies who may be possible targets for recently let-go staff, operating in a context of familiar faces is a great way to onboard talent when it becomes available. Interacting with the same people every day builds rapport, leaves a track record of impressions, and can make the eventual hiring of them a known quantity.


Entrepreneurship lives on good ideas. Co-working spaces are to nurture such ideas and foster creative ways for businesses to collaborate and support each other’s success. During times where there is pressure to cut labor costs, consider a strategic coffee with a member about how to share headcount to reduce costs and supplement skill gaps. These kinds of innovations, however temporary, are what make co-working environments unique. Believe in the possibilities.


And these are just the beginning. Companies that truly leverage the co-working space experience create virtuous feedback loops that never stop giving, including when difficult decisions like laying off staff need to be made.


Doing the difficult: How and how not to deliver “bad news”


Letting a staff go can be emotionally taxing and awkward. Most managers would avoid it if they could. But this perception of lay-offs as drudgery does nothing for doing it with integrity. And integrity is exactly what is needed. At a co-working space, you have the option of leaning into other members’ experience. The ability to ask your neighbor for help or to share their experience letting staff go can help make the process smoother. Below are a few helpful hints when you need to lay someone off:


DO think through your reasons. It is important that you communicate a legitimate reason for letting someone go. Be ready to explain it, however briefly.


DON’T fire anyone spontaneously or without warning. If you are letting a person go due to financial pressure, ensure something of the context is communicated in meetings or through notifications of some kind beforehand. If because of poor performance, ensure you’ve communicated a warning signal in prior performance reviews or one-on-one’s.


DO inform them of your decision in-person. Even in difficult situations, presence matters. It communicates warmth and concern. Pair this with a thought through reason and you are on your way to leaving your soon-to-be ex-employee with a positive last impression.


DON’T delegate and DON’T announce it around others. Avoid having a staff that isn’t the direct report of the person being let go communicate the news of their firing; it can sow confusion, leave bad impressions, and result in undesirable word-of-mouth interactions. Moreover, communicating it in earshot of others violates every employee’s legitimate right to privacy; given the vulnerability involved in letting someone go, all measures should be taken to avoid embarrassing them.


DO be optimistic and encouraging. Things like referring a laid off employee to a business that may be hiring for their skillset, communicating your ongoing availability to them for networking purposes, offering to write them a recommendation, and so on, can soften the blow of being fired. Always try to leave things in a spirit of hope.


A parting word


Ooosh Coworking and Happyer are dedicated to seeing startups and SMEs succeed, regardless of global economic outlook. We can and will walk with you in the challenges you face, and are eager to work with you on creative ways to flourish. If you are looking for a place of professional connection and collaboration, we look forward to hearing from you.

Updated: Nov 6, 2019

By Zegal X Neat X Ooosh Coworking


So you’re thinking of launching your startup in Hong Kong?

For entrepreneurs all over the world, Hong Kong has always been an attractive place to start a business. As a top financial hub for many entrepreneurs, Hong Kong has one of the most competitive and stable economies and relatively low tax rates. 

When it comes to startups, Hong Kong is similarly rising to be one of the most friendly cities for new founders and entrepreneurs to start their businesses. 


Here are 5 benefits of launching your startup in Hong Kong. 

It’s easy to incorporate

Hong Kong is known for having an entrepreneur economy and along with the favourable tax system, it’s very straightforward and fairly inexpensive to incorporate a company. (You can find the basic fees charged by the Hong Kong government here.)

Your entire application can even be done remotely, and you’ll have your company opened in a couple days. 

If you’re handling incorporating your company yourself, you can submit your incorporation documents either online through the 24-hour Companies E-registry or in person at the Companies Registry.

That being said, most people choose to hire a professional service provider to take care of all of this on their behalf. There may be some additional fees if you are hiring an agency to do this (i.e. handling the paperwork or providing a (virtual) office address). The total costs are, however, still low compared to establishing a company in most other offshore jurisdictions.

If you’re looking for more information, here’s a handy guide to incorporation in Hong Kong

You’ll be launching into a global business hub

Another benefit of launching your startup in Hong Kong? It’s an incredibly business-friendly city.

