In Southeast Asia's vibrant venture capital and startup landscape, a transformation echoes through the realms of enterprise software and deep technology as they descend upon us. As we embark on this new era, nations, both burgeoning and mature, ponder deeply on nurturing startups that reach for the stars. The venture funding sphere, once a bastion of bold dreams, now yearns for revolutionary creations and teams with global aspirations.

Reflecting upon this, I have discerned three pearls of findings:

First, the Luminance of Product and Technology:

In an age where only the extraordinary captivates, a startup's product or intellectual property (IP)/technology must not just innovate but shine among the global elite. This shift towards top-tier innovation resonates with trends favouring enterprise and deep technology.

Second, The Founding Team's Odyssey Beyond Borders:

The spirit of the founding team is pivotal. In a world without borders, founders must carry belief, confidence, and courage to journey globally. This international vision is the heartbeat of venture capitalists seeking market disruptors.

Third, The Art of Skill and Global Canvas:

The founding team's mastery in global expansion is crucial. Skills in international storytelling, team building, and capital raising form the fabric of their venture. Success is increasingly measured by the global footprint and international business acumen.

As we conclude, remember that in the universe's grand dance, every venture has its place. The pursuit of large venture capital FDI is a journey through an ocean of possibilities.

Echoing Rumi, "You were born with wings, why prefer to crawl through life?" Startups and nations must realize their potential to soar in the global market. Let this understanding uplift them toward horizons of success and innovation.

In recent years, researchers and practitioners alike have been studying the personalities of successful startup founders to understand what makes them tick. By analysing the Big Five personality traits—openness, conscientiousness, extraversion, agreeableness, and neuroticism—we can gain insights into the characteristics that contribute to a founder's success or failure. In this blog post, we will use what a quick Google search list as the best and worst rated founders and take a look at their personality traits. However, I only did a small sample set as a quick experiment. 

Best Rated Founders

The following five founders stand out as examples of those who excel in their roles:

1. Patrick Collison (Stripe)

2. David Vélez (Nubank)

3. Max Levchin (Affirm)

4. Brian Armstrong (Coinbase)

5. Stewart Butterfield (Slack)

These founders generally exhibit high levels of openness and conscientiousness, moderate to high agreeableness, moderate extraversion, and low neuroticism. These traits help them navigate the challenges of building and growing successful startups.

Worst Rated Founders

On the other hand, there are founders whose actions and decisions led to negative consequences for themselves and their companies. Some notable examples include:

1. Travis Kalanick (Uber)

2. Elizabeth Holmes (Theranos)

3. Parker Conrad (Zenefits)

4. Billy McFarland (Fyre Festival)

5. Adam Neumann (WeWork)

Founders here often display high openness and extraversion, but extremely low conscientiousness and agreeableness, along with low neuroticism. Their actions and decision-making processes contributed to the failures of their respective ventures.

Findings

Based on the analysis of these founders, several patterns emerge:

- Successful founders typically exhibit high openness and conscientiousness, moderate to high agreeableness, moderate extraversion, and low neuroticism.

- Unsuccessful founders often show high openness and extraversion, but very low conscientiousness and agreeableness, and low neuroticism.

- Sociopathic founders are characterized by very high extraversion, very low agreeableness, conscientiousness, and neuroticism, with variable openness.

- Founders with Narcissistic Personality Disorder (NPD) tend to have high extraversion, very low agreeableness, moderately low conscientiousness and neuroticism, with no clear pattern in openness.

As Rumi once said, "What you seek is seeking you." Similarly, the qualities that make great founders also attract them to entrepreneurship. 

The Analytical Pathway: A Common Ground

Our findings reveal a striking pattern: a substantial 91.1% of top venture capitalists previously held positions in analytical fields. This statistic underscores the value of an analytical mindset in the world of venture capital. Analytical roles, encompassing areas such as financial analysis, investment management, and data-driven decision-making, equip VCs with the acumen to dissect complex market trends, evaluate business models, and make calculated investment decisions. The high percentage of VCs with this background suggests that an analytical foundation is not just beneficial but perhaps essential in navigating the intricate landscape of venture investment.

Entrepreneurial Experience: Valuable but Less Common

Contrary to the popular belief that most successful VCs are former entrepreneurs, our analysis paints a different picture. Only 21.5% of the top venture capitalists were founders before stepping into their current roles. While this figure highlights the significance of entrepreneurial experience, it also clarifies that it's less common than one might expect. Having been in the founder's shoes does provide unique insights into the challenges and dynamics of starting and scaling a business. However, it appears that having a founder's background, while advantageous, is not a predominant trait among the world's leading VCs.

Diverse Roads to the Top

The journey to becoming a top VC is diverse and multifaceted. While a strong analytical background is prevalent among these successful individuals, it is by no means the only path. The world of venture capital values a variety of experiences, whether it's steering a startup through turbulent waters or navigating the complexities of financial markets. This diversity in backgrounds contributes to a richer, more versatile approach to investment strategies, benefiting both the VCs and the innovative companies they choose to back.

