Hang around in the local community long enough, chances are you would have cross path or at least heard about Jeffrey Paine. Known among the community as the guy who runs Founders Institute Singapore, Jeffrey also runs a huge list of other initiative to help the startup community in Singapore. One of his latest venture is a partner at the Golden Gate Ventures, and Jeffrey is often invited to speak and judge at various conferences and competitions.
Recently, Jeffrey was invited for a government round table discussion but was unable to make it. Although he was absent, he penned down his thoughts through his blog and it was widely circulated around the various social media channels. In the open letter, Jeffrey articulated his thoughts on the various challenges for Startups in Singapore along with the solutions, current situation as well as his own wishlists.
Read on to find out about the state of affairs of startups in Singapore, and what are the solutions Jeffrey propose. I assure you, Jeffrey knows his stuffs.
Open Letter to Government Round Table by Jeffrey Paine
To whom it may concern:
Thank you for inviting me to a government round table discussion next week to discuss about the state of affairs of our startups in Singapore and what challenges they face and solutions we can implement and finally how the government can assist startups through their policies.
Unfortunately I am away on a panelist engagement at Google I/O on July 29, 2012 in San Francisco. I will try to voice my thoughts with this letter and if you have any questions, please feel free to contact me.
Challenges for Startups in Singapore
A. WEAK IDEAS - In short, many Singapore based founders start out with small visions and weak ideas (not bold nor crazy enough nor targeting a large enough market). This is fairly common if they are first time entrepreneurs and perfectly alright. Not enough research is done on market size (TAM), go to market strategies (CAC/LTV) and the full customer development process. We suck at this, and we need to change that.
What is happening now: We have JFDI, e27 with the Visiting Mentor Program sponsored by the MDA. Spring Singapore is also subsidizing travel costs for mentors at Founder Institute Singapore. These programs bring great mentors to our shores. But, we need more from them while they are here (isn’t it always?). It is an extremely great start. Kudos to MDA and Spring Singapore. Thank you!
B. PRODUCT DEVELOPMENT - The second challenge for startups in Singapore is to get “some product” shipped. A lot of founders (technical or not) will face challenges here. The concept of minimal viable product, private alpha/beta launches (and how to manage them), post alpha iteration, user experience design, user testing etc. sounds foreign to most business founders. It comes down to Talent to produce and the know-how of how to produce.
What is happening now: We have local and foreign development shops based in Singapore, talent is scarce here to hire full-time (that is not what you want to do anyway early on if you are non-technical), many events and meet ups to meet potential hires/cofounders, Startuproots Singaporepromotes internships in startups for university students. Our currency is strong enough to afford talent (outsourced) in neighboring countries. But no coding school or training specifically for startup technologies and know how except maybe for Founder Institute (but we have a rigorous selection process). Founder Institute Singapore is still not enough.
C. GROWTH HACKING - The third challenge of startups here in Singapore surrounds go to market and customer acquisition strategies. A new term has been defined recently called “Growth Hacking” (by Andrew Chen). To be clear, the true work of Growth Hackers focuses on products that have achieved product / market fit. We need to help startups in Singapore get to product/market fit as early as possible with some techniques learnt from Growth Hacking.
Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of “How do I get customers for my product?” and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph. On top of this, they layer the discipline of direct marketing, with its emphasis on quantitative measurement, scenario modeling via spreadsheets, and a lot of database queries. If a startup is pre-product/market fit, growth hackers can make sure virality is embedded at the core of a product. After product/market fit, they can help run up the score on what’s already working.
Many Singapore startups have been given grants and equity funding, some have gone through accelerators/incubators and have secured their own set of advisors/mentors. What we are seeing now is a number of startups who are at risk of being a living dead company or worse deadpooled within months. In Malaysia, the government Cradle program implemented a Coach and Grow Program nation wide, in Singapore not as yet. We can change that.
Another challenge is knowing which beach head market to conquer vis a vis what product/market fit the startup has and when to pivot or shut down. More on the difficulty of market targeting is addressed in my previous post.
What is happening now: A few adhoc talks with Singapore based entrepreneurs and also visiting mentors like David Weekly, and David Kadavy (most recently). IDA has been supporting iStart Programs in the US and (Indonesia most recently and China coming soon). And of course our current mentors who are good in this based in Singapore are also mentoring and helping.
D. CAPITAL - Lastly, Singapore startups face still a challenge in getting risk capital in the country. For risk capital below S$600,000, in most recent times there are more funds that issues those check sizes but it is still relatively difficult to get. Grants from $50-100k is available as well but the grant programs present sets of conditions that may hinder speed, growth patterns or flexibility of pivoting. Finally, the Series A gap is pretty gaping in Singapore, although there are new entrants to the game (from Japan, Russia, Europe), but it is still not enough. That means startups have to be careful designing their capitalization strategy, they are pressured to be focused more on revenue growth early on which leads some of them to start “clones” or be too short termed for their own good (it isn’t bad, but it hinders game changing ideas).
What is happening now: For the digital media space: MDA iJAM grants, NRF TIS Incubators, Spring Seeds programs. Angel tax incentives are also in place. Many new events are being sponsored and organized locally which drives buzz and new influx of entrepreneurs and investors.
WHAT WE ARE DOING:
GOVERNMENT (SPRING/ ACE)
Spring Singapore Incubation Development Program (IDP)
Pros: Much needed initiative. Good diversity of sectors
Cons: Need to iterate and be open to new ideas. Keep incubators competing with each other on programs run. So what if they have similar programs? Let founders choose! If possible, set up a private sector led panel or committee to work through incubator’s performance and how to iterate to make it better each year. Incubators are startups sometimes and they are iterating as well.
Fixes: Keep iterating and measuring performances. Do 360 reviews from founders as well as incubators (inside and out). See what gaps from incubators are still missing and try to fix it by steering resources towards them and help them do it. Be flexible.
Spring Singapore Seeds Capital
Pros: Great initiative for many years with large amount for 1 for 1 matching.
Cons: Slow process, criteria not clear, panel needs to be refreshed within a set term of service, 2 for 1 is “always” better <3
Fixes: Test various options of the approval process. Rotate a list of panel members and measure their commitment and feedback. Panel members should spend more time with the founders to get a better idea of their competence, not just through paper and a few face to face presentations. A little more budget to back companies who clearly gotten their formula right and need capital to grow fast and double/triple down on them (this maybe where the 2 for 1 matching comes in).
ACE Startup Grants
Pros: Help first time entrepreneurs to launch with grants and mentor help
Cons: No structured program to help grant recipients to flourish (maybe Founder Institute can help design a program for them or have them enrolled in our program with special passes where they will not be kicked out). The grant should also apply to first time product company founders or repeat entrepreneurs who failed the first time. We should encourage more people to try again or think bigger. For e.g. a founder who started a F&B business with his wife, now wants to start a product company that can trenscend geographies should have the equal opportunity to receive the grant. At least make it a case by case and not a total shut out (it is not founder friendly sorry), trust me you will get better/stronger ideas that meets your KPIs.
Fixes: To increase quality deal flow, relax the criteria slightly (maybe have a case by case panel to approve outlier submissions). Instill a structured evaluation and mentor system to help startups get to product market fit with S$50,000. Partner with Founder Institute to enroll some of the successful applicants. Ideas can be fluid, either grant them and have them enroll or have them graduate SGFI before granting them.
Featured Image Credits: Jeffrey Paine