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Wanted: S’poreans to develop the next YouTube or Skype. Can it be done?

January 30, 2007 by justinlee  
Filed under Contributors Corner, Innovation & Technology

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So, the fifty million dollar question above will start to get most of us thinking. Oftentimes, we lament about our situation. Is it really true that we are not ready to make a company like YouTube or Skype in Singapore? How far are we from seeing the first successful company in the web 2.0 era? Our resident contributor and co-founder of Entrepreneur27, Justin Lee talks about the pros and cons on jumpstarting a success web 2.0 (not 3.0) story in Singapore and compares the infrastructure between Singapore and Silicon Valley.

Yesterday, Second Minister for Information, Communication and the Arts, Dr Vivian Balakrishnan said at the World Econmic Forum (WEF) in Davos that, “Singapore needs to attract individuals with bright ideas who can develop the next YouTube or the next Skype.”

Very interesting article to be plastered on the front page of our national newspaper of record, the Straits Times. Sounds like a call for participation?

The article then goes on to quote Dr Balakrishnan, acknowledging that, “The key thing is that the biggies are all coming from small groups of individuals with a bright idea. For us to get our share, we need to be able to attract some people with ideas and give them a launch pad to develop these ideas and plug into a global market… Singapore’s EDB prescription has been to attract MNCs and the refinement now is that we are also working as individuals.”

He then goes on to cite the case of Sim Wong Hoo’s Creative (ahem, again!) saying that, “The fact that Singapore created a sound standard shows that an invididual hiding in some corner, given half a chance, can make a global difference.”

Mind you, that was a case study from 20 years ago — before I even started to use computers. Mr Sim never went to University. He was what we would consider a ‘poly’ (polytechnic) guy. He stuck it out and has since made big money. But my point is that we seem to lack new heroes post-Mr Sim.

I respect Dr Balakrishnan for acknowledging that our country’s legislative and public policy framework would also have to evolve and keep up with the rapidly changing world of interactive and digital media. It is great to know that our Government acknowledges that more needs to be done. And recently, they seem to be quite “on the ball” too. Which is very interesting to see.

For a start, the Government is making the right moves in acknowledging that change has to begin from our schools. The Media Development Authority (MDA) has some interesting initiatives coming up under their i.Rock initiative which addresses that.

As of now, I don’t know enough specifics about their initiatives to make a comment. But I’d like to share with you what I think about this call for participation: to get Singaporeans to develop the next YouTube or Skype.

What I’d like to do is to consider the pros and the cons of doing something in Singapore. I’ll begin with the pros then the cons. Of course this is my very own opinion so please feel free to differ.

As an entrepreneur, it’s quite important to look beyond the hype and try to understand it at a more pragmatic level since you’re probably gambling with your own career. I’m not sure if I’m that qualified to give advice but I’ll share my thoughts:

The Bad:

a. Creative Technology is a nice entrepreneurial story but it doesn’t really connect with the young generation anymore. We didn’t get anywhere with Web 1.0 (probably only Interwoven, but it’s based in Sunnyvale) and we are nowhere on the radar with Web 2.0. It’s quite a tough to bring up new heroes when there haven’t been any right?

b. Niklas Zennstrom would probably have ended up in jail before he started Skype. I think Kazaa would have put him behind bars if he was in Singapore. Nuff said.

c. Chad Hurley would probably have ended up in jail if he started up YouTube in Singapore. Jailed for “copyright infringement” because we don’t have a DMCA.

d. We don’t have experienced backers (VCs) here… the Sequoias, Kleiner Perkins and DFJs. But this is a chicken-or-egg-which-came-first dilemma.
e. We don’t have an exit market here. No NASDAQ, no big companies to buy you out. Local startups like Hardwarezone didn’t score terrific valuations in their exit. You can either stay private or be globally oriented from day one I guess.

