As National University of Singapore
students drifted to the college bar for Wednesday’s “Ladies
Night,” Ishan Agrawal sat in his dorm’s common room, working
out how to harness the Internet to fight corruption in India.
Agrawal, 22, is one of 90 hand-picked students at N-House,
a residential block modeled after the dorms of California’s
Stanford University that housed Google Inc.’s Larry Page and
Yahoo! Inc. co-founder Jerry Yang. Their Wednesday evenings
brainstorming new ideas or pitching to potential investors are
part of a S$16 billion ($13.1 billion) effort by Singapore’s
government to build a tropical Silicon Valley.
“It’s like a big dating party, bringing everyone together,
which is what Silicon Valley does,” said Agrawal, from Dehradun
in northern India, who interned for a year at a startup in the
San Francisco Bay area and took classes at Stanford as part of
the program. “Here, you sit in the kitchen and discuss
entrepreneurship ideas. You discuss entrepreneurship in the
bathroom.”
Singapore became Southeast Asia’s only advanced economy by
moving up the technology ladder, turning a trading port into the
region’s biggest banking center and a manufacturer of
electronics, petrochemicals and pharmaceuticals. Now, the nation
is looking to gain a bigger share of a software industry that
raised $28 billion in initial share sales last year.
N-House, which opened in August 2011, is one strand of a
five-year plan by the government that includes offering new
technology companies grants of as much as S$500,000, supporting
venture capital funds, and encouraging high schools to teach
business and entrepreneurial skills, in an effort to groom the
next Mark Zuckerberg, co-founder of Facebook Inc.
‘Something Different’
“Singapore looks quite favorable,” said Josh Lerner, a
Harvard Business School professor who has written about efforts
to boost entrepreneurship. “If a program doesn’t work, they’ve
been willing to abandon it or fine-tune it and try something
different.”
So far, successes have been few. Standard-bearer for the
program is Darius Cheung, 31, who sold his first company, a
security program that protects mobile phone data, to McAfee Inc.
for more than $10 million in 2010.
His latest company, BillPin, is among more than 100 located
in a refurbished public housing block called Blk71 funded by the
government and Singapore Telecommunications Ltd. (ST), the nation’s
largest telecoms company. BillPin allows users to divide shared
expenses like rent and bar tabs via an Internet account.
Free Advice
Blk71 companies get subsidized office space and free legal
and accounting advice. They share office space with Edgar
Hardless, chief executive officer of Singtel’s S$200 million
venture fund, which backs mobile-related startups. More than 90
percent of the tenants are developing Internet-based software
and mobile apps, said Lily Chan, chief executive officer of NUS
Enterprise, who helped develop N-House and Blk71.
Singapore is “a relatively good place to be doing a tech
startup,” said Cheung. “The talent pool, the capital — it’s a
lot more available than when we first started.”
With more Internet-connected mobile phones and residential
broadband subscribers than households, the island makes an
excellent test-bed, said Andrew Roth, who relocated to Singapore
in 2011 from Hawaii. His Perx application, designed to replace
store loyalty cards, is backed by Facebook co-founder Eduardo Saverin, who moved to Singapore in 2009 and renounced U.S.
citizenship last year.
Saverin, now a permanent resident of Singapore, introduced
the startup to Singtel, Roth said, leading to a partnership
announced in October where the telecoms company bundles the
program with other apps.
Getting Out
While Singapore’s level of development helps test new
programs, some companies find its size limiting.
“One of the targets we set was to be out of Singapore
within six months,” said Vincent Ha, who moved his company
Gushcloud to California. The program gets social media users to
help retailers advertise in exchange for store discounts and
benefits.
“We thought we knew everything, but when we went to
Silicon Valley we realized that there are thousands more trying
to solve the same problem,” he said.
While revenue from Singapore’s information-communications
industry has more than doubled to S$83.4 billion between 2001
and 2011, the share of revenue from software has slipped to 14
percent from 25 percent, according to the government’s Infocomm
Development Authority.
Singapore has spent S$50 million on about 140 technology
projects over the past four years through a grant program that
offers companies up to S$500,000, according to Teo Ser Luck,
minister of state for Trade and Industry. Six out of 10
companies that completed their projects were able to secure
initial customers or follow-on funding, or both, said Teo, who
also chairs the Action Community for Entrepreneurship, or ACE.
