December 2014
Inside Entrepreneurship
Social entreprises lighting the way New incubation and acceleration programmes Start-up interviews: Muku Labs, Missionbird, J.J. Threads Co-working space: blueprint of Swire Properties www.educationpost.com.hk/ie-dec2014
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CONTENTS Feature
4
Social entreprises lighting the way BRIAN YEUNG
Trends
10
Start-up appeal ANDREA ZAVADSZKY
Education
12
What does business education teach entrepreneurs? ANDREA ZAVADSZKY
Insight
14
Solitude is beauty WONG YAT-HEI
Start-Up
18
‘Likes’ for fundraising WONG YAT-HEI
20
Building a business stitch by stitch WONG YAT-HEI
Co-working Space
22
Inspiring start-ups ANDREA ZAVADSZKY
Incubation
24
Start-ups build ‘wearable tech’ BIEN PEREZ
Opinion
28
Why your start-up isn’t getting funded MARIE SWEETMAN
Inside Entrepreneurship is published by Education Post, South China Morning Post Publishers Ltd. All rights reserved. ISBN: 978-962-8148-28-8
26
Shoring up technopreneurs
STAFF REPORTER
4
Feature
Silence le Cabaret performance led by deaf performers. Photo: Dialogue Experience
way e h t g n i t s ligh e s i r p e r t n Social e
BRIAN YEUNG Social entreprises (SEs) are
“Hong Kong’s social entrepreneurship is quite advanced in terms of numbers and marketing, compared with neighbouring economies in Asia,” says
seen as an innovative way
Kee Chi-hing, adjunct associate professor at Hong
which concern the community
Affairs Bureau’s Social Enterprise Advisory Commit-
of tackling various issues
Kong Baptist University and a member of the Home
by setting up new businesses
tee. To back this up, Kee notes that, with around
which usually operate on a not-for-profit basis.
450 SEs and a population of just over seven million, Hong Kong is ostensibly doing better than Singapore which has roughly 170 SEs for a population of 5.3 million. However, according to a survey by the DBS Social Enterprise Advancement Grant 2014, only 35 per cent of such businesses are making a profit, while 32.5 per cent achieve break-even and the remaining 32.5 per cent operate at a loss. These findings are in
5
Kee, left, is regarded as ‘father of social entreprises’ in Hong Kong.
Photo: Felix Wong
line with other research done last year by the Cen-
expanded its revenue stream with income from taxi
tre for Entrepreneurship at the Chinese University
advertising and organising events. For instance, the
of Hong Kong (CUHK). It showed that 62 per cent
annual Diamond Sedan Competition now attracts
of the 174 local SEs surveyed were profitable or at
corporate sponsorship and registration fees range
break-even in 2012.
from HK$5,000-35,000,” Leung says.
Diamond Cab, a Hong Kong start-up providing
In offering round-the-clock services, a particular
point-to-point transportation for wheelchair us-
challenge is finding customers during the late shift.
ers, is one of those social entreprises that was able
to break-even within a year of starting operations
“Current usage is mainly driven by demand for com-
in 2011.
muting to clinics and hospitals,” says chief executive Doris Leung. “To add an aspect of entertainment to
“Initial costs were high in having to buy five wheel-
the life of wheelchair users, we organise events to
chair-adapted vehicles from Japan, pay taxi licence
encourage them to go out for leisure activities and
fees, and incur other administrative costs. The plan,
offer a means of transportation too.”
though, was to target customers who could afford
fares starting at HK$115 and the company has since
Also an executive director of Social Ventures Hong
Inside Entrepreneurship
6
Feature Doris Leung is mobilising the city’s disabled community with her fleet of wheelchair-accessible taxis. Photo: Berton Chang
Kong, Leung has noticed that the private sector is in-
diversifying its pool of employees to include indi-
creasingly interested and proactive in supporting lo-
viduals with impaired hearing.
cal SEs. For example, DBS Bank has allocated HK$2
million in each of the last two years to support SE
Dialogue Experience chief executive Antony Pang
expansion through training, job creation, branding
sees no need to prioritise profitability over social
and other relevant activities.
impact or vice versa.
“Investors in SEs value the projects’ social impact
“It is important for SEs to develop value for money
more than the monetary return,” Leung says.
business offerings which the market is willing to pay for,” he says. “Customers will not come back if they
Another social enterprise, Dialogue Experience, for-
choose your brand simply based on empathy.”
merly known as Dialogue in the Dark Hong Kong,
achieved revenue of HK$16 million in 2012. It hires
Even so, Diamond Cab and Dialogue Experience
individuals with visual impairment to provide expe-
are in a minority among local SEs. They are neither
riential training and entertainment for corporate and
registered charitable organisations nor supported by
individual clients. Among other events, the compa-
government funding. And according to the CUHK
ny has organised concerts and dinners in the dark
research, only 37 per cent of Hong Kong’s SEs are
and now plans to offer a “silence experience” by
registered as companies.