f. Banking is too strong and is sucking away all available engineering talents. Just talk to any fresh grad engineer or anyone from any faculty and ask them where do they prefer to work first. It’s even sucking away the accountants from accountancy firms. Nobody’s left to do book-keeping :(

g. Even making oil rigs at Keppel is more lucrative and substantial an industry. Yeah, with the 7 month bonus last year, it’s really quite attractive. :)
h. No cushion or career hopping prospects for great tech people here. In Silicon Valley, if you’re good, you start a firm. If it fails, you can say it was founded by a Top Tier VC and still get a job. There is a real job market with great compensation and great perks for startup people there because of the critical mass there. Not so much here because we are essentially still operating at an outsourcing stage where headcounts matter more than talents hence depressed salaries.

i. Our Poly talents have a better chance at hacking out cool stuff than our Uni talents because: They have a more practical based curriculum hence they’re much more adept at developing software right out of school compared to the University curriculum which is more theory based. I’ve seen this before when I participated in programming competitions many years back.

h. We don’t have a big natural market. The idea of a test-bed is dead. Surprisingly, Singapore is still promoting that. Test-bed is a 1.0 idea. Web 2.0 companies need “beta markets” not pilot test-beds. Test beds take too much time to go to market. YouTube didn’t need test-beds. Skype didn’t need test-beds. What they need is a user-base that can test, evangelize and hence help scale the company. Right now, the biggest natural markets are: i. USA for the anglosphere, ii. China for the chinesesphere, iii. Germany for germansphere and iv. Japan for japanesesphere. Unfortunately most of SouthEast Asia is still rather economically backwards to be of any critical mass for Internet startups. I don’t think we are even close to South Korea which is 10x our size.

i. Media coverage for the local scene. Currently I don’t think the world’s media is looking hard enough at our startups and our initiatives. Given that we’re a tiny speck, why would they spend their time here instead of scouring Silicon Valley. But from talking to people, I suspect we do have some gems. Unfortunately, they’re still in the rough.

j. Blog Media needs to be more active: Besides mainstream media coverage, we also need an active blog media. A community of people who holding endless conversations online. This will help spread the word on what’s going on in our scene. And I don’t mean bloggers posting up pictures of what they ate at the hawker centre and what they bought at the flea market.

k. National Service kills the spirit of our young men. I know this is a senstive topic but it’s true. After lagging behind for 2.5 years and ploughing through the workload heavy university curriculum, most guys are, just too tired and more interested to catchup with the girls in the rat race than start companies.

The Good:

So what’s good about Singapore?

a. We’re trying. Really. Pat on the back for all the effort by people working in the Government coming up with this and that initiatives. I can see that from the efforts of some friends in there. (Interestingly, the smartest people in Singapore work in the Government — at least from the kids my year.)

b. We actually do have money to give away. More money than good ideas and good entrepreneurs unfortunately. Hopefully things will change..

c. Compared to lots of other countries in ASEAN, we’re quite far ahead infrastructure wise. Everything works here so you don’t have to worry too much. The business climate is great.

d. We have good engineers. I think there are many good engineers here. Just that they’re somehow stuck in some BigCo. I wonder what would make them come out?

e. We have the guts to proclaim we want to host the new YouTube or Skype in front of the world. Quite interesting coming from Davos.

f. Living standards here are fantastic. Can’t ask for more really. This is a good place to bring your family.

h. Our universities are striving. You can see how strong the universities are now. We’re quite good at attracting the best students from the region too.

The Conclusion:

Despite all these pluses, we’ll have to first accept that we’ll always be second-tier, to China and Silicon Valley because of their large markets, infrastructure and eco-system that would be really difficult to trump.

It’s hard to skip ahead to be first-tier because the difficulty of pulling ahead is akin to climbing the powerlaw curve: the climb keeps getting steeper as you get closer to the peak.

Having recognized that we’re sort of in second place, instead of trying to beat everyone we could focus on certain niches. Doing stuff that no-one else can. Like Israel, they’re small but very focused and have built up a substantial community.

Despite all these, it’s still a good idea to try. Don’t give up everyone! It’s good to have a dream and a vision and try to figure a way to make things happen — despite all the odds.

Our young people could probably be peppered with a little more enthusiasm, energy and vision. I don’t know how we can solve that in one shot but maybe going for E27, Nexus or Barcamp could help a little?

I hope this has been helpful. :)

Plugs:

E27 is coming up again in February. Signup for our mailing list to keep informed. (The box is on the right sidebar)

Nexus is coming up in March. Signup for it too. Best deal $15 only. It’s a conference on steriods at a low low price.

