Singapore & Silicon Valley

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I received an email interview request from a reporter at Business Times after meeting and chatting with her at yesterday’s Tech Venture event. I decided to reproduce my responses for the purpose of record and transparency, and hope that it can maintain the quality of conversation that our nascent ecosystem needs.

Hey James, nice talking to you yesterday at TechVenture.
Q1 Were you serious about helping with my SV story? Haha.

I’m always serious ;-).

A couple of questions for you, if you may:
Q2) How long were you at SV? And doing what?

I was there for grad school (Stanford) from 2005 – 2006 and again for work between 2007 – 2009 when I was working at Infocomm Investments, visiting venture-funded startups every other month to try to convince them to set up software engineering teams in Singapore. Since 2010, I’ve visited at least once a year to keep in touch with our fund’s investments in the US.

Q3) In SV, did you notice more Singaporeans moving there for work?

It wasn’t as obvious from over there since the Valley is filled with immigrant engineers of which Singaporeans represent a minute fraction.

It got a lot more obvious after I returned to Singapore in 2006 and tried to wrap my head around the shortage of startup-compatible software engineers in the Singapore tech ecosystem. I noticed that software engineers above a certain quality/talent level who were sufficiently exposed to western tech media, tended to aspire to leave Singapore (small fish pond) for SV (cutting-edge large homogenous market) to work at startups there. Many of them cite the higher standards of software engineering, higher salaries, better quality of life (cheaper car + house, more room to explore physically/mentally, be different and be accepted) and greater respect for software engineering as a profession as major pull factors.

I have many Singaporean friends who are now working in SV startups ranging from the more well-known ones like Google, Twitter and Quora, to the less known but equally awesome ones such as Kicksend. I also have seniors from my secondary and junior college days who stayed in the US and are still working at Apple and Nvidia.

Q4) Why is SV great / not great?

It’s great, period. Everyone wants to emulate SV, and everyone has failed to date.

It’s the only spot in the world that has consistently delivered globally relevant and successful companies and kept up with its virtuous cycle of paying it forward, and celebrate failure as much as it celebrates its successes. They’ve managed to suspend reality in a zone between San Francisco and San Jose as entrepreneurs and capitalists pursue often-impossible dreams, and backed by capital sources that understand that with high returns come high risk.

Q5) Do you think Singapore is the SV of Asia, like many articles claim?

No way, far from it. The “Silicon Valley of” label carries with it a heavy burden of expectations that we’re still far far away from. Our own ecosystem bled out after many startups here just about missed out on the IPO boom post-dot-com-bust at the turn of the century and again during the telecom bust; talent bled out as they sought to even out their individual opportunity costs. We’re only just beginning to see a revival of key elements in our ecosystem over the past 2 years – designers, engineers, entrepreneurs, capitalists, investments, acquisitions – yet much more remains to be done by us collectively before we can look back in the annals of history and claim Singapore to be the SV of Asia.

A more appropriate term could be to call Singapore the “SV-of-Southeast Asia in the making”; we’re not able to claim SV of Asia when we’re faced with the gravitas that are the 2 large markets of China and India, north and west of us, and smaller but still significant markets of Japan and Korea. There’s also only 1 Silicon Valley. Singapore will have to form its own basis for relevance amidst Southeast Asia. At best, we can try to become the SV of Southeast Asia, by fostering stronger interactions between Singapore’s ecosystem and other large markets around us, such as Indonesia, Philippines, Thailand, Vietnam and Myanmar.

Give us time, grant patience to bureaucrats to avoid constant course corrections when it comes to their ecosystem and innovation efforts, and wish upon us all a strong dose of luck, and we might just get there.

Q6) I can hear you snickering already, haha. But thanks anyway!

I don’t like snickers. I prefer to take a break and have some Kit Kat!

NRF TechVenture 2013 starts with extra S$50M for Series A

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NRF’s marquee event, bringing together entrepreneurs, capitalists and researchers, kicks off at 9am at the Suntec Convention Hall 403/404 with a short speech from Deputy Prime Minister Teo Chee Hean, announcing an infusion of S$50M in 1-to-1 matching for early stage venture funds.

Details are scarce for now since we’re less than 10 minutes post-announcement, but based on my observation of government innovation and commercialisation initiatives, this sounds like a refresh of NRF’s 5-year old Early Stage Venture Fund started in 2008 that I previously tracked. From that vintage, we saw 6 funds appointed by NRF which would receive S$10M if each fund raised at least S$10M. Of those 6 funds, I believe only Walden International’s Seed IV S$20M fund was actively investing in the TMT space. From Walden’s ESVF fund came investments such as Brandtology, HungryGoWhere, iTwin, Y-Find and Clozette, of which it saw exits from its investments in Brandtology, HungryGoWhere and YFind.