Conclusion: Blending Analytical Acumen with Varied Experiences

The landscape of venture capital is as varied as it is challenging. Our analysis reveals that top venture capitalists often share a common thread of analytical experience, providing them with the skills necessary to assess and manage risk effectively. However, the path to becoming a leading VC is not monolithic. Experiences as diverse as entrepreneurship, financial management, and technology development all play a role in shaping the instincts and insights of these investment leaders. As the venture capital industry continues to evolve, the blend of analytical rigor and diverse experiences will remain pivotal in identifying and nurturing the next generation of groundbreaking companies.

As venture capitalists, we see many promising business plans from talented founders. However, the stresses of starting a company can take a toll on mental health especially since Covid. Studies show over 70% of founders report some impact on their mental wellbeing[1]. While passion and vision are critical, we must also evaluate how a founder's mental health could affect their ability to lead a successful startup. 

- Look for self-awareness and maturity. Founders who are open about their mental health needs and actively manage them signal responsibility. Seek out those who prioritize self-care and have supportive personal and professional networks.  

- Scrutinize financial planning more than usual. Impulsivity or unrealistic projections may reflect impaired judgment. Look for pragmatic financial models with executive pay aligned to value creation.

- Assess the team dynamics. Diverse, complementary teams tend to be more resilient. Watch for "red flags" like frequent turnover or poor communication that may indicate unmanaged mental health issues.

- Consider market viability to another level of detail. Evaluate the business model, competitive landscape, and addressable market.

- Provide mentorship. All founders need guidance navigating startup life's ups and downs. Be available as a sounding board and connect founders to resources like coaches, therapists, and peer support groups.

With awareness and support, founders with mental health issues can channel their creativity to build sustainable, impactful companies. As investors, we have an opportunity to foster an ecosystem where mental health is openly addressed so founders can fulfill their visions. Evaluating founders holistically is key to funding resilient startups poised for long-term success.

Times are different now, investors should be more aware of what to look for and how to help founders more going forward.

Citations:

[1] https://www.pnas.org/doi/full/10.1073/pnas.2215829120

[2] https://executive.berkeley.edu/thought-leadership/blog/impacts-poor-mental-health-business

[3] https://hbr.org/1985/05/how-to-write-a-winning-business-plan

[4] https://www.nature.com/articles/s41598-023-41980-y

[5] https://www.forbes.com/sites/melissahouston/2023/05/31/the-impact-of-mental-health-on-business-owners/?sh=266080683e41

[6] https://www.crowdspring.com/blog/what-investors-want-in-a-business-plan/

[7] https://www.forbes.com/sites/annefield/2023/04/29/startup-founders-report-entrepreneurship-is-taking-a-toll-on-their-mental-health/?sh=266a8c8e2192

[8] https://www.forbes.com/sites/tracybrower/2023/02/28/mental-health-delivers-big-business-benefits-3-strategies-for-success/?sh=2667109b3c8d

[9] https://www.linkedin.com/pulse/what-do-investors-look-business-plan-mike-kovach

[10] https://finance.yahoo.com/news/72-startup-founders-report-impact-190904214.html

[11] https://www.paychex.com/articles/human-resources/workplace-mental-health-effects

[12] https://startupnation.com/start-your-business/investors-business-plan/

[13] https://www.fastcompany.com/90969820/will-your-startup-fail-personality-traits-for-success

[14] https://hbr.org/2021/10/its-a-new-era-for-mental-health-at-work

[15] https://www.indeed.com/career-advice/career-development/business-idea-evaluation

[16] https://www.sciencedaily.com/releases/2023/10/231017215925.htm

[17] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9969895/

[18] https://www.investopedia.com/financial-edge/0412/5-essential-steps-to-evaluating-your-business-idea.aspx

[19] https://link.springer.com/article/10.1007/s11187-018-0059-8

[20] https://blog.exit-planning-institute.org/how-owning-a-business-impacts-mental-health-and-stress-levels

[21] https://www.entrepreneur.com/starting-a-business/5-things-investors-want-to-know-before-signing-a-check/234536

[22] https://grepbeat.com/2022/07/13/startup-lifes-dark-secret-founders-often-face-mental-health-challenges/

[23] https://www.putnam.com/individual/content/perspectives/8047-mental-health-is-a-business-issue-how-companies-are-supporting-their-employees

[24] https://aofund.org/resource/what-do-investors-look-for/

I recently did a quick data analysis on Southeast Asia early stage venture capital investments in different firms over the past few years. The data (from Crunchbase) shows the ratio of investments made by each firm in a recent period of hype (March 2021 to March 2022) compared to their average number of investments over the previous 2-3 years. Let's dig into the data and see what insights we can gather. 

