Ask any Singaporean entrepreneur how good they think their company is compared to their peers – chances are, you’re probably not going to hear a lot of backslapping.

In fact, apart from the founders of successful Asian companies such as Tata, Samsung, Huawei and *cough* Temasek Holdings *cough*, as well as pockets of entrepreneurs from China (the Wenzhou folks) and India (that bunch of fierce nationalists), few Asian entrepreneurs, and by that extension, Singaporean entrepreneurs would put themselves on the same pedestal as their Western counterparts. Asian companies are caught in the vicious cycle of playing catch-up.

If you’re not convinced, ask yourself or your entrepreneur friends who they benchmark against in their field. If you’re in the system integration space, you’re likely to compare yourself against EDS, IBM and Datacraft. If you’re into consumer mobile phones, it’s gonna be Nokia, Sony Ericsson and Samsung. Asian societies have shaken off the bonds of colonialism and western subservience post-WW2, but Asian/Singaporean businesses appears to be comfortable living in the shadows of their western counterparts till this very day.

I gotta make my usual disclaimer by stating that there’s absolutely nothing wrong with measuring against the best. The problem only starts rearing its ugly head when such comparisons instill an inferiority complex among the minds of our Singaporean businessmen. Let’s face it – we’re largely a nation of quitters. What do quitters do when faced with stiff global competition? They take the easy way out and lower the price of their products and services! Our Singaporean businessmen and their Asian brethren fall into the trap of commodity pricing and excess capacity.

It’s a lot easier for a brand associated with luxury and price premiums to lower its price, than for a commodity-priced product to move up the value chain. Just look at Pierre Cardin. When I was a small boy, Pierre Cardin was the Louis Vutton of the day. Sometime in between, their management decided to lower their prices and expand their product offerings, opting for higher volume to drive growth. However, the converse does not hold true. Creative Technologies began the MP3 player war in pole position and chose to bet on selling technology and features. Since it lost its position to Apple and its iPod-totting lifestyle, Creative has been fighting an uphill battle for every decimal point of its market share since. Once people buy your product at a low price, it’s a lot harder to move them up the utility curve again.

To all you Singaporean entrepreneurs out there, drop that loser mentality of yours right this very moment! You’re never going to go very far whining about the lack of aid *plays Oliver Twist’s “Please Sir, I want some more.”* from government and complaining about how tough it is to earn a living. Stop walking in the footsteps of other giants, and dare to dream of your own pot of gold at the end of the rainbow. Believe in your vision and stride forth with confidence – even if you’ve failed, you know you’ve tried. You’ll feel a lot better than an entrepreneur who’s been at it doing the same old shit for donkey years.

Or is it donkey ears? Hmm I think they taste better deep-fried – kinda like that pigs’ ears snack you get in the Mama store at the HDB void decks of yore.

After all, entrepreneurship is a game of high risks and high returns – cowards and risk-averse peeps need not apply.

By Spring Singapore‘s definition, SMEs are those with S$15M (~US$9.8M) or less in fixed asset investment and, for non-manufacturing enterprises, 200 or fewer employees.

According to an article by Xinhua, SMEs form ‘an important pillar of the city-state’s economy’, employing 56% of the workforce and contributing 42% of gross domestic product. Taking GDP figures of US$138B from SingStats, this translates into a total of ~$58B contributed by our SMEs to the GDP in 2006.

SMEs are seen to be shock absorbers, innovators and contributors to a country’s economic growth (through higher total factor productivity – TFP) SME Growth in East Asia – Contributing Factors, World Bank presentation. An economy with a higher proportion of SMEs is more likely to be able to adjust smoothly to external shocks or business cycles. Yet numbers alone won’t guarantee ‘success’. According to the World Bank presentation, SMEs in East Asia that survived the financial crisis were found to be mostly engaged in exports, with the necessary economies of scale and higher productivity. Taiwan was able to ride out the Financial Crisis of ’97 relatively unscathed thanks to its large proportion of SMEs, which comprise 97.8% of all companies. In comparison, Singapore was deemed to have made it through the crisis by relying on its strong macroeconomic ‘fundamentals’, sound macroeconomic policies and quick responses by our government Coping with the Asian Financial Crisis: The Singapore Experience, ISEAS.

Perhaps sensing the inability of our SMEs to cushion any external shocks, the Singapore government put in place blueprints at the turn of the 21st century, such as Industry 21, ICT 21 and Technopreneurship 21, in an attempt to beef up our SMEs’ ability to serve as shock absorbers, innovators and contributors to the economy. Fast forward several years, and in the 2007 Budget Speech, the Singapore government iterates its intention to make Singapore the best place for SMEs, local or foreign, to locate, grow and to globalise. On 1 April 2007, Mr. Invincible Mr. Philip Yeo switched portfolios to serve as Chairman of Spring Singapore, to drive the government’s efforts to develop Singapore’s SMEs for the future.

