Business Adventures: A Tale of Two Davids
Welcome to the Business Adventures series. Here, we examine the ways in which CEIBS alumni partner together to achieve remarkable things. Each story provides actionable takeaways designed to inspire you on your career journey. In this episode, we talk with Global EMBA alums David Moreno and David Sancho about the importance of business knowledge and connections and the secret of a great business partnership and get some valuable advice for entrepreneurs looking to dive into China.
A Spanish architect in China
How easy is it for foreign professionals in China to run their own business, make meaningful connections, and create the lifestyle they want?
Not easy, if you ask David Moreno, Spanish architect and CEIBS Global EMBA 2017 alumnus.
Moreno arrived in China in 2013 and worked for Chinese architecture firms over the next three years. But he found the work unfulfilling.
“I did not see myself capable of working for other people, in such a different culture,” Moreno says. Instead, he wished to run his own design firm, just as he did back in his homeland.
Doing business in China, however, was an enormous undertaking. Moreno lacked the two most important things – business knowledge and connections – required to be successful as an entrepreneur.
He was at a career crossroads – not sure whether to continue his development in China or move back to Spain.
Fortunately for him, a friend gave him the timely advice he needed.
From lawyer to China CEO
David Sancho is a lawyer-turned-business executive, and knows a thing or two about making tough choices. In Barcelona, Sancho had transitioned from a criminal law career to working for Mango, a Spanish clothing design and manufacturing company.
“I studied law because it was a family tradition,” Sancho recalls. “But it was not my passion. There is a moment when you need to understand who you are, what you want in life.”
Sancho started as Mango’s SVP, Global Expansion in 2005 and ascended the corporate ladder. Come 2011, he started a new role as China CEO, moving to Shanghai in the process.
One year into his China journey, in 2012, Sancho joined the CEIBS English Executive MBA programme on a part-time basis.
“I initially knew nothing about China,” Sancho says. “But CEIBS had an excellent reputation. It was based in Shanghai, and I was based there, so there was no better choice.”
Education as a path to knowledge and connections
Moreno recalls meeting Sancho in Shanghai via the Spanish-speaking community. “He was a great guy, fun to be around,” he says. “We hit it off right away.”
Fast forward to 2016. Moreno was at his professional crossroad and Sancho had since graduated from the Executive MBA programme. The two were friends but had not worked together in any capacity.
One fateful day, Moreno called Sancho to ask for advice on his career situation. Sancho immediately suggested that they meet for dinner to talk about it.
Over sushi, Moreno poured out all his challenges working in China. Sancho listened attentively.
Sancho’s advice? Enrol in the CEIBS Global EMBA. Bit by bit, he laid out the benefits.
“CEIBS teaches core business concepts that are naturally foreign to us technical professionals. Architecture in David [Moreno’s] case, and law in my case,” Sancho says. It was the knowledge part of Moreno’s entrepreneurship equation.
Moreno also remembers Sancho telling him about the school’s network effects: “You learn from not only the professors, but your peers. The network is insanely valuable,” he says. Hence, the connections part of the equation.
Here, Sancho makes a claim that appears too good to be true but is repeated multiple times in our conversation: CEIBS is a family.
Why a family?
In a family, relationships are important. Spending time together – without need for reciprocation – is part of the dynamic.
In Sancho’s words, the CEIBS alumni community is a family. And once you’re a family member, you’re in. You help others without expecting anything in return, and what you get is equal to what you put in – if not far greater.
Moreno was initially sceptical. He expressed his doubts. “As an architect, how am I going to keep up with the business school concepts? That wasn’t part of my background,” he recalls.
But Sancho’s pitch proved compelling enough. He has an easy charm and persuasive personality that makes him relatable.
So Moreno took Sancho’s advice and enrolled in the CEIBS Global EMBA programme.
Business opportunities platform
Next question: how easy is it for two foreign professionals in China to run a business together, face collective adversity, and remain close friends to this day?
Over the years, Moreno and Sancho went into business together across a series of ventures. Even while they held their day jobs – Moreno with his own architecture firm, Sancho with Mango – they found opportunities to collaborate.
The two built a joint platform, with many projects centred on importing and exporting goods from and into China, respectively. Flooring, toilets, lights, and even vacuum robots – Sancho would leverage his network to bring deals in, and Moreno would help execute on the ground level.
The two have transitioned into business-savvy partners, keeping an eye open to new deals. More recently, they are speaking to another CEIBS alumnus about opening two projects: a chain restaurant in Shanghai and a real estate development in Bali.
