[Podcast] China paradigm #2: How to reach 6 million USD sales without initial investment with J.X. Paulin
In this episode of China paradigm, Matthieu David interviews J.X. Paulin, Founding partner & Managing director at DBX International. In China since 1994, and specialized in real estate business, he explains to us what it means being a foreigner and doing business in the country. During the interview, you will learn how DBX reached 6 million USD sales in 4 years after starting with no initial investment. Through the story of his journey in the country and abroad, we are exploring together how to build a successful partnership with a Chinese partner when you have no equity on the table. Finally, JX Paulin tells us what can be learned from China to do international business and how this founder, from the African diaspora, is leveraging his knowledge and experience gained in China and gain traction in Africa.
Matthieu David: Hi Everyone, I’m Matthieu David and I’m running his podcast, Game of Alpha. I’m learning today with J.X. Paulin. J.X has been in China for 25 years. If I calculate right, since 1992 and that you have been funding the company DBX in interior design, with about– What’s the number like 250,000 square meters David over the last 12 years, and DBX according to your website was founded in 1958, so you have to explain something on that because you don’t seem that old, and you said that you started higher into fire. I’d like to run this interview and to understand better about what it is about starting a business in China, especially when you have– You have been in China since 1992. Very few foreigners were in China at the time, three years back from China 1992, a lot of foreigners in China, so, I think a lot of story is about it, and also I discovered that you had a lot to teach us. You came to my office like I think a month ago, and I thought I knew what you were doing. I thought I knew what you did before, and then so much more. I found out that you have civil expenses, several nights in China, which are very dense and I got you on the phone recently for my own office because I needed advice, and I was amazed by your ability to find the right way of talking to me, because we come with me. Welcome to the show J.X and thanks for being here.
J.X. Paulin: Thanks for having me here. Actually was not right on the date. Let me put it this way. First the history of DBX, so fully story is my grand– It’s run with my family. My grandad was in construction, my mom was in construction and back in the days you had company called — and they were doing construction and architecture. My mom came to China in 92, for a project, and then she basically she let me come to China in 94. Okay. Myself I came in 94, and basically I was not interested in running any kind of architecture or any kind of construction business. As you mentioned, I had many lives. I work in entertainment business, managing the biggest club in China, back in the days, was fantastic experience a lot. I’ve seen things that few foreigners have seen and few Chinese have seen, and it was a great time, and then I moved to consulting, marketing consulting and management consulting, as you see that was my strong point. Then I became a chief representative for a French company that was also into market entry for French small enterprise based in western France, and then in 2002, yes in 2002, I was offered a position in then the top three design and build company in China, and honesty I moved in because he wanted a deputy general manager, and I was put in management. I moved in, and I get called by, I would say my family spirits ago, in 2004 and I have to go before I created DBX.
What we basically, we do, my mom said, “Listen, you know what, we going to buy your business back with my partner, I would name your name, and it turned out that we didn’t even use our money, so we created this, but he was, I would say is was important for the Chinese to understand that this company was not just created in 2004, 2005, it was important to say, “Okay” then again, when you come to our new work site now that we have 12 years history, I don’t see you have any mention of it.
Matthieu: Okay. You found the website, and was quite surprised that though historical rules. Yeah, I went through website through Linkedin so that I could find, and yeah, it was 1958, which is surprising and yeah, can help to begin the conversation, so, interesting point, so why did you leverage from your most rental assets? Was it purely for branding to other Chinese clients or did you leverage something?
Paulin: It was purely branding to our Chinese clients, we didn’t use any assets basically, because it was not that to change market. That’s it. We really started with my partner, my Chinese partner, to our first lecture, carrying your bags, and you’re around meetings, and luckily for me, I had a good network at the time of recent agent. I had network of clients, so we started the company with our clients already. Many clients follow me, and that’s it, but he was, when we met new client, new Chinese client, it was important for them to think that okay, we didn’t just pop up on the marketplace. So, it was in a way to reassure them.
Matthieu: Okay, I usually begin with a question about the society of a company and metrics on the company. What was the metric actually to be founded in 1958, but did you have, so can you share with us some metrics about company like the turnover, the number of people, a number of projects, I get when you review some of guideline, 250,000 square meters delivered about 15 designers, and 100 workers, if the numbers are still correct in the website. Could you give us numbers of revenues first?
Paulin: Okay. So, basically the numbers are still correct. What we did is, when I worked before in the previous company called CTN, when I was a deputy general manager, this company was as a DNB, that include, it was huge. We had 200 full time workers. We had 70 staff, and when I create DBX, with my partner, and we told ourselves, “Listen, we’ll never be that big because it was just not logical to be that big. We have different way of managing people. Most important thing was to make sure the times is quality and the design quality. So, once we had it, we had a tight team of designer, presenter, the square’s like new agreed, like special forces. Each designer could do everything, from concept, to design, to trajuring, to photos of each site, each project, and we agreed on this kind of management. We had a team of 15 employees at the most. to most known, more format, some years, we have 8, 10, 15, and then what we had, we had hundreds of workers, sometimes even more, working for us. So the beauty of it was because we were busy, because we had good business, and we still have, they went out on payroll, but they were only mainly doing a project that is, so that allows us to basically have more revenue in terms of net profits instead of my own old companies that were just like that’s what going on their, like 200 employees onto the workers under the federal. So what we did in 2008 was, we did our best year. We did 6 million US dollars and we look at it for 15 seconds now that, and now that we have driven this useless, what’s great. It was like a– It’s when we manage our team was really internal controls. So, each designer had its own freedom of doing project. Of course I was the one that lead the concept, but he has his own freedom. He could do within a certain time frame, but he could basically go on site or go and have a coffee with friend, but as long as the job was done, it was great. Funny thing is doing this kind of management, we have a huge market, a huge stuff. We don’t see, so we stop staying the first most of them for nine years, which in turn makes a lot.