7
“
Investors in SEs value the projects’ social impact more than the monetary return
“
Doris Leung
Table 1: Density of Social Enterprises in the United Kingdom, Hong Kong, Singapore and South Korea United Kingdom
Hong Kong
Singapore
South Korea
Data Source (Year of publication)
Social Enterprise UK (2013)
Hong Kong Council of Social Services (2014)
Social Enterprise Association (2013)
Korea Social Enterprises Promotion Agency (2013)
No. of SEs
70,000
457
179
950
Population (mn)
64
7
5.6
49
No. of SE per 1 mn population
1,093
65
32
19
Table 2: Overview on Hong Kong’s Poverty Alleviation Policy Annual Cost per recipbudget ient (HK$) (HK$)
Income per recipient (HK$)
Cost-effectiveness (HK$)
Comprehensive Social Security Assistance
$19.5 bn
$39,000 per recipient
$37,000 per recipient per year
$1: $0.96
Employees Retraining Scheme
$0.8 bn
$21,000 per employee
$7,600 per month x 10 months*
$1: $3.7
Social Enterprise (under the 3E’s Project)
$0.15 bn
$97,000 per job role
$6,245 per month x 112 months**
$1: $7.2
* The average duration of employment of those who can land a job is 10 months. As such, the total income is $7,600 per month times 10 months. ** The average monthly salary of a job created by the 3E’s project is HK$ 6,246 per month. As the median life span of the SEs under the 3E’s Project is 9.3 years, the total income should be 9.3 years times 12 month per year = 111.6 months, rounded up to 112 months. Inside Entrepreneurship
8
Feature
Antony Pang, CEO of Dialogue Experience (pictured right), with Concert in the Dark contributors. Photo: Jonathan Wong
As early as 2005, the Commission on Poverty pro-
Baptist University’s Kee has also conducted research
moted SEs as a way to enhance the eventual self-re-
on the social return on investment of SEs and oth-
liance of the able-bodied unemployed and create
er poverty alleviation measures in Hong Kong. His
other positive outcomes. In line with this, the gov-
view is that such enterprises should prioritise social
ernment currently offers a range of funding support
return on investment over profitability, since cost-ef-
including the 3E’s Project, otherwise known as the
fectiveness of a well run social enterprise is seven
Enhancing Employment of People with Disabili-
times higher than comprehensive social security as-
ties through Small Enterprise Project. Other funds
sistance as a means of poverty alleviation and near-
exist to support community investment and inclu-
ly twice as good as employee retraining schemes.
sion, partnerships for the disadvantaged, enhancing self-reliance, social innovation and encourage local entrepreneurship.
(Advertisement)
10
Trends
StartmeupHK team members, Jayne Chan and Duncan Tong
peal p a p u t Star ANDREA ZAVADSZKY InvestHK has set up a team to
further
strengthen
Hong
Kong’s position as the re-
gion’s leading start-up hub.
11
“
The intention is to leverage the department’s existing strengths and resources to assist startups and help Hong Kong’s start-up communities to continue thriving
“
Simon Galpin The team of two will reach out to both local and
“The intention is to leverage the department’s ex-
overseas start-ups and communities to support In-
isting strengths and resources to assist start-ups and
vestHK’s active promotion of Hong Kong’s role as
help Hong Kong’s start-up communities to continue
the preferred hub for setting up new companies.
thriving,” Galpin says.
“The setting up of the new start-up team marks a
InvestHK needs all hands on deck following up on
milestone for InvestHK in its outreach to founders
its ambitious initiatives, including the 2014 Start-
and the local and overseas start-up communities,”
meupHK Venture Programme, which invited start-
says Simon Galpin, InvestHK’s director-general of
ups from around the world to compete for benefits
investment promotion. “I am hoping that the start-
worth over US$500,000.
up team will further embed Hong Kong’s position as a leading destination and hub for start-ups, and
Designed to draw entrepreneurial talent to Hong
attract entrepreneurs and founders to set up their
Kong and use the city as their launchpad, the pro-
businesses in the city.”
gramme attracted 550 entries from 47 economies, up from 384 entries received from 39 economies in
StartmeupHK’s investor relations officer, Jayne Chan,
2013. “After two successful competitions and giv-
joins from the non-profit organisation TiE Hong
en the tremendous response and high quality of the
Kong, where she was executive director, while in-
entries, I believe that Hong Kong’s position as one
vestor support officer the Duncan Tong has arrived
of the fastest growing startup hubs in Asia has been
from ANZ, where he covered cross-border transac-
confirmed. InvestHK will continue to encourage
tions, mainly focusing on SMEs and start-ups. The
scalable entrepreneurs to come and set up in our
two executives were chosen for their extensive links
city and enjoy its many enduring business advantag-
and experience in both the local and overseas start-
es, while bringing new skills and ideas to inspire our
up communities.