But the what is not as interesting as the how. Let’s break it down.
Moreno and Sancho had a memorable first venture together, even if it was objectively a total and utter failure.
It was a co-investment in a fitness gym franchise in Shanghai, started by a mutual Spanish friend.
The two hold no punches when describing their first run. “It was a disaster,” Moreno says. “The original founder – who got us involved in his business – was a strong operations person. But he was in way over his head when it came to running a business and negotiating deals.”
“In hindsight, David [Sancho] and I learned that you can have a great idea and potential business in-the-making, but if the key management team isn’t capable enough, then everything falls apart.”
“We were too trusting with the founder,” Moreno adds. “We saw the initial positive cash flow and didn’t confirm the financials with him until it was too late.” That’s important – to validate all assumptions, no matter how basic, before each major decision.
The team also lacked alignment on long-term goals. Both Moreno and Sancho wanted to expand the gym into a chain, but their partners wanted to stay small.
It speaks to the strength of the partnership that the gym opportunity came and went, but the brotherhood remained strong.
What makes a great partnership?
According to Moreno and Sancho, the first, and most important, secret behind a good business relationship is mutual respect.
Moreno recalls one of their earliest joint ventures – an opportunity to import toilets from Spain to China. The local partner wanted to cut Sancho out of the deal. Moreno was incredulous.
“That was just disrespectful to David [Sancho],” Moreno recalls. “David brought the deal into existence. The way to win is not to get rid of people, especially people who bring real value to the table.”
A great partnership is also founded on value alignment, like a marriage. Moreno holds no punches. “If your partner doesn’t want the same thing you do, then you’re screwed.”
Value alignment means that Moreno and Sancho see eye-to-eye on the risks versus rewards. “The partner wanted us to take all the risk for minimal equity,” Moreno recalls. “That didn’t sit right with us.”
It is also clear that Moreno and Sancho bring complementary skills to the table. Each one has his own strengths.
Moreno’s strengths lie in technical planning and execution. He is a self-admitted stickler to detail – no surprise, given his background in technical architecture. He is also the due diligence person, converting high-level plans into concrete plans of action.
Sancho, on the other hand, is the visionary and big-picture person. He typically brings in new deals and leverages his network to make things happen at the macro level. Sancho’s current role, as the strategic growth officer of a startup, plays to his strengths.
Sancho’s startup helps global luxury and fashion brands in China grow via AI and technology. He must think strategically and consider what trends are on the horizon.
The two have brought both the high-level vision and low-level details together to maximize the chances of a successful business collaboration.
There is also the x-factor of making a partnership work in the long run: having fun.
“We just like being around each other,” Moreno says. “It’s not an obligation. And we understand that business is business. It’s not personal.”
The flip side of having fun is not having fun. Have they ever had any major challenges or heated moments in working together?
“Not really,” Sancho says. “We experience trouble together as a team, but we don’t create trouble against each other.”
Lessons learned: The hard way
Moreno and Sancho also have some lessons in entrepreneurship to share.
The first thing that comes to Sancho’s mind? Entrepreneurship is hands-on. The former Mango China CEO admits that taking matters into his own hands, for everything, required an adjustment period.
“Nothing is abstracted away in terms of roles and responsibility. I learned quickly that you no longer have this image of a big brand behind you.”
This extended down to one of the most fundamental tasks of a business – collecting payments from customers.
Getting paid was one of Sancho’s first challenges as an entrepreneur. Now, it was his time to give Moreno a call.
Moreno was uniquely suited to help Sancho. He had lived through a period where clients simply did not pay him for services rendered. “I’ve been cheated a lot. I’ve had a lot of people not pay me. Slowly you learn your lesson.”
Moreno suggested a framework to Sancho to overcome this challenge. Moreno no longer accepted deals where payments were not negotiated into milestones. If a client wanted something delivered before the first payment, he simply learned to walk away.
Even when things were going well, Moreno made sure to not deliver the “last mile” of a project until the final payment arrived in his bank account.
“Before CEIBS, I had clients tell me, ‘You deliver up front, we’ll pay you later, that’s just how things work in China.’ But after CEIBS, I tell them, ‘No, I went to business school here. I know how things work, and what you’re suggesting to me is wrong.’”
“When I tell potential clients that I’m a graduate of CEIBS, and that I studied business, the credibility becomes hard to dispute. I learned the skills and I grew more confident in properly expressing myself.”
“Clients are more willing to do business with me now because of what I, and what my network, represents. They know I won’t do anything underhanded because indirectly, I represent the school’s credibility in developing business leaders.”
