Techcrunch was first to break it to the Western English-speaking world on 4 September, but had trouble deciphering the output from Google Translate *cackle*. 动力博客 Mobinode was next with their rumors (later verified) of Lee Kai-Fu’s new gig, an incubator for young Chinese entrepreneurs in the form of Innovation Works. On 7 September, Lee Kai-Fu himself announced that US$115 million has been raised from WI Harper, Youtube founder Steven Chen, Foxconn Technology Group, Legend Group and New Oriental Education & Technology Group.
Even though it wasn’t exactly breaking news, I figured it was a relevant development to monitor for prospective applicants to the National Research Foundation’s (NRF) new Technology Incubation Scheme (TIS). TIS has the potential to inject some much-needed impetus in Singapore and Asia-Pacific’s innovation ecosystem, but only if would-be applicants have the following:
- Line up a star team
- Figure out a long-term sustainable business model, and
- Build/possess the right linkages to quickly bring their incubated companies to market.
Lee Kai-fu’s Innovation Works appears to have all three key success factors in place – (1) with himself, Steven Chen, and others to come, (2) presumably management fees from the US$115 million fund; even at a conservative 1.5%, yielding US$1.73 million per annum, the fund would grant Lee and his team plenty of mileage in low-cost China; and (3) with the China market at its feet, combined with institutional shareholders in the form of Foxconn and Legend. Throw in China’s largest provider of private educational services (New Oriental) as a pipeline of entrepreneurial and technical talent, and Mr. Lee appears to have it all the pieces in place.
Having said that, it’s a little disheartening how Singapore and the Asia-Pacific region continues to play second fiddle in the larger scale of things. We’ve always lacked a large homogeneous market – with the various APAC nations and the disparate languages, infrastructure and cultures – and the requisite string of start-up ‘hits’ to catch the attention of more established venture funds. Even Limited Partners are in short supply – without an exposure to venture capital and its successes as an alternative asset class, many have preferred to go for safer bets. It’s little wonder that the Singapore Government has had to continue to play the Sugar Daddy role – there’s just no other way out.
As we draw closer to TIS’ deadline of 30 September for submission of proposals, I would urge would-be applicants to dream big and shoot for the stars. Anything less in the face of comparables with the likes of Lee Kai-Fu’s Innovation Works, and we will be wasting this one shot that we have with NRF. It’s about time we show the world that just like its big China brother, Singapore also boleh (can)!