Overall, the data shows a fair bit of variation between firms in terms of how their recent investment levels compare to their historical averages. 

A few key observations: 

• Most firms (15 out of 17) saw increases in their investment levels compared to historical averages. This indicates an overall uptick in VC activity among these firms during the hype period. However, the degree of increase varied quite a bit. 3 firms saw modest increases of 50% or less compared to their averages. There are 2 firms that saw massive increases of 200-500% above their typical investment cadences. 

• There were 2 firms that saw decreases in investments in the 25-60% range compared to historical averages. So the pullback in investing among these firms depicted strong contrarian behavior compared with the surge in activity among the highest growing firms. 

Overall, these data reflect a VC market that saw accelerated growth in 2021 but with an uneven distribution - very few firms are pulling back showing investment discipline while others are rapidly expanding investments. 

In the complex and multifaceted realm of venture capital and startups in 2023 post 2022 slow down, emerging markets present a unique set of opportunities and challenges. A significant challenge is the potential diminution of later-stage follow-on funds and a concurrent decline in the quality of later-stage investors. This situation can engender a funding gap for startups in their growth phase and a dearth of strategic guidance. However, through strategic planning and innovative thinking, early-stage funds can effectively navigate these challenges.

When later-stage capital becomes scarce, it can create a funding vacuum that hampers the growth trajectory of startups, potentially leading to a deceleration in the overall startup ecosystem. The decline in the quality of later-stage investors can exacerbate this situation (based on performance and just the law of large numbers). In such a scenario, early-stage funds need to adopt a proactive and innovative approach. Here are some strategies:

1. Strategic Partnerships: Early-stage funds should seek alliances with firstly your limited partners, corporate investors, family offices, or other entities that have a vested interest in the startup ecosystem. These partners can provide not only capital but also strategic guidance, market access, and other resources. Focus and Lean on your Limited Partners, especially those who are financially driven not just strategic.

2. Syndicate Investments: Early-stage funds should consider forming syndicates with other early-stage investors. Syndicates allow investors to pool their resources, share risks, and increase the total amount of capital available for follow-on rounds.

3. Investor Relations: Early-stage funds should maintain strong relationships with existing investors and continuously engage with potential new investors. Regularly communicating portfolio companies' progress and milestones can help attract follow-on investments. 

4. Continue to focus on Capital Efficiency (from 2022): Early-stage funds should work closely with their portfolio companies to improve their capital efficiency. Adopt an advisory mindset builds trust and results.

An Analysis of Founder and Executive Education Backgrounds at Top Southeast Asian Startups

I conducted an analysis of the educational backgrounds of founders at 99 of the highest-funded startups in Southeast Asia. Using Crunchbase as the database and then researched the schools and programs listed for key leaders at each company.

By far the most represented university is National University of Singapore (NUS), with 18 attendees out of 227. No other university comes close, underscoring NUS’s dominance as a pipeline for Southeast Asian startup talent (bachelors). 

U.S. schools are also popular, especially Stanford (6 attendees) and Carnegie Mellon (6 attendees). However, an interesting finding is Harvard Business School (MBA) comes in second with 12 attendees.

Several other insights emerge:

• Within Singapore, beyond NUS, notables include Nanyang Technological University (10 attendees) and Singapore Management University (5 attendees).

• STEM degrees are common from schools across the board.

• US schools beat UK and Australian schools by a wider margin.

• Indonesian founders - ITB is creates more of such founders than University of Indonesia.

This analysis still only scratches the surface. With additional data on companies, founders, executives, and their educational paths, we could develop even richer insights into the human capital flows behind Southeast Asia’s tech innovation and entrepreneurship. Please let me know if you would like me to pursue any further research.

p.s For Parents from Singapore: Go to NUS for bachelors and HBS for MBA - there you go no pressure. You are welcome.

Forewarning: 

I accurately forecasted the tech crash globally and in SE Asia earlier in 2021 (although I was a quarter late (Q3 2022)- I did not predict the the war). The tech industry has seen a major downturn in 2022 due to various macroeconomic factors like rising inflation, interest rates hikes, and geopolitical tensions. While the timing of my prediction was slightly off, the rationale behind the forecast was sound.

The next softer correction is expected in Q3/Q4 2023 due to declining late 2022/early 2023 funding and disparity between performance and valuations. Venture capital funding in tech startups peaked in 2021 and has been declining ever since. At the same time, the valuations of many private tech companies remain very high relative to their performance and growth. This disconnect is unsustainable and will likely lead to a downward valuation adjustment for many startups.