local community,” Galpin says. Inside Entrepreneurship
Education
12
Ricky Wong is a graduate of CUHK EMBA.
on i t a c u d ess e n i s u b es o d t a h W eneurs? teach entrepr ANDREA ZAVADSZKY Studying for an MBA and learning
the
management
technical will
skills
benefit
of
entre-
Photo: Jonathan Wong
preneurs at different points of a
start-up’s
development,
entrepreneurial
thinking
but
has
become so highly valued in busi-
ness that many business schools
teacher is a venture capitalist with 30 years of experience,” says Lawrence Chan, CUHK’s administrative director of marketing and student recruiting
have started developing specif-
(MBA programmes).
neurship to the next level.
Chan says, the school also offers internships in
ic courses which take entrepre-
start-ups which – even for their students from large Fortune 500 companies – are a real eye opener.
The Chinese University of Hong Kong (CUHK) Busi-
Most recently, CUHK MBA students participated
ness School started running entrepreneurship-relat-
in a study trip to visit start-ups in Taiwan.
ed programmes about four years ago, in answer to growing interest in entrepreneurship following the global financial crisis.
“We believe entrepreneurship is very important. Large companies are also looking for intrapreneurship qualities. If [our students] are assigned to a new
“We [have introduced] two formal courses about
unit, a new product or a new country, the big com-
how to set up a business, covering funding by
panies expect them to lead and work like entrepre-
venture capital and private equity, how to im-
neurs,” Chan says.
press investors and how to evaluate as an investor if the start-up is worth the investment. The current
Dr Lars Groeger, lecturer in management (market-
13
ing), at the Macquarie Graduate School of Man-
Chiang also recommends a number of their
agement (MGSM) believes, MBAs could offer much
MBA courses to start-up entrepreneurs, such as
more to future tech entrepreneurs. MGSM started
Sustainable Business, Executive Discovery and Net-
adapting its curriculum to this growing
work, Residential Trip and Strategic Management.
need two years ago.
These courses cover business ownership, developing ideas for business and undertake the initiation
“For example, I taught an elective mar-
and development of a business.
keting course in Hong Kong that follows a design thinking approach to innovation,”
CUHK’s Chan says marketing, management and
Groeger says. Students were working on
leadership courses are important, while MGSM’s
a real start-up that was in the pre-launch
Groeger adds, “While I don’t think that you have to
phase. They were developing prototypes and testing
have an MBA to become a successful entrepreneur,
it with users, while the founders were pitching their
I have yet to come across one of our students who
business to venture capitalists.
has not applied MBA tools and frameworks as well as reflective leadership to drive their business.”
“We followed an experiential learning approach, throwing the teams in at the deep end, which led
Top 10 advice from business school professors
to a steep learning curve. Students really enjoyed the experience as they became part of a fast mov-
1. Know your personal strengths and weaknesses
ing start-up in an environment of great uncertainty,”
and try to learn something new everyday.
Groeger says.
2. Know your company’s strengths, weaknesses and the means to overcome capital restraints.
Groeger notes that entrepreneurial thinking is changing the whole approach to business problems. The traditional approach was teaching students to improve on an existing business model, but entre-
3. Know your competitors and the alternative products in the market. 4. Be passionate and have a hands-on approach: execution is very important.
preneurs create something which did not exist be-
5. Don’t look for money in the short term, focus
fore and will only know if it works through testing it
on the long-term benefits and the satisfaction of
in the real world.
running your own business. 6. Be prepared for failure, as success happen
“We try to prepare [students] for a reflective man-
won’t overnight.
agement style, so that they can improve the qual-
7. Build a productive and dynamic team. Your
ity of their decisions in a very fluid environment,”
idea will evolve but you need a great team to
Groeger concludes.
turn the idea into a viable business opportunity. 8. Look at the feasibility and viability of your ven-
City University of Hong Kong (CityU) offers an Entre-
ture. Talk and test it with users and other stake-
preneurship and Business Planning module in col-
holders right from the beginning. Most start-ups
laboration with the Haas School of Business at Uni-
fail because they build something that no one
versity of California Berkeley and has incorporated
wanted and they forgot about the user.
a business-driven information management con-
9. It’s all about the customer. Get to know their
centration into the curriculum “to help and nurture
needs and expectations – a customer oriented
students to discover their innovations which would
business should be the primary objective.
ultimately become a viable, lucrative business op-
10. Lead with innovation and sustainability.
portunity,” says Professor Kevin Chiang, MBA programme director, College of Business, CityU. Inside Entrepreneurship
14
Insight
Kevin Leung, Muku Labs
ty Solitude is beau WONG YAT-HEI Most
start-ups
in
Hong
Kong are devoted to app development,
but
Kevin
Leung believes that the city is the perfect place for a hardware business to thrive.