Before coming to China, Moreno stopped his own architecture practice as he was effectively producing pro bono work; clients wouldn’t pay him. “I finally knew how to communicate my business value to others, via frameworks, models, and structured tools we acquired through the programme.”
Moreno is particularly fond of a negotiation course he took at CEIBS, which helped him put things into practice. “I developed my confidence [in that negotiation course]. I learned how to negotiate effectively by not only making the rewards collectively bigger for the other party and myself, but telling the other party that I was doing that. A complete game-changer.”
Change the mind-set, change the outcome
Entrepreneurship is also fundamentally about mind-set change.
“The first thing I tell people considering entrepreneurship is, don’t,” Sancho says. “I’m joking, but it’s a very hard life. You’re alone.”
“Coming from corporate, there are a lot of support systems. Even when I thought I knew what it took, it didn’t fully dawn on me until I started. Fortunately, I had friends like David [Moreno] to guide me.”
Moreno agrees with Sancho’s observation that entrepreneurship is lonely, which is why the right partnerships are essential. He also believes there is a tendency to glorify the journey.
“Being your own boss is overrated. Even worse than having a boss is having clients. If your boss wants you to get something done today, you can manage expectations. ‘I need to go home; let’s work on it tomorrow.’ With clients it is much more challenging to manage such expectations.”
Moreno does not trivialize his clients’ needs; he is simply being pragmatic in his assessment.
“Think twice,” Moreno says. “That’s my advice to entrepreneurs. Think twice before each decision. Validate financials, confirm connections, know what you’re getting into.”
The positive side of entrepreneurship, however, is that it forces one to become stronger and diverse in outlook.
“I am involved in more than architecture now,” Moreno explains. “People come to me for that [expertise] but take the restaurant opportunity as an example. There are elements of real estate, retail, and branding in the project. I advise my business partners that they need consistency in what they do; design brings that consistency.”
David Sancho and David Moreno with CEIBS Alumni International Chapter President Cedric Devroye
Pay it forward
Both Moreno and Sancho’s experiences centre back to the concept of business partnerships as a family relationship. This includes the mind-set of paying it forward.
When Sancho attended school at CEIBS, he thought of himself as being a long-term member of the “family.” This was the experience that he passed down to Moreno.
“We try to give without an expectation to get something back in return,” Sancho says. By thinking less transactionally and longer-term, they continue to get deal inflow today through their CEIBS affiliations.
“Don’t expect to profit from CEIBS after graduation for the first two to three years. Give it time. When my classmates have challenges in their businesses… I mean, if someone has an issue right now and it’s really bothering them? If I can help, why not?”
“There are plenty of opportunities outside of your initial cohort in the Global EMBA programme,” Sancho adds. “Opportunities are everywhere. I would advise students to stay connected with everyone.”
Moreno agrees with Sancho. “I followed David [Sancho’s] advice. I volunteered for a lot of class activities. I joined the Class Committee Team (CCT), I joined the CEIBS Alumni International Chapter (CAIC).”
CAIC is the home base for English-speaking alumni all around the world. The chapter coordinates networking events, academic sessions and social activities while promoting the shared interests and experiences of its members.
“At the end of the day, CEIBS is a platform,” Moreno says. “CAIC is a platform. It’s an alumni chapter that is open to all English speakers, whether you’re in the Global EMBA programme or any of the other programmes.”
“Today, I’m a bit less involved because of [other obligations]. But people remember the work that you put in over the years.”
Sancho goes one step further and adds, with a bit of extra flourish, “CEIBS is a school with soul.”
For these two soul brothers, the journey together as business partners is an ongoing one. It keeps paying dividends.
In summary: Advice for entrepreneurs
1. A great business partnership is founded on value alignment, mutual respect, and complementary skillsets. It’s like a successful marriage.
2. Success involves mind-set and framework change. The “game” is played quite differently as an entrepreneur vs. in a corporate environment.
3. Validate everything; think twice before making any major decision.
4. Ask for help! Leverage different ways of thinking and addressing problems.
5. Business school is one unified way to learn structured thinking, soft skills, and new frameworks.
6. Provide value to others without immediate expectation of return. Things take time, and payoffs will eventually occur.
The author is James Hsu. James is a Chinese-Canadian entrepreneur, writer and author. He is the co-founder and Chief Product Officer of Stream Sage (a B2B livestreaming analytics platform) and a proud member of the CEIBS Global EMBA 2020 cohort. Connect with him via LinkedIn here.