How a Taizhou Crowdfunded Café Changed Managers 4 Times in 6 Months

In January 2016, Chen Xin braved the cold in Taizhou and skipped Starbucks for a little-known local café called "500 People." What she found wasn’t just another coffee shop — it was the product of a bold crowdfunding experiment that had drawn in 500 locals, each putting in ¥2,000 to chase a dream. But just months after opening, this once-hopeful project was mired in infighting, mismanagement, and rapid leadership turnover.

The 500 People Café in Taizhou went through four different management teams in just six months, despite raising ¥1 million from 500 backers. Internal conflicts over vision, leadership struggles, and failed governance led to its quick downfall.

A Crowdfunded Dream Begins

In late 2014, Xia Jun, a 30-year-old former programmer from Nanjing University of Posts and Telecommunications, was looking for a marketing boost for his failing local e-commerce venture, "Taizhou Shopping" . Inspired by earlier examples of crowdfunding — including a well-publicized Beijing café project that attracted 66 investors — he proposed gathering 500 people to crowdfund a coffee shop. Each person would contribute ¥2,000 for a single share, totaling ¥1 million.

The idea was to create not just a coffee shop, but a community hub for entrepreneurs, with potential to draw traffic to his online marketplace. Despite nationwide reports of failing crowdfunded cafés — such as HER COFFEE in Beijing, which shut down within a year of opening with 66 investors — Xia pressed ahead. Local interest was surprisingly strong: within days of launching the campaign, over 600 people had expressed interest, and the 500-share limit was quickly reached, with extra shares sold to contributors deemed “significant.”

The Battle Over Vision and Location

From the start, conflicting views on the café’s purpose and operations sowed discord. After evaluating two potential venues — a soon-to-close café called "Walnut Crane" and a bar in Wanda Plaza called "Ox Tail" — the majority of the provisional management team voted for the Wanda location. Xia Jun later referred to this decision as "planting the first seed of hatred."

K, a mid-level government worker and backer, had argued for the Walnut Crane site: it was move-in ready, avoiding costly renovations, and situated in a less saturated area. But the group chose the Wanda bar, which would require more investment without immediate operational advantages. The decision created tension that would only deepen.

Management Chaos and Rapid Turnover

When the café opened on June 20, 2015, the problems escalated. The first general manager, a seasoned business owner named Lao Qi, wanted to install a kitchen to serve affordable meals and increase revenue. He proposed a 9.9 RMB steak dish and argued that selling only coffee wouldn’t cover costs. But Xia Jun rejected the idea, insisting the second floor be used as a co-working space instead of a food service area.

Lao Qi, who had run his own successful café in the past, also tried cutting staff and removing an unnecessary office role. Within ten days, rumors about him spread, including accusations of theft and poor management. He quit abruptly. Over the next six months, the café went through four management teams. At one point, Xia Jun himself served as general manager for two months. Each leadership change reflected deeper disagreements over the café’s identity — whether it was a community space, a business incubator, or simply a place to serve coffee.

Infighting, Allegations, and Collapse of Trust

As losses mounted, distrust among the shareholders grew. Some claimed Xia Jun had used the café’s public image to promote other personal crowdfunding efforts, allegedly diverting attention and resources for his own gain. Allegations flew that dissenters were kicked out of group chats. One anonymous shareholder stated, "This isn’t a 500-person café anymore — it’s Xia Jun’s café." The original vision of collective ownership and grassroots entrepreneurship had eroded, leaving behind a fractured group with little coordination.

Xia Jun defended his role, portraying himself as a self-sacrificing idealist. "I am Don Quixote," he said. "I believe no one among the 500 was as selfless as I was." But even he admitted he lacked experience navigating office politics and managing diverse interests. He pledged to sell a personal property to keep the café afloat if funds ran out in a year — a promise that did little to restore faith among investors.

Expert Analysis: Why Crowdfunded Cafés Fail

According to Lu Feng, deputy director of the Internet Research Institute at the China Academy of Information and Communications Technology, the fundamental issue with most crowdfunded cafés is a clash between the model’s strengths and its inherent weaknesses. "Crowdfunding can quickly raise capital, but it often leads to poor alignment between decision-makers and operators," Lu explained. "There’s no clear separation between ownership and management, and without solid corporate governance, decisions become chaotic."

He added that many crowdfunded projects suffer from fragmented ownership, with no dominant stakeholder to provide direction. This results in unstable management structures and an inability to handle crises effectively. For a crowdfunded venture to succeed, Lu argued, it must establish clear roles, enforce professional management, and create mechanisms for accountability, oversight, and balanced incentives.

Frequently Asked Questions

Why did the 500 People Café in Taizhou fail?

The café failed primarily due to internal management conflicts, lack of clear leadership, and differing visions among stakeholders. Over six months, it went through four management teams, with disputes over the café’s purpose — whether it should be a community hub, co-working space, or traditional coffee shop. Poor governance and allegations of mismanagement further eroded trust among the 500 backers.

How much money was raised for the 500 People Café?

The café raised ¥1 million from 500 individuals, with each person contributing ¥2,000 for a single share. This crowdfunding effort was one of many attempted in China during the early 2010s, following a wave of similar projects that often failed due to operational and governance issues.

What was the biggest disagreement among the café's founders?

One major disagreement was over the location and concept. Some wanted to use a readily available, already-operating café space (Walnut Crane), while others voted to take over a bar in Wanda Plaza (Ox Tail), which required more investment but had no existing kitchen or branding. There was also conflict over whether to include a kitchen and food service, or focus on coffee and co-working.

How often did the management team change?

The 500 People Café changed management teams four times in just six months. The first general manager lasted only ten days, and at one point, project initiator Xia Jun served as manager for two months. Frequent leadership turnover contributed to operational instability and investor dissatisfaction.

What do experts say is the main problem with crowdfunded businesses like this café?

Experts note that the main issue is the lack of separation between ownership and management. Crowdfunding gathers many small investors without clear leadership, leading to unstable governance, frequent leadership changes, and poor decision-making. Without professional management structures or accountability systems, such projects often collapse under their own complexity.

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