(LINK) Hong Kong protests as “terrorism”; RMB & the start of “financial war”?; China Development Bank scandal

I feel that there is no good ending to this.

Hong Kong protests as “terrorism”; RMB & the start of “financial war”?; China Development Bank scandal

Is anywhere ever the capital of anything?

Adding this interesting tweet::

Was reading Term Sheet today and came across this.

http://fortune.com/2016/11/15/term-sheet-tuesday-november-15/ :

The Capital of Fintech: There’s apparently a fight, or battle, or race on between cities to become the Capital of FinTech. Hubs, scenes, ecosystems “capitals,” and various spins on the phrase Silicon Valley are overrated.

I see the benefit of mentorship, available capital, and attracting talent, but I don’t quite see the value in fighting over who has the most and biggest. Berlin’s economy minister launched a letter-writing campaign to beg London fintech companies to move. Singapore and Hong Kong are battling with government-sponsored conferences. Does there really need to be a winner? Can’t fintech just be an everywhere thing? (PS. I can’t help but think this is a sign that the fintech frenzy, and its related valuations, might hitting its peak.)

She is referring to this article :: http://www.nytimes.com/2016/11/15/business/dealbook/where-finance-and-technology-come-together.html

Several cities around the world are competing to become the capital, or at least one of the regional capitals, of fintech. If the young financial technology industry has the transformative effect that some have imagined, the contest could also determine the future capitals of finance as a whole.

And then of course for Asia the often coffee chat is around Singapore or Hong Kong:

Hong Kong has lots of competition from Singapore, which recently started its own aggressive effort to become a capital of fintech. Singapore has begun offering some of the same inducements as Hong Kong, including its first fintech week.

Last year, more fintech companies in Singapore raised money from venture capitalists than did in Hong Kong, but the Singapore companies raised less money in sum than those in Hong Kong, according to data from Accenture.

Funny enough all this is happening during FinTech week in Singapore. 🙂

My take is just like the blockchain frenzy we are at peak hype cycle for FinTech – in other words, Peak of Inflated Expectations. Buzzword bingo at its finest. I personally don’t think there will be a capital of FinTech but I could be wrong. 

This goes with my feeling that the only Silicon Valley will be …. Silicon Valley. Same as the next Amazon is still most likely Amazon.

As Erin alludes to – the power of a network, capital, mentors and the support system for a given vertical trend is great but products can be built by people anywhere for anywhere but maybe it helps to be in a Singapore or Hong Kong for some things but not always. Example is Abra based in California but product focused on the Philippines. 

In general though I think some of the core advances in FinTech are more practical and structural and may not need to be based anywhere special. In hearing Neal Cross from DBS the other day he mentioned that DBS has 40% profit margins so chasing the hype of FinTech is silly unless it can beat what they already do. Hint, hint – the banks don’t have a lot of interest in disrupting themselves so focusing on them or their financial centers may not be the answer.

I find it funny that the issues still plaguing banks and how fixing them is little to do with hardcore FinTech. Take for example that all the Singapore banks require you to use a hardware token generator. Mine ran out of battery the other day and I filled out paper forms to turn it in and to get a new one. New one had to be mailed to me and until I got it, I was not able to transact. Yes I know they have SMS tokens but they are for view only – not paying my bills.

Why can’t the bank know I don’t have my token for 5 days but allow me to do transactions that I always do? Pay the power bill for example but don’t let me add a new payee since that could be suspicious activity. Why can’t they use a software based token generator? Why can’t they use touchID on my phone? Why can’t they use my voice?

My point is that practical use cases for disruption in finance may not be connected to having to be in FinTech central.

Back to reality …

Lost the plot, off the rails – extraction needed!

From time to time I write about something other than tech because for a period in my life, possibly a very early mid life crisis, I decided to abandon tech to just exist. I had no real plan but to travel some, hang out and learn a language. I sold my house, moved from Hong Kong and ended up in the pub business in Bangkok. I have regrets and will always question my choices but I also have some solid real life experiences that I always call upon and a very healthy appreciation for the tech life, friends and of course family. I know I am spoiled.