BarCampSingapore was last weekend. But you can still stay informed of the next one.

Can Singapore produce our own YouTube? by Lim Der Shing, SG Entrepreneurs.

Get Money from SG Entrepreneurs. (Read the 2nd last para of this post.)

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Comments

  • art10080
    Valid points. Especially the be a banker part. I think I also regret should just stay in bank go to work on time go home on time, get 6 months bonus. Shoik. Except for these 2 years no bonus. Otherwise every other year bonus big like elephant.

    Problem here is too much wayanging around. So few really killer apps or ideas. Mostly just copy or big, fancy and useless. For example... rednano. Off hand I can only remember this one but if I go back to my library of press release of funded "good" ideas. I'm sure there are a few more even non savvy users will tell you it's stupid to fund something like that.

    As some of my friends like to say to me "What's the use of this stupid thing?"

    Hahaha... usual reply. I dunno...
  • TP
    1) Creative is WAAAAYYYY TOOOOO far away. Soooo Farrr away that the MP Vivian forgotton EDB refused to fund Creative when it came out with its first sound card. I’m sure Creative is rolling in it, but my point is could it mean non-funded = success?



    Hmm...that is the irony. They did not practise what they preached.

    When there is a successful case, they tend to use it as an example but they forgot about how these entrepreneurs were being treated when they first started off.
  • shewiz
    Most of the concerns are already expressed and I agreed to most points!!...But will the next big thing come from this tiny red dot??...Ever!!...till all of our concerns are resolved by respective angles, otherwise I'd rather have my R&D and development team offshore while we talk about money here if I were to hit the next big thing...But where's Mr VC??...:) another big finding...
  • SamCheng
    Yes, solve the main issues, acknowledge them, tell them thing to beware of, so that they know what they are stepping into. Lot of ppl I see get discouraged after they realize this and that of business. Be positive but not becoming ignorant. It can be both a adventure or painful lesson or both. Thing break apart when important members of team usually can't tahan anymore and went back 9-to-5 job.

    Understand many roles not only of own role so that communication can be make across the "board", otherwise there will be "expensive" lessons to be learnt for entrepreneur.

    Don't repeat and follow the biotech's lesson in Singapore. Knows what one getting into.
    Period.
  • Calvin Neo
    Hi people, just my little thought...

    There are 3 types of people:

    The first are people who know all the problems and selectively place their bets

    The second are people who don't care or don't know about the problems but just go ahead to bet

    The third are people who analyze too deep into the problems they never dare to bet
  • Yuri and SamCheng,

    i am not from your age group. Being younger, i am not sucked into that same system as most of the protagonists in your statements are. I am Singaporean too and I recently graduated. I am neither pro nor anti-govt. I believe incumbents will always have both accolades and brickbats thrown at them all the time and yes the current administration might be more than a tad cold and unfeeling in policies at times.

    I am not going to counter your points. I believe they are valid from your own personal experiences and perspectives gained over the years.

    All i want to say is i believe in a better future for Singaporean entrepreneurs. I believe the only way out of a difficult situation is to look on with optimism. If you cannot do that, at least do not pour undue scorn and scepticism on others who do. Offer your viewpoints + reality checks and help those who are hopeful succeed if you wish.

    Accepting the status quo without contributing does not help. I am not addressing these at you. I believe you guys care enough to offer your opinions and I really appreciate it. I created an organization to advance youths's interest in entrepreneurship because we need a community to feel that there are other youths who think like us and social support is paramount.
  • WeiChang
    SamCheng: Why are you so sure that Temesek holdings is losing a large sum overseas? The accounts are not opened. In business, you win some, you lose some. Just make sure that the winnings are more than the losses.

    But we mustn't spend all day taking about these issues, lets take a proactive attitude and try to build an empire in the situation that is giving to us. (Which is not too bad thinking that I could be born in other war torn places or if I am fighting for hunger or worse, disease.)
  • SamCheng
    Yoav,
    welcome to the real Singapore.
    what WeiChang say I can comprehend. There is always a "possibility" that GLC will ride to take advantage of its own relation to gov to come out policies to prevent competitors from competing in a lucrative marketplace and industry. To be blurt, GLC is competent in generating money locally than from overseas ? Is this due to the connectio with gov and its policy manipulation freedom ?? Maybe someone will give me a better insight and answer.

