Tech Founders in Asia's Model City

a report from:

TECH FOUNDERS IN ASIA'S MODEL CITYLessons from Mapping the Singapore Tech Ecosystem

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2 / TECH FOUNDERS IN ASIA'S MODEL CITY

Samridhi Singh and Lili Torok created this report in November 2015, with assistance from Matt Lerner, as well as Helen Greene, May May Pau, and Rhett Morris. Its findings are based on surveys and interviews with more than 200 local technology entrepreneurs in Singapore, as well as other industry data from Singapore. This project was made possible by support from the J. P. Morgan Foun-dation. It was conducted in association with the Global Entrepreneurship Research Network.

ABOUT THIS REPORT

LESSONS FROM MAPPING THE SINGAPORE TECH ECOSYSTEM / 3

EXECUTIVE SUMMARY

Singapore has emerged as a model city for policy-makers who believe that entrepreneurship drives economic growth, especially among internet tech-nology companies. While there is an abundance of macro-level data and analysis on the policies that enabled this growth, the entrepreneurs and the network that accelerated it have not been studied as of yet. To fill this gap, Endeavor Insight conducted a study to map Singapore’s tech ecosystem, inter-viewing over two hundred entrepreneurs to spot-light top influencers, identify connections between companies, and learn why entrepreneurs choose Singapore as their companies’ home.

1) A SMALL NUMBER OF COMPANIES ACCOUNTED FOR A MAJORITY OF JOB GROWTH IN THE PAST FIVE YEARS. Entrepreneurial tech companies in Singapore cre-ated over 7,000 jobs in the five years between 2010 and 2015. Most of this job growth, however, can be attributed to a few companies that grew at an exceptionally high rate, increasing their employment by 20 percent annually for three years in a row.

2) A SMALL GROUP OF INFLUENTIAL TECH ENTREPRENEURS DRIVE THE SECTOR’S GROWTH. If it had not been for a handful of suc-cessful entrepreneurs who shared their success, the Singapore tech ecosystem would look very differ-ent today. These entrepreneurs, once successful, reinvested their resources in the next generation of entrepreneurs through angel investment, mentor-ship, serial entrepreneurship, and the facilitation of former employee spinoffs.

These types of connections are critical to the growth of a successful entrepreneurship community. A recent study Endeavor Insight conducted in New York City found that entrepreneurs who are men-tored by successful founders are three times more likely to become top performers than their peers who received no such mentorship, and in Medellin, founders that have received mentorship are six times more likely to receive investment.

3) ENTREPRENEURS COME TO SINGAPORE TO BENEFIT FROM ELITE UNIVERSITIES AND A SUPPORTIVE ECOSYSTEM. Singapore is famous for its supportive immigration policies for foreign-born entrepreneurs and stu-dents. These policies, coupled with Singapore’s rep-utation as a supportive entrepreneurship ecosystem, have had measurable impact. In fact, of the ten most influential companies in this study, nine had at least one founder who was not born in Singapore.


NYC = ROLE MODEL

The emergence of the Singapore tech ecosys-tem has occurred in a remarkably short time. From a newly independent country with severe unemployment in 1965 to the tech giant of today, in just a few decades Singapore has developed a knowledge-based economy with an IT sector that employed over 72,000 people in 2015.1 More impor-tantly, of these 72,000 jobs, over 10 percent were created by local, entrepreneurial companies.2

Supportive legislation may have been vital to making Singapore’s tech ecosystem grow, but the connec-tions between tech entrepreneurs make this growth sustainable. The success of a few entrepreneurs often becomes the engine of economic growth in a city as entrepreneurs connect to each other. In Silicon Valley, New York, and Singapore, we see a multiplier effect at work: every success is followed by more employee spinoffs, more angel investments, and more inspired followers.3

Endeavor Insight developed original methodology to map entrepreneurial ecosystems and understand how individual success stories translate to city-wide economic growth. In Singapore, we have inter-viewed hundreds of entrepreneurs to learn about their companies, and their connections. These interviews inform us about the five key ways that entrepreneurs connect to each other in any city: investment, serial entrepreneurship, former employ-ee spinoffs, mentorship, and inspiration. We then use this data to map the social networks of tech entre-preneurs in a city, as shown on page five.