Conscious Choice
“There are more jobs than workers, so there are many who
need to be encouraged to make a conscious choice to be an
entrepreneur,” he said in an e-mail. “We are breeding a group
of young entrepreneurs who are open to and embrace technology.”
ACE has approved 37 applications for its smallest business
grant, S$50,000, since last February, Teo said.
“We’re pretty liberal about approving them,” said
Billpin’s Cheung, who sits on the grant committee. “Relative to
any other country, Singapore is definitely right there at the
top in terms of how easy it is to get initial capital.”
That may be a drawback, according to Palo Alto, California-
based venture capitalist Adeo Ressi, whose Founder Institute
helps startups in 37 cities, including Singapore.
‘Best Job’
“Singapore has done the best job of any government to
spawn an entrepreneurial ecosystem,” said Ressi, who travels to
the city about three times a year to meet with government
officials. “However, I think they’ve gone a little bit too far
in making it easy. If they can’t actually raise money from
people privately, they probably aren’t worthy of being in
existence.”
The island of 5 million people, ranked the easiest place to
do business for seven straight years by the World Bank, is the
second-easiest place in Asia after Hong Kong for entrepreneurs
to gain access to capital, according to a study by the Milken
Institute published in 2010.
Singapore’s program is partly modeled on the success of
Israel. In 2008, when Singapore’s President Tony Tan was
chairman of the National Research Foundation, he flew to Tel
Aviv to learn how the Mediterranean country had spawned Internet
innovations like instant messaging and software firewalls.
Private Funding
In Israel “the presumption was within a couple of years,
you were basically supposed to get funding from the private
sector and off you go,” said Augusto Lopez-Claros, the World
Bank’s director of global indicators and analysis, who has
written about Israel’s innovation programs.
Singapore chose a middle route, continuing funding of
chosen startups as long as they also are able to get capital
from private investors.
Other Asian nations also are trying to foster startups.
Taiwan’s National Youth Commission lent a record NT$2.1 billion
($72 million) to 2,661 young entrepreneurs in 2011, according to
the agency’s website. In contrast, China and India, the region’s
biggest economies, spawned global software companies such as
Baidu Inc. and Infosys Technologies Ltd. with little initial
financial backing from the government.
Changing Model
Targeting home-grown startups is a departure for
Singapore’s five-decade-old economic policy of attracting global
companies such as Exxon Mobil Corp. (XOM) to set up plants and offices
in the city-state.
Information and communications makes up 4 percent of the
nation’s gross domestic product, compared with 21 percent from
manufacturing and 26 percent from finance, insurance and
business services. The government aims to foster five local
enterprises with annual revenue of more than S$1 billion,
according to a research paper by the Ministry of Trade and
Industry.
“We will continue with our strategy of foreign direct
investment,” said Low Teck Seng, chief executive officer of the
National Research Foundation, the country’s research and
development body which works out of Prime Minister Lee Hsien Loong’s office. “At the same time, if our innovation and
enterprise efforts are successful, there will be a pipeline of
companies that grow.”
Trying to move the country to productivity-driven
industries from labor-driven ones will take time, said Euben
Paracuelles, a Singapore-based economist at Nomura Holdings Inc.
“It’s going to take a while to show up in the economic
numbers but this is probably the right path,” said Paracuelles.
“There’s going to be a transition period.”
Supporting Research
The prime minister said the government would spend S$16.1
billion to support research, innovation and enterprise over the
five years to 2015. The city-state plans to raise research and
development spending to 3.5 percent of gross domestic product by
2015, similar to Sweden and South Korea, from 2.3 percent.
To achieve the goal, Singapore will have to change its
culture, according to Chan at NUS. The island came in last among
20 entrepreneurial hubs, including Silicon Valley and Bangalore,
in terms of having the right mindset, according to a global
survey of 50,000 startups by Startup Genome and Telefonica SA. (TEF)
While Silicon Valley has it, “it’s taken them 30 years to
get to where they are today,” said Chan, a former managing
director at one of the Singapore Economic Development Board’s
investment wings. “We don’t have it in Singapore. Once you have
that, the government policies can pull it all together. So we
have to engineer that culture.”