Hong Kong is widely recognised as a global business hub and the location of choice for many international companies. What’s more, unlike many other (offshore) jurisdictions, Hong Kong law allows foreigners and non-residents to be the sole shareholder and director of a company.

The city comes in third on Forbes’ list of best countries to do business, and first, according to PWC, for having the world’s most business-friendly tax system.

The startup community in particular is also incredibly international – according to InvestHK, 35% of founders come from outside Hong Kong. Vibrant sectors include fin-tech, followed by e-commerce, supply chain management, and logistics technology.

Hong Kong is home to a growing number of startup accelerators 

The startup ecosystem is growing and thriving here in Hong Kong – the presence of startups also attracts a number of other organisations that want to see it grow.

There are no shortage of accelerators in Hong Kong, all with the goal of training and enabling young startups and founders with the tools they need to successfully launch and grow their businesses. Accelerators typically provide funding, coaching, training and access to a network, and often include office space. Here are a list of just a few accelerators in Hong Kong: 

SuperCharger is a leading FinTech accelerator, dedicated to taking startups into their corporate-sponsored accelerator program. Most participating startups are later-stage, B2B (Business-to-Business solutions) looking to partner with banks.


Brinc has a variety of different accelerator programs, for connected hardware, robotics, food technology, and energy startups.


Betatron’s program is 3 months long, and was founded by a group of VCs in Hong Kong. They won 1st place for Outstanding Contribution to the Asian Startup Ecosystem 2019 for the Greater China area and 2nd place for All-Asia.


China Accelerator helps internet startups cross-borders from within China to beyond, and also from outside into the Chinese market. 

What’s more, the presence of startups also attracts a lot of venture capitalists, especially because of Hong Kong’s geographical proximity to China as well. 

There are also other dedicated communities to tech, like Cyberport and Science Park, which are government-backed organisations that act as hubs for startups. These two communities offer office space and incubators as well. If you immerse yourself in a startup community, you can find a lot of support when it comes to raising money too.

There’s no shortage of flexible office space options

While this might be surprising to someone who’s not familiar with Hong Kong, another benefit of launching in Hong Kong is actually the variety of flexible office space options there are.

It’s no secret that Hong Kong property is expensive. And if you’re looking for an office space as a startup, it can be difficult to put down a deposit in an office building (let alone commit to a year long lease) when you’re strapped for cash, and don’t know for sure what size the team’s going to be a year from now. But the good news is that in response to this, a number of co-working spaces have begun popping up all over Hong Kong, built with entrepreneurs and startups in mind.

Most co-working spaces offer the flexibility that many new businesses need at the beginning. For example, most offer hot desks as well as private offices. Along with this is more flexible options for renting the space, such as month-by-month memberships, instead of year-long contracts. 

What’s more, because of the crowd that is typically attracted to co-working spaces, it also gives you greater opportunities to connect with peers and other similar entrepreneurial-minded folks.

Here’s a guide on how to compare different co-working spaces!

You’ll join a vibrant (and growing) startup community

Hong Kong is ranked 5th in the top twenty fastest growing startup ecosystems in the world. Along with the variety of accelerators and VC attention that Hong Kong has, this also means that the startup community in Hong Kong is active and vibrant.

Any given week, there are a number of startup and entrepreneurial events put on by different organisations. There are always opportunities to learn, network, and be inspired by peers and other passionate people in the startup space. 

A good place to get plugged into the local startup community is to connect with the Whub community, who regularly host startup events and partner with other organisations. Also, many other startups also host their own events related to their specific industries, which you can browse through on event sites like Eventbrite. At Neat, for example, we host entrepreneur-centric workshops, seminars, and community events (to meet our user community). 

We’d also recommend subscribing to the mailing lists of various co-working spaces since coworking spaces are often the venues of these events and meetups. Many co-working spaces offer memberships that include other valuable perks aimed to help support and grow burgeoning startups too. Ooosh specifically also offers growth initiatives such as a mentorship program, a trusted vendor list, access to their VC arm, Catalyst Ventures (as well as connections to ~80% of the VCs in Hong Kong).


So you want to launch your startup in Hong Kong?

There are a lot of communities, businesses, and infrastructure here designed to support startups like yours – and the community is growing. In short, if you decide to launch your startup here in Hong Kong, you’ll be in good company.