Matthieu: Okay, I see. You were finally 2004 and five years after you reached millions US
Paulin: It was like, he was basically, we almost double our turnover issue. It was great. 2005 we did great, 2006 good, 2007 was good, 2008 was the peak. We took a heat during the financial crisis like everyone, but even though we only fed the heat until 2010, and because we diversify, we went into a light industrial project. DBX was mainly created to answer the office demand. Offer desirable demand, and then what I did is write just like google to light industrial, so it’s 10,000 square meter project, ad then of course I expanded into Africa.
Matthieu: Okay. We will go back on Africa like on– First, I’m very interested to have listed the beginning because I always felt that it’s very rare to a finance evolve into a real estate. I feel it’s a very local business for every country, it’s very local for I guess, for every country should players into real estate, into this managing workers, right. One of the workers, well, suddenly don’t speak a word in English or may have the first foreigners in the industry. How do you manage it? What was the difficulties? How did you find difficulties? Or it was pretty easy for you? Could you tell us more of it?
Paulin: Well, first of all, you had for any industry, China. There were plenty of foreigners in 2014, I would say you had princess of real estate. For instance, you have guys like they were really famous in doing this job, all this great guys that are just real estate in China, Anthony Cos or this guys are not. Anthony Cos is a managing director. This guy work in real estate. Now, when it comes to design and built, and as you mentioned construction, you indeed a few foreigner, a few Westerners in this field. We have Singaporean, we have Hongkonese of course, maybe, but we have few foreigners. Back in 2003. I went through a course on law and safety. It was for occupying my position to do it, and I was indeed the only foreigner, only westerners in this course. We had Singaporean,We had Hongkonese, so we’re honor or PN, but I was the only westerners, taking Chinese course on the low and safety. As I had a previous background in diverse industry, managing workers was to luck to me, was not a shock. It was just like, interested with what’s challenging, and once again go at a really harder. We need good product managers. That’s what we’ve been for many years, and he was doing the management, I was in managing game, and he was managing the rest. Of course, it was like youths. It was great years of– The biggest challenge for me was to ensure the quality of the clients. That’s integrity of brand and the integrity of the project. That’s it.
Matthieu: I stayed. So, how many are insured?
Paulin: They’re on site? No, what happen is that, when you manage workers, when you work on site, at the end of the day you have to be on site, because for any construction worker, you’re telling, “Oh, you doing a project for Microsoft.” Who doesn’t know Microsoft. Period. The only ways that he’ll just send– This is project is important for the company if he or she sees his boss on site, that’s it. Also, it’s really, really have to– It’s your commitment toward your company, you have commitment towards your clients, to be on site, and to show the workers “You know what? You have to care about it because I care about,” and we know when we call my days. Well, cause it’s my day, novel office days. It’s okay, right in the morning, I would time my team meeting with my staff, working as a project, looking at a critical line, what happened, what might happen, and we did some suppliers, some real estate agent, and during the afternoon, taking my car, traveling around Chi, and just like visiting sites.
Matthieu: You mentioned timing. You mentioned like the availability to be available to visit sites and to be, I would say a bit intense and on work. I think that’s what you want to come there on the website, the contact form is saying that you are available until 6:00 PM and more if needed, I know we can if needed. Is it part of what you sell? The constant constant availability and that you’re very tense on product.
Paulin: Well, it is. I don’t think China is so challenging. It’s a market that is still changing. I don’t think that you can succeed if you’re not available for your clients, period. You have to, especially back in the days when the real estate was at it’s peak. We had no weekends. You have to answer a pitch, you have to answer basically tender on Monday, and it’s given to you on Friday. You’ll have to come during the weekend. Line of business. I don’t think we can consider a weekend. It’s more project based. That’s a way I trained my team, to see this. It’s a project based. It’s not time based. It’s not a job from nine to six. We have a mission to compete. We have a project to compete and that’s it. So, basically if it requires us to come on Sunday, we’ll come on Sunday. If it requires us to wake up at 9.
