Saturday, November 29, 2008

The 3Cs of Business Plan

[NOTE: An abridged version of this post was published by the Business Times (Singapore) on Nov. 17. ]

One question I’m asked most frequently by budding young entrepreneurs is, “What does an investor look for in a business plan?” I get asked this in my various capacities – as an entrepreneurship educator, as the director of NUS Entrepreneurship Centre, which provides seed funding to entrepreneurial start-ups by NUS professors, students and alumni, and as an active business angel investor, having invested in about a dozen start-ups in Singapore, Silicon Valley, China and India over the last decade or so.

There are of course literally thousands of how-to books about business plan writing that will offer you checklists on what a business plan should cover. Having been pitched business plan hundreds of times, I have learned to distill the essence of what I personally look for in a business plan down to three core questions, which I have dubbed the 3 C’s. Just as many of you have heard of the 4 P’s of marketing (product, price, place and promotion), I hope that many of you will remember the 3 C’s of start-up investing after reading this -- whether you are (or plan to be) an investment professional evaluating start-up business plans, or an entrepreneur pitching plan to investors.

So what are the 3 C’s? Here they are:

How does the venture CREATE value ?
How does the venture CAPTURE value ?
How does the venture COMMUNICATE value?

At the heart of any new venture is the identification of a potential opportunity, and a plan of actions to exploit it. So any good business plan must tell us how good the opportunity is, and how and why the people behind the plan can exploit it better than others. I believe the 3 C’s help discipline our thinking about the opportunity and its exploitation, by providing three sets of tests for the viability of any proposed business.

Value CREATION

Every business, no matter what it does, can only exist because it creates value for some customers. So the opportunity that a business plan seeks to exploit must be translatable into very specific answers to the following series of questions:

• What is the customer problem (“pain”) or need that you have identified ?
• How big is it – how many such customers are there ?
• Who will pay for it to be solved/fulfilled, and for how much?
• What specific products/services are you going to offer to solve/fulfil these pains/needs?
• By how much would the value of these products/services exceed the total cost of providing the solution?

I’m afraid that many business plans that I have come across fail to pass even this first test – while they talked about the wonderful technical inventions or business ideas they have discovered, they either failed to demonstrate the existence of real paying customers who will want to pay for them, or they did not take into account the full cost of converting their ideas into actually usable products, which will render the venture financially non-viable.

Value CAPTURE

Many entrepreneurs, particularly techies, think that they have a viable business just because they have developed something that people actually want. Unfortunately, this is often not true, because you may not be able to capture much of the value that you create due to the existence of competition. And competition comes from not just other companies offering similar products or services – as Michael Porter has summarized it nicely, there are five sources of competitive pressures that any business needs to watch out for:

• Existing Rivals offering similar products
• Potential New Entrants
• Close Substitutes
• Powerful Buyers
• Powerful Suppliers

In combination, these competitive pressures drive your price down, or squeeze your margins to nothing. To pass the value capture test, a business plan needs to (a) convincingly show why some of these competitive forces are absent (AND will remain so even after you have entered the market) ; or (b) clearly identify the unique competitive advantages that your venture has to counter each of these competitive forces.

It is usually a bad idea for a business plan to proclaim that there is no competition, as many na├»ve business plans do. To the experienced investor, this may mean either that the entrepreneur has not done his/her homework, or that the business opportunity is actually non-existent or so tiny that nobody else bothers to enter. From an investor’s perspective, the existence of competition is actually a good thing, for it provides a validation that the market potential is real, not imagined. The challenge is for the entrepreneur to show that his/her offering is so good that it can capture a viable market share, despite the competition.

Value COMMUNICATION

Even after a business plan has passed the above two tests, we are still not home free yet – there is the remaining test of how the venture can communicate its value convincingly to its customers and resource partners. This is of particular concerns for new start-ups trying to offer radically new products/services that are not familiar to the customers.

First of all, there is the liabilities of newness – if the new venture needs to sell to large enterprises (or to sell through large distribution channels), this is usually a big warning sign, for many of these establishments tend to be conservative and will not buy from an unknown entity with no prior track-records, no matter how good the product is. Secondly, when the product/service itself is novel, as is typically the case with new start-ups trying to commercialize new technologies or business ideas, a lot of educating of the users (as well as the relevant partners such as component suppliers and sales channels) is usually needed, which will not only raise the upfront cost, but also delay the revenue stream.

While the above examples highlight the go-to-market challenge, I have used the word communication to embrace the broader range of credibility and visibility challenges that a new venture needs to address – you may have a great product innovation, but unless people are aware of it, understand what it does, and have trust in your organization to deliver it, there will be great resistance to first adoptions – everybody is waiting for other credible reference customers to prove its viability first. What is worse, if your innovation disrupts the existing business ecosystem and requires new distribution channels or adaptations by existing suppliers, you are unlikely to get the complementary resources to help you get started. You will also have difficulty attracting top talent to join your venture if you cannot communicate a compelling vision to them.

Unless a business plan clearly addresses how it is able to overcome these value communication challenges – and still shows viability even after factoring these communication costs and time delays into its financial projection -- it is still not fundable even if it passes the earlier two tests. For example, I personally view more favourably a start-up plan that allocates stock options to attract credible people to join its board of directors and management team – besides showing that the venture is serious about attracting the right resources to enhance its execution capability, it also signals that the founders recognize the need to address its credibility challenges.

I use this 3Cs framework not only to screen business plan pitches, but also to monitor and advise the companies that I’ve invested in. I would be interested in any suggestion you have on how to refine it.

Friday, November 21, 2008

Global Entrepreneurship Week III

I managed to participate at 5 different events in the Week over the last 3 days, including speaking at 2 of them (the Microsoft BizSpark Launch and the BANSEA-Creative Community Singapore (CCS) Networking Event on Alternative Financing for Creative Businesses).

It is great to see Microsoft coming around to trying to work with early stage start-up companies, and I'm pleased that they have invited NUS Entrepreneurship Centre to be one of their network partners. While the free access to Microsoft software tools will certainly be very helpful, I believe one real beneifit for our Singapore-based start-ups would be to leverage their participation in BizSpark to gain regional and even global visibility. As a manifestation of Microsoft's power to draw media visibility, the event already gained coverage by Today, Channel News Asia Online, and Lianhe Zaobao, with more promised next week.