Coming from an engineering education background,
remote wireless camera shutter for smartphones.
Kevin Leung knew nothing about hardware to start
It has become a popular product sold around the
with, but he appreciated Hong Kong’s well-devel-
world.
oped logistic network and its proximity to manufacturers in the Pearl River Delta. He wanted to make
“When I first started the company, I was a one-man
use of these elements, which are vital to building a
band. Now I am still the only man in my company
hardware business.
because I believe in building the business through collaboration with partners, not by employing the
“I am based in Hong Kong, close to manufacturers,
top talent,” Leung explains.
I can monitor them closely. Hong Kong has fantastic logistics for me to ship orders to different parts of the
Leung has worked with a number of partners in-
world,” he says.
cluding engineers, designers and manufacturers from the mainland, and shared profits with them.
In 2012 he founded Muku Labs, which produces
He was inspired to develop such a business model
gadgets for photo taking. His first invention, Muku
after reading the book The 4-Hour Workweek, by
Shuttr, a selfie remote control, is the world’s thinnest
entrepreneur and angel investor Timothy Ferriss. “I
15
“
I don’t have a team. When I come up with a new idea I can develop it without having to worry that my employees are not able to adapt
“
have learned that many functions of a company can
soon, despite his close collaboration arrrangement
be outsourced. This way, I can maintain maximum
with mainland partners.
flexibility with my business and save costs,” he says. “I think many premium brands avoid the mainland, After Muku Shuttr, Leung went on to create camera
despite the fact that it is a huge and vibrant market,
lenses for smartphones – an entirely different idea.
because of copycats. If my products hit the main-
He can easily make the transition to a new product
land market, soon there will be many cheap repli-
by collaborating with another group of engineers
cas. Their quality is not as good, but still I won’t be
and designers, as well as manufacturers. “When I
able to compete with them because their price is so
come up with a new idea I can develop it without
low,” he says.
having to worry that my employees are not able to adapt to the new situation,” he says.
Looking forward, Leung says he will continue to focus on creating gadgets for photo taking. Although
This collaboration mode had done wonders for
he comes from a programming background, he is
Leung because his partners, who get to share the
not keen on the idea of developing apps because he
profits from every product sold, are ultra-motivated.
finds it hard to succeed in a minor market like Hong
“It is even better than paying a design house or a
Kong. “I don’t think Hong Kong is the best place
factory to do the work because they are part of the
to develop [and test] apps. Something may work
business, they have all the motivation they need to
here, but that does not mean it will work around the
do well,” he says.
world. The local market is too small, start-ups need to think globally to thrive,” he says.
Muku Labs products have reached the Asia-Pacific region, Europe and the US, but Leung says he has no
Muku Labs is not Leung’s first start-up. In 2000,
intention of entering the mainland market any time
during the dotcom boom, he started a website with Inside Entrepreneurship
16
Insight
friends that provided updates for stock prices and market news. “It sounds really ancient now to be starting a website, but back then we were one of the first finance websites,” he says. After the dotcom boom ended, nobody in Hong Kong talked about start-ups for more than a decade until they became a trend again in 2011. However, the current trend is different from the start-up culture in 2000, Leung says. “First of all, back then many start-ups were not founded by individuals without a background in business. Most were small companies split off from big ones that were not related to technology. Secondly, the cost of a startup has gone down a lot, compared to [the dotcom boom] due to advances in technology. The cost of employing a data centre and server – which are important support for technology start-ups – has become much cheaper,” he says. Leung is not sure if the current start-up trend will be sustained or die down quickly like the dotcom bubble, but the lower requirements for starting up a venture have attracted more individuals to join in, something which is positive for the development of a start-up ecosystem. Finding consistent investment has always been a challenge for start-ups, and Leung thinks investors should not focus only on providing financial support. “Investors in start-ups in Silicon Valley share their insights on business and networks with startups to allow them to thrive on the international stage. I hope to see local investors do the same,” he says.
Muku Macrowide and Muku Shuttr, both products are produced by Muku Labs
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18
Start-Up
Kelly Yim, Missionbird
ing s i a r d n or fu f ’ s e k ‘Li
WONG YAT-HEI
Crowd funding has helped many big ideas get off the ground without the need for one major investor.
Now, a few creative minds in Hong
Kong have created their own version of this form of fund-raising Photo: K. Y. Cheng
to benefit various charities.