Matthieu: Supposing like that which is like the time of day, like there is Sunday, I understand. So, to come back and what DBX is doing, I want to find out the office. You are not looking for office space, so I have to find a reason that, that was for the office space. Once I found that in the office space or different office spaces I like, then I go to you and I ask you if you can design it and again, what I found out in your book on the website, in your sales process, is that, you are offering your free consultation. The free consultation consist the– I provide to you the interlocking foundation for you to give us advice on how to organize a place or if it’s a good place for us or not, and then I can sign the lease, because if you’re confident that you can do the work on the edge and you can rearrange it, and with the price you would have given to me beforehand, is it what you do in terms of sales process and then on to design with you, you taking charge of construction, or even taking sign, the phone lines and so on. When did you stop? You don’t do something– You don’t help people find the office, and then you keep the key to your clients to use the office on their firm one redesign then what, right? Am I correct? Can you tell us more about what does it take? When did you stop your services with, until where it goes?
Paulin: Well, basically it’s like its North to be in China for 23 years and having a company for 40 years. Basically, when do we stopped? We stopped basically when typically it’s, as you mentioned, it’s once you have the location, then you cover it. What we could do and what we do is, once you think about moving out, you better call us, of course. Why? Because understand really, you have, a few business owner as you have. I have a clear idea of how much space you really need. Okay, first of all. but okay, this place should be neat. We have to think about what is the new workplace strategy that you need to apply? How you need to seek your business in the next five years, that’s what you used to see before, and then again, of course, because we had a really good knowledge of each buildings in Chi, and tell you okay, you can go to these firms, the rent might be cheaper, but in fact you might face a more expensive price of fitting out or more specific cost of renovating the air condition for instance. So, that’s the thing.
We really come as a consultant on this, but we do not want to step on the real estate or the agent footstep, but we come here to tell you, you know what, we don’t really care where you’re going, we just tell you, use, because we’ve got so many projects in the grade A, grade B, grade B- and super great offices. We also know what you are in terms of industry and what maybe you should look at. We also understand what the new employees, what’s the meaning of cause you want, because at the end of the day, we also want to design place. We said, are you okay, basically, might you? Okay, your team will need more space, more ceiling, you might want to come closer to the subway to– Forget about grade A, think of grade B, have benefit out to exist, but because you will have less costs when it comes to renovate, or change the air conditioning, blah blah blah. Basically, once you sense of these, you tend to key firm. We design, we fill out and we put everything we have, a liquid turnkey, it needs a few– We do order fire, air conditioning, IT installation, security, furniture of course, plantation. We also help you before you move basically, and when we’re done, we give you a budget. It’s a bit of a plug and play.
Matthieu: Okay. I see, and you know all the regulations for fire, you know all the regulations for you have to comply to. Basically, it’d the only one said is this. Actually, I understand. What if it fit out by the way, on your website? What do you mean? Feet out the-
Paulin: There’s a term of into your building. Basically, what we do and pretty cool, if you know this, we take a bear show, like a concrete bear show place and we build the interior. We have plenty of carpets, so we built a wall, the seating, the lights, that’s what we call Fill Out.
Matthieu:I see. Could you give a case you’re on, especially, product or you think would be very interesting for people listening to us to, could help them understand your business and how maybe some of the challenges is that some of the clients may have faced and you have so, so the case study that would be an example to visualize.
Paulin: We have many cases. The first one will be for the same time you’re working, what we could secure environments, for example the locals of French consulate in Chi, and look within for six years. It’s hard to create an environmentally, we’ve secured your aids, and of course it comes today have, to become, I mean, requirements, so how with six years of joined with for start for supplier. What’s an interesting, but we work with of course we work as a function of commerce with being there to support that desire since 2006 till now. We did want, it takes a function of commerce, what happened, for instance, I don’t remember when, I think it was 2012. Also function of commerce in Shanghai they had some neighbor upstairs. Basically, is a floor. Therefore it was 1,400 centimeters were on the site that were. It is what do we do. When you send me first, we think you’re here when you need. Generally, we sit down with them, we just talk about how we’re going to do? How long it would take us? How we can come out to meet the space so people can still work when we renovate the space and this is what we do. Okay. I like to say that DBX is a bespoke a designer and built. We were never agreed to be like any [maser], to do a youth project, but what we do is that bespoke tailor. We design and built spaces that fits you, and it’s the same. Any kind of requirements. When we get fact to read at the same. When you come to see us to be the, I don’t know, suit factories, we’ll not say, “Let’s see how much money you’re going to make.” We’re going to sit down and say, “Okay, let’s see what is practical? What we should do? What you shouldn’t do? Unless, I think is the best practice. What is your budget? Let’s work around your budget, to make sure that you can operate the same.
Matthieu: Yeah, I saw on your website, you mentioned your budget. You mentioned your budget is unique, which is a surprising, interesting way to mention that actually you can indeed find something which can fit within the budget of your clients. Okay, I understand.
Paulin: Let me come back to this. When I say the budget and it’s true. Your budget as best reconstructing middle is the same as, or you must begin, or to be the same as all the Bank of Fortune. That’s the thing, but our job is to make sure that we cut up to your business, we give you the best of what you can afford, and if we cannot– Sorry, we have limits in terms of you wouldn’t– We don’t want you to be sorry for it. It’s okay. We want you and your team to be comfortable to have such a well-being, and to operate perfectly in your space, and when we say that each project is unique, that way.