Although I have not yet invested in any "creative" businesses, this is not due to lack of interest on my part, just that I've not come across really interesting deal flows in this marketspace so far. Many entrepreneurial ventures in creative industries in Singapore have in the past tended to be run as social enterprises (depending largely on public grants/subsidies) or as lifestyle businesses that do not scale. But sensing that things may be changing, I took up the opportunity (as chairman of Business Angel Network Southeast Asia (BANSEA)) to co-organize the event with CCS as a way to get a better feel of the creative business entrepreneurial community in Singapore. I was pleasantly surprised by the high turnout -- over 100 participants -- and the level of energy during the informal networking. In my talk, I tried to highlight the need for creative business entrepreneurs to consider pursuing business models that are scaleable in order to make their businesses fundable by angel investors. I also highlighted some of the innovative financing methods that have been introduced in recent years in other countries (e.g. how a successful film production in Korea has received over 40% of its financing through micro-investments by online netizens) to encourage the creative business community to think more creatively about meeting its financing challenge. Through the event, besides meeting some very nice people, I've come to learned quite a bit about what CCS is doing to promote creative businesses in Singapore -- you can visit their website to learn more -- https://app.creativecommunity.sg/

The Technology Commercialization Forum (TCF) organized by the Industrial Liaison Office (ILO) of NUS Enterprise also drew a very high turnout (over 300 participants). I was particularly impressed by the keynote speech by the president of the Association of University Technology Managers (AUTM), where he made a passionate plea for policy makers to consider the long-term societal impacts of university technology commercialization, instead of focusing narrowly on licensing revenue generation in the short term. I truly agree with him that what really motivates some of us to do what we do (promoting innovation & entrepreneurship) is to try to make the world a better place. I would like to encourage you to read the Better World Project Reports recently produced by AUTM (downloadable from http://www.betterworldproject.net/reports.cfm) which provide interesting examples of university innovations that have truly made a significant impacts on the world.

Wednesday, November 19, 2008

Global Entrepreneurship Week II

The Global Entrepreneurship Week (GEW) has started this week. I have attended two of the many events organized in Singapore so far -- the World Cafe organized by Temasek Polytechnic on the first day, and the Opening Ceremony on the second day. As my centre is one of the co-organizers of GEW Singapore, I'm particularly pleased that the Kauffman Foundation has chosen Singapore as one of the selected countries outside USA/UK that they will give on the ground coverage. In fact, they actually sent two people to participate in Singapore's Opening Ceremony -- Jonathan Ortmans, the man in charge of the GEW world-wide, and Dr. Paul Kedrosky, who is doing videoblogging of GEW happenings in selected countries worldwide. You can see his blog post on Singapore's GEW Opening Ceremony at the main GEW website http://unleashingideas.org/.

At the World Cafe, I enjoyed the opportunity to interact with the primary and secondary school kids as well as polytechnic students, especially hearing their views on what they think are the most important traits of an entrepreneur. We were also asked to discuss the question on whether entrepreneurs are born or made, which I didn't like so much -- for reasons I can't fathom, many people seem to like to ask this question. Interestingly, the topic that seemed to have generated the most amount of participation among the kids (at least in the tables where I participated) was that of parents' reluctance to let their kids try anything entrepreneurial that detracts from their study, and the pressure on the kids to study hard and get a good job.

I was happy to note that there were quite a few new faces at the Opening Ceremony. I think it is important that our activities reach out to new people -- there is no point to keep preaching to the converted.

I am looking forward to attending more events during the rest of the week. In particular, I think the Speednetwork The Globe, organized by The Digital Movement (TDM) in Singapore, seems interesting and worth checking out -- visit www.thedigitalmovement.org/gew.

Monday, November 3, 2008

Global Entrepreneurship Week

The inaugural Global Entrepreneurship Week (GEW) will take place in the week of 17-23 Nov. 2008. Jointly coordinated by Kauffman Foundation in the US and Make Your Mark in UK, the goal of the week-long program is to encourage people from around the world to celebrate the spirit of innovation, entrepreneurship and creativity during one common week every year. To-date, organizations in 78 countries from around the world have committed to host a wide variety of events and activities during this inaugural GEW week.

I applaud this global campaign to raise awareness and interest in entrepreneurship, and am pleased to say that my centre (The NUS Entrepreneurship Centre) has taken the initiative to jointly host GEW in Singapore with the Action Community for Entrepreneurship (ACE). Together, we have engaged 35 other partner institutions to organize more than 40 events and activities throughout the GEW week. You can check out the latest GEW happenings in Singapore at this website -- http://entrepreneurshipweeksg.org. You can also find out what other countries are doing at this global website -- www.unleashingideas.org. A number of experimental global flagship events will take place to enable people from around the world to participate in simultaneously, including "Speednetwork the Globe" and the "Global Innovation Tournament".

Like any start-up idea, this year's inaugural GEW will probably be somewhat experimental and unpolished, but I believe that GEW truly has the potential to become not only THE annual platform for nations to celebrate the spirit of entrepreneurship in their respective countries, but also to emerge as an interesting global virtual platform for new entrepreneurial ideas from anywhere in the world to be paraded and tested on a global scale. I would therefore like to urge you to give this new initiative your support by attending events in your country that interest you, and by tuning in to the global website to see what is happening around the globe and blogging about them. More importantly, I encourage you to see the GEW as your opportunity to make your mark on a global scale, by unleashing new social networking ideas and novel events/games/activities that will capture the imagination and interest of the millions of entrepreneurially-minded people who will be tuning in from around the world. I look forward in particular to your suggestion on how my centre and ACE can work with you to launch your ideas in this and future GEW, not just in Singapore, but also to the world.

Monday, October 13, 2008

The worst of times...the best of times?

As I write, the global financial market has seized up, stock markets worldwide have plunged, investor panic is everywhere, and the global economy is fast sliding into recession, with the spectre of Depression 2.0 looming large indeed.

The chill had already frozen the venture capital investing market, with major VC funds holding back new investments. The mood is probably best captured in a presentation made at a recent partners' meeting of Sequoia Capital, one of the leading VC in Silicon Valley. The title of the presentation slides said it all -- "RIP: Good Times" -- you can view it at www.venturebeat.com (click here).

On a personal note, one of my investee companies (through my angel fund (BAF Spectrum)) had witnessed first-hand the chilling effect of this global financial meltdown -- it received a termsheet from an Asian regional office of a blue-chip, Silicon Valley-based VC firm about 3 months ago, and despite the fact that it cleared all their due diligence checking, the VC firm recently walked away from the deal. We found out later that their US headquarter had told them to hold all investment indefinitely, period. I have similarly learned from a friend who is a general partner of a VC fund that his institutional investors are asking him to put a hold on investing for the time being.

While there may still be a chance that some semblance of calm may return to the global financial market in response to the latest efforts by the governments of G7 and other nations to use tax-payers' money to shore up ailing banks and inject liquidity into the financial system, it is clear that, even in the best case scenario, this workout is going to take some time, and that the real world economy is already heading into a recession that is unlikely to be reversed within the next 12 months, even if we are lucky to avoid a severe and much longer period of negative growth.

In this worst of times, my best advice to entrepreneurial start-ups that have received seed-funding in the last 1-3 years, but have not yet reached steady cash-flow positive mode, is to move quickly towards a cash conservation mode with whatever cash you still have, for it will be extremely challenging to tap the venture capital market for your next round of funding over the next 6-12 months, if not longer. Find ways to reduce expenditure and explore interim sources of revenue to generate cash, and if it is possible, try to apply for some form of government grant for innovation to help stretch your run-way. It may be painful, but letting some people go may be the only realistic alternative to survive for some.

