There is a pattern playing out right now that most people outside hardware circles have never heard of. It goes like this: founders raise money in San Francisco, spend it in Shenzhen, and sell their products to the world. That sentence comes from Tuo Liu, founder of Robotuo, the open source robotics community that has become the default landing pad for foreign hardware founders arriving in Shenzhen. We sat down with Tuo for Episode 8 of the Asiabits Podcast to dig into exactly how this playbook works, who is using it, and why it matters for anyone building physical products in 2026.
The Hardware Startup Shenzhen Pattern Every Founder Should Know
When we asked Tuo to describe what he sees every day in Shenzhen, his answer was blunt:
"For most of the hardware and robotic founders, they usually raise money in the U.S. Not just the U.S. founders, but also the European founders. They move to the US and they look for funding in the Bay Area, and then once they get funding, they move to Shenzhen to make their prototypes and make their products later and then sell it to the world. That's a really clear pattern."
This is not a niche thing. It is not limited to humanoid robots. When we pressed Tuo on scope, he listed desktop robots, service robots, AI wearables, smart rings, bracelets, watches, and smart glasses. Basically, if you are building something that has physical components and needs to ship, this pattern applies.
And the numbers behind it are stark. How many actuator manufacturers exist in the United States? Zero. In Shenzhen? More than 50, at minimum. That single data point explains why founders who raise a $5 million seed round in the Bay Area are on a flight to Shenzhen within weeks of closing.
Why the US Funds But Doesn't Build
The explanation is straightforward. Tuo puts it this way: a good engineer in Shenzhen costs about $50,000 a year. In the US, you pay three times that. But it is not just about cost. It is about density. Shenzhen has the factories, the component suppliers, the tooling shops, and the engineers all within a 50-kilometer radius. When Thomas asked why there are no comparable suppliers in Europe or the US, Tuo pointed to 40 years of industrialization flowing eastward:
"In the past 40 years, both US and Europe, they kind of shift to the, they move their manufacturer to Asia and then later they don't have enough equipment, devices and factories to make those stuff."
The result: if you want to build hardware at speed in 2026, there is really only one place. As Tuo said: "For software, San Francisco is one of the best options. But Shenzhen is the best place for hardware."
Why Open Source Is China's Secret Weapon in Robotics
Open source is usually a conversation about software. DeepSeek, Qwen (from Alibaba), Kimi -- Chinese AI labs have been dominating the open source large language model space. But Tuo sees the same dynamics playing out in hardware and robotics.
"The large language models, so now the majority, the models dominating the world are the Chinese models like Kuwen for Alibaba, like Kimi, like DeepSeek and all others. They are helping a lot of small groups and small startups to use the open source model because it's way more affordable, much cheaper."
This matters because open source is how small teams in Southeast Asia, Africa, and Latin America get access to AI and robotics technology at all. They cannot afford the API costs of closed-source Western models. Chinese open source fills that gap, and it creates a massive distribution advantage.
Tuo's platform, Robotuo, brings this philosophy to hardware. It is a digital platform where founders can find open source robotics models, share their own designs, and source components from Chinese manufacturers -- all in one place. The pitch is simple: if Hugging Face works for AI models, why not build the same thing for robotics?
Michael made an observation during our conversation that stuck: the open source approach fits perfectly into what people call "China Speed." When you share knowledge across a community, everyone iterates faster. That is how China went from catching up to leading in specific hardware categories within a few years.
And it is not just Chinese founders contributing. As Tuo told us:
"I can see more and more founders, not just the Chinese founders, but also the US founders working on this open source side. They work on the open source operational system for the robots and for the smart glasses."
From MIT Labs to Shenzhen's Robot Valley
Tuo's own story is a case study in the pattern he describes. Born in Hunan province, raised between Shenzhen and Guangzhou, he watched Shenzhen transform from a factory town into the hardware capital of the world. Companies like DJI, Insta360, Bambu Lab, BYD, and Huawei all built their empires from this city.
After high school in China, Tuo moved to the US for undergrad and graduate school at Washington University in St. Louis, then spent several years working in Boston. His job? He was an architect, designing laboratories for robotics companies, MIT, Harvard, and other major research universities.
"I designed a laboratory for the robotic companies. Also I designed some of the projects for MIT, Harvard and other great universities in the US. And then I started to build some really good relationship with the professors in the school."
After 10 years in America, Tuo moved back to Shenzhen. Then something clicked. Those professors he had worked with at MIT and Harvard started emailing him: "Tuo, can you help me find some robotic components in China?" That was the spark. He realized there was a massive supply-demand mismatch. The research labs designing cutting-edge robots in the US had no domestic source for the actual parts they needed. Everything came from Shenzhen.
So Tuo built a community. What started as introductions over WeChat grew into the open source robotics community now hosting over 270 global founders. In 2025 alone, Tuo personally met more than 100 founders from the US and Europe who came to Shenzhen to build.
The Space Where Worlds Collide
Robotuo operates a physical space in Shenzhen where the community gathers. They host monthly happy hours where global founders meet, exchange ideas, and sometimes find co-founders. Tuo described a scene that stuck with us:
"Every time we host a happy hour in our robotic space, I can see, okay, this is world peace we need. The software guys from the US helping the hardware guys in Shenzhen from China."
This is the part of the China story that rarely makes headlines. While politicians debate tariffs and tech bans, founders from both sides are sharing meals, sharing code, and building products together. Tuo calls the relationship "Bay to Bay" -- the Bay Area in the US and the Greater Bay Area in China, linked by founders who care more about shipping products than geopolitical narratives.