Matthieu: Yeah. Interesting, when and can you tell us more about your association with your Chinese thought now? We have seen in China a lot of companies failing because a partnership or misunderstanding because of partnership. I can’t really state when you look at the hotels which cannot own the building, that can only manage it. These all work some tensions well between the guy who owns the building and the guy who manage the building, I guess real estate has been an example in China failing partnerships. It depends. We just picked up real estate as big industry. Could you tell us more about how you make successful because it works?
Paulin: It’s something really interesting because many people will know when I meet people and say, “Oh, you know, when you work personal shouldn’t Chinese, you have to send the same exact. You have to make sure blah, blah, blah.” I started DBX out of a handshake with my business partner. You just shook hand so you know we’re going to work for 10 years before, and we’re going to create what we become. Top one design brief that we’ve design with company for quiet real estate, and we, from the beginning really split our role, she was in charge of the finance and she was in charge so making sure that we have the best price for a supplier, and I was in charge of the rest: operation, design, construction, quotation and everything. It made the work so easily. It also was like, we had no issue, no legal issue, or whatever, because we were working towards the same goal. Look, right, because it made a solution. [crosstalk].
Matthieu: How you meet, because, you do that on handshake? Yup.
Paulin: Yeah. Basically we’ve met at a Chinese company. We met working together for Privacy honor.
Matthieu: Okay, and when you were working together? What did the person that you had, you enjoyed the most working with? Was it a person you trusted most? What is the person who actually you felt was the most ambitious. What made you think she was the right partner? I think is she right?
Paulin: Isn’t she? Isn’t she? What make me think she was the right partner actually it’s clear to that nothing, and she was the one convincing toward to open DBX, because she could see what we’re working for private box, how much they get. Basically, I was running the company, and taking everything so it was-
Matthieu: I understand. Your revenues, you were basically so involved in the company before that you knew everything about this company, you were managing it, and she was seeing you as the one could bring business, and she doesn’t know how to bring business, but she knows how to manage it. So, then she thought it was complimentary, and she told you as a local Chinese that we dream of let’s start a business. How is it in type of structure? That’s something which is very often ask. I mean, is it purely Chinese company against Sweetie State? I’ve got to be a lot of workers, always organized.
Paulin: They’re pure Chinese company.
Matthieu: Okay. So, you trusted her that she would make your agreement?
Matthieu: Okay, for people who are very aware of this, Maybe this was, you had in China differences between Chinese Equity company, foreign equity company, and when both of them are now emerging, it’s called a joint venture and it’s got a bigger work those way and some industries are forbidden like foreign businesses. Aren’t you into a designer firm, right? You could have purchased–
Paulin: No, we couldn’t have not. We could have started the new feed design only but not in construction.
Matthieu: I see. I think, and you didn’t think about it having two businesses?
Paulin: No. No, we didn’t-
Matthieu: Like want somebody opinion.
Paulin: No. We didn’t see anybody then we get– Honestly we get caught into action. We started really fast, and believe me though, when you’re busy building your business, you’re never really busy release your paperwork. When it was separately, and you have to keep in mind something, and that’s something that I advise I give anybody that wants to open to– That want to venture in a Chinese only company who trains partner. What you have to make sure, you have to make sure that at the end of the month or end of two months, you don’t leave too much money on the back account, because at the end of the quotation moves your partnership. That is a safe, but when you have nothing to steal from, now that much money on the bank account, that will be of course, if you had like, or if you had 10 million running on the bank account something might happen.
Matthieu: Okay. Okay. I see it. So, you are not the owner of the company a bit like other people who buy a share of Baidu, or Neulion on the Nasdaq actually they don’t want the company in China because the from the default, for education and teaching is operator for foreigners, because they just own the contract which started VIP and that’s the number that you did, but you have some way balance of poem. It’s more like checks and balances, and the company can run without you or deal between you two partners. Did you sleep well and disappeared?
Paulin: Yes, I did. You know, basically, what we have to put A, B, C into perspective. I also wanted to know. I was one wondering back singing reviews that would maybe 85% of all businesses, so I agree with that if something would occur. I could leave the company open and ex associate company and still make money, so, it was not as an issue. Now, you have to be confident on what you have, and to make sure once again that you don’t leave that much money out in the bank account, the company bank account, otherwise you might end up with nightmares, but once again mark my words, we need to trust the most something like a– You have to work your way. Of course we had clashes. We had disagreement. We are like brothers and sisters, and that’s it. That we rate the company together, and we head strong, we’re stressing, we had family. That’s life.
Matthieu: You were speaking each other in English or Chinese right away.
Paulin: Bends, it doesn’t suit. Now, our English is getting better but you didn’t have to speak English.
Matthieu: Okay. You end up to understand, to misunderstand things from her,to misunderstand things, to over interpret your chain was good enough or you couldn’t understand fine what she was saying and not be scared to misunderstand, because some aspects may be very technical, right. Like payment terms, like construction, the risk to maintain part of the construction, insurance and so on and maybe technical, and you were doing old China, that’s like–
Paulin: You have to remember that and moved in China in 94. At that time, few Chinese spoke English or French, so I had to speak Chinese. I had to learn Chinese and in my first job when I was working in business, no staff was speaking English, so I had my– My Chines was still back in the early ‘99, you see I was training in Chinese already. So, that was the worse. I’ve always been working in purely Chinese environment, because the only people that I spoke in English were my foreign workers.
