Singapore entrepreneurs have to be willing to fail

Startups in city-state lack readiness to fail and need to look beyond local market to sustain business, advises venture capitalist.
Written by Liau Yun Qing, Contributor

SINGAPORE--The local startup scene is "very strong and vibrant" but local entrepreneurs need to be willing to fail and aim for wider market opportunities, says a venture capitalist who hopes to bring Silicon Valley's spirit here.

Vinnie Lauria, a mentor at Singapore-based startup accelerator incubator Golden Gate Ventures, told ZDNet Asia in a phone interview that it decided to set up in Singapore because the country was a great platform for startups.

"The government has done a good job with top-down financing, but what's really impressive is the bottom-up events and communities that have been started here," Lauria said.

Through the company's startup fund and mentorship program, Lauria and his other team members--Paul Bragiel and Jeff Paine--are hoping to bring the Silicon Valley spirit to Singapore. Golden Gate is backed by U.S.-based super-early stage startup fund, I/O Ventures, where Bragiel is a co-founder and managing partner.

Among the "Valley spirit" that Lauria hopes to instill is the willingness to fail, something he sees as missing in the startup scene here.

"You only hear success stories like Facebook, but most of these [Silicon Valley] companies did not start out that way," he said. "Take Groupon, for example. It started out as a Web site for group causes where you get people to donate money to charities. That didn't work out so they pivoted [toward group-buying] and hit a home run."

"I haven't hear a lot of that here: the willingness to say, 'This really isn't working, we need to change our directions'," he noted, adding that this was part of building a successful startup.

With Golden Gate, Lauria also hopes to establish an angel investment spirit where successful entrepreneurs give back to the startup community in terms of investment.

He further observed that while there were many first-time entrepreneurs in Singapore, few had built successful startups two or three times over, he said.

"In Silicon Valley, you have a lot of people who have gone through the trial of begging people for money and proving themselves.

"Now that they have gotten successful, they say they want to make it easier for the next generation of entrepreneurs," he said. He added that he hopes entrepreneurs who have received funds and mentorship from Golden Gate will share a similar attitude and pay it forward.

Investors, startups need to think bigger
Lauria explained that he assesses startups differently from traditional investment funds or bigger corporations when deciding which to invest in.

"There's a number of factors that come together. I'm not looking at the traditional model like most investment funds which take a very conservative approach and ask the startup, 'How much money have you made? How much money will you make?" he said.

"I look at what is the market you are going after. What is the opportunity? Who are the market players? How does your team look like? What is your distribution model?" he said. "To me, building a Web startup is much more of an art. There's magic to it and it's not a broad numbers game."

He added that Golden Gate seeks out startups that are focused on the Internet and consumer-facing business, and these can be a Web site or a mobile app.

Startups also will need to think bigger in terms of geographical coverage.

Lauria said he is interested in companies that look at solving problems across multiple markets in Southeast Asia, rather than companies that are focused only on the Singapore market.

Startups that concentrate their efforts only on Singapore will have "too small a market" to work with, he said. Also, Singapore is wealthier compared to its neighboring countries so a product developed for the market here cannot simply be "copy-and-paste" for another market, he added.

If accepted by Golden Gate, local startups will share equity with its investors.

"We get a fraction of the company. For every S$50,000 (US$39,800) [investment], we get on average 12 percent share," he explained.

Startups that accept funds from the incubator will work alongside the three mentors for six months. The mentors will share their knowledge on building early-stage startups such as getting the first 10,000 users, product design, and social features to grow the product such as by leveraging Facebook and Twitter, he said.

Golden Gate calls Singapore its home base, but the company is also looking at setting up presence in other markets including the Philippines, Indonesia, Malaysia, Thailand and Vietnam. It currently is involved in other Southeast Asian markets through partnerships, he noted.

The company's three mentors are entrepreneurs who have set up various companies or groups to encourage entrepreneurship. Braigel founded or co-founded three companies: product forum Lefora, location-based social network Meetro, and game development studio Paragon Five. Lauria is a co-founder of Lefora, and founder of Silicon Valley NewTech Meetup which currently has over 6,000 members. Paine founded Pyrks and established the Founder Institute in Singapore, which is part a global network of startups and mentors.

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