A new Blog was launched this week by an early partner in Small World Group’s efforts in Singapore. It’s author is Chris Vargas and he has moved his entire family to Helsinki, Finland to engage with the start up scene there for a year. You can read his first post here.
In the post, he argues that Silicon Valley is less a “place” and more a state of mind. I resonate with that. See what you think. Welcome Chris!
After reading Chris’ first post, I was motivated to generate one of my own. So today’s post is a summary of where we have come in the 3 years since I returned to Singapore and began working to start an Incubator here.
First a simple summary –
- we have started 12 companies in Singapore plus 1 in the USA
- we closed 2 of the companies (or are in the process of closing, more on that in a bit)
- we raised more money for 3 of the companies in follow on fundings; all were increased valuations
- 8 of the companies have strong clean tech focus
- 1 company has a unique sports gadget
- 3 companies have internet/web roots
- 1 company brings a unique value proposition to emerging markets for computing and connectivity
Of the remaining 11 companies, 2 are currently seeking funding and have reasonable prospects.
One of the surprising results has been how long some of the companies have been able to stretch the money we invested. Each of the companies knows that they must finish their initial product, sell it to some early customers and have those initial sales transact at reasonable gross margins for their industries. We see that now happening for most of the remaining companies.
Our key investment thesis was that we wanted our “saplings” to be frugal with the money, learn how to be a full company with sales and customers and not think like a development group. We funded our first company 24 months ago in October 2010 and now we see this transformation happening in each of the groups. Hurray!
In Singapore, so many plans we saw initial had voluminous discussions about “markets” and how the new company would meet market needs. We have worked consistently to tell them not to focus on markets … little companies have to focus on customers. And now this is working. HP and Apple can address markets, little startups must focus on initial customers.
We also have worked to create a “culture” in the Incubator. Our culture is customer centric technology and business development. My partner in Finisar, Jerry Rawls, was fond of saying that culture eats strategy for breakfast (lunch) (Peter Drucker is the root origin for this, I think). And by this he meant, that Finisar’s culture – again one of fanatical customer satisfaction – would always trump us being clever, smarter, first to market. And it is this same approach which we now work daily to maintain at the incubator.
And it is working!
This week on Wednesday, Sept 26, we will hold our 3rd open house where each of our companies present and tell their evolving stories to potential investors. Most don’t need money so this session is about investors getting to know them BEFORE they engage. They can hear plans, talk about customers and sales and then watch the companies for another 4-8 months before any money transacts. It is a different model that has its origin in our culture. We sell results not futures, teams and their accomplishments, not so much patents and promise.