Thankfully, in Singapore, a number of government agencies like SPRING and MDA have recently launched new innovation grant schemes (e.g. the the first batch of POC and POV grant awards were awarded by SPRING this month) , so I would encourage our existing start-ups to apply for these. I also hope that the five new early-stage VC funds recently co-funded by the National Research Foundation (NRF) of Singapore will start their operations by early next year.

For would be entrepreneurs who are thinking of starting up your ventures, while the coming 6-12 months may seem to be the worst of times to do so, it could also possibly be the best of times, especially if you are convinced that you really have a great business idea, and your initial need for capital over the next 12 months is modest or you can self-fund/bootstrap a large part of it. When an economy is in recession, the cost of starting a business is lower than in normal times -- rent is down, input costs are lower, and the job market is soft, so attracting people to work for you becomes easier. It is true that venture investors will be extremely tight-fist and valuation is likely to be low, but hopefully you don't need to raise that much (yet), there is also less competition, and the entrepreneurs who are prepared to start-up at such a difficult time may get better noticed for their passion and tenacity. History has indeed shown that some of the most successful companies got going at or near the bottom of venture investing cycles -- both Cisco and Facebook got their first funding during the downturns of Silicon Valley. The ideal timing is that, by the time your product is developed and ready to go-to-market, the economy is turning up and the market starts to roar again. Better still, if your start-up idea involves substantial cost innovation, your product or service can still find a market in a recession itself -- by helping people or enterprises to survive recession better through cost savings.

The worst of times can still present opportunities, and thus becomes the best of times to start-up -- for the entrepreneurs who discover the right opportunities and are bold enough to act. As an early-stage angel investor, I'm still prepared to make seed investment in this period of gloom -- for the reasons stated above -- if the right start-up comes along.

Tuesday, September 30, 2008

Lessons from the Starting Up of StartUp@Singapore

I'm pleased that the annual StartUp@Singapore (S@S) business plan competition will enter its 10th year of operation when its official launch event is held this 22nd Oct. You can visit the S@S website for more details.

As the original founder of S@S way back in 1999, I must say that I do feel a sense of pride that the competition has not only survived, but has indeed grown to meet my original goals. Firstly, while I and my centre (NUS Entrepreneurship Centre) had played a lead role in the organizing of the events in the earlier years, the event has been fully run by NUS students since 2 years ago. Secondly, the number of participating teams in recent years had consistently exceeded 200, and indeed last year recorded the largest number of participating teams ever. Thirdly, the event had also been able to raise sufficient corporate sponsorship to become fully self-funded last year, and I am cautiously confident that the new student organizing team will be able to achieve the same this year, despite the distinctly harshier funding environment this year. Last, but not least, I believe the venture had now evolved to become more than just a business plan competition, but a highly effective program to get people to learn experientially about entrepreneurship by engaging in the early stages of the start-up process itself -- writing a plan, building a team, learning networking skills, and pitching to potential investors and getting mentoring feedback.

Looking back, I think the start-up of StartUp@Singapore itself may serve as an interesting case study about the entrepreneuring process -- opportunity recognition, brand positioning, fund raising, team building and execution. It all started in Q2 1998 when I was asked by the then deputy vice-chancellor of NUS, Prof C.C. Hang, to lead a task force to develop a plan on how to promote technopreneurship education in NUS. The vice-chancellor subsequently approved our plan in Q4 1998, and I found myself being asked to start up a new centre at the end of 1998 to implement the plan. (Incidentally, I decided to call the centre by the name of Centre for Management of Innovation & Technopreneurship (CMIT), since I'm from MIT...).

Although the main mission for the new centre was to introduce the teaching of technopreneurship to NUS undergraduates (this was how I got the mandate to start the Technopreneurship Minor Program...), I knew that I had to go beyond the classroom to raise awareness and interest in entrepreneurship in NUS. Being an MIT alumnus, I had vaguely heard of the MIT $50K business plan competition, and realized that there was an opportunity to start a similar business plan competition in NUS. (I actually knew I was going to do this when I was chairing the task force, but I did not mention it as a "to-do" thing in the task force's plan, as I didn't want to be stuck with it as a KPI in case I could not pull it off...). So as soon as I managed to get the Technopreneurship Minor Program successfully rolled out in July 1999, I went to visit MIT to talk with the MIT student organizers of the $50K Competition. After the meeting, I was quite confident that I knew enough to organize such a competition in NUS. But on the flight home, I became convinced that I had the opportunity to do more than that -- I saw the opportunity of having a competition that catered to not just NUS, but the whole of Singapore, because no one was doing any such competition in Singapore then.

So the first thing I did was to recruit an NUS student leader to join me to form the core management team. The student leader -- Ong Kee Sing -- was at that time the president of the NUS Entrepreneurship Society. He had earlier been trying to develop a business idea competition primarily among business school students, but I convinced him to take on something much bigger. We effectively divided our roles, with me playing the salesman & fund raiser role, while Kee Sing took on the COO role to actually build the NUS student team to run the competition. Between Kee Sing and me, we also came up with the name and logo-- I came up with the StartUp@Singapore name, while Kee Sing got the logo designed (which still largely stands today). I deliberately wanted a name that had Singapore in it to give it the right brand positioning, and even tried to get it trademarked (which I couldn't as there was some rules at that time about us not being a legal entity to own a trademark...).

The next thing I had to tackle was fund-raising, which involved selling the whole idea to some corporate sponsors. Those of you who know me personally would know that I'm a terrible salesman, but what saved the day was the lucky timing -- if you remember, Q4 1999 was close to the peak of the dotcom boom, so despite the bad salesman that I was, when I made the round to call on all the venture capitalists and government agencies that I knew (or had someone I knew to introduce), I actually managed to convince sufficient numbers to pony up enough sponsorship money -- I got NSTB to match the S$50K prize money, and several VCs to fund the operational costs. I must credit a venture capitalist friend, Mrs. Chin Tahn Joo, for helping to open the doors to some of her VC contacts for me. It is only after I had gotten some confirmed sponsorship funding that I went to my boss Prof Hang for his blessing.

