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.

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!

"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.

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...

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.

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 !

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.