Choose your beach head market wisely

Startups and movies have quite a bit in common.

Los Angeles, the Entertainment capital of the world. 

San Francisco Bay Area, the Startup capital of the world.

We know that to some extent but somehow it does not truly hit home.

If you produce an English movie in Singapore looking for worldwide adoration and box office revenues, it usually ends up with limited distribution (classified a foreign language film) and screened in film festivals with limited distribution outcomes. 

Sounds familiar?

How do you choose the right beach head market for your startup that you can readily dominate that makes sense from where you are and move on from there?

If there are essentially 3 types of major major markets, categorized as:

  1. English speaking - SF Bay Area as the hub
  2. Chinese speaking - Beijing, China as the hub (because China is indeed special)
  3. a) Rest of World (Developed) b) Rest of World (Developing) 

Then, starting out from Singapore with limited resources, capital, talent and rising cost is pretty challenging from the on set. Where is then your beach head market? What is your move, chief?

It goes back to the founding team especially the CEO and what his or her personal situations, ambitions, knowledge, connections lies. Some founders put the company ahead of themselves and consider what market is best for the company and go to where it brings the largest impact. Some founders go with what they are comfortable with and capitalize on the opportunity that they know they can achieve. There is no right or wrong answer here, that is why the startup game is incredibly hard.

If you have something game changing, or you are 1 of 3 companies in the world that do what you do, and/or you can demonstrate a 10x differentiation to your closest competitor or simply, you know something that no one else in the world knows, chances are there are only a small number of places that will understand you, appreciate your venture's risk reward profile and have the ready ecosystem that will surround you to make things happen. Go to where they are.

If your beach head market is not ready, changing customer behavior where early adopters are not abundant makes achieving escape velocity a lot harder. It usually takes more time than you think. If investors in that region do not have the time to wait for escape velocity to arrive, you will likely throttle down your ambition and iterate to fit a market that understands, engages and pays for what you have. 

Therein lies the rise of clones and me too companies. 

Trust me, they are equally as hard to start and run compared to companies with breakthrough ideas. However, if you have ambitions to solve local or regional problems using or applying solutions or products that people resonate with, where a lot of guess work has been taken out then interestingly timed products that will achieve traction will surface. However, these founders have to realize that because they have chosen this path, their markets maybe limited, with intense competition close by. They have to execute even faster. 

Achieving a break through idea is hard. Everyone is trying to do that on a daily basis everywhere in the world. Courage and genius are still needed to pull it off. 

Nobody says startups are easy. Choose your beach head market wisely. 

So what is the purpose or role of Singapore then?

Personally, I think for now, Singapore is a special enough place that helps stitch Southeast Asia closer together and makes it easier for entrepreneurs to do business in the region (i.e. Rest of the World - Southeast Asia). 

p.s. More on startup ecosystems coming up soon especially ours (Singapore). 
p.p.s If you like this post, please Like or Tweet it. 

First MIT Visit and Takeaways

I recently went to MIT in Cambridge, Massachusetts for the first time to attend a 3 days executive education program at MIT Sloan School of Management called MIT REAP, more here. More about the program in my next few posts but in short it has something to do with developing our startup ecosystem in Singapore.

Almost 26,000 companies are founded by MIT alumni that still existed in 2006. If they were a country, it would have the 11th highest GDP in the world. My first impression was that MIT churn out great technology companies from their licensed technologies, but that is not the case. Most of the 26,000 companies founded by MIT alumni, very few (about 10%) are from MIT-licensed technology. But don't get me wrong, there are still about 20-30 companies spun out yearly from MIT. It finally hit home after speaking to Dharmesh Shah from Hubspot that most software startups started by MIT alumni are not MIT-licensed.

After an informative and definitely transformative 3-4 days at MIT, here are my three takeaways with regards to startups that are associated with MIT and why they interest me:

1. People

A predominantly engineering university with a cluster of engineering disciplines creates tremendous network effects. World class in research, both in reality and in perception. I can feel my IQ rise as I wander around the campus, eavesdropping on conversations. No doubt, they have skills, some probably harbor world class skills of varying depths. Over the years, the history and performance of startups from MIT faculty and alumni further shaped those who enrolled, those who researched, and those who taught.

2. Culture

I ran into at least 4 professors who are entrepreneurs many times over or "have helped to start 12 companies". That is a pretty rare occurrence as compared to where I am from. The culture of collaboration, experimentation, and the courage to change the world seems to be within the culture of Cambridge and MIT. The desire to learn, improve and do forces everyone in the system to be better. It fosters "creative confidence" and the courage to explore paths to bring a product to market.