Kelly Yim, founder of Missionbird, tells Education
can share the link with their Facebook circle and
Post about her unusual path to success in creat-
for every “like” registered the sponsor will donate
ing Hong Kong’s first technology-based social en-
HK$2 towards the project.
terprise – Likefunding – which makes good use of social media.
What has made this model so successful? It creates a win-win situation for charities and com-
How does Likefunding work?
panies. It is also an easy, low-cost way to raise funds
The first step is to identify creative projects which
by simply getting “likes” on Facebook. Friends of
need funding and then match them with a corpo-
supporters can help to raise funds for a project just
rate sponsor, based on the budget available and
by clicking and sharing and, on average, this can
the company’s corporate social responsibility
lead to 10 to 30 more “likes”, thereby raising anoth-
(CSR) objectives.
er HK$20 to HK$60.
After matching, Likefunding provides a Facebook
Once a Facebook page has generated some noise,
link with details of the charity project and the mes-
it can attract more sponsors. For example, the Prin-
sage or logo of the corporate sponsor. Supporters
cipal Chan Free Tutorial World, a project providing
19
free tuition for under-privileged students, is a cam-
There are two software engineers, a person for mar-
paign which has drawn support from numerous
keting and finance, and a social worker. The latter is
companies and volunteer teachers.
responsible for identifying charity projects in need of funding.
We create a powerful media impact for sponsors at no cost. Through the Facebook “likes” and shar-
What are your plans for the future?
ing, their brand and corporate message gets a wider
We started in August, so are still in the early stages.
audience on social media. In our view, the model
However, the response so far has been positive with
makes sense because creative projects have the ca-
10 listed companies – mostly from the mainland –
pacity to go viral and companies want their brands
signing up as corporate sponsors, and we have al-
appear on social media and to use this platform to
ready raised funds for 20 charity projects.
publicise their CSR initiatives. The plan is to go global. We have been promoting What were some of the major challenges?
ourselves on Weibo and on crowd-funding plat-
Like many new concepts, it is not immediately easy
forms in the United States.
for the public to understand. The charity Operation Smile China is our first mainIt took around five years for people to see what
land campaign. It is helping to spread the story of
crowd funding, our reference model, is all about.
a child with a cleft lip in an earthquake-hit part of
Therefore, I expect it will take more time and effort
Yunnan in order to raise money for surgery. After
for us to gain wider public recognition, but I plan to
coverage on CNN in October, we have been field-
focus on promoting the new concept and educat-
ing more than 20 projects from all over the world.
ing people as necessary. Of course, we are grateful to the early adopters of the platform because it
At present, we don’t get any income from the pro-
takes a certain amount of courage to trust us, an
jects we run, but in the near future, we hope to get
organisation previously unheard of in the area of
10 per cent of the funding we raise.
fund raising. Personally, I stopped working for a year to develop What prompted you to launch a start-up?
Missionbird and will have to start hunting for a full-
I previously worked as an actuary. It was a steady
time job soon. That will mean a change in the lev-
job, but didn’t allow me to use any creativity. Devel-
el of commitment, but we have developed a good
oping “apps” is a good way to be creative, but since
working system and built a team, so I think the com-
I am not a tech person, I started by taking a course
pany is in good hands going forward.
on app development. That is where I met the people who became my partners for Missionbird. We
What is the toughest thing in launching a start-up?
developed two quite successful apps before coming
My family did not agree with me at first. They
up with the idea for Likefunding.
didn’t understand why I would give up a steady job to work on something which didn’t seem to bring
How many colleagues do you have?
an income.
The team consists of four full-time staff and me.
Inside Entrepreneurship
20
Start-Up
Katherine Cosentino, J.J. Threads
tch i t s y b h s stitc s e n i s u b a Building WONG YAT-HEI
In little more than three years, J.J. Threads
has gone from being a newly launched web-
site to a company employing 10, which is in talks with investors and has big plans for further expansion.
“I have trouble sleeping because I’m so excited
Based in Hong Kong to be close to its production
about how much we are growing,” says J.J. Threads
base and representatives of the world’s leading fab-
chief executive Katherine Cosentino.
ric mills, the company offers top-quality shirt fabrics in special designs. Using a factory in Hong Kong
However, what outsiders might see as an overnight
also makes it easier to control delivery times and
success is actually the result of a lot of hard work.
ensure that customers receive items 10 to 14 days
Start-ups can take longer than originally planned to
after an order is placed.
get off the ground and the process often involves learning from sometimes costly mistakes.