    Can it be true ??? Well, ask those around who bid projects against GLC and its's related companies, and you see the same thing as happened in NKF, where sometimes "relationship matter more than anything else". Maybe it just human nature or "guanxi".

    I won't say it's wrong but it's just business as usual. The case of open-bidding is sometimes a "smokescreen" to bring price down and reap good profit though in reality at expense of service and product and to show that companies is "open to competition and ideas". Most usually already has a pre-determined company to work with. Open-bidding is just "a very good way" to get proposal for free and don't have to pay expensive consultant to do it, and moreoever, also get a diversity of ideas.

    True or not, well, just mix around with people who "been there" will help one find the answer.

    Perhaps, that's why ppl say that business world is deceptive, cunning and shrewd, and to succeed require a "distinctive mindset" to win. Ever wonder why Singapore GLC keep losing money in oversea investment ??? I believe the lack of international business experience and understanding of other culture is the cause. The same thing they apply to Singapore can never applies to other countries but yet GLC try to do likewise. They seem to take a single food for everybody approach. Other country's people are just to "disobedient" compare to the "obedient" Singaporean.
  • WeiChang
    I must state that I am not criticizing our government because Temesak holdings definitely brings immense benefits to Singapore since it is the cornerstone of our budding economy. However, I feel that the policies may have a dual effect. Eg. The CPF is used to ensure that Singaporeans are able to retire comfortably but it also locks up our capital for entrepreneurship.

    Another example: Temasek holdings own controlling interests in SMRT, Capital Land, Singapore Power and SIA. These companies are huge and it is difficult for privately own companies to compete with them since they are all under the 'same group' and thus take part in synergies that may be unavailable to the private sector. (Example: Most of Capital Lands' malls are close to MRT stations and they have sheltered walkways to the stations. This definitely benefits the population but a privately own company may find it more difficult to build the same shelter or build at that location.)

    Of cause, this may be necessary due to national interests and consumer interests (Singtel controls the local telecommunication network, NTUC and SMRT keeps fares low) but nevertheless they may restrict the growth of the private sector since these companies would likely beat any competition due to their size and funding..

    Also I feel that there are more red tape in government linked companies than private ones. The proposal someone has to write for Capital Land to get a retail space would have to be longer and nicer.. :)
  • Yoav
    Very interesting responses and thanks for the warm welcome Yuri! I have to disagree with you, though, that Estonians (or anyone else anywhere on earth) doesn't worry about making a decent wage to cover their cost of living, and that this fear is unique to Singaporeans thus keeping them from enterprising activities. Nor is Singapore the only country in the world at threat from low-cost outsourcing or immigration. These problems are almost universal. I'd say they're greater in the US where housing isn't subsidised, healthcare and education are very expensive, and immigration is (unfortunately) such a big issue it'll be one of the majors in the elections next year. It's the culture and environment that determines the response to these problems.

    Actions are guided by people balancing incentives with opportunity cost.

    People start up companies because they think they can make more money and lead a happier lifestyle by doing so than by working for someone else. That's the high incentive. These people understand that failure is not death - you can recover and use your hard-earned knowledge to succeed when you try again. That's the low opportunity cost. Getting these two forces to balance correctly is very much shaped by culture and environment.

    Sam Cheng is right that young people with less commitments have an easier time starting up companies. Again, this is as true in Silicon Valley as it is in Singapore. Mainly because younger people can't always see the true cost of failure for lack of experience!

    There is some role for government programmes to work on strengthening the incentives (by promoting new enterprise as a noble goal and showcasing local heroes) and by reducing the opportunity cost (by working to remove the stigma of failure with established companies). But as Sam says, get too involved in the details of the creative process and you do much more harm than good.

    WeiChang, I'm curious to know how Temasek Holdings restricts the growth of the private sector. I won't pretend to know anything more than the basics, but I was under the impression it's basically a big fund (regardless of where the money comes from), so saying it restricts growth is like saying the big US private-equity funds are slowing down the US economy, which is not true.