To safeguard your investments and your own startups, consult with trusted advisors, investors, and shareholders on your business growth, projections, and capitalisation strategy. Startup founders and investors should review financial projections and valuation models to ensure they are grounded in realistic expectations for growth and performance. Companies should also evaluate their capital needs and options for meeting those needs if VC funding continues to slow down (this slow down will stretch till end of 2023). Plans may need to be made for extending runway, cutting costs, and pursuing alternative funding sources. There will be instances where existing investors may force strategic options to even cease operations and return capital, be mindful of the rationale and use data and evidence to help with your decision making.

Brace for impact from end of Q2. The effects of reduced funding and more cautious investor sentiment will start to be felt more acutely toward the end of the second quarter of 2023 and into the third quarter. Startups and investors should prepare now for this changing landscape to avoid being caught off guard.

Stay alert. 

Art by Ivan Dubovik

Firstly, let me apologize for this really tardy post. I have been wanting to post this back in late 2019 and again in mid 2021. Startup activity and valuations crept higher in late 2019 due to the launch of several new funds in 2018 in Southeast Asia, followed by more capital inflows from US, Europe, Korea, Japan, India and China.

In 2020, we had a short burst of panic from March to July 2020 but investments restarted with smaller rounds and finally back in full vengeance from the start of 2021. This contributed to the best year ever in 2021 in terms of capital inflow in our region. To top it off we had interests from US SPACs and direct IPOs with companies in Southeast Asia. 

At the moment with the public market correction and uncertainty coupling with the effects of the US inflation due interest rate hikes and the war in Ukraine. There is a fear that this will come to the private markets, and yes it will. Valuations are 50-70% over valued since years before the pandemic.

What are the reasons? I will briefly touch on two.

1. We have not experienced a correction in Southeast Asia since the GFC contributing to a strong growth of new founders and investors in our ecosystem. In addition, without a flow of exits like quick acquihires, M&As and IPOs, many of our companies remain private with mostly paper gains and when IPOs do arise, early investors are cashing out and not invested for growth. As such, the quality of founders and investors reduces over time. This gives rise to undisciplined investments in companies where unit economics and growth rates are blurred between companies that gives venture returns vs those who don't. Finally the pandemic don't help in with the situation as it also gives rise to a postponement of performance and extension of rounds with little to no causation to performance.

2. Compressed funding rounds spread out over a shorter period of time in order to capture market share became more prevalent. If research on market size, adoption and timing is not done well, the execution of the business will be impacted. Overselling of our region's size and growth without relying on real business or consumer drivers affects the speed and consistency of market adoption. Hence some valuations of companies fails to be justified with performance. The region is still an emerging one, its maturity may sometimes be far from what we expect, making business projections difficult to forecast. 

So what do you if you are a founder or investor?

1. For new startup founders - Work on and refine your 12 year plan and capitalization strategy and find valuation comparables that are realistic to achieve. This is not an easy exercise but an exercise you have to do nevertheless.

2. For operating founders post Series A - Speak to Series C and D investors and ask them what are they expect of your business milestones and try to close that knowledge gap.

Besides the usual rhetoric of telling you to tighten your belt and extend your runway to over 18 months, you need to be operating your business at a level that will interest capital providers who have now sharpened their pencils. The silver lining here is there is still a large over hang of venture capital raised in 2020/2021 but trust me the investors will be more stringent going forward. Realign your approach to performance once you are clear of what is expected of you. There are situations when it is too late to turn back, and this will lead you to take a strategic option that unfortunately is the best path ahead for your company, employees and shareholders. 

I foresee higher stress levels for founders in the next few quarters. Do lean on your trusted network of advisors, mentors and coaches to help guide you through whatever is coming. 

If you need help or someone to talk, do reach out to me or the team at Coachable Initiative. 

Keep your heads up, we got this.

Here are some questions you can try with your kids to have a healthy exchange after picking them up or coming home from school.

1. What happened in school today?

- this trains observation and descriptive abilities

2. What did you perform well today?

- encourages no matter what is deemed good to be shared and we can encourage them to do better

3. What did you learn today?

4. Are there anything you don't know or don't understand today? Anything disturbing or feels weird?

5. Are there areas mom and dad can help you with?

- help to figure which areas they can solve themselves and which areas parents can help solve

I have been asked many times about smaller startup ecosystems in Southeast Asia what they should do to generate large technology startups and thus attract more foreign direct investment in their countries. After yet another roundtable with a government entourage and local and regional ecosystem leaders, let me share a few thoughts. 

Start by using historical data and research to give you a place to start. We have over 10 years of startup and funding data to study in Southeast Asia of which I will not cover in depth, but for those who are keen to chat about using data driven strategies to run your fund please contact me.

Here are some high level data for you.

In SE Asia, most of the largest valued companies are:

• Global aspiration - 8% (most are B2B)
• Indonesia only aspiration - 40%
• SEA regional aspiration (usually with Indonesia as one of the aspired market) - 30% (1 in many)
• SEA ex-ID Squids - 17% (many in 1)
• SEA ex-ID only aspiration - 3% (hardly funded nor grow fast enough - 1 in 1)

With this as a backdrop, and the fact that the founders are aware that they are more than likely a copycat (99% are).