Since the business is based on a website, orders can be accepted from anywhere around the world. So
“Especially early on, there is a lot of trial and error
far, though, the company has mainly dealt with US-
in finding the correct technology partners, suppli-
based customers, filling a niche by offering bespoke
ers and vendors,” Cosentino says. “I knew this was
shirts in a market where the idea of custom-made
going to be difficult, and was told things can take
clothing is relatively new.
longer than you expect. We have always tried to learn from our mistakes. If one approach isn’t work-
The website teaches clients how to take measure-
ing out, we move quickly to rectify the situation.”
ments and create their own design with numerous
21
“
In terms of marketing, one priority is to increase the social aspect of the site and increase customer interaction in order to expand the community of users
“
options for collars and cuffs, piping, stitching, but-
in the pipeline to get notifications when the latest
tons and more. Playing around with colours, styles
designs are posted on the website. An expanded
and cuts to design a good-looking and fashionable
product line is also in the works which may in-
shirt can be an absorbing and collaborative expe-
clude trousers and jackets, satisfying a demand for
rience. That is one reason the business has built
good-value, better fitting clothes.
a reputation through word of mouth and social media marketing.
Start-ups should be realistic
“One of the things that make us unique is that we
•
We are surrounded by stories of companies
elevate our users to be designers instead of just cus-
that seem to have achieved success overnight.
tomers shopping at a retail store,” Cosentino says.
I’m sure there are a few true overnight success-
“Users design different aspects of their shirts, and
es, but it is important to keep reasonable ex-
then share them with the rest of the J.J. community.
pectations of what you plan to achieve over a
If another user buys their design, they receive store credit as a thank you for inspiring the rest of the
given timeframe. •
community with their design.”
It may take longer than you anticipated to achieve your goals, but it is very rewarding to see hard work come to fruition.
In terms of marketing, one priority is to increase the
•
Starting a business brings many complex chal-
social aspect of the site and increase customer inter-
lenges and it is important to build a smart team
action in order to expand the community of users.
who can face those challenges. However, it is equally important to have a supportive commu-
“We see a lot of opportunity in customisation and
nity of friends and family who can cheer you
social e-commerce,” Cosentino says. “Social net-
on when things get difficult.
working and online customer sharing on Facebook are effective ways.”
Katherine Cosentino
Customers can now “follow” other users who regularly put up new designs, and there is an option Inside Entrepreneurship
22
Co-working Space
blueprint’s tech-focused co-working space. Photo: Swire Properites
rt-ups a t s g n i r i p s In
ANDREA ZAVADSZKY
With its central geographical location in Asia, its
and investors – of blueprint, a new accelerator and
role as the gateway to mainland China, and a long
co-working space launched by Swire Properties.
tradition of hardworking entrepreneurship, Hong Kong is well-placed to substantially contribute to
Although Hong Kong is not tackling unemployment,
the start-up boom.
the government and governmental organisations are supporting tech start-up entrepreneurship, which
Technology start-ups developed as a global answer
will hopefully lead to a more diversified economy,
to gnawing questions about unemployment in the
explains blueprint’s project leader, Charlie Melvoin.
wake of the financial crisis of 2008, and found an
“Hong Kong is too reliant on finance and property.
enthusiastic reception in Hong Kong.
Entrepreneurship was lacking, and building up the tech sector will nurture other kinds of businesses,”
“I was very impressed to see how much excite-
he says.
ment and interest there is in the tech scene,” says Hilary Szymujko, who arrived straight from Seed-
There are several reasons why the technology sec-
camp, the London-based pan-European accelerator,
tor and its start-ups deserve some help. High office
to take care of different aspects – such as mentors
rents are a major stumbling block for newly set-up
23
companies, and investing in technology has not
“People can work alone or in a shared space. We
been an attractive option in Hong Kong, compared
are not driven by money; we don’t need to cram
to the finance and property sectors.
people in. It’s very important to be inspired by the space you work in,” Bott says.
It was the management trainees at Swire Properties who came up with the idea of setting up an acceler-
Opening in January, the space on the 17th floor will
ator – a plan that neatly fitted in with the company’s
be taken up by an accelerator dedicated to 10 busi-
corporate social responsibility (CSR) objectives.
ness-to-business (B2B) technology start-ups from all over the world. Both floors have 24/7 access.
“Creating the project dovetails with [our objectives of] supporting start-ups and innovation. We have
The blueprint accelerator already has 16 partners
the space and expertise,” says Henry Bott, who
from web hosting to professional services, and more
takes care of blueprint’s business development.
than 70 mentors ready to link up with the chosen 10 start-ups, which will also receive help for testing
Swire Properties has made available two floors
their products and linking up with investors.
measuring 20,000 square feet in Cornwall House, Taikoo Shing. The 16th floor is a co-working space,
Szymujko says: “We are looking to build a com-
available for local start-ups for a HK$2,000 mem-
munity which will last longer, creating a group of
bership fee per month. Teams of three or more
friends and mentors throughout the globe.”
members only have to pay HK$1,000 per person. They will accept up to 300 members, expecting about 200 of them to use the office at one time. The open-plan co-working space has meeting facilities, a self-service cafe and telephone booths for privacy. It also offers a range of benefits, including free mail boxes, scanning and printing, guest passes, entry to events organised at the premises, highspeed and reliable Wi-Fi and discounts at Pure Yoga, East hotel and Vogue Laundry.