Singapore’s social network map tells an interesting story: similarly to New York, Silicon Valley, or Lon-don, a small number of entrepreneurs was behind most of the ecosystem’s growth, and most of the job growth over the past two decades can be attributed to a handful of quickly growing companies. Unlike in any of the comparable cities, the majority of these successful entrepreneurs were foreign-born, and the number of their connections grew at a significant-ly faster pace than anywhere else where Endeavor Insight has conducted a study.

The tech entrepreneurs (in this map only) generat-ed over 7,000 jobs in 2014, up from a few hundred in 2010. Many of their companies, like Star+Globe Technologies, Zopim, and SgCarMart were among the largest exits in Singapore; in the past ten years, there have been a total of 42 exits in the country, generating an estimated USD 529 million in wealth for the city, to which these companies contributed to a great extent.

Of the ten most influential companies on this map, six deserve special attention: Garena, Yolk, Wego, RedMart, PatSnap, and MyRepub-lic. These six companies represent three percent of the ecosystem map, but they account for 76 per-cent of total job growth in Singapore over the past five years. A quick look at one of these six, Garena, demonstrates the impact of high-growth compa-nies on an ecosystem like Singapore.

Lesson 1: A small number of companies accounted for a majority of job growth in the past five years

SINGAPORE’S FASTEST-GROWING TECH EMPLOYER: GARENAForrest Li, the founder of Garena was one of the lucky few to have sat in on Steve Job’s famous ‘Stay Hungry Stay Foolish’ Stanford Commencement speech in 2005. He then founded Garena in 2009, a gaming company that is now worth USD 2.5 billion and employs 3,700 people. Garena was Singapore’s first billion-dollar internet company.

Garena was born out of network effects. While at Stanford, Li was introduced to Toivo Annus of Skype through a friend. An-other friend of Li’s turned out to be the nephew of Singapore billionaire Robert Kuok. Li’s girlfriend introduced him to Kuok Khoon Hong, the owner of the palm oil giant Wilmar. These three contacts were the initial investors in Li’s first company that subsequently led to the birth of Garena. The power of connections didn’t stop there. The Vice President of General Atlantic, a New York based private equity firm, Nick Nash, grad-uated a year after Li from Stanford Business School. After the firm made an investment in Garena in 2014, Nash joined the company full-time as Garena’s president.

But Li’s own influence on the Singapore tech ecosystem is also considerable. In 2013, Garena made its first investment to RedMart (also one of Singapore’s fastest-growing companies). Roger Egan, the founder of RedMart, is one of the most men-tioned ‘inspirers’ on the map, galvanizing the founders of over half a dozen tech companies such as Greyloft, Bakipa, BitX, and Smove, among others. Moreover one of RedMart’s former employees, Raman Shalupau, went on to create Cofounders and later Eventmetrics.4


THE SINGAPORE TECH ECOSYSTEM1995-2015

MENTORSHIP

INSPIRATION

INVESTMENT

FORMER EMPLOYEE

FOUNDER

Legend:

Size of circle reflects the influence of the entrepreneurs at each company based on their number of outgoing connections.

Source: Endeavor Insight analysis.


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Singaporean tech entrepreneurs are high-ly connected to each other: the entrepreneurs studied by Endeavor Insight had, on average, two connections to another entrepreneur. Successful entrepreneurs, or companies that employed over 10 people and grew by a minimum 20 percent annually, were connected to an average of five other entre-preneurs in Singapore, suggesting that successful entrepreneurs were significantly more connected than their less successful peers. In comparison, our research indicates that New York tech entrepreneurs had on average about three connections to other entrepreneurs on the Endeavor Insight New York Tech Map.