Matthieu: Okay. You learn Chinese on your own or you took the classes?
Paulin:I went to university and then after that a masters
Matthieu: Three month and then after on your own. Okay. You’re not typing, right? You’re, you’re speaking your type.
Paulin: I speak in a type, yeah.
Matthieu: That’s more difficult to write, okay. I understand. So, I wonder your website and looked at me, that’s the code and so on to see if you were using digital tools to get clients and so on. I’ve been seeing some interesting tools you’re using that optimize me on your website. You have a Facebook pixel, but I don’t see a lot you’re doing online. How do you get your clients? I get this stuff online, maybe offline, right.
Paulin: When you have to see– I must admit that on DBX, we aren’t big on digital, wh? Because we are already onto the Chinese market, and in Orlando business we get really, it’s more like referral. People will give us referral. Like you, if I do your office, met you, you’re going to introduce me to somebody else, and even if I– We’ve only worked with real estate agents, we work with lawyers, that does seems too– We could use of course internet digital tools to drive more clients. To drive more traffic to our site, because then the game we’re doing it abroad would not make sense. We have to do it for China, by doing everything, and I don’t see it will create more traffic because at the end of the day, this is really a training square of [syncing] like you always say. So, like, let’s see if I call your director of human resource and start giving a DBX, if I”d say that okay, I’ve been introduced by a whole saler and frank. Okay, that’s it. The funny thing, more men that we had barely go and see our website.
Matthieu: Okay. I thought you using your website and brochure, you can send to them? This is what we work cases is. This is what we did before, but no actually, it’s with email, those with paper. Okay. I understand. Human that is many raffle– I think you are very social person. You had a product to this people making like thought. Did you learn that somewhere? Or did you just like practicing, and because of your business needed you to be always your character?
Paulin: I think it’s character.
Matthieu: Because some people agree to learnt about it. Learning about negotiation, learning how to behave with people, reading a lot of books actually written mainly by American authors about how to behave and so on and they have patterns, the same patterns. Have you find some patterns on how to convert a referral you get. Do you have a set process of following? Or is it on intuition and feeling brings in meeting?
Paulin: I will not say intuition, it’s just what we say, it’s everyone trial. We spoke that worked, is that we apply. Of course we have to have some pleasant behaviour amenities and to analyse behaviour and with that being said, I will always did my team, “Okay, this is what I’ve done. It hasn’t worked, but maybe work on you.” Means that nothing is covered installed. That when they are free to try something else, but of course when you look at how we approach clients, is we have a systematic, how we do, how to win the applause or maybe present things, when you do presentation, the order of the slide, when you want to show it’s based on human behavior.
Matthieu: You’re saying it’s not systematic. You have not systematized too much of business is more, it’s the coding– Even the approach of client is bespoke, you’re going to creep out for specific clients, specific foundation, like what you’re telling me, right?
Paulin: Yeah, because its fund is different. We work with great names. Basically, it doesn’t care going, that you want to backup for trying. Doesn’t care that you don’t– The greater the bigger, is like a VC firm in China. What he wants he wants to do. If you’ve done some luxury brand before, period, and so, that still we have to work on a different approach. We have to show them different things, but basically it almost the same thing is– What is systematic is what we show to the facts, it’s the approach. Can we meet a client without even destroying. It’s really like, t’s going to be based on these requirements on this DNA, and his industry DNA, or even on where or he or she comes from. Because once again, if I meet an American and tell you, “Oh, we found a French [consultant].” Okay, good, go on, but if I tell you, “oh, you know , it’s been.”[Don’t apologies 00:05:55] which is a biggest real estate, industrial real estate in the US, you would say, “Oh, great.” I have this example. Once I was at the gym, and I was talking to a guy coming from Singapore and I’m– Yes, we’re to ourselves. I work for design and build firms. “Which one is it?” I say, “DBX,” We’ve done our air fronts, we’ve done a GCD code, Blah, blah, blah, and they didn’t even branch as well, and I’ve tried to really call which company we’ve done, I say, “Oh, we’ve done PSA.” PSA, Singapore, Port Authority. Huge, and then again, what have you seen? “Wow, you must be so good.” You must sudden because it was like, to me it was a small three harvest a project where that, but for the Singaporean guy, it was like a name and we’ve done many Singapore company, like a huge name, like we’ve done PSA, NCS, whatever, but each if you’re attending to a French guy or a French lady, she will ring a bell, but to a Singaporean it was like, “Wow, you must be so good at this.”
Matthieu: Sure. It’s a cultural understanding. It’s understanding. It’s contextualization. You contextualize the speech for each client. I see, but is it your team can do it or you are the one who do a lot?
Paulin: They can do. It’s in our project. I’ve learned this approach even in China. As I say till you know when you do a product for Microsoft or Apple and your worker doesn’t care, we will teach. You have to build into the basically, to make it more understanding, become understand into our own concept, and once you applied, assume you need to apply in many aspects when you meet people, to make people understand, and so once you teach your team to do it, they can do it perfectly. It’s unsafe. It’s normal.
