With the success of start-ups like Facebook and Uber,it's no wonder more young people are finding it attractive to dive into Singapore’s buzzing start-up scene. Liu Kai Ying ventures into the local community to find out more.
With the success of start-ups like Facebook and Uber,it's no wonder more young people are finding it attractive to dive into Singapore’s buzzing start-up scene. Liu Kai Ying ventures into the local community to find out more.
Walking into SPH Plug and Play feels a little like entering a corporate wonderland. Dotted with colourful and modern furniture, the start-up accelerator at One-north features an open-concept office and even has a coffee bar manned by a barista.
“Grab a coffee. It’s free,” says Jeremy Lim, who works for SnapAsk Singapore, a mobile tutoring app. When I ask about his position in the company, the straightforward 27-year-old says that while he’s the Chief Operating Officer, he doesn’t relish the title. “It’s very pretentious,” he says.
Jeremy has been working at SPH Plug and Play for close to 10 months. It was started by Singapore Press Holdings, Infocomm Development Authority (IDA) subsidiary Infocomm Investments (IIPL), and Plug and Play, a global start-up accelerator from Silicon Valley.
Donning a casual outfit of a denim shirt and jeans, Jeremy shares his story, which is slightly reminiscent of the likes of Mark Zuckerberg and Steve Jobs, who both dropped out of a traditional academic route to pursue their start-up ventures. “I was kicked out of junior college. I was retained in secondary school. I didn’t study and screwed up my exams. [I used to] play soccer and party every day. Then I realised I could make a few grand from organising parties for teens. It wasn’t a lot of money, but to a 17-year-old, it was a big deal,” says Jeremy.
That was Jeremy’s first try at entrepreneurship. Since then, he has dabbled in two other businesses, and SnapAsk is his third attempt at managing a start-up. “It comes with a huge amount of satisfaction after you hit a certain level. When you start being able to pay yourself a salary, it’s [tantamount to] building your own career. That, to me, is more meaningful than seeking a career from someone else. A lot of people have tried to talk me out of this and said, ‘Hey, you’re turning 30 soon, why don’t you get some stability and work [for someone]?’ Even my parents have become less supportive. They keep telling me to join an MNC. But it’s really the satisfaction that [keeps me working for start-ups]. You just have to believe that it’ll turn into something meaningful,” he says.
Jeremy is not alone when it comes to receiving a lack of support from family and friends. Josephine Chow, who used to work for Zalora and is now the Country Head of e-tailer ShopBack, is also used to getting flak for giving up a profitable job to join a start-up. “When I left Zalora [to join ShopBack], my parents asked me, ‘Why are you going into another start-up? What are you doing to yourself?’ It was not easy to tackle this, but I decided to go for it anyway, because I really enjoy the start-up life.”
For Josephine, a sense of adventure is what appeals to her. She joined Zalora soon after she graduated from university and left for ShopBack five years later because she missed the excitement of being in a new start-up. “It’s the mess you need to clean up that’s always exciting. You are sort of thrown into the battlefield and you have to pick up a hammer to arm yourself. [It’s all about] setting up the team, setting up processes, and finding new ways to grow the business in the most effective way.”
“You are sort of thrown into the battlefield and you have to pick up a hammer to arm yourself.”
Getting granted
Housed in an industrial building just opposite Jeremy’s office, it’s hard to imagine that ShopBack, which grew from a team of six to over 50 in one and a half years, almost didn’t happen. “We looked for support from government institutions when we first started, but we got rejected. It was really a stab in the heart back then, and it pumped us up to be more resourceful and to strengthen our proposal and business position. We actually have the rejection letter on our wall just to remind ourselves [of that lesson],” says Josephine.
Grants are highly sought-after by start-up founders as they provide the company with money needed to kickstart their ideas. As many founders are young and relatively new to the working world, they may not necessarily be able to fork out their own capital or apply for sufficient bank loans to help them build their companies.
As mentioned above, one of the main sources of grants is government institutions. In his speech at the Economic Development Board Society’s 25th anniversary dinner last year, Deputy Prime Minister Tharman Shanmugaratnam spoke of the government’s aim of creating a “valuecreation” economy that strives towards innovation. To achieve this, various initiatives have been set up to boost the start-up ecosystem in Singapore. Between the years of 2008 to 2015, for example, the National Research Foundation (NRF) invested $41.3 million in start-ups.