Marketing the competition to students and the general budding entrepreneurial community turned out to be relatively easy once I had the prize money (and several prominent VCs to agree to serve as judges) -- the dotcom euphoria certainly helped to draw in a lot of interests. We ended up receiving over 200 business plan executive summary submissions, twice the target that I promised my boss. I was also lucky in my choice of COO -- Kee Sing did a great job marshalling a team of dedicated NUS students, and despite some minor hiccups, their execution was great. (One of the things I have learned as an educator working with young talents over the years is to hold my tongue -- it is often better to let them try and do something that you knew would likely fail, instead of stopping them from doing so (so long as it does not have serious consequences) -- people learn from their mistakes much better than if they didn't try in the first place. )

Despite the good start, the following year the competition nearly died -- just as the dotcom boom made the start-up at the end of 1999 easy, the dotcom crash in 2000 made everything difficult -- sponsorship from VCs dried up, NSTB was transitioning out of its stewardship of the T21 initiative, and entrepreneurial interests among Singaporeans nosedived. We had enough of foresight towards the end of the first competition to know that the second year would be tough, and I prudently stashed away some surplus funds from the first year to roll over to the second year. I was also able to rope in a long-term strategic partner -- the NUS Business School Alumni Society -- to help in the organizing effort. Their help in securing sponsorship from their alumni networks was crucial to make up partially for the loss of VC sponsorship. The number of participating teams dropped by half, but to cut the story short, we managed to persevere and survive.

In the intervening years, we had the good fortune of finding a succession of capable and passionate NUS student leaders to take the helm of S@S, and over time the student leads themselves had developed a very effective peer-to-peer process of grooming their own successor. My mantra to each student lead team is to try something new each year, and over the years, we have indeed seen a continuous streams of experimentation and innovations to the competition (e.g. introducing a youth category, reaching out to the heartlanders, bootcamps, advertising on buses, etc) . Some of these worked, some didn't, but I believe we all learned a lot in the process, and the fact that there's always something new kept the excitement up and made it fun. While my actual role in S@S had reduced over the years (even though I had continued to serve as co-chair of the steering committee), I must say that it has always been a privilege for me to have the opportunity to work with such entrepreneurial young talents -- it is they, collectively, who have taken ownership of S@S and built it into what it is today.

If I may draw any lesson from my own involvement in the early founding of S@S, it is the following: Borrow ideas from others, but define your own unique opportunity; use your first mover advantage to stake-out a clear brand positioning; recruit a self-motivated team; under-promise so you can over-deliver; emphasize execution & experimentation over endless debates on ideas; and last, but not least, recognize that lady luck gives, but also takes away, so be prepared for both.

In closing, I would like to link back to my last blog entry about double social entrepreneurship: I believe that StartUp@Singapore has the potential to become a double social entrepreneurship model. Indeed, my wish is that S@S will be copied by others around the world, for our ultimate goal is to get more people, especially those from the developing world, to learn experientially about entrepreneurship. So here's my suggestion to our future student leads of S@S: make it easier, not harder, for others in the developing world to copy us!

Tuesday, September 23, 2008

"Double-Social" Entrepreneurship

You all know the saying -- give a man a fish, he lives a day; teach him how to fish, and he lives a lifetime. There is certainly profound truth in this -- that imparting knowledge does more to improve lives than charity -- and I am not knocking it. The world needs more of both.

But reality is a bit more complicated. First, teaching someone fishing can be time-intensive and difficult to scale, unless one invents a better teaching methodology. Second, if fishing requires the use of a fishing equipment, then knowing how to fish is not enough -- you have to get the fishing equipment as well, which may be costly, especially if someone owns the intellectual property behind it and can charge a monopoly price.

What I am getting at is that doing good is not just a matter of good intention, it requires a good understanding of the role of innovation and scalable business model. This brings me to the concept of social entrepreneurship. Or, shall I say, the common misconception of what social entrepreneurship is about.

Social entrepreneurship has become a big buzzword these days, but like all buzzwords, its meaning has become vague and (as I will argue) potentially misleading. Generally, the term has been used to mean entrepreneurial activities directed at addressing some social problem (doing good), instead of making money for the entrepreneurs (doing well). In this sense, some have equated social enterprise with non-profit organization. There are some who believe that one can do good while doing well at the same time, and distinguish social entrepreneurship as having this characteristic, vs. the traditional non-profits that can do good but cannot do well, and thus need to rely on charity to fund its do-good activities. There are of course further distinctions -- some use the term to mean only a venture that can do good and do well at the same time, while others would include a venture that makes money in some conventional profit making activities and use the profit to subsidize its social (non-money making) activities. Regardless, most people seem to agree that the label "social" in social entrepreneurship refers to the intention of the venture -- trying to do good.

While this definition of social entrepreneurship (let's call it SE1) is certainly useful in highlighting its difference from conventional, purely profit-seeking venture in terms of its goal, it is in another sense not very helpful at all, because it doesn't tell us how social entrepreneurship actually differs from conventional entrepreneurship in terms of its entrepreneurial process.

I would like to argue that there is actually another meaning of social entrepreneurship that focuses on the process, not the goal. In this interpretation (let's call it SE2), social entrepreneurship is about a process of entrepreneuring that essentially socialize the core innovation or knowledge asset, versus conventional entrepreneuring, which emphasizes keeping one's core innovation or knowledge asset proprietary or private. In other words, in social entrepreneurship, the entrepreneur creates a new innovation or knowledge-asset, then allows (indeed, encourages or empowers) others to replicate it, whereas the conventional entrepreneurial model would have the entrepreneur trying to protect its innovation (e.g. seeking intellectual property rights protection with the aim to prevent others from imitating it).

The open-source model is essentially an example of social entrepreneurial model in the SE2 sense. Another example is the Wikipedia model. What makes the open-source and Wiki models powerful is that it encourages not only others to use its innovation, but also to contribute their own innovation or content which in turn is freely distributed. In other words, an SE2 entrepreneurial model unleashes and multiplies many more entrepreneurial contributions. Now, the open-source or Wiki model does not actually do away with the concept of intellectual property rights -- it just defines it differently from the conventional proprietary right, and involves a different form of licensing. It also involves a different entrepreneurial process or model for managing future innovations on top of the prior innovation, one that is social in nature (community of volunteer coders, user contents aggregation).

In my view , the really powerful social entrepreneurial ventures are therefore those that not only seek to achieve social goals (SE1), but also do it with a socialistic innovation process (SE2). If I may come back to the fishing analogy -- a social program to get volunteers to teach people how to fish and a chairty program to dole out fish both have social goals (SE1), and the former is certainly better than the latter. But even better would be an entrepreneur that invents a better way to fish that dramatically reduces the cost of the fishing equipment compared to existing technologies , then gives his or her invention away to the people to not only encourage them to use it (at the much lower cost compared to existing technology), but also to make their own improvement, and to have such improvements freely diffused as well. An alternative example would be an entrepreneur that invents a more scalable model to teach fishing, such that people who learn how to fish can easily (and are motivated/obligated to) become teachers of others.

There are actually a growing number of examples of such "double-social" entrepreneurship emerging in the developing world. One of the best examples I know is that of the Aravind Eye-Hospital in India, well documented in C.K. Prahalad's book, The fortune at the Bottom of the Pyramid. In essence, Aravind not only pioneered an innovative product technology (low-cost lens) and an innovative process technology (low-cost eye-surgery process), but literally make them available to a vast number of poor patients who could not otherwise afford it, using a business model that charges a small margin on more well-off patients to cover patients who cannot pay at all, or very little. The Aravind hospital system includes innovating a highly scalable model for training village girls to become effective nurses that handle most of the work conventionally done by doctors and surgeons, leaving the latter to concentrate only on work that truly require their critical skills.