The new announcement will probably go some way to bridging the commonly bandied “Series A funding gap” in Singapore and hopefully give deserving early stage startups the extra working capital to build innovative and regionally or globally relevant technology companies that exit in some form or fashion, and return value to founders, employees and investors. The onus is now on NRF to execute on the ESVF refresh quicker than their first time round in 2008, and hopefully pick more experienced fund managers with strong track record and vested interest in the success of technology companies in the Singapore ecosystem.

Back in 2008, there weren’t that many startups in the seed stage funnel looking to raise their Series A. I’d say NRF had put the cart before the horse by launching their ESVF ahead of TIS back in 2008. Now that there are 90+ or even over 100 TIS incubated startups in the ecosystem, we don’t have 5 more years to get the ESVF right. Everything has to be seamlessly executed to avoid flushing all that good work of revving up our early stage technology scene down the Drain of Broken Dreams.

I’ll end this blurb with some photos from the opening of TechVenture 2013. Till next time.

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US$200M Viki acquisition by Rakuten makes me beam

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Well well, I guess someone forgot to draw the string on the proverbial bag and let the cat out earlier than it was supposed to. Kara of AllthingsD got the scoop; lucky her!

By now, Viki’s purported US$200M acquisition by Rakuten is all over Singapore’s online tech news, Facebook and Twitter. I’ve also been inundated by well wishes and congratulatory back slapping, both online and off. A friend (or two) was also respectfully curious about how much dough I made personally from this transaction. Another friend thought I became a millionaire overnight, which is a nice thought, but probably untrue.

What’s certainly true is Terence Lee’s comment in his follow-up op-ed piece on SGE:

As such, Viki’s exit is considered good news for the region’s angels and pre-Series A investors of the NRF-TIS vein. Silicon Straits’ (formerly Neoteny Labs) James Chan must be beaming. It pushes boundaries of what’s possible here and signals that Southeast Asia may soon see even larger exits.

I am indeed beaming, not because investors made money alongside Razmig and his team, not because Viki is going to blossom even more as part of the larger Rakuten family, but because this acquisition/exit debunks a couple of widely held myths and pegs Singapore’s tech ecosystem critics and boo boys back a good several notches.

  1. It is not possible to build a world-class internet company from scratch for the world, out of tiny Singapore. You do need to start with a strong team, idea and that little bit of luck to get yourself an awesome investor list, continue executing and get over the finish line. Peng Ong would be proud.
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  2. Software startups need less more money than the government thinks it needs to succeed, especially in an off-balanced risk capital industry backstopping a nascent startup ecosystem. Some of us were recently told by certain segments of the Singapore Government as part of their policy review and realignment that “software startups need less money to go-to-market” when compared to hardware and biomedical startups. They’re only partially correct; software startups typically require less capital than most biomedical startups to get out of the door, but are now on par with hardware startups. This is because platforms such as Kickstarter are providing bootstrapping hardware entrepreneurs with a non-dilutive source of working capital, driving their capital efficiency to be almost equivalent to software ideas. I still think software startups are slightly more capital efficient than hardware startups, which have to deal with inventory, returns and in general more ‘physicality’. Also, let us not forget that Singapore isn’t exactly the cheapest place to hire top-tier software engineering talent willing to give their best at high-risk startups; ask Viki’s founders, they would know. I fondly recall running around helping Razmig to get set up and hire Singapore’s l33t RoR hackers for Viki’s early engineering team when they first set up shop in Singapore in mid-2010. Prior to Viki’s Series A, it had raised well less than S$589,000 and didn’t have anyone on full-time employment. It went on to raise US$4.3M for its first institutional round in Q3 2010, with majority of its Series A coming from Charles River Ventures, Greylock Partners and Neoteny Labs, with my partner Joi Ito joining the Viki board. It then raised a US$20M Series B in Q4 2011 before eventually selling in Q3 2013 for a supposed US$200M. Viki would not have gotten enough working capital to attract the necessary talent and scale quickly if it had chosen the usual Singapore entrepreneur’s path, i.e. take S$50K from iJam to start with, followed by S$250K for SPRING TECS POC, maybe S$500K from SPRING TECS POV, then S$589K from incubators under the NRF TIS, and then S$1M to 2M from funds under the NRF ESVF. Help of any form is always appreciated by entrepreneurs, but some form of help, while well-intentioned, can inadvertently crimp entrepreneur ambitions or attract the wrong sorts of entrepreneurs; a lot more can be done to structurally reform the Singapore Government’s startup equity program.
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  3. Venture capital can be unattractive as an alternative asset class to fund managers. I’ve tried and failed to interest fund managers in Southeast Asia who found the 7-to-10-year lock-in by venture funds to be unappealing when compared to their usual diet of hedge and macro funds that provide annual or more periodic capital returns. I think our US$5M fund still has a few winners in the making so the final verdict on this point is still out, but being in a position to return capital (and more) to our investors 3+ years after the fund got raised, with such a lean operating budget, is an extremely strong position for any fund to be in, venture or otherwise.