3. Collision 

The most unique thing that caught me that were constantly being emphasized, was the way the campus is constructed to encourage "collision" amongst students, professors, post docs, and alumni. The famous MIT Media Lab is designed and located specifically to create "creative collisions". They even conduct entrepreneurship classes at the Media Lab, see https://www.media.mit.edu/about/ventures.

To add on to the 3 takeaways above, the talent pool in Boston/Cambridge is one of the best in the US, the availability of early stage capital is second only to Silicon Valley and co-working/collision spaces like CIC it only helps to support more creativity and courage to start companies.

My conclusion is, with enough density of people with the right entrepreneurial DNA and skills colliding together in a supportive ecosystem, amazing things will happen. What does this mean for me or Singapore? Stay tuned to my upcoming posts.


Other references:
MIT technologies are readily available online http://web.mit.edu/tlo/www/industry/inquiries.html#SelectedTechnologies.
An inventor’s guide to startups for faculty and students http://web.mit.edu/tlo/www/downloads/pdf/Startup_Guide.pdf

Southeast Asia Series A Crystal Ball Report

I don't know about you, but if you are an early stage technology entrepreneur in Southeast Asia raising venture capital to fund the growth of your business, you will likely have no idea what the cross section of institutional Series A investors in the region are looking for. 

We are not talking seed or angel rounds, but professional fund managers managing other people's money.

What I found in the last 2 years of investing in Southeast Asia is there is a gap of knowledge of what metrics or criteria these fund managers are looking for before even perking their interest. 

Many founders will be looking at raising their first institutional round this year. In order not to get caught in a tail spin and getting sucked into doing bridge and/or down rounds, we at Golden Gate Ventures wanted to do a survey amongst most if not all of the Series A investors that we can hustle our way into.

If you wish to help refer investors please drop us an email at info@goldengate.vc.

If you wish to read our findings in a report, please leave us your email address below.

Thank you.

Leave your email here

Your startup life in 2014

A few words about Lunar New Year Resolutions (if there is such a thing) that I will lay down for myself and I hope you will like them too.

Back in 2009, there was a huge gap of qualified startup mentors that are able to help first time founders (especially) or serial entrepreneurs building product companies for the first time. The FTM (fuck this moment) came when I see too many sub-par quality companies funded and fail (a total waste of money) and hence sparked the creation of Founder Institute Singapore in 2010 with huge support from the IDA and Spring Singapore. Since then, we are crushing it, thanks for asking.

Four years later in 2014, the mentorship gap has narrowed considerably although never completely, we now have a new, and flourishing startup ecosystem that I am proud of. However, the evolution of founders has brought them to meet different challenges especially people management, setting a vision and direction, work life balance and defining the culture of their companies.

What is missing is the next step of founder coaching. Whether they come from the board, advisors, or fellow founders or even full-time executive coaches focused on startup leadership. Our fraternity should come together to help like-minded folks to plough through the good and mostly tough times.

Back in 2010, I gave away some internal secrets on how to build relationships in business (probably not much of a secret). I spoke about it only once publicly in a SMU lecture. Here are the highlights:

The way to build relationships with anyone in business is to know how to (in that order) take care of their:

  • Love/Family Life (especially Kids - their health, education and/or love life)
  • Physical, Mental Health (especially physical health - a thought, an action will change perceptions deeply) 
  • Money matters/Career (especially making them look good and proud of their achievements)

So taking a page above, in 2014, founders please:

1. Take care of yourself this year. Do not let your startup and milestones consume you whole. Slow down and look up at the blue sky once in a while and take a deep breath. Look at your love ones and be clear on why you are doing what you are doing.

2. Seek out a small fraternity (less than 5) of like minded founders that you can chat, update and share your journey with. Grab dinner with them once a month, create a Whatsapp/FB Group Chat, connect and share. Startup life is hard, period. You need an outlet and a sounding board.

3. Focus on your job at hand (money matters/career), have a personal life (love/family life), and have a side interest/hobby (physical, mental health). And lastly, workout (preferably in the late morning or early afternoon, a few times a week).

No matter what your situation is, founders are a different breed of people whom I have the good fortune to meet, train, (occasionally scold), and invest in. Stick together to help one another. Be blunt. Remember, there are people around you who is there to help, support and lend a helping hand. 

They do care about you no matter what you may think. Sometimes a text, a message, a nod will trigger a catch up that is long awaited. 

Sometimes just knowing that they are around is all you need.

Blogs I found that you might like to start with:

http://scott.a16z.com/2014/01/17/success-at-work-failure-at-home/

http://www.themonsterinyourhead.com/

Books:

Startup Life

(of course there are plenty more...)

Happy Lunar New Year to one and all. (This post was inspired by this song below, hope you enjoy it).


