The
growing startup scene in southeast Asia is a bit different than its counterpart
in Silicon Valley.
For one thing, the salaries are lower -- chief
executives typically make less than US$9,000 a year -- and people don't get
very excited about stock options.
"Asians don't really understand working
for equity," said Pierre Hennes, who is chairman of a local group of
startup investors and also runs two venture capital funds of his own.
Hennes spoke Wednesday on the sidelines of the
DEMO Asia conference, which takes place this week in Singapore. This is the
first time that DEMO, a series of conferences for emerging technologies that
helped launch names like Palm, ETrade and Salesforce.com, has held an event in
the region, outside of China.
The main show, which begins Thursday, will
feature about 75 startups in various stages of infancy from more than a dozen
countries and from single-person Internet plays to advanced medical device
ventures. Fees for a booth on the showroom floor or the chance to present in
front of media and venture capitalists start from SGD$1,500 (US$1,200), a large
sum for the smaller companies, although some financial assistance is available.
In Singapore the government has actively moved
to sponsor budding local entrepreneurs through bodies like its SPRING agency,
which eases their way through the local bureaucracy and sponsors local events
and grants aimed at early startups. The tiny island country has a long history
of international trade, operating some of the busiest ports anywhere, and is
well-suited culturally to work with the world's current tech powers -- over a
third of the population speak Mandarin and about a fourth speak English.
But local investors say that many locals who
start companies tend to think small, or choose straightforward Internet
commerce sites because the barriers to entry are low. The SPRING website
devoted to its entrepreneurship projects features designers of "eclectic
messenger bags" and a machine to automatically make Roti, a type of Indian
flatbread.
At a small event before the main DEMO
conference, pitches included a site to match students with teachers in specific
subjects and an online tool to help market researchers find test subjects. When
one was asked how she would protect against copycat sites, she said simply
"I can't."
"It's a little bit of everything. You
might see some copies of things that exist in other places," said Jeffrey
Paine, the director of local incubator BattleVentures.
Local entrepreneurs and venture funds looking
to draw financing from Asian investors can find it more difficult than in the
West. With lucrative opportunities to invest in regional real estate,
currencies and local stock markets, which regularly pay out double-digit
returns, pitching the hit-or-miss nature of startups can be a challenge.
Negotiating salaries and contracts can also be
tough for outsiders, who aren't used to the frugality of the locals.
"In Asia they don't like to pay much, and
they bargain like hell," said Hennes.
Jay Alabaster
IDG News
Business & Investment Opportunities
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