Other institutions that offer a helping hand to budding entrepreneurs include universities, private entities like banks, and also SPRING Singapore, which is a statutory board under the Ministry of Trade and Industry. For instance, art guide app ArtHop is a start-up that benefitted from a two-year grant from SPRING Singapore. Its founders applied for ACE Startups Grant, which is a co-matching grant where the government pumps up to $50,000 into the start-up. In return, they have to meet various milestones that were set for them at the beginning.
“These milestones are something that you and SPRING will need to decide on together. It’s not something that applies to all start-ups, but it’s based on each start-up’s strengths and how their business works. [Some] requirements for this grant are, number one, your product must be entirely new in the market or, number two, it has a very different approach towards a current product in the market,” says 24-year-old ArtHop co-founder Grace Hong.
According to Grace, some perks of the grant include having access to experienced mentors and opportunities to get plugged into the start-up ecosystem via events and workshops. To continue to qualify for the grant, she also has to submit a progress report regularly as funds from the ACE Startups Grant are given out in three tranches. This pushes Grace to meet the milestones set in the beginning and to continually ensure SPRING Singapore that her business model is a feasible one. In the case that her business model pivots, she would have to meet with SPRING Singapore to discuss milestones again.
Schools are also a popular alternative for some start-ups to get the funding they need. Set up by three 26-year-olds, mobile marketplace app Thinges looked to Nanyang Technological University for support at the start.
Besides the plethora of sources for grants, a strong infrastructure and the relatively high spending power of consumers make Singapore a hotbed for start-ups. “Many start-ups actually set their ground here first. [In terms of] infrastructure, everything here is very sound. People are willing to spend, especially on the online industry. They have spending power and are able to use different payment methods. This helps to push Singapore forward,” says Josephine.
“Besides the plethora of sources for grants, a strong infrastructure and the relatively high spending power of consumers make Singapore a hotbed for start-ups.”
Worthy sacrifices
Besides getting the necessary funding, there are other challenges that the start-up community faces. One of them is pushing through to the next stage after receiving a grant. Even though having a wide pool of sources for budding entrepreneurs to obtain their seed funding sounds great, Jeremy feels that it may not be the best thing for potential start-up founders. “We just end up having, what some people call, ‘grantrepreneurship’, where it becomes very easy to launch something but not necessarily to see it through. The jump from the seed funding stage to the next level is huge, and I’ve seen many people fall out at that stage,” he says.
On top of resisting the temptation to give up, many start-up owners are also choosing to survive on a minimum to invest more into their business. “If you care for the business, whatever you earn, you will want to pump it back so you can hire more people and pay them as much as you can to retain their services. This usually happens until you reach a certain point where it becomes comfortable, and then you start paying yourself a little. My previous start-up ran for almost two years, but it was only in the last six months that I started paying myself,” says Jeremy.
Under their funding scheme, the founders of Thinges are only allowed to draw a maximum of $1,000 a month for their own expenses. Cheryl Liew, a co-founder, reveals that she took a pay cut of more than half of her previous salary as an Android developer to join Thinges.
“The number one challenge of starting a start-up is, you’re going to have to survive on your miserable savings for a period of time – at least until you can pay yourself,” says Cheryl. “I learnt that a lot of things I used to buy were unnecessary. I thought I needed them, but now I realise I didn’t. [The pay cut] really sets you back and makes you go back to basics like figuring out [how to save on] food and optimise your pay cheque.”
What it takes
Needless to say, the business of startups is not for everyone. Besides drawing a low salary at the start and having to hustle even when times are hard, a start-up founder has to be completely dedicated to his or her cause throughout. “You need to really believe in the business model you came up with, and take a leap of faith,” says Josephine. “And sometimes, you have to close both ears and just go for it, because if you don’t, then you’ll never know.”
Even if the venture fails, Jeremy feels that it’s fine because failure is a good opportunity to learn. “You’re still young, so you can keep trying different things until you find your passion at something you are truly good at, and you stick to it through and through. Even today, I’m still searching,” he says.
In addition to a solid dose of determination, Thinges co-founder Aloysius Ang thinks a start-up founder needs two special qualities: “A bit of craziness, a bit of stubbornness. Because that’s what’s going to hold you there for a while.”
"The number one challenge of starting a start-up is, you’re going to have to survive on your miserable savings for a period of time – at least until you can pay yourself.”