That being said, standing on the other side of the bar in places like Bangkok would afford me a view of humanity that not a lot of people talk about openly. We would see it a mile away – some normal dude living the high life in Asia seemingly unaware that they were getting sucked in too deep. The alcohol, the drugs, the corruption, and yes the girls.

These people would miss work, miss meetings and some would even start a double life without their families knowing about it. I know of very successful people who have two families and have even imported their second family to their home country. Just nutty stuff. Situations that before my time in Asia I didn’t even know existed. I was too naive to be honest.

Sometimes the right people in that someone’s life, who had gone off the rails, would step in forcibly try to extract their friend or family from the lifestyle in hopes of getting them back home.

I would hear stories like this all over Asia – believe me it wasn’t just Bangkok. Many times it was in places where someone was making a lot of money and just didn’t realize what was happening to them. Funny enough I recall that more than a few of these folks were in finance and some were also in tech. Usually males of course.

Given the circumstances an extraction was needed and many times it worked but other times the lost soul didn’t want saving. They continued on with their new life.

Other times you would hear of a suicide or someone getting killed. Or even just dying from something strange.

I won’t wager an opinion on any of this except to say that this story coming out about Rurik Jutting sounds very believable. An extraction was needed – too bad there was no one around him to pull it off.


Thoughts on SEA ecosystem and location

Lots of twitter activity over the this post :: http://www.nokpis.com/2014/08/28/hong-kong-versus-singapore/

As mentioned I wanted to follow it up with some thoughts on this post :: http://thenextweb.com/asia/2014/08/23/time-founders-southeast-asia-accepted-location-used-advantage/

Let me preface I did not attend GOAB nd I don’t know Mona. I used to follow her on twitter but she broke my follow rule of never replying to my replies. One of my twitter rules is if I reply a few times to folks – famous or not and they don’t ever reply back then I figure there is no point in following. The point of twitter is reasonable discourse – at least for me anyway.

Mona nails well the recent rise of the SEA ecosystem and how one can most likely build a startup anywhere. Totally agree! However I think there are still some issues.

I will add that this is a tough soapbox to get on for me these days cause I will admit I am NOT in the scene as much as I used to be but this is also one of my weird opinions on the local scene. People talking about the scene and eventing tend to get more attention than those just heads down actually building a startup. Maybe that is just my personal feeling but the local media tends to focus on funding, rumors and covering events talking about the scene more than going deep on what is getting built, by who and the obvious failures that can happen. If I had more time I would do a few things – start a podcast talking to folks building things about how they got here and why they are building what they are building. I would start a review service going deep on all the consumer facing products that are coming at us everyday – some good and of course some bad. An investigative service trying to uncover why local startups fail so we can all learn from it. Alas – I don’t have the time. I am too busy with Spuul and my family to take on any more tasks. I will keep up my mentoring and writing as I see fit. The podcast idea is still brewing cause I miss TWIA and figure there is still some local demand for a good audio feed.

That being said, unlike my time at Yahoo, I am not running around at events or attending many startup focused conferences. Which leads me to another need in the local ecosystem, there are not many events or communities to lean on for those in the local startup land that are a few years in and maturing. This will hopefully improve over time.

Back to some of my thoughts on the article…

– I think seed funding is getting pretty easy to get. However it might all depends on your definition of it. Let’s say less than 150k USD for starters as a rough estimate. I think anyone with some connections, a good idea and some perseverance can land some money in this range. But anything past this I think is hard – there are some trends that buck this. Do something in ecommerce or transportation and for some reason the money is just flowing. Try to do anything with a large risk portfolio, hardware or enterprise and I think the money is much harder to find. Jump in the 150k to 1 million range and unless you have rockstar metrics, a super connected angel or crazy PR – it gets quite hard to find. This is from my personal experience and what I hear from companies I either mentor or talk to a fair amount.

