SINGAPORE--A room with tables and chairs--hardly anything motivating. But for new startups, it is a valuable space that allows for creativity to run wild.
Situated in the heart of Singapore, tertiary institution Singapore Management University (SMU) has carved out a space for startups to generate ideas and work on innovation, most of them tech-related. The incubation space is now occupied by 13 startups, of which three are not SMU related.
The university's Institute of Innovation and Entrepreneurship (IIE) says it "welcomes everyone, not just the SMU community to use the incubation space".
One startup which has benefited from IIE's incubation program is Foound. It recently produced a mobile application that allows friends to arrange gatherings with less hassle. The app is now available for the iPhone and iPod touch.
Founder and CEO Danny Tan, a graduate of NUS, has been "incubating" at SMU since Dec. 2009 and has found the work space there highly conducive for building ideas.
"Being at SMU allows us to focus on developing our product and service without worrying about overheads like office rental, Internet access, etc. Most importantly, the people at IIE understand how to help startups without requiring us to jump through too [many] 'hoops'," said Tan.
Foound has also gone a step further by securing the investment of venture fund Neoteny Labs under the Technology Incubation Scheme (TIS) initiated by the National Research Foundation (NRF). Under the scheme, NRF provides up to 85 percent co-investment in a startup company identified by the incubator managers, while the latter invests in the remaining 15 percent as well as provides guidance and mentoring to the aspiring entrepreneurs.
CEO of NRF Francis Yeoh said: "Technology startup companies are most vulnerable during their seed and early stages when the chances of success are extremely low.
"This is why it is important that they receive help and guidance from the incubator managers who are experienced entrepreneurs or investors with strong business and technology and networks that are so valuable to these fledgling companies," added Yeoh.
In a statement released by NRF, seven startups including biomedical research company Clearbridge Biomedics and Socialico, a fantasy stock market prediction games developer, have been selected by three technology incubators, Clearbridge Accelerator, Neoteny Labs and Social Slingshot, for grooming and development.
Another tertiary institution Singapore Polytechnic (SP) has grants of up to US$2,300 (S$3,000) for full-time students to test-bed their ideas. Students and alumnus can apply for up to US$38,400 (S$50,000) to build startups under the YES! scheme. Government agency SPRING Singapore will match S$4 for every S$1 raised by the applicant, and successful applicants do not need to return the funds given to them.
An SP spokesperson said innovativeness of the business idea, feasibility of the model, potential market opportunity, as well as the commitment and execution plan of the management are criteria that applicants are judged on.
Mindset change for greater innovation
With more help at hand, Singapore youths are gaining the extra push in building their startup. But venture capitalist Jason Su of Blackswan thinks more can be done.
"The thing about entrepreneurship in Singapore is that the education system [has been training] the workforce for MNCs in the past few decades. I do see a slow paradigm shift in education philosophy, but it's still too early to impact upon the entrepreneurial scene," Su said.
Although the Singapore government is pushing initiatives for entrepreneurial seeds to grow, the venture capitalist felt that risk-taking is key to greater innovation. "I honestly feel that given the risk-adverse culture our kids are brought up in, a paradigm shift in education is key to change the mindset of youngsters and to prepare them to take up more risks. A liberal arts education that is in the pipeline is a positive step forward."
Despite more ideas coming onboard, technologist Bernard Leong has no plans to "incubate" any seeds, unless a proper prototype comes along. But he said the "ability to make money" is definitely a criteria that is crucial to the decision to invest, alongside the demonstration of ability to secure paying customers to use the product.
Su echoed the "profitability" aspect of the investment, but said Blackswan has also invested in money-losing social enterprises.
"We supported an enterprise by the name of Beacon Enterprise, which has since folded. It was money-losing, but was a worthwhile cause since they [were] trying to hire the disadvantaged workers during the last election. By and large, we are not a charity, so investing in such ideas are rare," Su added.
While absurd ideas can end up as the Next Big Thing, both Su and Leong agreed that it is not the idea alone but the people championing and executing the idea that are crucial to a successful "seeding". SP also deems commitment an important factor in their selection of applicants for YES! startup funding.
The incubation space at SMU is but one of many initiatives that IIE is pushing. The institution has a value chain of activities and support, such as lunchtime talks by distinguished luminaries, open-mic sessions for anyone to pitch ideas, and an Entrepreneur's Corner twice a month where students and experts can network.
The university is launching an Innovator's Corner on Sept. 3, where potential startups or startups looking to expand can drop by for quick consultations and even attend clinics on targeted topics such as intellectual property rights.
IIE has also pioneered roles such as Entrepreneur-in Residence and Investor-in-Residence spearheaded by serial entrepreneurs known for setting up a string of new ventures one after the other. The former can co-found businesses with students, while the latter conducts monthly reviews and shapes startups so they are attractive to angel investors.
Meanwhile, Foound's Tan is not resting on his laurels. His startup will be working with more investors to create "an irreplaceable application on every mobile device that helps users manage and improve their social experiences".
"To achieve that, the team will be working on feature improvements as well as making Foound compatible with other mobile platforms in the coming months," said the young innovator.