Connectivity is also rapidly increasing among local tech entrepreneurs. On average, the total num-

ber of connections in the network grew by over 62 percent annually between 2010 and 2014. Our data indicates that every new incoming connec-tion increases a company’s chances at becoming a high-growth company, or scaleup, by more than 10 percent in Singapore. Apart from focusing policy support on scaleups, another, equally sustainable solution would be to help entreprepreneurs find mentors and establish the connections that will help them become a scaleup, that is to grow by over 20 percent annually for three consecutive years.

Compared to any other city Endeavor Insight has studied so far, successful Singaporean companies were the most engaged with the next generation of entrepreneurs as mentors. Mentoring was more common than any other connection type on the

Lesson 2: A small number of influential entrepreneurs drive the sector’s growth



reached far beyond their immediate employees and customers. They are serial entrepreneurs and an-gel investors, they inspired and mentored others, and often their employees started new businesses. Increasingly experienced with every new venture, they became the best mentors and the most expe-rienced investors, proving the theory that a healthy and supportive entrepreneurial ecosystem is key to job growth.

Showcasing and supporting these top entrepreneurs is important for the continued growth of a sector because their influence has a multiplier effect on the growth of the local economy, creating wealth and employment in the city. Below are two people who have played a key role in shaping Singapore’s tech ecosystem in the past two decades.

map. Almost all of the top influencers we identi-fied were founders of companies that were either acquired, like TenCube or Zopim, or high growth companies, like Garena, which created thousands of jobs over a short period of time. These founders were highly involved in investing in other companies and mentoring and inspiring a new generation of entrepreneurs.

It is not surprising, then, that most of the spectacular growth in Singapore’s tech sector can be traced back to a handful of influential entrepreneurs. Similar to cities like New York and Cairo, a small number of tech companies generat-ed most of the new jobs in Singapore. Once these companies were successful, they worked hard to share their success. The impact of these entrepre-neurs multiplied across the entire ecosystem and


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Meet the Influencers: Virginia Cha and Darius Cheung

VIRGINIA CHA is arguably the most influential entrepreneur within the network of Singaporean tech companies. She is a serial entrepreneur who played a part in the life of over fifteen Singaporean companies to date; she teaches at all three major unviersities; and, like many of Singapore’s most influ-ential entrepreneurs, she is also an expat.

Virginia graduated from the University of Hawaii with a degree in Computer Science in 1980. By 1994, she was director of advanced technology at Unisys. She became involved with entrepreneurship in 1995, when she was hired by a research center backed by the Singaporean government to help commercialize its lab technologies.5

With the backing of Singapore’s National Science and Technology Board, Virginia Cha created the Commercialization Grant Scheme, providing eligible researchers with access to seed funding and sup-port in raising capital and building a business plan.

But as she was working on the Commercialization Scheme, her career took a second, even more im-portant turn: she became the co-founder of one of the supported spin-off companies.6

The resulting venture, Star+Globe Technolo-gies, has become one of the most influential ventures in Singapore, and this influence has created a powerful multiplying effect. Through mentorship, investment, and serial entrepreneur-ship, Virginia Cha has impacted a total of fifteen other companies, roughly 10 percent of the compa-nies in this map. She has mentored Vincent Lau and Dickson Gregory of Paywhere, a company she also funded. She also mentored some of the founders of Gozo Labs and Alex Wong of Rainmaker Labs, who went on to become the founder of ShopGuru. Almost twenty years after Star+Globe Technologies, she co-founded Basilo Labs, a startup focusing on user-generated mobile video advertisement.

The Influence Virginia Cha on the Singapore Tech Ecosystem Star+Globe Technologies

MENTORSHIP

INSPIRATION

INVESTMENT

FORMER EMPLOYEE

FOUNDER

Legend:




The Influence Darius Cheung on the Singapore Tech Ecosystem

TenCube

MENTORSHIP

INSPIRATION

INVESTMENT

FORMER EMPLOYEE

FOUNDER

Legend:



DARIUS CHEUNG Is the quintessential seri-al entrepreneur. By the age of 34, he has founded companies in multiple sectors including real-estate, fin-tech, and cyber security. Unlike the 65 percent of Singapore’s founders who were educated abroad, he is truly a homegrown entrepreneur – a rare find in Singapore.