With his Midas touch, Singapore’s very own Mr. Invincible has been a lucky talisman to all the initiatives he’s steered since his entry into civil service. Will his efforts bring success in an area that has to date eluded the grasp of every other competent civil servant before him?

Only time will tell…

Whenever the question is raised as to why Singapore has yet to see a world-class startup emerge (since the dot-com boom days) from its shores, people turn to our poor chicken and her egg for what appears to be a logical response.

Without good venture capital funds investing in Singapore, our startups will forever remain in the backwaters of the Straits of Malacca and die a slow death. On the other hand, without top quality Singaporean startups to begin with, those top venture capital fund managers in the moulds of Draper Fischer Jurvetson, Sequoia Capital and Kleiner Perkins Caufield & Byers will never cast a glance in our direction.

And so we are faced with a Catch-22. Or is that so?

Let me ask you this in an attempt to illustrate – which of the following scenarios would you (as an entrepreneur) prefer to be in?

1. - You are hooked up with a great team, and given the barren venture capital landscape in Singapore, ended up settling for $2M in seed funding from a mediocre VC. While you love the chemistry within the team and how everyone’s awesome at what they do, you can’t help but feel that the business idea isn’t quite “there” yet.
2. - You were floored by this kick-ass Web 2.0 idea and was asked by your friend to join his team. You’re even more psyched when you realise that they’ve received $5M in funding from Sequoia. However, 3 months down the road, half the founding team has quit due to personality clashes and disagreements over the direction that the startup was heading in. You wonder why you joined in the first place.

Ok ok, so I set it up on purpose, and if your answer is to prefer the latter, I salute your guts.

My point is that the people in a startup are absolutely critical – no world-class idea is going to take off unless you have a world-class team at the helm. With a world-class team, even the lousiest ideas can be turned around, or new investors found. Silicon Valley has always been about the people – the VCs were a by-product of these great people who “moved up the value chain” and continued to 拉其他的企业家一把 (lend fresh batches of entrepreneurs a helping hand). Why should it be any different in Singapore?

Many of us tend to forget that a large part of being an entrepreneur is to have the ability to ignore the naysayers and achieve unprecedented success. Well ok, ignore the majority of them, because some of these naysayers do occasionally impart words of wisdom. Entrepreneurship is also not for everybody, the same way we’re not all cut out for professional sports. It’s a bloody entrepreneurial world out there, and if you don’t have the DNA to pick yourself up after multiple falls, you best stay clear. That is why I believe it’s ok if most Singaporeans prefer a regular job and a regular paycheck – we need you guys to offset the crazy things that we’re prone to doing, so that Singapore’s economy doesn’t go out of whack overnight. The problem only gets magnified when our limited pool of entrepreneurs lose the ability to ignore the naysayers.

The potpourri of cultures that is Singapore has given rise to a nation of nay-sayers. Our government says no to a lot of things, good or bad; no to chewing gum, no to littering, no turning at red unless light says green, no bar-top dancing (until recent years), no to politically sensitive and irresponsible blogging. We’re so used to the government taking such good care of us Singaporeans that we’ve also taken on their nay-saying attitude. Heck, we’re even saying no to casinos and no to allowing more immigrants into Singapore to hit that magical 6.5 million population, even when it’s clear we need these force multipliers for our continual survival. Our government has always led the way, and today, when the government is slowly but surely changing its course, our people are struggling to follow.

The next time your friend shares with you his or her plans for a start-up, try to take off that nay-saying hat you’ve always had on, and give them your balanced opinions. It’s ok to criticize, as long as you’re not blatantly nay-saying. That’s what I’ve set out to do here at whysgentrepreneurssuck.com, and that’s what I hope you will join me in doing.

For I am but one, and can never compete with the wisdom of the crowds.

contributed by whysgentrepreneurssuck

I read with much chagrin an article in today’s Today *plays canned laughter*, titled “Cupid just a click away”. Loh Chee Kong (cheekong@mediacorp.com.sg) reports on the spurt of startups that are trying to bear the mantle of SDU’s match-making efforts. Some 30 new services have sprouted up in the last 5 months alone:

• iFoundaries “Who works around you?” – an online dating portal for white-collared singles. Think “Who lives near you?“. Secured S$141,000 in seed funding from SDU’s Partner Connection Fund. To be unveiled this July.
• Singles Mingle – taking care of a couple’s needs from the first date till they say “I do” *another PORTAL – what a bore!*.
• GoMovieDate.com – online match-making for blind dates at the movies! Mr. Matthew Tan (director) says, “Our website helps them to do sweet little things like send chocolates or flowers after the movie date.” *erm…how very thoughtful of GoMovieDate.com*
• Lunch Actually – match-making through lunch dates. *interesting…maybe I should sign up myself*