Entrepreneurs that dare to dream on a wide enough canvas and are afforded sufficient capital to do so can make a difference to our world. The tens of millions of users that have benefitted from the language practice through fansubbing, the cross pollination and cultural spread that fan-subbed content facilitate on Viki, and the cash payout that Viki’s founders and employees get will continue to generate not just employment in Singapore, but more importantly the groundswell of virtuous pay-it-forward cycles that will hopefully spark off that next few big exits.

In the meantime, the Viki team deserves some time off to celebrate. Razmig et. al., you guys bloody deserve it. Joi, great job.

All of you were truly awesome ;-).

p.s.: check out Razmig’s CNBC interview about the exit.

littleBits in Singapore

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I recently started Get Hacking with a couple of old friends from high school to teach, make and sell components, kits and finished products that can help kids and adults learn STEM and make things, and in so doing bring a bit more of the DIY and Maker Movement to Singapore and Southeast Asia. One of the first things I did was to reach out to Ayah and her amazing team at littleBits, and import the following:

  • Make More Library – we plan to conduct tech-and-craft courses at Silicon Straits CO.LAB under the Get Hacking brand to generate interest and awareness of littleBits as a highly accessible platform for kids and adults to learn and make. Stay tuned for more info.
    littleBits Make More Library
  • Starter Kit – S$115 per kit + S$8 for delivery in Singapore [FB post]. Cheaper than buying direct from littleBits web store (US$89 + US$17.28 shipping = ~S$133), and cheaper than littlebitsg.com‘s offer price of S$140 or normal price of S$180 *gasp*
    littleBits Starter Kit
  • Extended Kit - S$180 per kit + S$8 for delivery in Singapore [FB post]. Cheaper than buying direct from littleBits web store (US$149 + US$17.28 shipping = ~S$210), and cheaper than littlebitsg.com‘s normal price of S$280 *gasp*
    littleBits Extended Kit

I’ve always felt that mainstream education curriculum could do a lot more to push our next generation towards tinkering, questioning assumptions and “making”. It’s gotten a lot better since I was a kid, but technology hasn’t been idle either, which neutralizes any progress that mainstream education had made since. I believe kids can and should be doing more than “art”, with littleBits being the perfect medium for “tech-and-craft”. I meet many designers who don’t know tech and engineering, and many engineers who don’t know design. In the past, making proper electrical circuits involved soldering. Designers were held back from the full range of prototyping by relying on engineers to tell them what’s possible or not. With littleBits, an individual’s knowledge gap becomes less important, enabling kids and adults to just snap electronic modules together for fun, learning or prototyping.

It’s great that I’m an investor in littleBits, but it’s even more gratifying to see the unbridled joy in our children’s eyes when they snap together the electronic modules in littleBits kits and make something cool. We hope to start a Tech-and-Craft revolution in Southeast Asia on the back of maker products and tools such as littleBits, Arduinos and 3D printing, and welcome you to join us in our journey.

Drop us a note if you’d like to learn more.

littleBits photo shoot by SPH at Silicon Straits CO.LAB

HazeCast

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My lifestyle has changed dramatically over the past week, ever since the Sumatra-peatland-fire-inspired haze has enshrouded Singapore. It’s actually an annual phenomenon in Singapore, but somehow this year, the haze situation has deteriorated quickly. We’ve hit record PSI readings. I’ve cancelled and rescheduled meetings when the haze hits 300 and above. My family and I have cooked and eaten in almost exclusively. My 19-month old son hasn’t stepped out of the door and has seen more of our Sharp Plasmacluster Ion air purifier (operating at full tilt) and air conditioner than his parents. I’ve succumbed to wearing the N95 mask each time I step out of the house. The above are the only actions I can take against something which I can’t do much about.