Henry Bott, Debbie Lau, Hilary Szymujko, Michelle Buultjens and Charlie Melvoin of blueprint Photo: May Tse
Inside Entrepreneurship
24
Incubation
ech’ t e l b a r a e w uild ‘ Start-ups b Simon Squibb, Nest
Photo: May Tse
BIEN PEREZ AIA Group, the largest insurer in Hong Kong, and business incubator Nest teamed up last month
to
launch
an
ambitious
accelerator
programme dedicated to assist entrepreneurs and start-ups focused on health-care-related wearable technology.
“This is a first for Asia. We are saying it’s harder to
12-week programme in Hong Kong that will mentor
get into this programme than getting into Harvard,
and support eight Asian participants to accelerate
but those who get in will have a support system like
the development of their wearable health-care-re-
no other in the region,” Simon Squibb, the founder
lated technology businesses.
and chief executive of Nest, says. Acceptance of applications began on November 18 Nest, which has invested about HK$30 million in
and will close on February 1, 2015.
local technology start-ups, also helps small businesses with further fund-raising, access to legal, ac-
The programme will start on March 2 and conclude
counting and human resources services.
at a “Demo Day” on June 4 when the participants will formally present their products and services to
The new “AIA Accelerator, powered by Nest” is a
an audience of international investors.
25
“
Smartwatches, smartglasses and fitness bands are the big-three device categories that will be driving the vast majority of global wearables growth in the future
“
Neil Mawston
“We noticed many start-ups approach us about
Amazon Web Services, a subsidiary of US e-com-
health-care-related wearable technology, and felt
merce giant Amazon.com will provide 12 months of
this is a segment that is ready to take off in Asia,”
online support, free training and courses on system
Squibb says.
architecture, administration of server operations and business applications development. Software giant
Research firm IHS forecasts that global shipments of
Microsoft will offer three years of free software,
wearable computing devices will reach 130.7 mil-
cloud computing services and joint marketing.
lion units by 2018, up from 51.2 million last year. This market comprises five segments: military, in-
“We are expecting a huge response to this entre-
dustrial, infotainment, fitness and health care.
preneurial support platform,” Squibb says. “After launching this successfully, Nest plans to develop
Squibb says Nest proposed teaming up with AIA
similar programmes next year. We hope that others
and had also approached other high-profile brands
will copy this model we have established to help
with a vested interested in the market segment.
more entrepreneurs in the region.”
AIA and Nest will arrange to have their own special-
Neil Mawston, executive director at consulting firm
ists and leading industry experts in wearable health-
Strategy Analytics, said in a report: “Smartwatches,
care technology mentor the eight start-ups selected
smartglasses and fitness bands are the big-three de-
for the programme.
vice categories that will be driving the vast majority of global wearables growth in the future. These are
The government-funded Hong Kong Science and
the main areas where we recommend manufac-
Technology Parks Corp will provide work space for
turers, retailers and mobile operators focus their
the start-ups. It operates three industrial estates, in
wearable investments.”
Yuen Long, Tseung Kwan O and Tai Po. Inside Entrepreneurship
26
Incubation
Shoring up techno STAFF REPORTER The Hong Kong start-up ecosystem has received new support by a partnership of Hong Kong Science and Technology Parks (HKSTPC), with local universities and start-up communities. Launching the TechnoPreneur Partnership Programme (TPP) on November 11, HKSTPC further extended its commitment to expanding its comprehensive support to technology entrepreneurs beyond the geographical boundaries of Science Park. On the same occasion, TecONE and Soft Landing Centre were also opened officially as enhanced services to back the start-up community. Witnessing the thriving growth of the city’s entrepreneur circle, HKSTPC spearheaded Allen Ma, HKSTP
the set up of TPP with 19 partners, including 13 start-up organisations such as CoCoon, Paperclip and Nest; and six local universities. These committed partners all pledged to establish closer ties to better serve young enterprises at large. Under this programme, HKSTPC will extend its comprehensive support and services to technology start-ups of the TPP partners located across Hong Kong; and technology enterprises in HKSTPC will gain access to the diversified resources provided by TPP partners. While creating greater syner-
27
opreneurs gy through resource sharing, TPP responds to the
of innovation and technology to the entire start-up
common needs and challenges faced by start-ups
community. This is crucial to accelerate our city’s
through a wide range of services which fall into six
technological advancement and enhance our com-
key categories: investment and fund raising, busi-
petiveness,” Ma added.