I say chagrin, because I believe the success of entrepreneurship in S’pore can be partially attributed to the number of singles we have. Don’t get me wrong! I’m perfectly cool with entrepreneurs having boyfriends and girlfriends. It’s just that most Singaporean girls (or their parents) start getting fidgety if you don’t marry them before 30. You’re then expected to take up a housing loan and buy public housing, or if you happen to marry a rich one, move into a condo at the very least. After a pompous wedding attended by all your pals and relatives, you’ll find yourself happily married to the love of your life, and saddled with housing and car loans. You stare glumly at your seriously-depleted bank balance, silently curse the S’pore government for getting their CPF and public housing schemes right, and kiss your personal seed capital and startup dreams goodbye for the next 1 or 2 decades. Five years on, your house is filled with the joyful sound of children, and you decide to upgrade to a larger apartment and give your family a better life, chucking your startup dreams and aspirations out of the window for good.

Unless your significant other shares your dreams, it’s gonna be reaaaaaal hard to bite the bullet and bear the risks of starting your own business or work for a startup.

Don’t you think our Civil Service sends us conflicting signals? On one hand, we have the Ministry of Community Development and Sports dangling big fat carrots to encourage couples to have kids. On the other, countless nameless public servants in statutory boards such as EDB, Spring S’pore, IE S’pore, IDA and MDA work their asses off to promote entrepreneurship and our SMEs.

Wake up Singapore! You can’t always have your cake and eat it too!

p.s.: A simple solution would be for the government to import entrepreneurs from around the world, and stop trying to encourage entrepreneurship amongst Singaporeans. Singaporeans can continue in their 9-6 jobs and receive a comfortable paycheck from the government or MNCs while they have loads of fun making babies. Leave all that entrepreneurship bullsh*t to them foreign talents yeah?

But you and I know the likelihood of such a policy being adopted is as likely to happen as Chiam See Tong becoming Prime Minister of Singapore. Besides, I’ve yet to make my first million as an entrepreneur!

Bah.

Can Singapore produce a world-class startup? Our newly minted resident contributor, whysgentrepreneurssuck, expounds on the lacklustre venture capital industry in Singapore and how we are doing it all wrong in our quest to fund the next big thing.

Singapore is home to 160+ VC firms managing a total of S$X billion. Fact.

Singapore has a successful venture capital industry. Myth.

The truth of the matter is, out of these 160+ VCs, only a handful are known to be open to the idea of investing in Singapore start-ups. The majority raise and park their capital here and invest in India and China, because as one venture capitalist once told me, “the deal flow quantity and quality is just so much better.”

Whoever mooted the idea of using US$1.3b to attract venture capitalists to set up shop in Singapore (in the form of EDB’s Technopreneurship Investment Fund) in the hopes of completing the Singapore entrepreneurship puzzle could have been somewhat misguided. Bring the VCs and you’ll get your start-ups? HMMMMMM…I salute your spirit and intent, but not your methods.

Our venerable business angels don’t fare much better on the scorecard either. Most of Singapore’s angels made their wealth from traditional businesses, such as real estate or banking and finance. To most entrepreneurs, these angels continue to maintain their relevance, and more often than not have a tremendous impact on their F&B-or-what-have-you enterprises. Yet anecdotal evidence suggests Singaporean angels, by virtue of their poorer risk appetite, lack of domain knowledge and insistence on positive cash flow, have missed out on one of the largest slices of the entrepreneurial pie – technology innovation.

And so our government resorts to market-distorting policies to plug the funding gap in the ecosystem, through a co-investment model (in the form of SEEDS funding and Growth Financing) for start-ups. I say these are market-distorting, because public funds are being used as a means to lower the risks borne by VCs and angels, to incentivise them to invest in 2nd-tier start-ups in Singapore. The really good start-ups will have no problems securing access to capital – VCs and angels would be falling over their feet to stake a claim on them before you can say return-on-investment. The question all of us should raise then, is: “Is this the best/most effective and impactful use of public monies?”

Ok ok ok…hold your horses. Not all SEEDS-invested start-ups were 2nd-tier. These funding certainly give entrepreneurs a shot at proving John Fischer (the F in DFJ) wrong about Singapore.

I don’t believe Singapore will ever produce a world-class start-up in the next 20 years.

- John H. N. Fischer at Stanford GSB, when asked after a class about why DFJ stopped investing in Singapore

I don’t need to extol too much on the mega-high returns that start-ups are garnering in the Information economy and increasingly so, in the Attention economy. Singapore has wasted a good 5 years chasing the shadows of the dotcom boom, and it’s about time our nation’s leaders start taking a serious look at this, with a different eye. Your MNC-courting ways won’t work when it comes to nurturing world-class SMEs.

At the end of the day, it’s all about the team behind the start-up. Court the talent, and all the capital and wealth of the world will flow into Singapore.

When that day comes, I will gladly close this blog down. Until then however, the rest of you will have to put up with my endless tirade.

Editor’s Note: This has been reproduced from the author(s)’ blog.