What should you do then?

1. Gather Knowledge

• Understand your environment in your beach head market or markets you are targeting and figure out your problem statement, consumer and business drivers and timing
• Figure if you and your team are the ones that are capable to address these market(s)
• Then focus on product and growth metrics while serving these markets and try to move from the bottom left to the top right corner of the chart above

We (founders and investors) have a fundamental lack of knowledge flow between capital providers from different stages. I would recommend more open conversations between accelerators and Series B to D capital providers to really understand what they are looking for. We also need to speak to other founders they are likely to copy around the world to learn what not to do in their businesses. Lastly, we need to learn from others in both developed and developing markets and understand what drivers are needed to help startups to be successful. Everyone needs to gather knowledge.

2. Market Mapping

If you are able to go global and compete with the best in class, likely aiming to be the top 4 in the world, go for it. However, from historical data, the probability of that happening is low but not impossible.

The higher probability of where you are now or will be are the 2 bolded options above.

First, if you are not addressing Indonesia from day one, you need to start planning your regional plan from day one as there will be other copycats in the region as well with a head start because they are either already based in Indonesia, or has raised more capital and/or launched in multiple markets earlier than you.

Second, be a Squid

This is where most startups get stuck, they are there but not quite. Look to be a squid with 2 tentacles and 8 arms in your home country, and plan to extend 2 tentacles to potentially 2 countries and 8 arms into potentially 8 different business lines. This way, your total combined addressable market will be larger than you originally sought out to do.

Hope this helps. 

Happy New Year!

99% of companies should not raise capital from venture capital firms.

But many founders who are in the 99% thinks they are the 1% who should. Sometimes investors think the same way and that may spell trouble many rounds or years later.

Work with your cofounders, advisors and investors to make sure where you stand.

If you are the 99% (and there is absolutely nothing wrong with this), and want to be the 1%, work hard and leverage on your team, capital and strategy (timing/speed), and execute to address larger markets (Y-axis) and increase the sophistication of your MOATs (X-axis). See http://reactionwheel.net/2019/09/a-taxonomy-of-moats.html.

Once you know who you are and what you will be in 7-10 years will you be able to honestly approach the right investors who fit you. 

In Vietnamese

99% các công ty không nên huy động vốn từ các công ty đầu tư mạo hiểm.

Nhưng nhiều nhà sáng lập nằm trong 99% này lại cho rằng họ là 1% còn lại nên muốn làm. Đôi khi các nhà đầu tư cũng nghĩ như vậy và điều đó gây rắc rối trong nhiều lần hoặc nhiều năm sau đó.

Làm việc với những người đồng sáng lập, cố vấn và nhà đầu tư của bạn để đảm bảo vị trí của bạn.

Nếu bạn là 99% (và hoàn toàn không có gì sai với điều này) và muốn trở thành người 1%, hãy làm việc chăm chỉ và tận dụng đội ngũ, vốn và chiến lược của bạn (thời gian / tốc độ) và thực hiện để giải quyết các thị trường lớn hơn (Y -axis) và tăng độ tinh vi của MOAT (trục X) của bạn. 

Xem http: //reactionwheel.net/2019/09/a-taxonomy-of-moats.html.

Một khi bạn biết bạn là ai và bạn sẽ là gì trong 7-10 năm nữa, bạn sẽ có thể tiếp cận thực tế những nhà đầu tư phù hợp với mình.

Accelerators should exist in every country where a startup ecosystem has been initiated whether they raised private capital to operate or are government supported, here are a few tips for operators of accelerators (especially in emerging markets):

1. Go sector focused if you can as they are more dependent on being able to localize and where the power of local networks are more important.

2. Work on both inbound and outbound recruiting of founders. Leverage on PR, both on and off line marketing activations to improve your funnel. After knowing the profile of founders you would like to fund and assist, you can use Linkedin to do an outreach campaign to have them apply direct or engage with your team in a call to find out more. Work on improving your funnel.

3. If you are an agnostic accelerator, be as close to market standard as possible with your investment amount and terms. Best teams will either raise money on their own or apply to YC or nothing, so you need to be able to stand toe to toe when compared.

4. Set up an advisory panel of honest and committed founders and investors to help you select your final cohort. Diversify this panel of advisors to get the most honest set of feedback as possible. This will improve your selection of founder types, and ideas. In emerging countries, almost all ideas are copy-cats, the more data you have in your hands the easier to select the final cohort that will result in success.

5. Run a rigorous feedback loop during the program, focusing on company building exercises, and making sure they are venture back-able. Work with more people in the investment sector from angel, seed to Series B/C to help select, critique and refine models as they move along the program. This will help increase the funding rate post graduation. Also cut founders that do not fit your own criteria as an accelerator early on, ideally within the first 2 weeks.