As Francesco Crivelli from Intuition Core told us in Episode 6, the collaboration between Silicon Valley software talent and Shenzhen hardware talent is one of the most underreported stories in tech right now.
The Playbook: How Foreign Founders Actually Do It
So what does it look like in practice when a founder decides to run this playbook? Based on Tuo's experience with hundreds of founders, here is how it typically unfolds:
Step 1: Raise Capital in the US
VC culture, larger round sizes, and a strong network of hardware-focused investors make the US the default place to raise. Many of the founders in Tuo's community are Y Combinator alumni or have raised from Bay Area funds. Even European founders often route through the US for funding before heading to Shenzhen.
Step 2: Move to Shenzhen for Prototyping
Once funded, founders arrive in Shenzhen and tap into the supply chain. But Tuo stresses that you cannot do this over email. WeChat is everything. Suppliers do not respond to cold emails, they respond on WeChat. That is why community access matters so much.
"In the West people prefer to use email, but in China, WeChat is everything. So that's why the founders all use WeChat. Because the suppliers all use WeChat."
Tuo recommends founders visit at least three factories physically before committing. And he made a point that surprised us: Chinese factories are actually eager to help founders in the pre-seed stage. In the US and Europe, factories typically only care about large-volume customers. In Shenzhen, they will make prototypes for early-stage startups.
"The factories in China, they love to help the global founders. Even they are in the pre-seed round. But in the US and Europe the factories don't care because they only care about the bigger customers."
Step 3: Sell Globally
With a working prototype made at Shenzhen speed and Shenzhen cost, founders can go to market globally through DTC channels, Amazon, Kickstarter, and B2B partnerships. The cost advantage from manufacturing in China often translates into better unit economics and more competitive pricing, regardless of where the end customer is.
The Three Types of Founders in Shenzhen
Tuo broke down his community into three groups:
- Robotics founders -- building humanoids, desktop robots, service robots
- Consumer hardware founders -- AI wearables, smart glasses, IoT devices
- Software founders -- coming to Shenzhen to help Chinese robotic companies target global markets, especially with LLM integration, voice control, and localization for Western markets
That third group is particularly interesting. US software engineers are now moving to Shenzhen not to compete with Chinese hardware companies, but to help them sell internationally. Chinese robots often need different LLMs and voice control stacks for Western markets, and that is where American software talent fills the gap.
Watch the full conversation with Tuo Liu on the Asiabits Podcast.
Getting Started as a Foreign Founder in Shenzhen
If you are thinking about running this playbook yourself, here is what Tuo recommends, distilled from the advice he gives to every new founder who arrives in Shenzhen:
1. Join a community first. Do not show up cold. Connect with groups like Robotuo before you arrive. As Tuo explained, the community helps you avoid middlemen and connects you directly with the right factories and partners. Otherwise, as he warned, "you're going to meet a lot of middlemen" and "become frustrated about a lot of things."
2. Visit Huaqiangbei. Shenzhen's legendary electronics market is still the place to start sourcing components. It gives you an immediate sense of what is available and at what price points. Tuo also mentioned maker spaces like Chaihuo that give founders a place to work and prototype.
3. Get on WeChat. This is non-negotiable. Every supplier, every factory contact, every founder community runs on WeChat. Email will not work. Tuo's platform aims to solve this friction long-term by putting suppliers on a global-facing platform, but for now, WeChat is the operating system of Shenzhen business.
4. Visit factories in person. Pick at least three, see how they run operations, and evaluate their prototyping capability. The willingness of Chinese factories to work with early-stage founders is a genuine competitive advantage that does not exist in the West.
5. Learn some Chinese. Tuo was diplomatic about it: "It's a super plus for a founder. But we understand it's extremely hard to learn Chinese." Even basic Mandarin helps. The cultural goodwill it generates is real.
What About Trust and Due Diligence?
Michael asked Tuo a pointed question: with so many companies in the landscape, how do you know which ones are legitimate? Tuo's answer was practical -- there is no shortcut to visiting factories in person and seeing the operation with your own eyes. Communities like Robotuo help because they have already vetted many of the key players, but founders still need to do their own homework.
This is also where the Asiabits network can help. Our Insights coverage tracks the Shenzhen hardware and robotics landscape, and our team is on the ground in Shanghai and Shenzhen to help connect the dots for founders, investors, and corporate leaders exploring this path.
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What Tuo is building with Robotuo is not just a community or a marketplace. It is a bridge. And the traffic on that bridge flows both ways. American software engineers go east to help Chinese hardware companies sell globally. Chinese manufacturers go west by making their components accessible on international platforms. Founders from Europe, Southeast Asia, and Latin America come to Shenzhen because it is the only place where they can turn a napkin sketch into a shippable product in weeks, not months.
Tuo called it "open source communication" -- the idea that sharing goes beyond code and models. It extends to contacts, factory introductions, market knowledge, and founder support. As Thomas put it during the conversation: "Everyone here in China is so generous. Not about money. It's about resources, about contacts, about network."
The geopolitical headlines would have you believe that US-China technology collaboration is dead. On the ground in Shenzhen, the reality is the opposite. Founders are building together, scaling together, and selling together. The playbook is clear. The only question is whether you are going to use it.
This article is based on Asiabits Podcast Episode 8 with Tuo Liu, founder of Robotuo. Listen to the full conversation on YouTube or wherever you get your podcasts.