To help the change, the government said in November it
would spend S$15 million over the next three years in the
nation’s schools to encourage potential entrepreneurs, including
visits by executives, on-site incubators, internships and
S$10,000 student grants.
“No one forces us to work on ideas or create companies or
anything,” said Agrawal at N-House. “It’s more like if there’s
a nerd group they are going to talk about these kinds of things,
so it comes very naturally to all of us.”
To contact the reporter on this story:
Sharon Chen in Singapore at
schen462@bloomberg.net
To contact the editor responsible for this story:
Stephanie Phang at
sphang@bloomberg.net
Singapore Joins Hunt for New Zuckerberg With Stanford-Style Dorm
NUS Enterprise via Bloomberg
Aspiring entrepreneurs from NUS Enterprise discuss ideas with an alum, right, from the NUS Overseas Colleges program and iLEAD program in the common room at N-House, Singapore.
Aspiring entrepreneurs from NUS Enterprise discuss ideas with an alum, right, from the NUS Overseas Colleges program and iLEAD program in the common room at N-House, Singapore. Source: NUS Enterprise via Bloomberg
Billpin founder Darius Cheung
NUS Enterprise via Bloomberg
Darius Cheung is the founder of Billpin, which is among more than 100 companies located in a refurbished public housing block called Blk71 funded by the government and Singapore Telecommunications Ltd.
Darius Cheung is the founder of Billpin, which is among more than 100 companies located in a refurbished public housing block called Blk71 funded by the government and Singapore Telecommunications Ltd. Source: NUS Enterprise via Bloomberg
Singapore Joins Hunt for New Zuckerberg With Stanford-Style Dorm
NUS Enterprise via Bloomberg
People work at the hot-desk area of Blk71 in Singapore. Blk71 companies get subsidized rent and free legal and accounting advice.
People work at the hot-desk area of Blk71 in Singapore. Blk71 companies get subsidized rent and free legal and accounting advice. Source: NUS Enterprise via Bloomberg
Singapore Joins Hunt for New Zuckerberg With Stanford-Style Dorm
NUS Enterprise via Bloomberg
Entrepreneurs and aspiring entrepreneurs are engaged at one of Blk71′s BarCamp, an unconference event where participants share about their business and product development in Blk71, Singapore.
Entrepreneurs and aspiring entrepreneurs are engaged at one of Blk71′s BarCamp, an unconference event where participants share about their business and product development in Blk71, Singapore. Source: NUS Enterprise via Bloomberg
Singapore Joins Hunt for New Zuckerberg With Stanford-Style Dorm
NUS Enterprise via Bloomberg
Entrepreneurs and aspiring entrepreneurs are engaged at one of Blk71′s BarCamp in Blk71, Singapore.
Entrepreneurs and aspiring entrepreneurs are engaged at one of Blk71′s BarCamp in Blk71, Singapore. Source: NUS Enterprise via Bloomberg
Singapore Joins Hunt for New Zuckerberg With Stanford-Style Dorm
Munshi Ahmed/Bloomberg
Singapore has spent S$50 million on about 140 technology projects over the past four years through a grant program, according to Teo Ser Luck, minister of state for Trade and Industry. “We are breeding a group of young entrepreneurs who are open to and embrace technology,” he said.
Singapore has spent S$50 million on about 140 technology projects over the past four years through a grant program, according to Teo Ser Luck, minister of state for Trade and Industry. “We are breeding a group of young entrepreneurs who are open to and embrace technology,” he said. Photographer: Munshi Ahmed/Bloomberg
Singapore Joins Hunt for New Zuckerberg With Stanford-Style Dorm
Munshi Ahmed/Bloomberg
“In Silicon Valley the culture is there, it’s taken them 30 years to get to where they are today,” said Lily Chan, chief executive officer of NUS Enterprise. “We don’t have it in Singapore. Once you have that, the government policies can pull it all together. So we have to engineer that culture.”
“In Silicon Valley the culture is there, it’s taken them 30 years to get to where they are today,” said Lily Chan, chief executive officer of NUS Enterprise. “We don’t have it in Singapore. Once you have that, the government policies can pull it all together. So we have to engineer that culture.” Photographer: Munshi Ahmed/Bloomberg
Singapore Joins Hunt for New Zuckerberg With Stanford-Style Dorm
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