6. Work on a sustainable model financially so you can build a brand to carry the product forward. Sometimes you rely on the investment model (e.g. x% of investment will be paid as a program fee or a put option to sell your stake at Series A), others may resort to doing consulting gigs with corporates and/or raising private capital or sponsorships to self sustain. There are various models, make sure it suits you and your team. 

Hope this helps any new or existing programs.

In the next many months, this might be the new normal. Meeting founders for the first time over Zoom and making bigger efforts with personal reference checks. Perhaps, if investors have a wide network or have team members in various outpost offices (for e.g. for us in Singapore and Jakarta) and already know potential founders before hand, the time scale will stretch out less.

How do you read people over video within 15 mins?

Using voice, and verbal cues as signals to judge people.

How do you source and rely upon on your network’s references?

New skills need to be acquired to collect such data for decision making.

Finally, trends for your business will accelerate, which means the traditional way of managing venture capital funds will change quicker sooner. Whatever you think that will happen in 10 years will happening in the next few years. Be prepared.

Points to note when you are fund raising:

1. Do your homework - Your job is to get your fund raising materials (deck, financials) to a level that is ready to be communicated and consumed. It will constantly be updated as you move along in your business as well as while you are pitching. Research your target investors really well to better optimise conversion rates (which stage and average check size, geography (your beach head market vs your eventual markets), sectors, do they lead or follow, post investment engagement with the company etc.).

2. Have a different mindset from selling - Your job is to get your "nos" as quickly as you can as you go down the list of investors to reach out to as opposed to trying to convince an investor and wrestle them down to a "yes". Investors know what they like to invest in, that is their day job. From your own research and interviews with founders who received investments from investors, you are only maybe 70% of the way there as far as you how much you know an investor and what do they like to invest in "at this time", it will never be apparent. 

3. Start with 3 warm up pitches followed by 7 ones - Use the first 3 pitches to hone your real-time pitch down, have a cofounder be in the room as well to jot down frequently asked questions and watch for any visual cues that signals that your pitch is weak or strong. If you get 10 straight rejections, stop fund raising and regroup with your team, advisers/investors and find out what is wrong. Sometimes its you, the targeted investors, or its because the investment environment has changed. Find out the cause and tweak (A/B test it) your approach again. Sometimes you need to hit a different set of investors to talk to, and most times it is not your pitch style or flow. And of course, there are times when the reason is you. But trust me, there are enough investors out there now to invest in all types of founders, so just keep going.

"Apologies for the hiatus in the blogosphere, I'm back."

(Link to article)

Thank you for this feature, and happy new year to you all.

After digesting (partly) the ICM Masterplan  and various ideas suggested for the Startup Ecosystem, these are my thoughts below. I will try to keep this brief. If you have questions about any of it, please email me (it's been a long week). This post will be updated along the way (beta).

It was my first time in Bandung and Yogyakarta (Jogja) Indonesia recently speaking and visiting startups, incubators and co-working spaces. I caught up with several Founder Institute Singapore graduates in Jogja (above) and dived deeper into the startup community and where their state of affairs are. Here are some findings and feedback on what I discovered.

Ecosystem report card (1-5, no 3): Jogja/Bandung

I get this question quite a lot in the last 3-6 months from students and professionals from the industry. To not repeat myself over and over, I thought I will just blog about it.

Venture capital is broadly categorized under Private Equity as a financial asset class. "Venture capital" here will be referred to early stage - seed, and Series A investments. Growth and late stage venture capital is quite different in many sense (which I will not go into in this post).

If you like to work for a venture capital firm that invests in early stage technology startup companies in Singapore as an analyst, associate, principal or junior/venture partner level. The points below will give you an edge above everyone else who are smart, hungry and full of initiative, willing to be coached etc. After all, it is an apprenticeship business. Everyone starts somewhere.

First, you have to love the world of start ups. It has to ooze out of conversations with you, your resume and the way you talk (live and breathe it). What are some of the tell tale signs that you are crazy about entrepreneurship and starting up?

1. You have participated in business plan competitions or entrepreneurial clubs and associations.
2. You have started a company or worked in a startup (family businesses do not count).
3. You have dabbled with a side project or two while you are holding down a day job.
4. You have taken a class to teach yourself a functional skill in technology - coding, design, UX, online marketing etc.
5. You have invested in a startup and are able to articulate why you have invested.
6. You have helped, advised founders of a startup.
7. You have organized or ran community events and activities for startups.

Second, you have to have founders' empathy. How do you acquire this particular empathy?

1. You have started a company or worked in a startup and worked under the founding team.
2. You have invested in at least a startup and are active either on the board of directors or speak to the founders 1-2 times a month. And have done this more than 5 years.

Third, you have a skill that is relatable to founders of startups.

