Greek Complexity

sgCarMart's SGD 60 million exit augurs well for start-ups, raises thoughts and questions

SGE reports that listed media firm Singapore Press Holdings, the parent company of Singapore's Straits Times, has bought sgCarMart, an internet portal for car buyers and sellers, for SGD 60 million (about USD 48 million).

This is very good news for the previous owners of the company. It also bodes well for the broader tech start-up ecosystem in Singapore and the rest of SE Asia, as it is easily one of the largest purchases of an Internet start-up here -- the largest probably remains the Deutsche Telekom-Propertyguru deal -- which should encourage other young and, er, less young entrepreneurs to strike out on their own. This was a true-blue, homegrown (non-transplanted), bootstrapped start-up. Kudos and more kudos.

Some other thoughts:

• Will the sellers, the founders in particular, recycle their money back into tech start-ups, either as repeat entrepreneurs or as investors in other start-ups? I certainly hope so. We have real estate investors aplenty in this region, tenjyooberimuch. We don't need more. What we need more of is people like Paul Srivarokul.
• Have they spread the wealth? With more than 60 employees at the time of the acquisition, it would be great if a few more potential entrepreneurs now have some unexpected spare cash to launch a brand new venture of their own. As much as I would like to see more start-ups in this region, I especially think it would be useful for start-ups to beget still more start-ups. There's nothing like having been there, done that, to be able to return there, do that again.
• With acquisitions like this one, Singtel-Amobee and others now starting to happen, will Singapore's capital market investors start to gain an understanding of upstart technology companies? That M&A is starting to happen now is really good news but we also need to see young tech start-ups staying independent and going public, something that can only happen if brokerage houses and public markets investors are willing to take a look at some of these newcomers. I do know of some regional start-ups that may soon be ready for a look at the public markets -- but none of these appear to be considering listing here.
• It's interesting to note that enabling online car sales was never a stated objective of the Singapore government, unlike other initiatives like creating biotech start-ups, spinning off and commercialising A-Star technologies, turning Singapore into this-or-that hub, and so on. sgCarMart did receive some small grants from two branches of the government but these can't be characterised as anything more than tangentially related to the government's broader goals for entrepreneurship in Singapore. Does that sound like a negative statement? Actually, it isn't. What I mean is something really quite positive and heartening -- the government doesn't need to pick winner and losers when it comes to start-up activity. A lot of this can and will happen organically. As long as we don't actively set out to impede enterprise formation.
• Unfortunately, SGE reports that "SPH has, on behalf of Vincent, declined an interview request with SGE about the acquisition and the founding team’s future plans". 
  

  Image source: Wikipedia
  
  Someone please remind me what industry SPH operates in...?

Choosing an office location for your start-up

Paul Graham makes a great point about where to house your new start-up in this piece from 2010:

It's a smart move to put a startup in a place with restaurants and people walking around instead of in an office park, because then the people who work there want to stay there, instead of fleeing as soon as conventional working hours end. They go out for dinner together, talk about ideas, and then come back and implement them.

via Where to See Silicon Valley

Doesn't that just make you go, "D'oh! Why didn't I think of that?"

Yes and no, I guess.

If you're an ad agency or other media type in Singapore, you already do this. The whole Club Street area, for instance, if full of agency types who don't go home after work. (Whether that is an unquestionably good thing is another question entirely.)

But if you're a tech start-up located at Science Park or Block 71 or a big JTC office park somewhere, hmm, I don't know.

This clearly also has implications for policy-makers.

• "Should we spend money on a new technology park for entrepreneurs?"
• "Should we promote small offices in existing commercial areas?"
• "Do start-ups belong in universities or offices of their own?"
• "How important is non-office support infrastructure (restaurants, parks, gyms...) compared to the offices themselves?"
• "How much effort should we put into managing all this development? Should we leave it to develop organically?"
• ...and so on

This advice also depends on which country we're talking about.

In Singapore, it's certainly easier for colleagues to hang out after work at a nearby bar. In most Indian cities, going to after-work drinks itself feels like work.

There's also the small matter of cultural preferences. Whether people hang out with each other after work and where they do so depends not only on the availability of nearby restaurants or even commute times, but also on whether it's a cultural norm. The Japanese are well known to go drinking after work with co-workers even several times a week (hence, capsule hotels). In contrast, Indians, particularly ones with families, don't really have a big drinking culture but may visit colleagues at home or organise social gatherings with co-workers and their families outside the office.

