Venturing out to start businesses
Grads, with the help of incubator schemes, are growing their start-ups
By Cassandra Chew
WHEN National University of Singapore (NUS) graduate Stanley Han, 28, registered his business in 2003 he did not even have a product to sell.
Six years later, the electrical computer engineering graduate’s firm, Personal e-Motion (PEM), is on the brink of clinching five international deals for its KooBits platform to produce digital content such as e-books.
And it is already generating a six-digit turnover.
Mr Han’s company is one of two NUS Enterprise incubatees that managed to secure funding of $4million from external investors in July. A further two incubatees are currently looking to win a total injection of $2million.
They are symptomatic of the growing number of university incubatees here who are outgrowing their ivory tower homes and approaching venture capitalists to take their fledgling businesses to the next stage.
At least 45per cent of the 46 ventures started at the Nanyang Technopreneur Centre since 2002 have succeeded in winning external funding. And some 12per cent of the Singapore Management University’s (SMU’s) 23 start-ups have harnessed external investors since 2005.
NUS Enterprise chief executive Lily Chan considers these progress markers to be ‘starting milestones’ towards the entrepreneurial society envisioned by Minister Mentor Lee Kuan Yew in 2002.
Back then, Singapore was ranked third from the bottom of 27 participating countries, including the United States, Norway and Japan, in entrepreneurial activity in the Global Entrepreneurship Monitor 2001 Executive Report.
What followed was a slew of government-led initiatives to ‘remake Singapore’ and create an entrepreneurship-friendly environment.
Universities here sought to emulate model incubators at top institutions such as the Massachusetts Institute of Technology (MIT) and Stanford University. MIT alumni are responsible for such global household names as audio equipment firm Bose, biotechnology pioneer Genentech and leading semiconductor chip maker Intel. Stanford graduates have founded social network hi5, education company Testtakers and online community for the eco-conscious Care2.com.
The challenge for dons such as Ms Chan since then has been to alter the traditional definition of success – such as securing a stable job after graduation – and to whet the entrepreneurial appetites of young Singaporeans.
‘We have had to get the young excited about this because they are the next generation of Singaporeans. It takes a mix of environment, technology, creativity, ideas and support,’ she says.
NUS Enterprise was founded in 2002 and its enterprise incubator is staffed by eight full-time personnel, who – like their counterparts in SMU and the Nanyang Technological University – help provide mentorship, funding support and business resources. The organisation also offers low-rent sites for start-up ventures.
Alongside is the NUS Overseas Colleges programme which allows students to intern with budding start-ups and take entrepreneurship classes abroad.
Since it began in 2001, more than 700 students have participated in the programme in six cities including Shanghai, Stockholm and Silicon Valley.
It is Ms Chan’s dream that NUS will one day join the ranks of MIT and Stanford to ‘attract some of the top talents…and have venture capitalists and financial people walking its halls’.
Already, about 120 companies have passed through the NUS incubation system, with over 40 actively guided by mentors. Of the 120, 20 have failed, but more than 30per cent have successfully raised funds, are generating revenue, or are expanding overseas.
For PEM’s Mr Han, it was the combination of consulting mentors and networking with businessmen that opened his eyes to the global potential of his business.
‘The school linked us up with a lot of experts and advisers from different backgrounds, which helped us polish our business model,’ says Mr Han, who founded the company with department faculty professor Shuzhi Sam Ge, 46, and then-research fellow Chen Xiang Dong, 38.
The Beijing native and Singapore permanent resident plans to use the latest infusion of fresh funds to scale up manpower at his 25-strong firm and grow his business.
He anticipates his firm making its first profit in three years and, one day, hopes to take PEM public.
NUS Enterprise mentor Kristav Childress is similarly upbeat about the future for entrepreneurship here, which he feels ‘is in the Singaporean DNA’.
‘The Singapore education system hasn’t trained the students really to distil their ideas for an immediately-clear business plan, but Singaporeans are resourceful with the ability to think laterally,’ he says.
Ms Chan thinks getting students interested has not been easy because entrepreneurship is not a career for the faint-hearted, nor an easy path to take.
Sure, she says, there has been a ‘change in society’ with more young graduates choosing to start their own firms.
But NUS Enterprise’s chief executive feels the path ahead is likely to be long, with many young minds yet to be won over from more predictable career options.
‘The NUS Enterprise incubation ecosystem is a starting milestone. But this path is long and we need entrepreneurs who can build scalable business models. Ultimately, Singapore must have ‘patience’ capital – it will take time, and resources to make this work.’
casschew@sph.com.sg
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