The world needs more entrepreneurs with social goals. But what is truly in short supply are the double-soical entrepreneurs who have the vision and innovative know-how to create a venture that combines social entrepreneurial processes and social goals.





Monday, August 25, 2008

What's Wrong (or Right) about Singapore's Entrepreneurial Ecosystem, Part II

I would like to thank the dozen or so of you who sent me emails to share your views on Singapore's entrepreneurial ecosystem (also the five who left comments on my blog). While many of you have (rightly) highlighted the lack of early stage finance (angel investors, early-stage venture capitalists) as a major impediment in Singapore, I would like to highlight another factor that may be just as important, if not more so -- the lack of advanced firms that provide the seed-bed for the development of advanced skills and knowledge, and that are willing to try adopting new, advanced but unproven technology from small start-ups, i.e. serving as lead-users to other start-ups. Indeed, in certain business sectors where such advanced firms were present, Singapore had actually witnessed sizable emergence and growth of start-ups, contrary to the perception that Singapore's entrepreneurial ecosystem has been uniformly weak for start-ups in general.

From the mid-1980s to the late 1990s, Singapore had actually experienced significant start-up growth in one sector -- the supporting industry to the hard-disk drive (HDD) industry. If you examine the number of companies that IPOed in the 1990s, you will find a sizable number came from this sector -- ranging from precision engineering firms like MMI, Brilliant and Seksun to contract manufacturing firms like Natsteel Electronics and JIT (both had since been acquired by others). Others like facility engineering services firms Perdana Consulting had also done well, even though they did not go public. These firms were arguably technology-intensive, and some of them were able to compete globally, although nearly all of them started by serving the major HDD assemblers located in Singapore from the mid-1980s -- Seagate, Conner, Maxtor, Western Digital, etc. Indeed, quite a few of these firms were started by ex-employees of these HDD assemblers, who accumulated deep business or manufacturing process technology domain knowledge of the industry, before coming out to become component suppliers or service providers to the same or related industry. (For those of you who want to know more about this dynamic process of new firm formation in the HDD sector in Singapore in the 1980s and 1990s, you can consult the chapter I wrote on Singapore for a book on the globalization of the data storage industry published by Stanford Business Press in 2000 -- the book actually bears the title "From Silicon Valley to Singapore: Location and Competitive Advantage in the Hard Disk Drive Industry". )

This new firm spawning process is actually not that much different from the ways in which advanced firms in successive high tech industries in Silicon Valley have spawn the subsequent creation of new start-ups through the process fo employees leaving to become entrepreneurs -- whether it is Fairchild in Semiconductor, HP in electronic instrumentation, or Apple in personal computers. The one difference between what happened in Silicon Valley and Singapore's hdd industry is that, while the advanced firms in Silicon Valley were engaged in product innovation, those in Singapore's hdd industry were engaged primarily in manufacturing operations, albeit with some involvement in manufactruing process innovation. The employees in Singapore hdd industry thus learned primarily about manufacturing operations and process innovation, and the start-ups they created naturally drew on what they learned -- hence it is no surprise that their start-ups were concentrated in component production and assembly, process automation and contract assembly services, etc.

It is interesting to note that early stage financing has NOT been a major limiting factor to the creation of many of these hdd-related start-ups -- the main reasons being that there existed a critical mass of people who understood the industry, and the fact that there was a ready market for the products and services of these start-ups, which reduced the perceived risk of investing in such companies. Some of these start-ups were self-funded by the entrepreneurs themsevles and their friends who had accumulated savings as employees in the hdd firms; some of the funding came from former industry senior executives, other investment came from other business executives and professionals in related industries, and later, private equity funds and investment bankers who were familiar with the industry. The key point is that such investment were forthcoming from people who knew the industry, who knew the entrepreneurs, and who could assessed the risk because of their domain knowledge and people knowledge.

Fast forward to the 1990s and 2000's, we can witness a similar burst of Singapore-based start-ups in the offshore and marine services sectors -- with Keppel FELS and Sembawang Corp serving as the advanced firms that have become globally competitive (collectively they controlled more than 2/3 of the world's market for offshore platform construction), many such offshore and marine services firms were spawn, including quite a few that have IPOed in recent year, e.g. KS Energy, Swiber and Ezra. Again, the same process can be discerned -- knowledge gained from the advanced firms emboldened some of their employees and distributors to become entrepreneurs, and the ready market provided by these advanced firms for a wide range of services reduced the risks for such entrepreneurial entries.

The point is that, where there exists advanced firms, Singapore has been able to support healthy new firm formation and growth. It is only when entrepreneurs in Singapore try to start new ventures in sectors where Singapore does NOT already have some advanced firms and lead-users as anchors that they encounter difficulty in getting funded. It is NOT that Singapore has no high net-worth angel investors, or that such people are inherently risk adverse. It is because the entrepreneurs are trying to start companies in sectors that the existing angel investors do not understand, do not know the entrepreneurs, and cannot assess the risk competently.

In this sense, entrepreneurs in Singapore who are trying to do what Silicon Valley is best at -- starting new companies that pioneer new product innovation using cutting edge technology and targetting at lead-users -- are doing it in the wrong place. Singapore had produced some successful manufacturing firms because we were a major manufacturing base for some rather advanced manufacturing operations by global MNCs. But because Singapore had NOT been a base for advanced global MNCs to perform their product innovation activities, we had not been able to acquire much advanced know-how in product innovation. Unless and until a szable base of advanced firms and lead-users are carrying out their product innovation activities in Singapore, thereby enabling a sizable number of Singaporean engineers and managers to acquire such advanced know-how to become entrepreneurs and investors, it would continue to be difficult for product-innovation-based entrepreneurial start-ups to get started and funded in Singapore.

I would highlight two implications from the above observation. First, Singapore's entrepreneurial ecosystem is not uniformly weak or backward; there are sectors where Singapore's ecosystem may arguably be better than what can be found even in Silicon Valley. Just as Silicon Valley has a great ecosystem for, say, web 2.0 start-ups now because it already has advanced firms in web 2.0 and hence lots of people, including VCs and angel investors and entrepreneurs, who understand web2.0, Singapore has a great ecosystem for marine services start-ups for the same reasons. The key is to pick the right type of business to start in Singapore -- businesses that best leverage on the strength of Singapore's existing (and emerging) ecosystem. Some of my own recent angel investments have been guided by this perspective (more on this in future blogs...).

