Yesterday, Startup Genome just published its 160-page report on the world’s top startup ecosystems. For those unfamiliar with Startup Genome, it was created by three young entrepreneurs, Bjoern Herrmann, Max Marmer, and Ertan Dogrultan to take a comprehensive, data-driven dive into what makes startup ecosystems successful around the world.
Unsurprisingly, Silicon Valley ranked first in the World’s top startup ecosystem, and coming in second is Tel Aviv, followed by Los Angeles, Seattle, New York City and Boston. For Asia ecosystems, it seems like there is an under-representation of countries on the list. Singapore is the only country from Asia that made it to the top 20 list.
Here’s the comparison between the Singapore ecosystem profile and Silicon Valley’s:
Some highlights of the findings adopted from the Startup Genome report:
- Singaporean startups are 15% more likely to monetize directly than SV startups.
- Singaporean entrepreneurs are as highly educated as SV ones (52% Master & PhD vs. 42% in SV).
- The Singapore startup ecosystem has the same healthy mix of startups targeting consumers, enterprise, and SME customers as SV.
- The key challenges of Singaporean startups are similar to SV startups.
- Startups in Singapore are 88% undercapitalized compared to SV startups before product market fit.
- Funding sources in Singapore rely more on incubators and self-funding, less on accelerators, super angels, and VCs.
- Startups in Singapore have less employees per stage (6.57) compared to SV.
- Startups in Singapore have 35% fewer mentors per company compared to startups in Silicon Valley..
- There are 46% fewer serial entrepreneurs proportionally in Singapore than in SV.
- Singaporean startups rely more on advertising and license fee revenue models than SV startups.
- There is lower technology adoption in Singapore than in SV. Singaporean startups heavily rely on PHP, Java, and .NET, with no use of Ruby compared to their peers in SV.
- Singaporean startups are 50% less data driven than startups in SV.
- Singaporean entrepreneurs focus 51% less on web, 48% more on mobile, 2.4x more on consulting, and 7.1x more on non-web software.
- Founders are slightly less likely to tackle markets they have had previous experience with than their counterpart in SV (52% vs. 63% in SV).
- Singaporean startups are 2.1 times more likely to tackle smaller markets than their peers in SV. They are 30% less likely to tackle markets markets sized $1 billion to $10 billion, and 70% less likely to tackle markets greater than $10 billion.
- Singaporean entrepreneurs are 12% less likely to commit full time before finding product market fit than their peers in SV.
Mig33, Viki, Zopim, Bubble Motion, Buzz City, and Tencube were highlighted on the report as local startup examples. All these are examples of startups which target a regional or global market. The report also highlights some of the key things Singapore startups always complain about: lesser employees, fewer mentors, lack of commitment and low risk appetite.
What’s really interesting to note is also the fact that Singapore startups are 50% less data driven than startups in SV. 50% is a significant difference. While we often hear about the importance of data, what we are lacking is entrepreneurs or startup founders who have successful use cases that can be shared with the community. Singaporean startups are also 2.1 times more likely to tackle smaller markets than their peers in SV, reflecting the lack of ambition among Singapore startups.
What can be done
One obvious thing that needs to be improved is the number of peer-to-peer mentors. George Kellerman, venture partner at 500 Startups recently echoed the exact same message during his visit to Singapore recently: “Silicon Valley is fortunate to have a paying forward mentality where entrepreneurs help and mentor each other. More of this should be happening in Asia.”
Singapore startup founders who have had a successful venture can be more hands-on in mentoring and guiding the next generation startups. While we do see this improving (case to note: HungryGoWhere’s cofounders are actively mentoring startups), we still need more mentors coming in and helping to grow the ecosystem. Ask any startup working at Blk71, one of Singapore’s most popular coworking spaces, and you will quickly realize that there is a lack of startups with active mentors.
So the question then is, how can startups look for mentors? Word of advice: ask and you shall receive. Like yourself, startup mentors are always around the community and most likely they are very approachable. Take Hastify for example where the founder John met Hoong An in a networking session and subsequently convinced him to come onboard as a mentor.
“So with a hustling mindset, I took a deep breath and went up to him and introduced myself and congratulated him on his recent exit. I began telling him what we were doing at Hastify and he got really interested in what we were building,” John recalled.
Startups also need to start tackling a bigger and more international market and understand that a slight change in business model positioning to fit a global market can make a lot of difference. Business strategies and decisions have to be backed by data. One recent example that I came across was a great blog post by Simon Newstead, the CEO of Frenzoo. In his article titled Death of a Feature, he shared how he decided to kill a feature, which actual data backing his decisions. Startups need to start basing their strategies on user metrics.