Matthieu: Okay, because I see a lot of businesses which you align a lot of the founders, the founder of the founders, and I feel that dealing with your clients is a lot about memory about the part, all right? I was thinking that the best person who could talk about the best product it’s yourself, so that wasn’t my question about, have you found a way that your team is able to talk about the project you did before use or you still have to supervise and mentioned civil product, you have to. Do you work before? Are you work still ends hard?
Pauli: I have to be in town, when it comes to concept, or managing big projects or me managing complex projects, because you see a profession gets better with age, when you’re an architect or interior designer, consultant, we get better with age, because we’ve seen so many things. We can basically say, “You know what, don’t do this because you’ll have more impact on this one.” We can– When I see a layout, I can tell you, “Okay, well you shouldn’t do it because this doesn’t make sense,” because I can project your company in five years time, so to say, and it takes experience to do so, not because I was the greatest architect, I’m the greatest, I’m the smartest man in our earth, it’s just because I’ve done so many project before ,so it continues and actually in the next five years, you’ll see a lot more like this. Even in the next two years.
Matthieu: Yeah, the projects. That’s why it’s the value of the company yourself. It’s sometimes difficult to disconnect value of your company and the value of yourself, and that’s something that launched wouldn’t want to, is to disconnect the fact, yours and self, because you’ve got into company so they can go sometimes, right? So, is it your face?
Paulin: Yeah. Yes it is, but as soon as you have to make some compromise. You know as I told you, I ventured to Africa in 2010, and some things that time I stopped to try more and more, and until my business took a hit in China because I was no longer more important, but you see, I believe in putting my team into the dirt where like, “You know what? You have to be able to handle this sector.” I’m going to give you and this is like, I’m going to try to tell me this is like not, and do it. When you have to– In China, there’s a lot of learning by doing, and of course they’ve done mistakes, and when they’ve done great things, I’m sure that it’s a greater achievement that they have done in a way, until they learn their own way, but truly it’s– Once again when it comes to complex or high profile clients, I have to be answered.
Interview: Okay. When you reached about $6 million of telegram, ow many project was it in a year?
Paulin: Sorry, come again.
Matthieu: How many project was it in this year when you reached $6 million? What’s the average size?
Paulin: Well, the average size it’s– We no longer used to do like 20,000 square meters a year, and as soon as the average size, maybe 1,005, and also we’re talking about what, 10, like 15 projects.
Matthieu: So, when you say the turn over, when you’re talking about the turn over, you inptu also the cost of construction, all the purchase that you have to do for electricity and so on. This is meaning your turnover, right?
Paulin: I know when I’m talking about, you turn on grace, how much money you generate.
Matthieu: It’s over 6 million, and inside this turnover, you’ll have to pay for the workers, for the construction, for the material to build the new office, right? It’s pretty heavy in terms of cost, isn’t it?
Paulin: Yes, of course we are looking at the cost that they can grow up to 80% of it. Basically-
Matthieu: How many?
Paulin: 80% of your work.
Matthieu: Okay, I see. It’s made like advertising when we interview, when we talked as you point out advertising that tells us the budget that they have to give my and to assert to which add and then they get basically the fees on it, but okay, I understand. So, you just talked about if we can– It seems that’s a topic you want us to talk about since the beginning and I tried to focus on China first. Anyway, how is it about being a foreigner in China? Living in China as a foreigner, did you feel it help you to do business? Do you feel it slowed to new world? What’s your like?
Paulin: I feel like, you know a lit in Beijing? I think there’s different city to make a lot in Chi. We have a great– Now I moved to Singapore, of course and you can see Singapore in China. It was way to turn, so I waited for foreigner. It’s challenging, but when it comes to business, I will always say that China is a game of rules. We have one set of rules for Chinese and one set of foreigners.
Matthieu: It’s my feeling as well as the rules are not the same, but you have to know the rules and sometimes can be positive, sometimes can be negative and yeah. I use a word like Chinese tend not to be xenophobic or xenophilic general react to– They react to people boldly, but you submit. You will never be Chinese. I will never be Chinese and I would be treated differently, but that doesn’t mean bad or not good, which is something different in France I think because other countries sometimes being a foreigner, they’ll see that negative and there’s no really, yeah, upside of being a foreigner, but here in China, that there’s an upside world, and okay so, coming back to our. You said that from June 10th you will begin to investigate to get into Africa, and I look after we, before we finished, because we still have like 15 minutes, we talked about your interest in IT, and how it influenced the way you managed DBX. I think it would be very interesting topic to look at and you go on, you investigate another domain, another field, and we should get influence to your main business, but let’s go back on this later on. I don’t want to forget at what I’m telling it to you now. So, about Africa, why did you do that?
Paulin: Basically, I’m form Togo, and as I was, like as a company was running and I was pretty pleased with what we’ve done. Let’s try to go back and see what I can– If what I’ve learned could benefit Africa in anyway. So, I traveler to Liberia, to Gabon, I travelled to 16 African countries till now, and it was great. The beauty of Africa in a way, it’s liek China, at different years.