Second, entrepreneurial ecosystem is not static, but can evolve over time. In particular, public policy can play an important role in stimulating or accelerating the pace of change in certain directions. Thus, notwithstanding the difficulties in starting product-innovation-based new ventures in Singapore that I highlighted above, specific policy interventions, e.g. public co-funding schemes to reduce risk of angel investors, bringing in experienced mentors that have the relevant industry, business and technology knowledge, and public support scheme for early internationalization and cross-border fund-raising, can help nurture the beginning of some limited successes, which in turn will spawn more start-ups over time, in a virtuous cycle. This is something that my centre (NUS Entrepreneurship Centre) in NUS is trying to do for NUS-related spin-offs; again, more on this in some future blogs...

Wednesday, July 30, 2008

don't think out of the box... get out of the box!

Hardly a day passes without my hearing someone uttering the exhortation to "think out of the box". I am sure the folks who utter this cliche meant well -- surely it's good for us to become more creative in our thinking -- but I actually think that this exhortation can be counter-productive and in some contexts may in fact be down-right wrong. The problem with this "think-out-of-the-box" metaphor is that it encourages the belief that one can actually solve real world problems by sitting where one is -- one just needs to be able to think in clever and creative ways. While this imagery certainly appeals to our intellect, I believe a more appropriate metaphor for many of us, especially the intellectual type, is not so much to try to think out of the box, but to GET out of the box -- i.e. get out of our comfort zone and actually go down to the ground where the real action is, so that we can experience first-hand what the real problem is like, as opposed to what we IMAGINE it to be.

We already have too many smart bureaucrats who sit in their air-conditioned office to dream up clever policies or regulations that unfortunately don't work (or make things worse) in practice because their clever policies have omitted certain realities on the ground (for those of you living in Singapore, you may recall the recent incidence of the Land Transport Authority (LTA) coming up with new regulation on where taxi can stop that was well-intentioned but turned out to be impractical and had to be retracted -- would this has happened if the officers involved have actually gone to the ground themselves?). We already have too many smart business school professors sitting in their ivory towers writing clever papers that have little relevance or impact, because they don't bother to talk to the actual folks in industry (ok, some of my colleagues will kill me for saying this...). And yes, we already have too many smart entrepreneurs writing fancy business plans without first going out to observe or talk to potential customers about what their actual pain points are.

Too many wrong solutions are implemented because people imagine what the problem is, instead of being out there to personally experience and learn what the real problem is. What we need to exhort more is for people to get out to the real world to learn first-hand -- the creative thinking can come later, after you have a better grasp of what the real problem is. I particularly stress this point to young entrepreneurs that I'm advising -- by all means, do your homework to formulate your product strategies and develop your go-to-market plans carefully, but what is more important is to start engaging potential customers and to learn about what their real pain points are as early as you can -- unfortunately, very often this cannot be done effectively without actually launching a product into the market. You will get far more ideas about what to do next, when you have real feedback on a real product, than if you just talk about your product concept on paper -- the quality of the conversation is just not the same. The worst business plans are those that provide fanciful market segmentation analysis, but cannot name actual companies or persons that the entrepreneurs have personally talked with or observed about the specific needs, and how their proposed product are actually addressing such needs.

Don't get me wrong -- I'm not suggesting that we become constrained to the existing reality and become enslaved to working within the mold of conventional wisdom; indeed, a large part of achieving truly radical innovation is to upset the existing order with disruptive ideas, and to do this we do need maverick, out-of-the-box thinking. I do believe, though, that all innovation, to be successful, must solve some actual or latent user needs, and often these needs are not well articulated, so the best way to discover what they are is to be out there and observe how the users grapple with their problems in their natural context. In this regard, I believe we all can become better innovators and entrepreneurs if we learn to become more like anthropologists (one of the ten faces of innovation as identifed by IDEO's Tom Kelley). Afterall, discovering opportunities is at the heart of entrepreneurship, and the best way to discover opportunities is to become more observant about people's needs and desires.

So, if you have been thinking hard trying to discover the next great entrepreneurial opportunity, stop thinking and try getting out of your box first.

Sunday, July 6, 2008

What's wrong (or right) about Singapore's entrepreneurial ecosystem ?

Silicon Valley has become the Mecca for would-be high tech entrepreneurs AND government policy makers around the world. A large proportion of entrepreneurs founding companies in Silicon Valley are immigrants coming from outside the US (see e.g. Annalee Saxenian's Silicon Valley's New Immigrant Entrepreneurs, and Angelika Blendstrup's They Made It), and hardly a day passed without some government somewhere in the world declaring that they intend to make their countries/regions to become the next Silicon Valley. There have been many articles and quite a few scholarly books on how the Silicon Valley entrepreneurial ecosystem works ( the three books I most recommend are : The Silicon Valley Edge, Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region, and Regional Advantage: Culture and Competition in Silicon Valley and Route 128 ) , as well as an increasing number of works that seek to compare various Silicon-Valley-wannabe-regions in the world with the real McCoy (see e.g. Building High Tech Clusters: Silicon Valley and Beyond, Cloning Silicon Valley: The Next Generation High Tech Hotspots, Creating Silicon Valley in Europe, The Inside Story of China's High Tech Industry: Making Silicon Valley in Beijing ). I myself have contributed a chapter each on Singapore in two of the latest such books (Making IT: The Rise of Asia in High Tech, edited by Rowen, Hancock & Miller, Stanford U Press 2006, and Growing Industrial Clusters in Asia, edited by Yusuf, Nabeshima and Yamashita, World Bank 2008).

Many official government delegations from Singapore have visited the Silicon Valley in recent years to learn how it works, and to find elements that they can adopt back home. There has been significant changes in government policies towards improving Singapore's environment for high tech entrepreneurship in recent years, and some of these recent policy changes clearly bear the imprint of what have been learned about Silicon Valley through such visits. Nevertheless, a casual browsing through a number of popular blog sites on Singapore's entrepreneurship scene, like Sg.Entrepreneurs, seem to suggest that many entrepreneurs are not happy with the environment for entrepreneurship in Singapore. Since 2002, a stream of my own NUS students, who spent their one-year internship with high tech start-ups in Silicon Valley under the NUS Overseas College (NOC) program, had come back to Singapore, and many would invariably tell me soon after their return home that they greatly missed SiliconValley, and that they lamented various weaknesses in Singapore's entrepreneurial ecysystem when compared with that of the Silicon Valley.

In this and the next couple of blogs, I would like to focus on how Singapore's entrepreneurial ecosystem can become more vibrant and dynamic. While I do have some points of view (including some contrarian ones, as you will see...), I would like to start by encouraging my readers to contribute their own comments on what specific aspects of Singapore's entrepreneurial ecosystem they found lacking when compared with Silicon Valley (or other high tech hubs in the world), and what they think could be done to improve things, and by whom. I would like to encourage you to go beyond just observing differences between Singapore and Silicon Valley, by probing more into the underlying reasons for such observed weaknesses, as well as to ask more fundamental questions, e.g. what aspects of Silicon Valley (or other high tech regions) should we actually try to emulate ? Might some of the observed differences actually suggest strengths we have that we can build upon to differentiate ourselves from other high tech hubs, rather than just trying to ape what they are good at? I look forward to your contribution and the interesting exchange that can emerge !

