Opinion

Which city is better at attracting creative start ups – Singapore or Hong Kong?

Simon SquibbSimon Squibb is founder of investment firm Nest (not to be confused with the thermostat company recently acquired by Google) and is also founder of Hong Kong creative agency Fluid. 

In this interview with Mumbrella’s Asia editor Robin Hicks, the Hong Kong-based entrepreneur wonders if – contrary to many views on the subject – Hong Kong is doing the better job at attracting start ups in the creative industries than its old rival, Singapore.

How do you feel Singapore and Hong Kong compare in terms of the infrastructure and incentives their respective governments offer creative start ups?

Hong Kong and Singapore are always compared to one another in terms of what they offer start ups. Both governments have recently been stepping up incentives provided to entrepreneurs and business founders. Government funding in Singapore is easier to come by, with one program offering up to half a million dollars when the start up gets $80,000 in private funding. This, however, may not always be a good thing in my experience. Start ups who are more hungry for capital are more desperate, and as a result much more dedicated and focused on success.

Hong Kong is said to have been falling behind Singapore in terms of the number and profile of creative start ups emerging on the regional stage. Would you agree, and what do you feel the HK government needs to more to catch up?

Singapore’s government has been known to put more of the country’s capital (2.2 per cent) at work behind technology and innovation. Hong Kong’s government, which only puts 0.73 per cent of the city’s GDP into R&D, needs to step up in this respect.

As always, private enterprise in Hong Kong is more than capable of filling this gap. And, again, frankly better businesses are funded by investors who are betting with their own money than governments betting with tax payers money, in my view.

That does not mean to say the governments of Hong Kong and Singapore should not both make investment in infrastructure to support the start up eco-system and help stop what I call “quiet brain drain”. What I mean is, we entrepreneurs go to places like Israel, London and Silicon Valley where we can get more support, when we could from setting up in Singapore or Hong Kong instead.

These locations have a strong start up mindset, they have strong anti-monopoly laws that allow start ups to disrupt the status quo, and they respect entrepreneurs and the huge upside in brand exposure (for a country), jobs and income they can benefit from.

Which creative start up in Asia do you admire the most for how they’ve gone about starting and building their business?

Alibaba. What is amazing about this company is not only its rise from nothing to a 200 billion dollar company based on a (now) obvious idea, but also the fact that it can show the West the potential future of start ups coming out of Asia and what they are capable of achieving.

Also, many say this Asian start up has saved Yahoo as much of the Yahoo share value today is attributed to their stake in Alibaba.

What is also incredible is that Yahoo invested in Alibaba in the way they did. Jack Ma [Alibaba’s founder] did what many have not been able to do – convince big brands with power (Yahoo) for their own good, to look beyond their US boarders and invest in an Asia play.

Lucky for Yahoo they did, or some say Yahoo would be finished and would not have had the funds or the pulling power to bring in the likes of Marissa Mayer as CEO, who is said to be slowly turning Yahoo around.

Beyond Asia, I would say LinkedIn impresses me. I do love Reid Hoffman (the founder) for quotes like “building a startup is like jumping off a cliff and trying to build a plane on the way down” – so true! Plus they they had a revenue model from day one (so many don’t have any – and they have had three!) that so many said would not work. And although it took nine years from idea to IPO, they stuck at it and made it happen on all levels. Also, LinkedIn is one of the few companies to under sell themselves in the IPO pitch and go on to outperform their pitch to investors when they floated.

It’s an amazing company and has delivered great returns for investors (at every stage), while also building something of real use for millions of people. LinkedIn has changed an industry (recruitment) and done so against all the odds.

You’re an entrepreneur having launched Fluid some years ago. What do you feel are the perfect conditions in which to launch a start up?

The external conditions are never as important as your passion for your idea. Of course the business you build has to be something that people truly want and need. But beyond that it is about believing in your business and surrounding yourself with people with skill sets that compliment your own.

Do you feel that 2014 will be a good or bad year for start ups in this region?

This year will definitely be a good year for start ups in this region. Recognition for this space continue to grow and an increasing number of entrepreneurs are setting up their companies here in Hong Kong, and the quality of start ups we are seeing continues to improve.

We are all very hopeful for the potential of 2014 and I am putting everything I have into making it happen in Hong Kong. So clearly I believe it is going to be a big thing in Asia in the future as it already is in places like the US.

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