Darius dove head first into the world of startups, soon after graduating from the National University of Singapore with a degree in Electrical Engineering. With seed-funding from the university, he built his first company, TenCube, an anti-virus company. In less than five years, Darius led the company to raise two rounds of financing, built a team of 26 peo-ple, and created an award-winning mobile security product, WaveSecure.

The big win for the company came when McA-fee, the internet-security giant led by Intel, acquired TenCube, one of the first exits in Sin-gapore’s history. TenCube’s buyout was an import-ant turning point in Singapore’s entrepreneurship

history, giving other local entrepreneurs the hope that they too can be on the global stage. Since then, he has founded BillPin, a money sharing mobile app, and 99.co, a web portal for property rentals in Singapore backed by Sequoia and Facebook founder Eduardo Saverin.

Darius’s success has been key to the successes of many other businesses in Singapore. Darius was one of the early mentors to Royston Tay of Zopim, a high-growth customer-service tech company that was acquired by Zendesk in early 2014. Zo-pim’s growth has had a considerable ripple effect on the ecosystem, with former employees founding companies such as Gothere and Present. Gothere’s founder, Dominic Ee, and Darius went on to build 99.co together. Coming full circle, Zopim gave an angel investment to 99.co. Darius is also an active angel investor, giving back to the next generation of fast-growing companies such as Carousell, HipVan, and PlayMoolah.


Lesson 3: Entrepereneurs come to Singapore to benefit from elite universities and a supportive ecosystem

Of the ten most influential companies Endeav-or Insight identified in Singapore, nine had founders who were foreign-born, including such influential figures as Gerald Tock of Inzen Studios and Ross Veitch of Wego. Some of them came to study in Singapore and stayed after graduation, oth-ers came just to start a business. The Singaporean government has encouraged mentorship by bringing in mentors like Hugh Mason, who ended up creating JFDI.asia, one of the most popular accelerators in the ecosystem.

Our research suggests that most entrepreneurs normally start a business in a city simply because they live there. Not in Singapore: the entrepreneurs surveyed mentioned the city’s reputation as an international hub, its supportive ecosystem, and its business-friendly policies as reasons for founding their companies in Singapore. It seems that most en-trepreneurs come to Singapore with the purpose of starting a business, making it a great case study for understanding what entrepreneurs look for in an ecosystem.

The Singaporean government should be credited for facilitating the arrival of both students and entrepreneurs to the city. Merit-based scholarships for foreign students are widely available through the Tuition Grant Scheme, fully funded on the condition that students stay for three years in the city upon graduation to work or start a business. For entrepreneurs, the EntrePass, a special entrepreneur visa was introduced in 2004. It allows founders to apply with a nascent business plan and they have a month to incorporate after receiving their visas.

The factors contributing to the recent success of the Singaporean tech industry include the govern-ment’s business-friendly policies and a supportive ecosystem of entrepreneurs, mentors, and inves-tors committed to the growth of businesses in the city. This suggests that a supportive ecosystem can attract considerable resources to a city: on the one hand, it will attract entrepreneurs to the city; on the other, the more embedded these entrepreneurs are, the more likely they are to generate wealth and jobs.


Why Did You Choose to Start Your Business in Singapore?Most frequently used words from 200 interviews



Looking Forward: Empower the influencers

Singapore’s tech ecosystem grew at a remarkable pace over the past twenty years, and this growth has been enabled by a combination of three things:

1. A small number of influential entrepre-neurs who engaged with the next generation of entrepreneurs;

2. A small number of high growth companies that generated most of the job growth; and

3. Supportive government policies that laid the foundation for more growth, supporting Singaporean startups and facilitating an influx of foreign entrepreneurs.

