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:
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.
So what is the purpose or role of Singapore then?
I recently went to MIT in Cambridge, Massachusetts for the first time to attend a 3 days executive education program at MIT Sloan School of Management called MIT REAP, more here. More about the program in my next few posts but in short it has something to do with developing our startup ecosystem in Singapore.
Almost 26,000 companies are founded by MIT alumni that still existed in 2006. If they were a country, it would have the 11th highest GDP in the world. My first impression was that MIT churn out great technology companies from their licensed technologies, but that is not the case. Most of the 26,000 companies founded by MIT alumni, very few (about 10%) are from MIT-licensed technology. But don't get me wrong, there are still about 20-30 companies spun out yearly from MIT. It finally hit home after speaking to Dharmesh Shah from Hubspot that most software startups started by MIT alumni are not MIT-licensed.
After an informative and definitely transformative 3-4 days at MIT, here are my three takeaways with regards to startups that are associated with MIT and why they interest me:
1. People
A predominantly engineering university with a cluster of engineering disciplines creates tremendous network effects. World class in research, both in reality and in perception. I can feel my IQ rise as I wander around the campus, eavesdropping on conversations. No doubt, they have skills, some probably harbor world class skills of varying depths. Over the years, the history and performance of startups from MIT faculty and alumni further shaped those who enrolled, those who researched, and those who taught.
2. Culture
I ran into at least 4 professors who are entrepreneurs many times over or "have helped to start 12 companies". That is a pretty rare occurrence as compared to where I am from. The culture of collaboration, experimentation, and the courage to change the world seems to be within the culture of Cambridge and MIT. The desire to learn, improve and do forces everyone in the system to be better. It fosters "creative confidence" and the courage to explore paths to bring a product to market.
3. Collision
The most unique thing that caught me that were constantly being emphasized, was the way the campus is constructed to encourage "collision" amongst students, professors, post docs, and alumni. The famous MIT Media Lab is designed and located specifically to create "creative collisions". They even conduct entrepreneurship classes at the Media Lab, see https://www.media.mit.edu/about/ventures.
To add on to the 3 takeaways above, the talent pool in Boston/Cambridge is one of the best in the US, the availability of early stage capital is second only to Silicon Valley and co-working/collision spaces like CIC it only helps to support more creativity and courage to start companies.
I don't know about you, but if you are an early stage technology entrepreneur in Southeast Asia raising venture capital to fund the growth of your business, you will likely have no idea what the cross section of institutional Series A investors in the region are looking for.
We are not talking seed or angel rounds, but professional fund managers managing other people's money.
What I found in the last 2 years of investing in Southeast Asia is there is a gap of knowledge of what metrics or criteria these fund managers are looking for before even perking their interest.
Many founders will be looking at raising their first institutional round this year. In order not to get caught in a tail spin and getting sucked into doing bridge and/or down rounds, we at Golden Gate Ventures wanted to do a survey amongst most if not all of the Series A investors that we can hustle our way into.
If you wish to help refer investors please drop us an email at info@goldengate.vc.