i.JAM needs to be sweeter

By Murli Ravi, head, South Asia, JAFCO Investments (Venture Capital). This article was first published on his blog. Check out his tweets @murli184.

Singapore has a bunch of government schemes put in place to support R&D, technology commercialization, seed funding for startups and so on. One of these is the i.JAM grant scheme. (You’ll agree it’s a cool name because it starts with a lower-case i. And there’s a dot in the name. Yes, the JAM is all-capital but no, we won’t explain what the abbreviation stands for. If it’s an abbreviation. But I digress.)

This is a pretty decent scheme if you’re a budding tech entrepreneur. You can go and read all about it on the program website or here.

However, before you decide to take the plunge and become an i.JAMMER (er, corright spelling anot?), watch out for this: if you’re approved for this scheme, you’re allowed a maximum salary of SGD 1,000 (USD 800) per month. No, I didn’t miss typing a zero. Whaddaya mean you need money for rent?

Readers outside Singapore may wonder what SGD 1,000 a month actually means. As a reference for comparison, my understanding is that cleaners and dishwashers make anywhere from SGD 700 to SGD 1,200 a month, a fresh engineering graduate would make perhaps SGD 3,000 to SGD 4,500 a month, and a newbie lawyer further north of that.

On the cost side, rent can cost anything from a few hundred dollars a month for pretty basic accommodation (one room in a public housing apartment) to perhaps SGD 2,000 a month for a small flat in a decent private condo. These are rough numbers.

Seriously, what are our friends at the IDM PO thinking? There must be a reason for this, surely there must be, but I don’t see it.

A wit once said, “Bureaucrats write memoranda both because they appear to be busy when they are writing and because the memos, once written, immediately become proof that they were busy.” That hilarious statement explains many things about the way bureaucracies and bureaucrats function. But what possible reason could there be for coming up with such an onerous limit on grant winners’ salary? Could it be that:

• They only want the independently wealthy to become entrepreneurs? But then why would such an entrepreneur want to go through all the hassle of applying for this grant?
• They only want to fund people who have no alternative means of sustaining themselves except to try and start a company in return for accepting SGD 1,000 a month?
• They want to punish good entrepreneurs?

Does not compute.

The policy is counter-productive. Do they want entrepreneurs to be perpetually worried about their personal subsistence or focus on growing their business? Creating new technology, serving customers, hiring employees and all the rest is hard enough without having to also worry about being able to feed and clothe oneself.

None of this means over-paying. If the grant committee doesn’t agree with a business plan, just don’t fund the business. No VC to my knowledge has an explicit salary criterion. Yes, of course some entrepreneurs are overpaid. But then one engages with those entrepreneurs on a case-by-case basis or just walks away. Specifying a very low salary limit upfront is just silly.

Hmm, maybe that’s where the answer lies: specifying a very low salary will discourage all but the few types of people bulleted above from applying, therefore resulting in less work for IDM PO. I really really hope this isn’t the reasoning although, depressingly, I wouldn’t be surprised if it was.

So what should IDM PO be doing instead? They should be funding projects based on their viability, not on whether the founders are willing to live on a pittance. Really, WHO CARES if an entrepreneur builds a business that can allow the entrepreneur to make a decent living as long as he tries his dangest to actually build that business?

Working as an engineer, let alone turning tech entrepreneur doesn’t have much of a cachet in Singapore to begin with, except among a few break-the-mould types. Click this, read that. Creating an artificial and unnecessary restriction on top of this is just shooting Singapore in the foot by achieving exactly the opposite of the government’s stated objectives.

And plenty more could be done beyond the purview of the i.JAM scheme such as, e.g., helping somewhat more advanced startups get bank funding by guaranteeing their loans, to provide one idea off the top of my head.

Many of the fields that the i.JAM purports to be aimed at — computer vision, AI, analytics, augmented reality… — need high-quality experienced business founders. At these peanuts? Don’t hold your breath.

Update: this post spawned a further discussion here.

Updater: Terence Lee of SGE has been told that the salary cap isn’t a cap. About a third the way down on this page. Not sure how to reconcile this with what the i.JAM page says or what a recipient of the grant told me himself.

Photo: Amanda Slater

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