Or can we?

This image was captured by Nasa's Moderate Resolution Imaging Spectroradiometer at 2.30pm on Wednesday, June 19, 2013. -- PHOTO: NASA

This image was captured by Nasa’s Moderate Resolution Imaging Spectroradiometer at 2.30pm on Wednesday, June 19, 2013. — PHOTO: NASA

And so I lobbed an idea of a “HazeCast” network to my old friends from Tinkertanker whom I’ve known since I was 13. We’ve been kicking the cans around getHacking for the past few weeks but never really got going. I threw out the gauntlet for us to build an open source air quality sensor prototype, initially providing readings for PM10 and PM2.5, and assembling enough of them to form a citizen-led air quality sensor network. I was inspired by what Joi, bunnie and Sean did with SafeCast, and figured an open source community-led Collaborative Economy approach would also work great here. Other similar projects (e.g. AirQualityEgg) have been mooted and worked on elsewhere in the world, so we’re certainly not the first to try. The tech looked simple enough. We huddled for some planning, bought the components (dust sensor, amongst others) for an initial production of ~20 sensor modules, and hope to have something to show in the next week or two.

It’s not that the National Environment Agency (NEA) isn’t giving us data. Since the onset of the seasonal haze, NEA has moved towards publishing more data on the severity of the haze, via hourly 3-hour PSI readings and 24-hour PSI readings. The Singapore Government has also acted decisively in the form of setting up the Haze Inter-Ministerial Committee, the Prime Minister’s remarks, then with Minister Vivien Balakrishnan hand-delivering PM Lee’s letter to his Indonesian counterpart, and today, with the statement that they will be giving away 1 million N95 masks to 200,000 low-income households and ensuring supply of said masks. Big deal, and good job, but I’m sure you can do better.

The Singapore Government is trying really hard and acting decisively in such trying times, which is great, but I think the good intentions of our government to give us their version of air quality is still not instilling enough trust amongst the citizenry. What we’re all crying out for is real-time or near-real-time data of air quality from a published list of air quality monitoring stations, displayed against official metrics as prescribed by the authorities with rationale for their metrics explained in simple language. Singapore’s PSI is based off US EPA’s old standards, which US themselves no longer use, and does not take into account PM2.5, which in my opinion is the most significant and hazardous component of our haze. NEA tries to deal with this by publishing 3-hour PSI and PM2.5 concentrations separately, and applies a 3-hour weighted moving average function to their readings. Someone has reverse-engineered NEA’s MA function for its 3-hour PSI in this Gdoc spreadsheet, and it shows a 50%(current)-33.33%(last)-16.67%(previous before last) weight. It seems like a sensible formula, but I’d also love to see a 1-hour PSI reading with an aggregate weighted moving average reading for each 15-minute block, say with a 50%-30%-15%-5% weight, for a more accurate “real-time” reading.

Update: NEA has re-organised its presentation of air quality data, i.e. streamlined front page on NEA and more granular historic PSI readings, but have firmly re-focused on 24-hour aggregate readings for the most part. I can’t remember if 3-hour PM2.5 readings used to be there (I think so), but I can’t find it anywhere now; sneaky!

As per their haze FAQ, NEA appears to be presenting its PSI and PM2.5 readings from a “telemetric network of air monitoring stations strategically located in different parts of Singapore” (question 1). Singapore’s PSI zones are also segregated into 5 (N, S, E, W and Central), but as the FAQ explains, the zones are split the same as for weather reporting, as per the town centres of major population centres in Singapore. From the FAQ, I can’t tell how many air sensor inputs NEA is basing its PSI off, and a less-informed individual may erroneously link question 1 with question 4 and assume that there are air sensor monitoring stations in all the listed town centres as per NEA’s response to question 4. A quick look at NEA’s Singapore Weather website reveals weather data from 54 stations, though it’s not clear which of those also have equipment for air quality monitoring.

Comparison between 1-hr & 3-hr PSI readings - Photo credit: Harinderpal S Grewal’s Facebook Page

Comparison between 1-hr & 3-hr PSI readings; note the smoothening effects a moving-average function has – Photo credit: Harinderpal S Grewal’s Facebook Page

More transparency is needed, and instead of lobbying or waiting for the government to take action, join us as we attempt to build HazeCast, a citizen-owned alternative air quality monitoring network. We’ll start with 20 modules, but could possibly rope as many households and individuals as we can keep up, to add to the accuracy and density of our hyperlocal data.

We’ll post updates as we make progress. Stay tuned!