Singapore companies are appropriating Silicon Valley commercial models for the local market and venturing across regional borders to secure the best entrepreneurs and ideas.
JFDI.Asia, for instance, is Southeast Asia's first affiliate to the Global Accelerator Network, which promotes the organization's model to "accelerate" the development of an idea into a viable company and provides entrepreneurs with S$15,000 (US$11,652) in funds, as well as mentoring and support. It takes between 5 and 20 percent equity in the startup.
JFDI.Asia's CEO Hugh Mason and social engineer Wong Meng Weng established the accelerator over the past two years, with their work culminating in the recent JFDI.Asia Demo Day in early-May, where 11 Singapore-based startups pitched their ideas to 110 potential investors.
Two startups, Kark and ShopSpot, announced they had secured investments before Demo Day, and over half of the teams pitching on the day itself had secured funding offers, Mason said in an e-mail interview.
The accelerator model is used to solve problems in the local culture and geography--a finding Mason and Wong observed when they recently met with other members of the Global Accelerator Network, distributed as far as Brazil and the Ukraine
For Asia, it's mobile first
However, in a region where the mobile device is an individual's primary means to access the Internet, it is critical to consider Asian consumption habits are different from other parts of the world where the PC and laptop still rule.
Mason said: "As [Facebook CEO] Mark Zuckerberg found out when he tried to make Facebook work on mobile devices, that means thinking differently. Almost all our startups have begun with a mobile app first, and then thought about how their idea might work on larger screens. It's been a great discipline. It has forced them to think about simplifying their ideas and making the user do the minimum amount of work to get a benefit.
"The interface needs to work for anyone around the world, of course, but the way it's marketed and the way the company is thinking about growing its user base grows out of the way people live in Asia," he explained.
Innov8 was also at Demo Day and is a partner of the accelerator. The S$200 million (US$155.4 million) venture fund set up by Singapore Telecommunications identifies new technologies that give companies under the SingTel Group a competitive edge in their respective markets, which collectively reach 430 million customers across Asia. The telco handed down the broad mandate earlier this year when it regionally aligned its business units across all geographies where it operates.
According to the company's investment manager, Monica Tsai, Innov8 scours for investment opportunities across Australia, Indonesia, China, India, Thailand and the Philippines. Company executives, for instance, travelled to Sydney, Australia, in early-May as sponsors and supporters of the Startup Weekend event, during which entrepreneurs formed teams and built a prototype in 48 hours.
SingTel always reaches for opportunities beyond its immediate proximity, Tsai said in an interview, noting that Innov8 has offices in Silicon Valley and China, and will be opening another in Israel.
The company's international reach reflects the reality of doing business in a country of about 6 million people.
She said Innov8 last year led a A$5 million (US$4.9 million) investment round in the Australian application, Dealised, which enables companies to roll out their own group-buying Web site--a technology she believes is applicable to any SingTel company.
Innovation can come from Asia, too
Tsai said: "We don't want to say OK, we invest in a certain geography. Part of the solutions that come up, part of the next generation, it doesn't have to come from where it's going to operate, it can come from somewhere else, everywhere.
"A lot is still coming from the U.S. but there's a lot of interesting things are happening in China that's very relevant to Asia, and that can be taken out and put into markets that are quite similar," she noted. "Why not tap into Asia? One it's a lot closer, and two it's a lot bigger market. You have billions of people rather than 300 million people and there's a lot less competition."
"That's where the growth is going to come from, it has been and going to be the growth going forward, and whatever works in Asia, will work in Africa. That's why we have cross-market investment and presence," she said.
According to Wong, creating successful startups will boost Singapore's nascent tech startup industry. The JFDI.Asia executive said the city-state had already adopted some promising startups including Viki.com, which crowdsources subtitles to translate Korean dramas into other languages and last year raised US$20 million.
"Our motto is 'in Asia, for Asia' and anyone who knows their American history will complete the triad with 'of Asians'", Wong said. "But we didn't want to say it explicitly because white guys can jump too."
"A startup that serves markets in Southeast Asia belongs in Singapore. If the target customer speaks three languages without really trying; has yellow or brown skin; is the first person in their generation to go to college; and doesn't own a laptop computer but uses a featurephone or smartphone to access the Internet, that's the startup for us," he said.
Noting that JFDI.Asia's motivations were "purely commercial", he said the company was looking to create startups with the potential to address growing markets in the Asian region.
"Developing the startup ecosystem in Singapore is a positive externality, a side-effect which we are happy to foster, just as those who came before made it possible for us to get going," Wong said.
Mahesh Sharma is a freelance IT writer based in Australia.