The vice of creativity

http://doulosyap.wordpress.com/2013/03/25/the-lightness-of-racism-the-vice-of-creativity/

"Greed is good. Fun will not go unpunished."

The Green Pod - ideal bike parking?

http://www.gizmag.com/green-pod-bicycle-parking/14790/

Could do with this in Singapore. Also has self-cleaning showers and storage for your cycling clothes. Solar-powered and appears to be unmanned.

i.JAM revamp? Entrepreneurs, investors weigh in on what it needs to do to stay relevant

Excerpt: "An intense debate has raged over the weekend about i.JAM, a government grant scheme for seed stage startups, among Singapore’s entrepreneurs, developers, and investors."

More here: http://sgentrepreneurs.com/2013/03/19/i-jam-revamp-entrepreneurs-investors-weigh-in-on-what-it-needs-to-do-to-stay-relevant/

Also see this update.

This is an auto-generated post from my reading list courtesy IFTTT. See http://ifttt.com

Singapore continues to be attractive to start-ups from elsewhere

Notwithstanding my post the other day about a shortcoming of one specific government support scheme for tech entrepreneurs, Singapore continues to be seen by entrepreneurs as an attractive place to do business , and rightly so.

Taslima Khan quotes me and several others in Business Today, a fortnightly publication in India, about Indian entrepreneurs' Look East Policy, specifically focusing on Singapore as a destination for Indian entrepreneurs to move HQ to, raise money or otherwise expand.

Singapore's advantages over India? Briefly:

• Ease of listing Singapore-domiciled companies on various stock exchanges. India-domiciled companies cannot be listed directly on a foreign stock exchange.
• Singapore's small market, perhaps paradoxically, gives start-ups the cachet of being a regional or global company, as opposed to an Indian (Chinese/Malaysian/American/Indonesian/etc) company, which might be seen as focused purely on the domestic market
• No capital controls
• Predictable policy-making
• Comfort among customers and partners from around the world to work and sign contracts with Singapore-registered companies
• Low taxes
• Established brand in the business world
• Being a regional centre for decison-making for some industries, such as advertising and financial services
• Indian entrepreneurs feel culturally comfortable in Singapore

Having said that, only moving one's legal HQ to Singapore while maintaining substantially all operations within India may not achieve much, as I said in the Business Today piece.

There are of course disadvantages too, two of the most commonly cited in my experience being higher cost of operations and a much smaller base of potential employees to choose from.

i.JAM needs to be sweeter

Singapore has a bunch of government schemes put in place to support R&D, technology commercialisation, seed funding for start-ups and so on. One of these is the i.JAM grant scheme. (You'll agree it's a cool name because it starts with a lower-case i. And there's a dot in the name. Yes, the JAM is all-capital but no, we won't explain what the abbreviation stands for. If it's an abbreviation. But I digress.)

This is a pretty decent scheme if you're a budding tech entrepreneur. You can go and read all about it on the programme website or here.

However, before you decide to take the plunge and become an i.JAMMER (er, corright spelling anot?), watch out for this: if you're approved for this scheme, you're allowed a maximum salary of S$1,000 per month. No, I didn't miss typing a zero. Whaddaya mean you need money for rent?

Readers outside Singapore may wonder what S$1,000 a month actually means. As a reference for comparison, my understanding is that cleaners and dishwashers make anywhere from S$700 to S$1,200 a month, a fresh engineering graduate would make perhaps S$3,000 to S$4,500 a month, and a newbie lawyer further north of that. On the cost side, rent can cost anything from a few hundred dollars a month for pretty basic accommodation (one room in a public housing apartment) to perhaps S$2,000 a month for a small flat in a decent private condo. These are rough numbers.

Seriously, what are our friends at the IDM PO thinking? There must be a reason for this, surely there must be, but I don't see it.

A wit once said, "Bureaucrats write memoranda both because they appear to be busy when they are writing and because the memos, once written, immediately become proof that they were busy." That hilarious statement explains many things about the way bureaucracies and bureaucrats function. But what possible reason could there be for coming up with such an onerous limit on grant winners' salary? Could it be that:

• They only want the independently wealthy to become entrepreneurs? But then why would such an entrepreneur want to go through all the hassle of applying for this grant?
• They only want to fund people who have no alternative means of sustaining themselves except to try and start a company in return for accepting SS$1,000 a month?
• They want to punish good entrepreneurs?

Does not compute.

The policy is counter-productive. Do they want entrepreneurs to be perpetually worried about their personal subsistence or focus on growing their business? Creating new technology, serving customers, hiring employees and all the rest is hard enough without having to also worry about being able to feed and clothe oneself.