Matthieu: You said one article if China is in 1990th.
Paulin: Yeah, correct. Yeah, because when you go to, let’s say you go to Accra in Ghana, you will see likewise. Like Chi in 2005, you go to Nairobi in Kenya you will say, “Oh, it’s like Chi in 2010.” You go to Johannesburg, “It’s like Chi two years ago.” You go to Liberia, it’s like wow. Liberia is like Chi in the 80s. So, it’s different. In terms of real estate, in terms of potential, in terms of youth, it’s incredible. That being said, I think their will not be any other market in China in terms of size, dimension, unity, it’s unique, but Africa definitely there’s huge opportunities, huge opportunities, real estate if ther’s any in build field. It’s difficult. Africa is another beast. It’s great.
Matthieu: Yeah. Let’s get to the big– Well, I tried to find, understand the motivation as well behind it. You say you are from Togo, but you’re French, right?
Paulin: Yes I am.
Matthieu: Yeah. So, I feel there’s a lot of people who actually have an international background and they are in some way attracted to go back to the roots. Was it because of China, which was reflecting to you those roots? Or was it something you had always been into you to go to do something for Africa, to do something in Africa, because you said something which is interesting, you said, “I want to do something for Africa.” You didn’t say I want to do something in Africa. That means I think that the motivation behind it seems to be beyond business. Is it something that after your successful job in China, you wanted to do something else in Africa? Can you tell us more about the motivation?
Paulin: Yes it is but you see, when I moved to China in 94, ou mother I wrote a letter to my mom and I said, “You know what, Africans have to learn from China.” In 94. It’s like we have to stop looking at Europe as a role model, and we have to learn from China. So to me, after many years in China I said, “You know what? Well, I’ve learned things. I’ve learned many things in China and I see where to apply it in Africa in many ways,” and it’s true and I’m convinced that the future of Africa will lie in its relationship with Asia.
Matthieu: Why do you think that the development of Africa will be linked more to Asia than the West?
Paulin: Because the West sees Africa for its past when Asia sees Africa for its future So, you see it’s different. When you go to France, you talk to guys or ladies at work for in Fortune 100, they tend to see Africa like as it used to be, and when you speak to a Chinese you would see that they see Africa as it should become.
Matthieu: Okay. So let’s get specific on what you did in Africa. What did you do? Did you realize some development? Did you develop and-?
Paulin: Yeah, so what we did basically we worked with different department, with private investors as well and government people to work on a reinstatement of distressed assets like distressed building. In Liberia, for instance, it was really interesting how we work out with the– We design our work on regional small city pending. We work on social housing in Gabon, we work on the university. How to renovate the university in Gabon as well with private investors in Cameroon, in Genda. It’s really interesting. When you come from a Chinese background, and when you have the speed with you, ideas and when you’ve done these jobs so many times, you come with fresh ideas and fresh way of doing stuff. People might say, “Oh, this is impossible,” as if, of course it’s possible. You just have to twist it a bit, do this, do that and stop looking for perfection. It doesn’t exist. Be pragmatic, then there you go.
Matthieu: Do you feel you can leverage– I understand you can leverage your experience you have on 20 years or 15 years in build, but do you feel that you can leverage relationship with China like sourcing materials or sourcing products or it’s more get things.
Pauline: It’s everything: the experience, general knowledge, the relationships that I have in China, and it’s not what I believe, it’s what I’ve done. I would really leverage my knowledge and experience and my relationship to export things like electronic goods and hopefully next year we’ll work more on the project.
Matthieu: How do you find a product in Africa? Because you don’t have an office, right?
Pauline: We opened a company in Gabon, but we had to shut it down because the cost of running was too expensive, and it wasn’t that big market. Basically, how we found product is just by the network of relationships that I’ve created over there. My friends that refer to us, and at the end of the day, you don’t have that many, black dudes expect because I have success in China, that come back to Africa so, its, yeah.
Matthieu:Yeah. You’re unique, and do people might talk about you. You may be– People remember of you easily because of your story-
Pauline: I think when you come with a will of doing something. We have many people from the diaspora that come back to Africa and coming from Europe, and seeing things, once again as a past, but coming from China, even if when you go to Africa, you would come– We want to disrupt things, because every day we are facing disturbance in China. So, when you come you have– You come with your ideas, so we don’t have that many people, I would say you don’t have that many Afro Asian as I call myself and a bunch of Africans that have been raised in China, that come back to Africa with the will and the ability to change things, to do things. I will not be so pretentious to say that we’re going to change things, but definitely we’re going to work together to build new things.
Matthieu: Talking about the diaspora, China has relied on the diaspora to someway develop the economy but I always feel that there is a part of the diaspora which is, Chinese diaspora, which is very disconnected now to the Chinese economy and they don’t understand China anymore when they come back, especially after one or two generations. And there is the diaspora of Chinese who went to Chinese two generations, and there’s a diaspora of Chinese who went abroad to study away, and then come back to the country like 10, 15 years ago. What if you were Africa? Do you feel the same segmentation can make sense because the situation is different so diaspora can play different role in Africa.