Wednesday, July 2, 2008

Correction on my post on Gabriel Garcia Marquez

I stand corrected -- since my post about the poem by Gabriel Garcia Marquez sent to me by my friend, I have received two emails alerting me that the poem is actually a hoax -- one of them, Readymade, has kindly left a comment on my post. The actual author of the poem was apparently a Mexican.

I take this as a great example of the working of the wisdom of the crowd, and the reason why wikipedia works.

Friday, June 27, 2008

Social networking across generations

To further expand on my last blog about the potential of social networking applications involving the elderly, consider one of the the biggest problems confronting most healthcare systems: the problem of medication compliance, which is particularly acute among elderly patients. Basically, many patients fail to take their medications as prescribed, either out of forgetfulness/laziness, or false sense of recovery (leading to premature termination of medicine taking). Because of non-compliance, many medication prescriptions fail to have their intended effects on the patients. In addition, the efficacy of many drugs cannot be scientifically verified because of the compounding effect of non-compliance.

There are no easy solution to this huge problem, although I have come across a number of interesting innovations trying to deal with it, including one by a Singapore-based start-up called RemindCap. As the name suggests, the company makes a medicine bottle that has a special cap fitted with electronics that can be programmed to beep when it is not opened at the prescribed time interval. While I like this innovation, it is not as creative as another one that came out of Japan: they also put a special cap on the medicine bottle meant for the elderly patients, but instead of just beeping, they add a network connection that links the cap opening to a digital pet belonging to the grandchildren of the patients (many Japanese children play such digital pet rearing games). If the cap is not opened at the prescribed times, the digital pet grows weaker and eventually die. So out of love for their grandchildren, the elderly patients become more diligent in adhering to the medicine taking schedule. I find this example fascinating, because it not only utilize digital technology (as does RemindCap), but also incorporates deep insights of the social bond between the patients and their grandchildren, and taps the power of grandparental love to overcome their own human weakness.

Of course we can see various limitaitons to this particular innovation as a business (e.g. not all elderly patients have grand children who play digital pets, so the addressable market is reduced...), but my basic point is that the internet and digital media have the power to leverage and enrich social relationships, even among people who are not IT-savvy in the literal sense. The issue is not technology; what we need is imagination, empathy for and understanding of human weaknesses, emotions and desires.

The example above pertains to social networking across generations, but one can easily think of many other forms of scoial links (e.g. imagine teenagers playing in a virtual world game, in which their avatars can only gain strength if their team-mates exercise on a treadmill machine...who knows what this may do to kids' obesity...). I do believe that the potential for using digital technology to connect the elderly and young children is particularly vast and untapped...if you think about it, which demographic groups have got the most amount of leisure time for play and social interaction? The elderly and their grandchildren! Indeed, they have more in common than they have with the middle generation (who are busy working). Sadly, these two generations are increasingly physically separated in most urbanized societies, as nuclear family becomes the norm. I hope a new generation of entrepreneurs will create the imaginative digital tools to help them re-connect with one another...

Tuesday, June 24, 2008

Reverse Mentoring

We all know that the culture of personal mentoring of new entrepreneurs by experienced investors and entrepreneurs has been a key part of the vibrancy of the Silicon Valley entrepreneurial ecosystem. I am happy to see that this concept is beginning to take root in Singapore as well, with more young entrepreneurs looking for mentors, and an increasing number of experienced entrepreneurs and venture capitalists/angel investors learning to take on this role. Indeed, since about 2 years ago, my own organization (NUS Entrepreneurship Centre) has started to engage a number of mentors to help advise and coach some of our NUS spin-off companies. Besides recruiting a number of experienced investors based in Singapore, I have also engaged a number of "international visiting mentors" who are experienced entrepreneurs based in Silicon Valley, to tap their global business experience.

In a macro-sense, mentoring represents a kind of market process, albeit imperfect, to recycle the tacit knowledge and experience of one generation to another. The more efficient this recyling process, the more productive the entrepreneurial creation process is likely to be, as the new generation learns through their mentors how to avoid many of the mistakes made by the earlier generation. The growing interest in mentoring among the entrepreneurial community in Singapore thus augurs well, even though we are still at a nascent stage and there are still lots of room for improving the mentorship process in Singapore (e.g. while it is a widely accepted practice in Silicon Valley for entrepreneurs to provide stock options to mentors, this is seldom done in Singapore, and many mentor-mentee relationships are fuzzy and lack a disciplined process).

However, the purpose of my blog today is not to dwell on this issue (maybe it can be the subject of another blog...). Instead, I would like to suggest that we should start looking at promoting a different kind of mentoring -- that of reverse mentoring, i.e. mentoring of an older generation by a younger one.

The main aim of reverse mentoring is to overcome a major flip-side of experience -- as the world is constantly changing, often times experience gained at one time period may no longer be applicable to a later time period, and indeed, an over-reliance on past experience can close one's mind to fresh perspectives and prevents one from innovating new approaches. Just as the greenhorn can benefit from coaching by the experienced, the experienced can also benefit from coaching by the young, who often are much more attuned to new developments and new possibilities in the world, particularly new technologies, new social trends and new cultural values.

While the concept of reverse mentoring is not really new -- e.g. Tom Kelley, the founder of the famous design company in Silicon Valley, IDEO, has a good discussion of it in his recent book, The Ten Faces of Innovation -- it has not caught on yet in any significant way, even in Silicon Valley.

My prediction is that reverse mentoring will become a major new phenomenon over the next 10 years: while the full potential of the digital revolution as a transformational force in both the enterprise and consumer market is becoming ripe to be exploited over the next decade, many of the senior managers in my generation who are still occupying position of influence over the key strategic business decisions of their organizations have NOT personally learned and embraced many of the new emerging digital media and technologies themselves. In contrast, the new digital media and technologies -- be it social network, virtual world, re-mix, etc. -- have become second nature to the generation of younsters who are only now entering the labor market. There is thus a great need -- and a great opportunity -- for the reverse transfer of knowledge, whereby the managers & policy makers of my generation can learn from the tech-savvy generation of youngsters -- be they students, employees or entrepreneurs -- the potentials and nuances of the new digital media and technologies, through the same process of personal mentoring, except that it is now the young teaching the old.

One of the great privilege of being an academic professor in a university like NUS is the opportunity to learn from the continuous flow of bright students who hail from the new digital generation. Indeed, the free, open-enquiry academic environment of a university provides a wonderful context for reverse mentoring to be practiced -- provided that the professors come with the open-mind to learn, reverse mentoring can naturally occur. In contrast, in business corporate and government departmental settings where relationships are more hierarchical, reverse mentoring goes against the grain of the organizational authority pyramid, and will usually not occur unless there is explicit recognition by senior management that learning from the new generation need to be an integral part of their organizational culture, and that specific formal mechanisms are put in place within the organization to facilitate it.