Singapore has an impressive track record in support-ing early-stage startups and foreign entrepreneurs, and the government has created conditions where influential entrepreneurs like Virginia Cha or Darius Cheung could drive the sector’s growth even fur-ther. Nevertheless, there is room for improvement in terms of supporting later stage and high growth companies, and facilitating more connections be-tween them, especially in terms of former employee spinoffs and serial entrepreneurship. As we have seen above, these influential companies are often behind most of the employment growth in a city, and they also often have lasting impact.

Even though six fast-growing companies ac-counted for a majority of additional jobs in the network studied in this report, there seems to be a lack of public support going to companies like them, even though their founders are more likely to ensure the sustained growth of the sec-tor because they are more likely to give back. The Singaporean government created a favorable envi-ronment for businesses and invested an immense $6 billion in developing its startup scene, but, as is often the case, the government focused most of its support on early stage startups. The Technology Incubation Scheme, the Business Angel Scheme, the Early Stage Venture Fund, and The National Research Foundation’s (NRF) Technology Entrepreneurship Scheme target early stage startups.

It is key that public incubation schemes, VCs, accelerators, and mentors refocus their attention on helping companies achieve later stages of growth in order to increase employment numbers. As discussed in greater detail below, connecting entre-preneurs to each other and pairing them with the right mentors is crucial to sustaining job growth, especially in an environment where the government has laid the foundations of a supportive business ecosystem with a number of business-friendly policies.

Why should Singapore worry about job growth? Singapore may have less than three percent unem-ployment, but many Singaporean companies need to cultivate a customer base in neighboring coun-tries, whose collective population totals 600 million. Employment growth in these neighboring countries is key for Singaporean companies’ international ex-pansion. As research has shown that one additional innovative job can translate into as many as five jobs in other sectors, investing in high growth companies is often a lucrative investment for governments.

Singapore’s case has shown that mentorship and connectivity often translate into high growth. Encouraging companies to establish con-nections and pairing startup founders with experi-enced mentors can be reliable tools for city policy makers seeking job creation.



ENDNOTES1. Labour Force in Singapore 2014, (Singapore: Ministry of Manpower of the Republic of Singapore, 2014)

2-46.

2. Ibid.

3. Michael Goodwin, The Power of Entrepreneurship Networks: How New York City Became the Role for Urban Tech Hubs, (New York City: Endeavor Insight, 2014)

4. Endeavor Insigth analysis based on interviews with 200 tech founders in Singapore.

5. Virginia Cha, Asia’s Entrepreneurs: Dilemmas, Risks, and Opportunities, (Singapore: Routledge, 2015), xii-6

6. Ibid.

7. Endeavor Insigth analysis based on interviews with 200 tech founders in Singapore.


ENDEAVOR is leading the global high-impact entrepreneurship movement to catalyze long-term eco-nomic growth. Over the past fifteen years, Endeavor has selected, mentored, and accelerated the best high-impact entrepreneurs around the world. To date, Endeavor has screened more than 30,000 en-trepreneurs and selected 800+ individuals leading 500+ high-impact companies. These entrepreneurs represent over 225,000 jobs and over $6 billion in revenues in 2012 and inspired future generations to innovate and become entrepreneurs too.

ENDEAVOR INSIGHT, Endeavor’s research arm, studies high-impact entrepreneurs and their contribu-tion to job creation and economic growth. Its research educates policy makers and practitioners on how to accelerate entrepreneurs’ success and support the development of strong entrepreneurship ecosystems. In 2013, Endeavor Insight joined with the Kauffman Foundation and the World Bank, to co-found the Global Entrepreneurship Research Network. Endeavor Insight research in emerging markets is partially supported by a generous grant from Actis.

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This project was conducted in association with the members of the Global Entrepreneurship Research Network.

Endeavor InsightDecember 2015Copyright © Endeavor Globalwww.endeavor.org/insight

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