1. You can code, design, growth hack, online/mobile market.
2. You are helpful with smart introductions. With potential hires, partners and customers.
3. You have a specific engineering background. e.g. machine learning, artificial intelligence.
4. You have a specific industry background. e.g. advertising networks, gaming studio.

At the end of the day, irregardless of what your position is in the venture firm. You need to command respect from the best founders out there. This is more important than just money. As you grow with experience, it will help propel you to the next level.

Lastly, be yourself, hustle your way there and know deep down what is your motivation to join our profession.

Good luck.

You are still better looking at 8 months. Ok, you win.

Father and son. Control C, Control V. Damn stylo.

Last week, we had our first event of the year for Founder Institute Singapore 2014, entitled "Making the Leap from Employee to Entrepreneur". It was the first time for the past 4 years with this particular event content. I invited 3 of my recent FI graduates to talk about their founding journey.

What transpired during the 2 hour session totally overwhelmed me and brought me  to tears more than once (especially Rishi's talk). 

I hereby salute all founders who have made the decision to make the leap. You will always have my respect.

Our next 2 events before starting the semester can be found at www.fi.co/join. 

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Founder Institute Singapore Summer 2014 is Launched and Taking Applications! Go to www.fi.co/join (select Singapore)

The next Founder Institute Singapore semester - will be tentatively called "Founder Institute Singapore Rewired 2014". I have been directing Founder Institute Semesters in Singapore for the past 4 years and mentored and helped start several chapters in Southeast Asia. Our cohort of alumni is the best group of people I have gotten to know ever. No assholes so far (which is what I am proud of), all real mofos who would not take no for an answer as they navigate the startup maze. I hereby salute you all.

I have invested in quite a few of you, exited one, mentored and advised a bunch. The feedback from the market on Founder Institute graduates are impeccable but we are not going to get big headed. Founder Institute founders possesses the founder DNA when you first enter the program, the rest is the idea, the tools, the push and the tenacity to get things done. I know roughly what will succeed now after all these years. So lets get down and do this shit.

There will be 2 main changes coming up (which are in the works but will be implemented in a form that I see fit once the semester starts, this is my FTM - fuck this moment):

1. We will focus a lot more on the first 5 weeks of ideation than ever before. In addition to the mentors' rating and special assignment grading of the founders at the 2 mentor review sessions. I will also give my input from the start and actively kick people out no matter what the mentor rating is. 

The criteria is simple: focus on the mission and ideology of your company and clearly articulate the problem statement against your own personal founding story.

If the general direction is game changing, and may move me to think of quitting my job (hypothetically) to join you. You will be safe and will remain in the program.

This semester will be epic! Hang on, embrace yourself.

For the past 2 months, I mentored a group of over 40 scientists and entrepreneurs in the water technology industry (wth? you may ask) and put them through an entrepreneurial fast track program (condensed version of the Founder Institute program) with the purpose of potentially spinning out high growth water startup companies. The results were rather amazing. Not in terms of which teams were selected to pitch at Hydro Pitch Day on June 2nd, 2014 as part of the Singapore International Water Week, but in terms of how they have grown and how they have bonded and helped each other out in a short but definitely interesting 8 weeks.

I took up the challenge because it is precisely what I am uncomfortable with; dealing with PhDs and patents. Only in uncomfortable situations where you learn the most and ask the most interesting hard questions. Hard science and entrepreneurship, marrying them together is a pretty challenging task no matter who you are. Research institutes around the world are battling the "Return of Investment" question surrounding R&D budgets allocated over and over again, universities tries very hard to emulate MIT and Stanford and work on spinning out companies as part of their technology transfer KPIs. Singapore is no stranger to this.

Here are my summary of findings and take aways after working with the teams for 2 months. I hope my "outsider" perspective can shed some light.

Finding 1 - Technology chasing a market. Academic researchers tend to surround themselves with seemingly "great" intellectual property looking for a market to sell to or apply. A primary reason is because they do not have a well rounded complementary team who are able to hustle and research their way through the maze of customer development and very few are from industry. Most technology transfer offices are also weak at that because of the wide range of technologies they have to deal with, it is hard to be strong in a vertical when you are spread too thin.

Finding 2 - Seemingly "great" technology in the eyes of the inventor are technologies that are not validated yet by anyone that matter. Very few have begun trials with a prospective customer. They seldom have the time or know how to step back and reconsider whether what they have invented is indeed revolutionary or simply just incremental. The technology's strength and differentiation compared with other university technologies, startups who have been funded or in stealth mode or large company research labs has never been truly tested or benchmarked against. 

Finding 3 - Most teams are weak in understanding who their actual customer and the form of their product. Without this clear understanding, it is difficult for many of them to clearly articulate the true market size and opportunity. However, it is due to the early stages of commercialization that they are in this predicament, this is also the precise stage to have people from various disciplines to be involved and infiltrate new ideas and ideas combinations to spark innovative "What if" questions.