    Yoav
  • Well said, SamCheng.
    I wont go long on this since several points brought up are my thoughts too.

    One thing for sure that I have seen many times amongst my many friends that wanna start out;

    "
    Sit there and think too much, you wont get anywhere.
    Sit there and plan too much, you still in the same place.
    Sit there and worry too much, you are still stuck.
    "

    Paddy
    BAK2u.com
  • Calvin Neo
    I kind of agree with WeiChang and Bjorn that if you are an entrepreneur by heart, you might just succeed anywhere. WeiChang is really talking about the spirit of entrepreneurship.

    But I do also take Yuri and SamCheng's point that environment will play a pivotal role. Environment can be molded by govt policies, friends, climate, existing industries etc. It's pretty broad.

    Sim Wong Hoo once said that he succeeded because 天时地利人合. It might well represent an 'asian' and 'local' pespective to entrepreneurship. We have a less developed capital market in the early days - so luck seemed predominantly important. Today, with EDB on the ball and government support, its going to be easier. But I guess we still need to see a blend.

    Lastly, guess its not good to talk about 'average thoughts'. I think all of us CAN be great entrepreneurs - we didn't have the word 'worker' stamped on our heads when we were born. Think about this: If we did't send our brightest to Oxford or Harvard for polishing, would they have become the scholars they are percieved to be? I am just assumming - if SamCheng had a chance to go somewhere(NOC?) during his younger days, maybe he might have a fire bigger than any of us.
  • SamCheng
    What I can really say is that gov's decision make a great impact in whether one really want to try entrepreneurship.

    Singapore doesn't need a few great entrepreneurs who amidst all the adversity and high cost of living, he can still do it. What Singapore need is to develop a culture of entrepreneurship and innovation. Isn't this is what gov trying to achieve all this while ??? And why did it fail despite all this effort ??? Sure, ppl say that Singapore is still young compare to other country, the fact I choose to disagree because our gov has increasingly growing unpopular with public and oversea, and so what's the chances entrepreneurship will flourish in the future ??

    It is no longer "I can do it", but "we can do it", and why only a few dare venture ??

    If culture of entrepreneurship is developed here, there won't be gov's interference at all, and so why there isn't so. And what is the ratio of ppl going entrepreneurial directly after graduation ???

    Been positive is one thing but to remain positive without finding out the cause of all this is just denying oneself.

    Supposedly if someone know that he won't have enough money to pay for housing in future, what is the chances of that person going to entrepreneurship ???
  • I agree with Bjorn that we cannot hope for the government to help us in our business endeavors. Sure, I'm sure our policies give rise to many who wallow in self pity and our copyright laws and other regulations restrict many wonderful ideas. The GIC and Temasek Holdings own most of our assets and may likely suppress the growth of the private sector making Singapore less capitalistic and more socialist than most would care to admit.

    However, entrepreneurship is not about the government or any large institutions. It is about nerve, energy, ideas and the heart to take risks for an individual, all of which a Singaporean is able to invoke and use to great fruition under our system. One could blame the government for taking all these away from him but then I highly doubt that these individuals would make it in another place as well if their will could so easily be extinguished in the first place.

    These are 'average' thoughts, 'average' mentality for the 'average' person. An 'average' person wouldn't be a great entrepreneur because by definition, they are just 'average'.

    Naturally, the system could be better, but for an individual, we can't sit down all day and wallow. We have to make do with what we have and try to succeed using our will, as we wait for our 'system and situation' to improve.
  • SamCheng
    To Bjorn and Yuri,
    Now in my late thirties, and having exposed to many so called entrepreneurs, I can say what Yuri has said make sense. Ask around anybody why ppl will not dare to venture, the first thing they tell u that they have family to feed and house loan to pay. They rather seek the stability of fixed pay and cpf contribution rather than risk themselves over loan issue. That's alone is number one killer in Singapore. In university, where graduate yet to expose to the society and doesn't feel the pressure to repay debt (especially school fee bear by parent) yet, it is much easier to take up entrepreneurial activities earlier on. But once, they begin to realize the reality of Singapore life and policies, most do actually give up along the way. Those who stick around wonder why they ever start it.

