National University of Singapore law student Leonard Tye asked JFDI CEO Hugh Mason what budding lawyers need to know about entrepreneurship and startups, writes Crystal Neri.
Hugh Mason founded JFDI.Asia, the region’s pioneer business accelerator, growing a $1m investment into a $60m startup in their first three years.
Leonard: Is it desirable for people from different countries to start a startup?
Hugh: Historically 90% of our startup teams at JFDI have come from outside Singapore and, empirically, there’s a strong sense that’s been a real advantage. Aside from the fact that someone from Philippines can tell an Indian team immediately if their proposed company name means something awkward in Tagalog, having folk from around Asia in one place means that teams automatically start thinking about how they are going to scale regionally from Day 1.
Leonard: Do geographical barriers stop groups of people who share a common belief/ideology working together?
Hugh: We supported GSY ASEAN earlier this year and it was wonderful to see how people who share a belief that we can make the world a better place came together across cultural barriers.
Leonard: What problems could arise from such an arrangement?
Hugh: The main challenge is very pragmatic. It’s very very very hard to actually make any startup succeed. A thousand times harder than folks readingTechcrunch or watching The Social Network would believe.
It’s hard enough when you are all from one culture and in one place. But I have seen folk from one culture working in different places collaborate very effectively (e.g. techies working together in different locations but united by a common ethic.) That does take structure to succeed – much as doing a degree by distance learning needs structure to make sure everyone’s expectations are aligned.
But maybe we will all just get used to the challenges and find ways around them and maybe even make a real asset out of diversity. Our startup codecloud.me is doing just that. It allows people from around the world to advance their careers by collaborating on small structured projects.
“It’s very very very hard to actually make any startup succeed. A thousand times harder than folks reading Techcrunch or watching The Social Network would believe.”
Leonard: The Singapore government has been particularly enthusiastic about providing for many avenues of funding for new businesses. My entrepreneurial peers from the US often comment about how privileged we are. Equity here is quite unlike in countries like the US where private funding is more abundant. Lately, crowdfunded equity seems to be heralded as the future of startup funding in the US. Current investment laws in Singapore do not seem to allow for this. Do you think this will eventually be a thing in Singapore?
Hugh: Crowdfunding for Reward is already happening in Singapore through several channels but to be honest the strongest projects seem to gravitate toward Kickstarter and Indiegogo.
My impression is that the Monetary Authority Of Singapore (MAS) is cautiously edging toward authorizing Crowdfunding for Equity but, to be honest, I question what value it adds in an ecosystem that is already awash with early-stage funding. To put that in perspective – last time we totted up the numbers I think we reckoned that there is about SGD $1.5 billion of seed and series A funding available in Block 71 Ayer Rajah Crescent alone. So in Singapore, there’s a shortage of investment-ready businesses, not capital to fund them, something that experienced business angels echo elsewhere. So IMHO crowdfunding needs to bring more to the table than just cash.
Leonard: The legal industry is notorious for remaining in the tech “dinosaur age” (especially in Singapore). Overseas, there are legal startups attempting to commodify simple legal services (e.g. Rocketlawyer), or take on an “uber for law” model (e.g. Lawpal, no longer operational). Do you have any specific views on disrupting the legal industry in Singapore and would JFDI take a special interest in legal startups?
“In Singapore there’s a shortage of investment-ready businesses, not capital to fund them.”
Leonard: JFDI mainly admits for profit startups into its accelerator program. Does it have any plans to work with non-profits?
Hugh: We are currently doing an experiment with DBS Foundation to see how the methods we use to help for-profit startups to discover a viable business model might also help social enterprises that are near to commercial sustainability to make that leap. We just took our first to social enterprises through that program and it looks encouraging.
My sense is that there are some very important impact-driven organizations where it’s very hard to ever imagine commercial sustainability (those caring for victims of female genital mutilation or paedophilia, for example). On the other hand when you look at some of the interesting work done by the Asia Venture Philanthrophy Network, with whom we have an active dialogue, or the success of the Bill & Melinda Gates Foundation, it’s easy to imagine a future where risk management techniques developed for venture capital could help make impact-oriented enterprises more effective too.
Hugh: You are very welcome as an intern – we have people with us all the time. Regarding careers in VC, Guy Kawasaki says this better than I ever could.
Leonard: Why do you do what you do and what keeps you at it every day?
Hugh: I had an interesting insight when I first started working at the BBC. Friends making current affairs shows said to me that politics never really changes – human nature is the same now as it was hundreds of years ago. But innovation and entrepreneurship upset the apple-cart of history.
They change the balance of power and bring what Marx and Schumpeter called Creative Destruction. For sure technology has conjured up Anthrax and Nuclear weapons but frankly I’d much prefer today’s dentistry to what my Dad grew up with in the 1930s. So I am an optimist about technology.
In the last decade I think we’ve come to understand how technology evolves, how innovation can be systematized through approaches like Lean Startup andDesign Thinking and how we can teach entrepreneurship. All these things create wealth and opportunity and gives me huge hope for the future.