Comments on Singapore's Wishlist to Elevate Singapore's Startups


Techinasia recently covered the outcome of ACE's 6 month discovery process of the state of Singapore's startups and came back with 10 recommendations. The full post is here to help with the context of what I am commenting on below.  I have been known to chime in on such matters from time to time.

So let's do this.

1. Let private sector partners play a greater role in developing the entrepreneurial community.

Easy to delegate but this needs a clearer strategy with stretched goals as resources and commitment from the private sector are limited. Work backwards from what we want to achieve and figure a way that both public and private sectors can work together in a realistic form and attacking small goals within a reasonable amount of time.

2. Double the number of youths in overseas immersion programs to 400 annually.

Agree with this fully as I have seen and have funded great talent coming out as a result of these programs. However, not all programs are designed well, do regular 360 reviews of such programs, and keep improving them.

3. Encourage schools to introduce tinker labs.

To create interest in science and technology is an excellent goal. Tinker labs should be one of the many items on the list to try to hit that goal. 3D printing and the like is the flavor of the year, try not to be too caught up on it. I do support any creative ideas to interest students. We have some programming workshops and road shows (educating students on the startup culture and job scopes) planned at polytechnics and universities at Startup Academy in 2014, it is one of our small tried and tested way we know how.

4. Unlock corporate venture capital and other private financing options.

Totally in support of this move to unlock more financing structures for startups, be it venture debt or tax incentives for large GLCs or private corporations when they invest. Government should also engage large corporations to invest and support Singapore based venture funds. This could be an indirect way to help serious corporates who are looking to set up their internal corporate venture arms.

5. More collaboration between large corporations and startups.

Agree. However, online platforms will not work in the short term. Do it the old fashion way. Curate the startups and qualify the large corporations with their interest/objectives/problem statements and make sure the decision maker sits in during the pitch meeting. Figure out what his or her agenda is within the large corporation (dig it out) to make sure no one is wasting the entrepreneurs' time.

6. Make Singapore a crowdfunding hub.

Agree. Why not? Whether its crowdfunding of projects like Kickstarter (not very likely to scale due to our market size) or equity crowd funding (if MAS allows). Singapore should be the epi centre for such model innovation. We would love to have Angellist base themselves in Singapore addressing Asia.

7. Help startups get better access to talent.

Agree with the intention and several suggestions. However, we do need more resources on the ground to train our next generation of innovators (like coding, ui/ux and growth hacking schools). That is more important than relaxing foreign employment regulations (although that needs a re-look right now).

8. Grow the physical spaces for startup activity.

Agree as well, this looks to be better suited as a Public/Private Partnership. The government subsidizes, the private sector design, build and manage. Just take note of the eventual location. The top locales so far are still: Blk 71. Chinatown/Tanjong Pagar/Raffles Place. Arab Street/Bugis/Middle Road. I think other hubs in other locations will be hard to achieve stickiness. Focusing on 1-3 hubs will suffice.

9. More government funding in nascent tech sectors.

Agree as well if there are deserved entrepreneurs with great ideas, they should be able to receive the same incentives. However, reality is harsh at times, it will take a while to move the needle.

10. Enhance programs that help startups expand abroad.

Well, I raise both my hands and feet. We are planning something big for IntroduceStartups.com tour soon. We have always advocated to startup founders to travel more and meet like minded people. 

"Amazing shit happens when like-minded people meet". ;)

There you have it. Pretty mild thoughts from me this weekend.

Have a great weekend.

Gif source: allyourgifrelatedneeds.tumblr.com

"Are you wealthy" Tokyo Tour 2013

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Golden Gate Ventures were invited to speak and attend several startup conferences in Tokyo in December 2013. So we thought why don't we make this trip an off-site for the team and that became a business development and fund raising tour for our portfolios and finally morphed into a formal IntroduceStartups.com Tokyo tour with ourselves, portfolio company founders and some entrepreneur friends. A total of 9 of us headed off to Tokyo filled with excitement and anticipation. 