Finding 4. Without special interventions from mentors, investors and "an ecosystem", hard science spin outs will take time and will continue to face challenges.

So what can we do to change this situation in addition to running entrepreneurial programs like the Lean Launch Pad, here are my preliminary thoughts (perpetually in beta) ;)

1. Research institutes and universities should carefully curate a panel of advisors that consists of;

a. World class (no geographical restrictions) hard science venture investors who invests in seed stage (writes the first check) who has seen, invested and worked with various technologies and scientists/entrepreneurs at a global level over a few cycles and/or decades;

b. Operational executives from potential customer segments who has experience procuring technologies and finally; 

c. Founders operating in the same vertical who are not jaded (and hence become naturally pessimistic) by the industry, or the entrepreneurial process. Find recent entrepreneurs who are excited and upbeat about what they are doing to change the world.

Have them meet twice a year to look through potential research and patents. Each technology vertical should form one panel.

2. Research institutes and universities need to foster a culture of clashes of students, faculty from different disciplines, and the entrepreneurial community. 

a. Run meet ups (in the central part of town please) where entrepreneurs and scientists gather, but not pitching the final business case rather to explain what the core technology does. Seasoned entrepreneurs who dare to ask the right "What if" questions will challenge all forms of thinking and seed new ideas. Let the question-storming start and foster among the community and do not constrain the process. Have someone facilitate the process who really knows how to foster creative questioning.

Finally, it has been a pleasure working with all of you at the Hydropreneur Program. I gained many new friends but importantly a new found respect for all of you. Your work, passion, expertise and sheer genius sometimes blows my mind. I enjoyed our crazy discussions and banter over the weeks. There are a bunch of you I would love to work with in the future and perhaps fund your new ventures if the investment criteria fits my fund. Till then, stay crazy, optimistic and keep asking crazy "Why & What if" questions.

Catch you all soon and keep in touch.

p.s. Good luck to the 6 finalists at Hydro Pitch Day! I will be cheering for you, and this time with no expletives. I hope.

After a long day at work and arriving home past Justin's bed time, I notice an interesting phenomenon. The moment I laid my eyes on him, a smile appears on my face for which I have no control over. I was clearly smiling because my eyes are looking down my cheeks but my brain cannot comprehend why.

A smile from the heart.

A phenomenon that is new. 

I can get used to this.

~Good night, my little man. See you tomorrow.

Startups and movies have quite a bit in common.

Los Angeles, the Entertainment capital of the world. 

San Francisco Bay Area, the Startup capital of the world.

We know that to some extent but somehow it does not truly hit home.

If you produce an English movie in Singapore looking for worldwide adoration and box office revenues, it usually ends up with limited distribution (classified a foreign language film) and screened in film festivals with limited distribution outcomes. 

Sounds familiar?

How do you choose the right beach head market for your startup that you can readily dominate that makes sense from where you are and move on from there?

If there are essentially 3 types of major major markets, categorized as:

1. English speaking - SF Bay Area as the hub
2. Chinese speaking - Beijing, China as the hub (because China is indeed special)
3. a) Rest of World (Developed) b) Rest of World (Developing) 

Then, starting out from Singapore with limited resources, capital, talent and rising cost is pretty challenging from the on set. Where is then your beach head market? What is your move, chief?

It goes back to the founding team especially the CEO and what his or her personal situations, ambitions, knowledge, connections lies. Some founders put the company ahead of themselves and consider what market is best for the company and go to where it brings the largest impact. Some founders go with what they are comfortable with and capitalize on the opportunity that they know they can achieve. There is no right or wrong answer here, that is why the startup game is incredibly hard.

If you have something game changing, or you are 1 of 3 companies in the world that do what you do, and/or you can demonstrate a 10x differentiation to your closest competitor or simply, you know something that no one else in the world knows, chances are there are only a small number of places that will understand you, appreciate your venture's risk reward profile and have the ready ecosystem that will surround you to make things happen. Go to where they are.

If your beach head market is not ready, changing customer behavior where early adopters are not abundant makes achieving escape velocity a lot harder. It usually takes more time than you think. If investors in that region do not have the time to wait for escape velocity to arrive, you will likely throttle down your ambition and iterate to fit a market that understands, engages and pays for what you have. 

Therein lies the rise of clones and me too companies. 

Trust me, they are equally as hard to start and run compared to companies with breakthrough ideas. However, if you have ambitions to solve local or regional problems using or applying solutions or products that people resonate with, where a lot of guess work has been taken out then interestingly timed products that will achieve traction will surface. However, these founders have to realize that because they have chosen this path, their markets maybe limited, with intense competition close by. They have to execute even faster. 

Achieving a break through idea is hard. Everyone is trying to do that on a daily basis everywhere in the world. Courage and genius are still needed to pull it off. 

Nobody says startups are easy. Choose your beach head market wisely.