As Tom Kelley pointed out, reverse mentoring should be an integral part of a truly innovative culture. To those of you who are like me, I encourage you to consider having one or more reverse mentors for yourself, to help you refresh your mind to the changes in the world. To underline my own commitment to this idea, I have started the process of recruiting a number of my NUS students to serve as reverse mentor in digital media/technologies for me and my management team at my organization (NUS Entrepreneurship Centre). (Incidentally, I have started my blog with my 14-year old daughter as my reverse mentor.)

To those of you from the digital generation, I encourage you to consider the entrepreneurial opportunities of creating new reverse-mentoring businesses for the baby-boomer generation. With reference to my previous blog, I believe that those of you who can innovate ways to get the elderly and soon-to-be-elderly to embrace more effectively the new digital technologies -- in their own idiosyncratic ways -- will be well positioned to exploit the much larger opportunities of the globally exploding elderly and soon-to-be-elderly market.

Saturday, June 21, 2008

Follow the Big Waves, but Think Contrarian

We are now in the midst of the Web 2.0 craze, and every other entrepreneur I meet these days is trying to start a new Social networking site. Never mind that even the most talked about ones -- Facebook, Youtube, Second Life, Twitter -- have not turned profitable yet.

I do believe that Web2.0 and Social Networking will become big, indeed much, much bigger than what we can even imagine today. But I very much agree with the advice offered by Peter Thiel, the ex-CEO of Paypal and currently founder and president of Clarium Capital Management (which was the early investor in Facebook), when he spoke at the recent TIECON 2008 that I was fortunate to be able to attend. His advice -- yes, follow the big waves, but think contrarian: meaning, don't do what everyone is thinking of doing, or can easily think of doing. Just as anyone could think of starting a pet dog food portal in the Web 1.0 days, most of the social networking sites I get pitched these days have the same feel -- it's too obvious, so even if it works, there'll be many others around the world who have, or will have, started the same thing.

My own contrarian thinking is that, while everyone sees the young and tech savvy generation as the natural targets for Web2.0 -- after all, most people my generation are considered lost cause as we "just don't get it" -- some of the most significant value creation will be found in applying the power of social networking to the elderly generation today. I think it is a fallacy that, just because many of the people in that generation (and I'm trending towards that soon...) are IT illiterate, they won't be able to benefit from the social networking power of the internet.

One example from Japan that I like very much is the thermo-flask maker who adds an internet connection to the flask. The old parent living alone in their rural home in Japan start their day pouring hot water from the flask to make tea. If for some reason the flask is not activated, the flask is programmed to send an alert to their son working in Tokyo, who can then call back to find out if there is anything unusual. We are obviously not even scratching the full power of social networking and user-generated content in this case, but you get the idea.

My contrarian bet is on the start-up that exploits the intersection of the two exploding sets -- social networking and aging population -- while others are mostly looking at the young and cool. Send me your business plan if you have one sitting in this sweet spot!

In arriving at this contrarian bet I'm connecting two different dots -- the fact that I'm part of the aging population myself, becoming increasingly aware of the challenges I will face soon as an elderly, and the fact that my involvement in NUS Entrepreneurship Centre and in angel investing keep me constantly exposed to new web2.0 ideas; in particular, the NUS Overseas College (NOC) students that I come into contact with often keep me abreast with the latest developments in Web2.0 from Silicon Valley, China as well as right here in Singapore. One such group of NOC returnee students in Singapore, who called themselves the E27, is now running an incubator for interactive digital media (IDM) for my centre (Garag3). I would encourage you to visit their E27 website to find out the latest happenings in the web2.0 community in Singapore.

Gabriel Garcia Marquez

I recently received this beautiful "farewell letter" written by Gabriel Garcia Marquez, a Colombian Nobel laureate in literature who is diagnosed with terminal cancer. When I was an undergraduate student at MIT, I used to read and love Gabriel's books -- those were the days when we were all passionate about changing the world and righting the world's injustice, and his writings stoked the fire in our belly. Reading his letter now brings back bitter-sweet memories of my Cambridge days, and helps me to connect back to an earlier dot in my life.

The friend who sent it to me is a Malaysian (part of the Malaysian-who-studied-in New Zealand friendship network of my wife who studied in New Zealand...) whose wife had recently died of cancer. I have forwarded it to one of my NUS students who is completing a one-year internship program in Silicon Valley (the NUS Overseas College Program), and he in turn has posted it on a new web-portal that he and several other NOC and Stanford classmates have developed called spread-the-love (www.spreadelove.com). They hope to make it into a platform for people to "discover, share and collaborate around the things that they love".

I recommend you to go to this spread-the-love web-site to read Gabriel's touching letter, as well as to learn more about what that portal is trying to do, and hopefully you can contribute towards their effort as well. For those of you who have not read Gabriel's books before, I would strongly recommend them as well.

Monday, June 9, 2008

Connecting the Dots

The title of my blog is inspired by the "Connecting the Dots" speech by Steve Job at the 2005 Stanford University commencement. Being someone with an unusual background and diverse interests, I certainly have many dots to connect. I am part of the overseas ethnic Chinese diaspora -- born in Malaysia, but now a Singapore citizen. I studied physics and electrical engineering/computer science for my BSc's and MSc at MIT, and completed my PhD there in regional planning/industrial policy. I was an entrepreneur, a social activist, and now an active business angel investor and public policy consultant, while holding a day-job at the National University of Singapore (NUS) as a tenured, full professor in both the NUS Business School and the Lee Kuan Yew School of Public Policy, where I teach and research on both high tech entrepreneurship and innovation strategy/competitiveness policy. I am also the director of the NUS Entrepreneurship Centre, where I spearhead the university's wide range of programs -- incubator, seed funds, mentoring, etc. -- to nurture entrepreneurship among NUS professors and students. I have strong links to the Silicon Valley, having spent sabbatical leaves at U.C. Berkeley and Stanford University, but also the Nordic countries, as well as Korea, Taiwan and China. Notwithstanding my strong intellectual conviction in the positivist scientific world view, I am philosophically a Buddhist, and a learner of Qigong.

In this blog, I will try to share my intellectual journeys in connecting the diverse dots of my own life to arrive at my somewhat unconventional perspectives on various issues, but in particular on how Asia is being transformed by the forces of technological AND social innovation and entrepreneurship, where the technological and social entrepreneurial venturing opportunities will lie (and what I am doing to invest in them), and what the key socio-economic challenges we will need to look out for (and the kind of public policy innovations that I am advocating for Singapore and other Asian states to adopt). Like Steve, I believe that great insights come from the synergy of diverse experiences, and our ability to empathize (from personal experience) is just as important as our ability to conceptualize (from intellectual analysis). I am also a big fan of the Small World, Strength of Weak Ties perspective, and the serendipity of knowledge discovery and innovation (see the book by James Burke).

As I begin my blog journeys, I welcome your comments and look forward to seeing how your dots and mine can begin to connect...