ness development, soft landing services and laboratory support, coaching and training, promotion and
Resonating with its mission to nurture technology
community outreach, and consultation for admis-
start-ups, HKSTPC also opened TecONE and Soft
sion of incubation programmes – all of which are
Landing Centre in Science Park.
crucial to start-ups at their inception stage. TecONE is a one-stop resource centre jointly set up Allen Ma, chief executive of HKSTPC, expressed his
and managed by HKSTPC and Hong Kong Produc-
excitement at the ceremony. “The start-up commu-
tivity Council (HKPC) and will provide technology
nity in Hong Kong has been flourishing in recent
SMEs with comprehensive advisory services such
years. For example, according to figures from Com-
as public funding schemes, industry support pro-
panies Registry, the number of newly set-up private
grammes and business financing, all of which are
companies has recorded a sharp increase of 76
significant for fledging businesses.
per cent over the past five years, skyrocketing from 98,000 in 2008 to 173,000 in 2013. The number of
Soft Landing Centre provides a flexible “home-
start-ups in town have also soared from less than 10
base” environment for technology companies from
two years ago to 37 today, which is almost a quad-
around the world to explore the markets of Hong
ruple increase. At HKSTPC, we have been receiving
Kong, mainland China and the Asia Pacific region.
enthusiastic response from start-ups enquiring and
The centre offers a great opportunity for users to
applying for our incubation programmes,” says Ma.
make the most out of the vibrant community with close to 500 technology companies in Science Park,
“Given the rising entrepreneurial spirit in Hong
to exchange ideas and explore collaboration with
Kong, by launching TPP we are building one of the
like-minded industry talent. Likewise, the centre
most extensive networks for technology entrepre-
will be a great platform for local start-ups to get con-
neurs in Hong Kong. This marks a great leap forward
nected with foreign counterparts and explore joint
for [HKSTPC]. Through connecting the industry, fos-
partnerships. Furthermore, professional consultants
tering collaboration and nurturing talent, Science
will be providing legal and accounting advisory ser-
Park is no longer just a technology hub in Shatin,
vices on a regular basis at the centre.
but a robust base that radiates the vibrant ecosystem Inside Entrepreneurship
28
Opinion
ded n u f g ttin e g t ’ isn p u MARIE SWEETMAN t r a t s r u Why yo
Photo: iStockphoto
29
No one wants to pour money into an idea that has
Does your idea rely 100 per cent on another prod-
no guarantee of succeeding. If you are desperate for
uct? For example, have you created a plugin that
funding for your start-up, you might already have
increases or improves Tumblr’s messaging system,
started off on the wrong foot. Investors want to fund
with the hope to gain enough popularity for the
ideas that will not require extreme risks or experi-
parent company to purchase the product? Think
mentation. You need to do the work to make your
again. Most big companies will end up fulfilling that
idea seem like (or actually be) a safe bet.
need themselves rather than searching for outside help. Furthermore, an end-game of acquisition is
There are a few signs outlined below that might help
short-sighted and makes your start-up a far greater
clarify why your start-up isn’t getting funded. None
risk for potential investors.
of these signs mean that your start-up is doomed, but if you find that your company exhibits two or
Are you going it alone? While many companies have
more, it might be time to reconsider the likelihood
just a single founder, it is far more common to see
of securing funding.
funded start-ups with two or three. There are several reasons that this trend exists. First, what if something
Are there other companies who do something –
happens to you? An investor doesn’t want to be left
similar to what you’re doing? It could be a bad sign
with no one to pick up the slack. What’s more, hav-
if there aren’t. This might seem counterintuitive –
ing co-founders shows that other people believe in
“My idea is highly original!” – but most start-ups
this idea; it’s convincing if there are people willing
actually alter or interrupt existing business rather
to stand with you and fight for this start-up. Finally,
than invent a new kind. Investors like to see start-
investors know that no single person can do any-
ups that shake up the industry. It helps them make
thing on his or her own. Your strength in one area,
favourable comparisons and predict growth.
e.g. programming, won’t necessarily translate to sales. Investors need to know that the start-up has a
With start-ups, you should think of growth
solid team to support it.
in terms of exponential rather than linear. If your growth is slow but steady, this is a
Finally, have you made any money? Venture cap-
much less exciting proposal for venture
italists want to support ventures that are going to
capitalists than exponential expansion.
be profitable. It’s hard to prove profitability without
And, contrary to popular belief, you do
some money already in the bank. If you’re having
not actually need funding to kick-start
trouble generating revenue, then your idea may
exponential growth. Funding has
be unfundable.
proven unlikely to affect the growth track of a company.
Inside Entrepreneurship