– Location is still tricky. We at Spuul experience this some. The local press tends to pass us up cause they don’t see us in Singapore much. The Indian press always wonders why we are not in India and the USA press tends to overlook global plays from Singapore in general. I think the funding conversations take a similar tact at times. I think for location to work well for you it might make sense to be sure that you can dominate in the market where you have your HQ. Then figure out your regional play and maybe the globe later. Saying you are here and working on the globe might not work for those that like a tangible way to grok things. Of course you may have built something killer or viral that just works for everyone. I am speaking in terms of products as well – not the notion of outsourcing or being a vendor.

– The silicon valley stigma. I look at this one from a different angle than others. I base this on doing some focus groups with yahoo and talking with anthropologists who also study tech. If you get in a room in let’s say in Indonesia. You have a set of normal people who use tech and the internet. You present them with a novel product idea, some screens and user stories. You ask some of these people would they use this if it it came from Indonesia. Or Singapore. Then ask some of them would they use it if it came from Silicon Valley. What happens is they almost always get more excited about the product from the valley. Always. I don’t think this will change anytime soon. It is no different than people loving a Hollywood movie. It is not about what is better but just the cultural aspects that appeal to folks. I think startups in the region have to contend with people on a very local level to win or doing something very unique. If you build something similar to something else that comes from the the valley I think it won’t be successful. Granted this does not pertain to closed or unfair markets like China or say Vietnam who don’t allow truly level playing fields.

The local scene is exploding – just figure out where to make your mark.

Hong Kong versus Singapore

This is a good read :: http://ventureburn.com/2014/08/hong-kong-and-singapore-meet-the-evil-twin-startup-ecosystems-of-southeast-asia/

I won’t really dig into the startup issues cause my experience with startup land has mostly been from the HQ of Singapore. When I lived in Hong Kong, many moons back for about 5 years, I was focused on enterprise software and at the time Hong Kong made more sense. We were looking to grow in North Asia and Hong Kong was the better location for that. I think back in those days everyone felt that the “gateway” to China was Hong Kong. Now it seems the gateway to China is going to China. So for some the need to be in Hong Kong makes less sense than it did before.

Singapore is sometime’s known as the “gateway” to other parts of SEA region. Again – if you want to focus on Indonesia, you can just setup there. However maybe it is better to establish your HQ in Singapore for various legal reasons. Of course if you are looking at a regional play – Singapore makes a great base for SEA – easy to argue that this is a better place to setup than Hong Kong. It could be that for startup land the North Asia, SEA/South Asia split still plays out. You want to tackle Taiwan, China, Hong Kong, Korea and Japan? Hong Kong makes a good base. You want to go for India, Pakistan, and SEA? Singapore is the better choice.

However – maybe you plan on going after the globe, this is what Spuul is doing, and you still need a home base in Asia. For this I reckon that Singapore is the much better bet than Hong Kong. Again here I am not commenting on the HK ecosystem or the I want to live there and do a startup. Or I find HK is a better city for me so I plan on doing my startup there. Great. You should do it wherever you want. That is the cool thing about doing a startup – for the most part location doesn’t matter. I will write some more about this though since I have some stuff to debunk from this article :: http://thenextweb.com/asia/2014/08/23/time-founders-southeast-asia-accepted-location-used-advantage/.

So back to the I want to tame the globe and I plan on living in Asia – which place is better? Hong Kong or Singapore? I think for this decision to be made one has to dive into some of the practicalities of living – not just the startups issues. On this note I think Singapore is the only choice. Reasons:

– The air is much cleaner. Hong Kong air pollution is epic and worsening.
– Much easier to have a family in Singapore. Yes – not all startups are devoid of real adults, with families. Singapore is easier to manage a family than Hong Kong.
– Public schooling is English first in Singapore and much more modernized. In Hong Kong an expat must put their kids in International Schools unless they speak Cantonese as their main language.
– Permanent residency is much harder to obtain in Hong Kong. Seven years of residency and employment prior to applying. I got my Singapore PR in less than 3 years of working in Singapore.

I am sure there are other issues to consider or even good reasons to refute the list above. Local people may not need to factor any of these issues but I would argue that startups are global in nature with employees from all over the world. These employees will look to settle, have families and for this – Singapore is the obvious choice.