    It's sad situation we are in. There are two possibilities why ppl want to become entrepreneur in Singapore:
    1) Get a taste of been the own boss and ride on the trend. This is especially attractive to graduate who are supported by universities.

    2) Season employee who are pissed off by corporate who tends to comprise of incompetent and incapable management. Usually the ppl below work hard to cover the management's incompetencies, but then management get all the rewards "secretly" when thing is done.

    Another main problem with Singapore is that gov want a say in everything. Often gov's help turn up to be the reason why thing won't work. The problem is that blogosphere has already erode the gov's credibility and expose their ever-changing policies in term of coming way to make money from public. Like ERP increasing, car park been privatised to make money, and land sell at high price to property developer like nobody business, giving themselves huge pay. Ppl will not believe that gov is helping them but in fact find way to get $10 out of every $1 invested as happen in the past for GST and progress package thing.

    If Singapore is such a money-culture thing, most will rather want as much money as possible to survive, rather than lack of money, and definitely been entrepreneurial is not the way to go if money is the main priority.

    Sure ppl can bootstrap, but for how long in term of ever-rising cost increase by gov and their so called free market ???

    To promote entrepreneurship, it probably better to have someone established in the field to lead change (if he could) than a bureacratic and unpopular gov organization. At least, that's more credible. Commit someone like SimWongHong who has experience to lead change not someone of big org with huge salary to lead change. The tendencies for big org is have status quo since why employees will want to take risk for high-pay job ??

    Bjorn, when you work in the society, we will like to hear of your experience in working life. You probably agree on what Yuri said.
  • Yuri
    I'm not in my late-30s either. I just read alot of blogs. Initially I was going to write late-40s, but then I realised that people in late-30s were affected too.

    True, these are sweeping statements, we should get a public opinion poll on this, but no one dares to run such open polls.

    The only recent gauge to such sentiments is from the Wee Shu Min-Derek Wee incident, and I think that pretty much nails down my point. Welcome to Singapore Yoav and Bjorn. 4 million Singaporeans greet you with a BIG smile. Please signup for citizenship quickly. Citizens are now a priority.
  • @ Yuri, that is way presumptious and a lot of sweeping statements to make. While i am not of the late-30s age group and I won't understand how your age group think, I believe you are painting a very misleading picture of them.

    I tend to think that if you believe in the stuff you say about this hypothetical late 30s group, it will become a self-fulfilling prophesy. Wallowing in self-pity -- i hardly think anyone likes that tag.
  • Yuri
    And to add to that... you would have to worry because you can go back to estonia and live comfortably.

    Singaporean still have to live here wrapped in the same public policy that kicked you out.

    Imagine if the Estonian government did that to you. What would you do? Vote for a new government?
  • Yuri
    Yup. You probably don't see a very smat estonian government sucking up all the resources in the country do you?

    And even though estonia has little resources in the first place, it took enterprising foreign capital to get Skype going.

    What Estonia had going for it was a bunch of talent engineers with nothing else to do.

    Engineers that didnt really have to worry about securing their little HDBs or maintain a pay-level above inflation.

    Of course, I am assuming alot of things about Estonia, and on my part that is ignorance speaking, but once you have sweated it out in Singapore for a while, bought 5-year bonded limited-resale HDB, maybe become a Singaporean, or been caught in the next property trap and deflation hits you like a brick and the government collaborates with banks to steal your home, or find that after working 10 years in Singapore in technology and your salary remains the same because Singapore is importing the rest of estonia to work here, you will find that your newly arrived wide-eyed friends will find Singapore the most refreshing oasis, until they have been wrapped with the sub-concious trap of Singapore's public policies.

    When you reach your late-30s and we no longer need your aging brain, we will kick you out like a used tissue. :) Phoooeeey.....
  • @ Yoav, the size of a country does not dictate a startup's success. I think we understand that, the skype founders were not estonian, they were swedish (Niklas)and danish (Janus) instead. So yes, if your point is that non-Singaporeans like yourself can succeed here too, I agree. Success is blind to nationalities nor geographical boundaries.

    I agree govt is not needed too. But well, the private sector in Singapore is not well developed to take on startup investment. The largest cash hoard is at the public level, hence that determines our local investment climate.
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