None of this means over-paying. If the grant committee doesn't agree with a business plan, just don't fund the business. No VC to my knowledge has an explicit salary criterion. Yes, of course some entrepreneurs are overpaid. But then one engages with those entrepreneurs on a case-by-case basis or just walks away. Specifying a very low salary limit upfront is just silly.

Hmm, maybe that's where the answer lies: specifying a very low salary will discourage all but the few types of people bulleted above from applying, therefore resulting in less work for IDM PO. I really really hope this isn't the reasoning although, depressingly, I wouldn't be surprised if it was.

So what should IDM PO be doing instead? They should be funding projects based on their viability, not on whether the founders are willing to live on a pittance. Really, WHO CARES if an entrepreneur builds a business that can allow the entrepreneur to make a decent living as long as he tries his dangest to actually build that business? Working as an engineer, let alone turning tech entrepreneur doesn't have much of a cachet in Singapore to begin with, except among a few break-the-mould types. Click this, read that. Creating an artificial and unnecessary restriction on top of this is just shooting Singapore in the foot by achieving exactly the opposite of the government's stated objectives.

And plenty more could be done beyond the purview of the i.JAM scheme such as, e.g., helping somewhat more advanced start-ups get bank funding by guaranteeing their loans, to provide one idea off the top of my head.

Many of the fields that the i.JAM purports to be aimed at -- computer vision, AI, analytics, augmented reality... -- need high-quality experienced business founders. At these peanuts? Don't hold your breath.

Update: this post spawned a further discussion here.

Updater: Terence Lee of SGE has been told that the salary cap isn't a cap. About a third the way down on this page. Not sure how to reconcile this with what the i.JAM page says or what a recipient of the grant told me himself.

Updatest: Also see my post Singapore continues to be attractive to start-ups from elsewhere

Wealth Over the Edge: Singapore

Interesting piece from my reading list. Not written by me.

Excerpt:

It's midnight on a Saturday night at the Marina Bay Sands resort near the sparkling Singapore River, and all the boutiques are shut. But past a cosmetic-surgery clinic and a Ferrari accessories store close by, a large crowd is getting increasingly agitated.

More here: http://online.wsj.com/article/SB10001424127887324662404578334330162556670.html

This is an auto-generated post courtesy IFTTT.  See http://ifttt.com.

 

Insistent innovation

I just discovered a new set of buildings in Singapore that house a bunch of research labs and university facilities.

"New buildings in Singapore? Ok, so?" is what you're thinking. As you should.

But this post isn't about the buildings. It's about the names of the buildings.

One was labelled RESEARCH in large letters embossed on the outside of the building.

The second was called INNOVATION.

The third was branded ENTERPRISE.

And the building I was visiting had been christened CREATE.

Remind you of anything? Yes, the names were in all-caps. Maybe they just wanted the name to be big-big so peeper could see from far-far.

Except that when I entered CREATE, I read that it was actually an abbreviation that stood for Campus for Research Excellence And Technological Enterprise.

Draw your own conclusions.

Best mobile banking app?

I just saw a video demo of Krungsri aka Bank of Ayudhya's mobile banking app. It's the best mobile banking app I've ever seen by far. Not just about bank balances and branch locations like the typical banking app, but also transfers, shopping, stock brokerage services, rewards redemption, bill payments, reminders, social features, and so on and so forth. Some of this is even available to non-Krungsri customers. The only thing that detracts from their effort is that they only support smartphones (maybe only iPhones).

This may all sound obvious, possibly even a little "so what?" depending on how cynical you are -- but my experience with other mobile banking apps (if an app even exists for your bank) has been complete c**p, even in supposedly advanced Singapore. Other banks' apps I've seen may:

• provide pretty basic bank balance type info
• use the mobile phone purely as a channel for poorly thought through "promotions"
• pretend that they're a fun social networking app that people will enjoy using, not realizing that consumers look to banks for functionality not fun
• have such poor user flow that frustrated consumers uninstall them immediately

Both regional and global banks are guilty of the above.

Youtube should have a video of Krungsri's app that shows you what I found so admirable about it in comparison to the above all-too-common faults in other banks' approaches.

The presenter of the demo pointed out that their approach was to take a marketing approach from the beginning, rather than IT. The focus was on user experience, which doesn't mean pretty graphics but imagining what a customer, whether a young student, a high net worth individual or anyone else might need and delivering that simply. Technology considerations (and the inevitable arguments with the IT department) came later.

Clearly they know what they're doing.

Update: This is the demo I saw.