Pauline: I see the situation is maybe the same. I believe that we have the eldest generation, people like my Dad that moved to France to study or career, and eventually at the end of the day and went back to Africa, but didn’t really work or do something, but now you have, I would say my generation that wants to do something, so they go to France, they study, and build the will, and they’re able to do something, and you have also a different of, I would say a generation, I always say like, but once again you have to understand that there is different Africa.
There is the francophone Africa as a French speaking Africa, and there is English speaking Africa, which is totally different when we talk about business. In the Francophone Africa, people that are 50, 60, the only dream that they had is they wanted to become minister. People that are in the 30s like you, 40s like me, we want to be businessmen. We want to make business, and so difference lays there. So, we really want to do something, but before there seems “Okay, I want to become a businessman. I want to become a minister.” So the interests are different.
Matthieu: Yes, I see. You see the segmentation is more in terms of age than in terms of what people did before, okay, I see.
Pauline: Basically, more in terms of age, and when you move to English speaking Africa, most of the diaspora which is there, they are businessmen. They’ve seen the opportunities. They see, okay, what happened you know is, they’re looking at things that their parents would never look at, like agriculture, their parents would never look at agriculture, but I met a guy from Zambia and he had a business in the passion fruit and it was doing great. So, you see all these kind of things. He was raised in London but that didn’t stop him from doing agricultural business in Zambia.
Matthieu: Yeah, I see. Before we close, you went into a tech in Africa and we talked a lot about it, we would work to get a link legal part of your journey, and could you tell us more about what you did and how it influenced your main business? Because I still feel main business is still DBX, and how this deep dive into tech mobile, the internet probably, changed your perception on DBX?
Paulin: You want I did in– Actually, I’m moving into tech in Africa as a good Chinese. I saw an opportunity and I just moved into it. Would you swear you know something that you cannot undo on me is, I see it as the Chinese business. That’s it if you know, I’ve been– My business acumen has been sharpened in China, so we as a Chinese businessman. I was working on a design in big project for the Ministry of Education in Gabon, I saw the huge lake in education, in tools to indicate Africans and huge needs for it. I also saw the lack of data, when we talk about data, and data is the new oil that we have, and you don’t know anything about these students with– I got 200 million of them just that until we become the next middle class. So I started the social media that were part of giving them knowledge that they don’t have, and also giving the a bit to connect together, and for us because your way to inquire data, and it was great because it put me in front of the reality of the internet in emerging markets. Is not wired to be believed, it’s just like when you take, let’s say, Cameroon only has 20% internet penetration. When you don’t put ads on Facebook and hoping to succeed, it doesn’t work like that. So, it really allowed me to see a different approach and to create offline communities which is really interesting, and we know the way we enroll people, and we enroll them by making them fitting forms. It’s like, “What?” Yes, it works crazy because they were so huge of filling forms. We were supposed to enroll thousand of them, just filling forms, giving us information on their phone numbers, and mail, and what they like and things like this. So it was great. What it gave me for DBX, it allowed me to move into the tech world, which I was. I’m a techy but I was not into it and it allowed me actually to push the momentum and to create– You would see next year, we’re working on a new project. We will still be in Africa, it will be heavily of design built, but it will incorporate tech as well, so it’s going to be fine.
Matthieu: Okay. So, you’ll have like– Okay. I feel that moving from one industry to another, basically, you have worked in two different industries. One which is construction on design build, and then after what social media, within the social media. It’s different and in some way, you don’t really leverage your past experience. Do you feel it’s good because it open your eyes or it’s a mistake that still when you doubt? What’s your take on it? If you have to advise other entrepreneurs who may be feel to be involved with the business and want to get a new momentum with another very, very sexy and very exciting industry?
Paulin: In a way, if you look at numbers, it was a mistake, because it did slow DBX down, because I did really focus on one year. I was managing team in India, managing team in Cameroon, overseeing my Chinese team in DBX, it was like a bit of Split, and yes, we took at it. We took at it on the numbers. That being said, in two years from now, as seeing if it would have been a smart idea for me to move into this state one, because now I know we, last year we also– Two of my staff, two of my teammates in DBX started a tech project that I was overseeing, and we could never have started it if I didn’t have some knowledge on internet that they required. Now I can talk about tech, I can talk about blockchain, I can talk about things because I know how it works and I know how we can work in emerging markets.
Matthieu: Okay. Coming to an end, I think it’s one hour already actually. How do you like it? I’ll tell you, how did we, anything we missed some part of the such a name, what’s your feedback?
Paulin: It’s pretty hard to come back to ask someone about these 24 years, 23 years of life, of progression experience and even for DBX, it’s like since 2004, it’s really hard, but you did ask good questions, as the only thing for anybody that wants to open this in China, and since it’s great, it’s never too late, you just have to think if it’s now you have to understand that you will take some heat. It’ll never easy, but it’s feasible.
Matthieu: Thank you very much. Thank you very much for your time and I really enjoyed talking to you as always, and I’m forward to send you the podcast will be online and guess in a choice. Thanks J.X. Bye everyone.
China paradigm is a podcast is sponsored by daxue consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.