We booked 3 apartments on Airbnb (under the same owner) in the same apartment building in Roppongi, a block away from Ropping-Ichome Station. It was nicely situated in a residential community that is not too far a walk from the subway station or the main street of Roppongi. Highly recommended for traveling groups or families (business or pleasure). The apartments have between 2-3 rooms of both tatami and modern configurations, a shared bathroom and dining/kitchenette. Spacious for central Tokyo apartment buildings and very local (an experience modern hotels do not give you). The group came together mostly as acquaintances/strangers but we quickly gelled after the first night of work and play. Over the next week of living and working together (and crazy texting on Whatsapp), we bonded very quickly and I am sure we all miss some of those crazy mix of night outs, pitch meetings, great food and conversations. Special shout outs and thanks to a few people who made our trip superb! Eugene (Always our buddy and brother, love that 500 Yen Karaoke Bar at Shinjuku and best of luck at Rakuten!), Reina (Amazingly smart and funny surgeon/entrepreneur! You have taught us a thing or two about business in Japan and for that, thank you 0.01!), Batara-san (You are the man, enough said!), Moo (Superb to meet you in Tokyo and thank you for the quick introduction to a potential investor via Facebook, you the solid), Masaru Ikeda (What else can I say, thanks for helping and hanging out with us and am proud to be an advisor to The Bridge, see you in Feb and to a great 2014 to you and your team!), Takeuchi-san (My long-time friend who is a tireless International Business Developer, always there to help with introductions, thank you so much!) and our super associate Justin for all his coordination, scheduling and Google Map Ninja-ing. 

Some of our tour highlights are listed below (some events, meetings are omitted for "privacy" reasons). Pictures are embedded towards the end of the post. 

Main Events: 

Innovation Weekend 2013 Finals (by Sunbridge Global Ventures) - thank you Hiraishi-san for the invitation and slotting our portfolios to pitch, truly grateful! It was an excellent event! 

GlobalBrains Alliance Forum 2013 - thank you Yurimoto-san for the invite and last minute passes for our group. Learnt a lot at the conference, it was full of great content, at a remarkable venue ended with a great dinner party! Some coverage of it here on Techinasia.

Golden Gate Ventures Investor Dinner- An invite only event with investors, friends and partners held at Gonpachi. Thank you to all who came to share Golden Gate Ventures's short journey in Southeast Asia, it was really nice to meet all of you. Look forward to more good times ahead. See you all soon in Tokyo and/or in Singapore! 

Some company visits include:
- KDDI
- Rakuten
- Monoco.jp
- Digital Garage
- Transcosmos
- Samurai Incubate
- ntt docomo
- CyberAgent
- East Ventures Japan
- Qualcomm Ventures Japan
- Mentors and private industry professional meetings
and many more... 

 In the short time I was there in Tokyo, a number of takeaways that maybe useful to you.
- The startup ecosystem is back in Japan! Lots of innovative ideas with exquisite design tastes and plenty of passionate founders. Not in complete full swing but the momentum is there.
- The stock markets are also back with a vengeance. IPO exits are back and have provided great exits to many investors.
- The Japanese government is supporting startups and SMEs with massive budget allocation earmarked for growth. Somewhat familiar in Singapore's context but with more vengeance.
- B2B is bigger than I thought here in Japan. Lots of opportunities for enterprise startups if you know how to navigate the Japanese market. (many Unicorns lie here).
- Southeast Asia on the whole will be a topic of discussions in board rooms in Japan in 2014. We are co-organizing an invite only conference in Singapore in Feb 2014 as one case study to kick off that discussion.
- Golden Gate Ventures will definitely have more things planned for Japan in 2014. Stay tuned.

And that wraps it up folks. Tokyo is indeed a unique city. We all miss it the moment we reached the airport to leave it. But we will be back and that is a definite. See you all soon my lovely "Are you wealthy?" mates! p.s. for those interested to know why we name the tour "Are you wealthy?", ask anyone of us from the tour. 

Kokorokara honto ni domo arigatogozaimashita! 心は本当にどうもありがとうございました! 

Stay tuned for our next tour to Bangkok in 2014!
 
   

Crazy Ideas

Why are there little to no crazy game changing ideas from Southeast Asia?

Recently I gave a short talk at JFDI.ASIA’s Batch 4 teams. My talk was centered around having a simple product hook in your product that makes it easy for founders to articulate their vision to people (users, investors, potential employees, partners) that they engage with.

As we invest and learn from the teams we work with in the Southeast Asia region, watching founders execute on ideas, the one thing that always nag at me is their product hook. How special is that hook? Does it engage emotionally or change behaviorally? Who ultimately will care?

We are in the beginning of the entrepreneurial revolution. Although the Lean Startup movement painted a great picture of what can be taught, it is not a framework for everyone. Execution is important but a lot of that has been commoditized. It all comes back down to the idea and how you think the world should be. You just need time to let the world know that.

So why aren’t there more crazy big changing ideas here in Southeast Asia?

  1. Fear of failure is probably the main cause. It makes people and people around them (i.e. ecosystem) think too short termed.
  2. There is low density of founders who have tried crazy things, failed, and still keep on trying.
  3. Lack of confidence.

Having said all that, it is extremely difficult to design a product hook with global appeal. I know that, we all know that. That is what ultimately differentiates companies.

Try not to paint yourself into a corner and stop there. Keep inventing and rounding up troops that believe in your “crazy”. And break out.