The last three weeks in Hong Kong have been an incredible learning experience. Since landing, I’ve sat and spoke to many of the startup community leaders here and am gracious for all of the time taken and discussions had. Additionally, my arrival here was timed against the RISE Conference, where I was able to chat with local tech startups encompassing the whole spectrum of maturity levels.
From all of my conversations and interactions with community programs, here are my initial observations.
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(1) HK startups are thriving … in quantity. Quality, on the other hand, is still taking its sweet time.
There is a lot of general interest in entrepreneurship and tech, as evidenced by an endless stream of community programs and Meetup events hosted nightly throughout the city. There’s also a lot of interest in HK from foreigner entrepreneurs, searching to become early-movers in a frontier market.
Co-working spaces are also (surprisingly!) not as empty as one would expect, given the supply of over 50 in HK alone. Startup enthusiasm, slowly but surely, is spreading, but I feel the quality of this scene’s development will be limited by how it currently functions and what it emphasizes...
(2) Education first! ... second, and third?
From what I have seen, there is no shortage of entrepreneurship 101 events and programs. Actually, it seems like the entire startup scene in HK is exclusively catered to sparking interest amongst aspiring entrepreneurs.
Here’s the issue— entrepreneurship 101 serves its purpose for a specific audience, but is limiting when it permeates most of the startup community’s activity. Why?
Entrepreneurship education provides the general framework for business— it can teach you how to build revenue models, think about sales optimization, and internalize the value of good branding. What it cannot do, in a particular manner, is teach you how to build a valuable product solving a (sometimes complex) issue in a consumer-friendly way. All entrepreneurs utilize these basic frameworks, but that's not what defines their success. Their success is born from very concretely knowing the problem they're solving, knowing how they are going to solve it, and most importantly, knowing for whom the issue is being solved.
(3) There are established entrepreneurs here, but where are they?
Even with the dominant focus on introductory education, there are established tech companies here with strong track records— 9GAG, GoGoVan, Notey, Prenetics, LaLaMove, Klook, and Grana, to name a few.
These are all companies that either have long moved out of infancy, or are just moving beyond it now. Stated otherwise, these are all examples of companies that have moved beyond the framework of entrepreneurship and toward execution, growth, and sustainability. Yet as individuals who have transitioned from education to execution, I don’t see much involvement on their behalf in the community as leaders.
I’m sure all of these established HK founders are extremely busy. However, I’m more certain that their lack of engagement and mentorship in the startup community stems from the following: the startup community here doesn’t offer much value to entrepreneurs once they move beyond the fundamentals.
(4) Everyone wants AND is in the process of creating a venture fund.
Every conversation I have about active players in the startup scene, there is always a side note thrown in about how this or that person is in the process of building a venture fund, or already has one. Even the HK government has produced its own (rather massive) fund in light of this trend.
My psycho-analytic mind leads me to believe that these anecdotes are not without meaning, and that there is power and legitimacy associated with having a venture fund.
It is also possible that it is culturally specific reference, and one that I probably don’t understand in its full depth. Regardless, my gut says the “venture fund trend" is an indicator of a high degree of importance put on the value of money. It’s interesting in light of one of my mentors’ (controversial) commentary — “money is cheap, and doesn’t guarantee success.” Not particular to me, this was his advice given to entrepreneurs clamoring for funding, without realizing that the value of an investor shouldn’t be defined by his/her check.
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Between the dominant emphasis on introductory education, the spectacle of venture funds, and the communal disconnect between aspiring entrepreneurs and established entrepreneurs, I see the HK startup scene focusing too heavily on aspects of entrepreneurship that will not foster sustainable growth.
From my perspective, there is a web of inter-related causes and effects from my four observations above, producing a closed circuit and stunting development. Spelled out, this is how I see it functioning: the community focus on education (2) and the association between venture funds and legitimacy (4) effects the lack of engagement from entrepreneurs who already have money and domain expertise (3) while that disconnect between the community and entrepreneurs stunts aspiring entrepreneurs from moving beyond general education, producing high quantity and low quality (1).
There are definitely other ways of dissecting cause and effect in this web of phenomena. And this is by no means conclusive. This is merely a benchmark for my own thoughts, and a provocation for others.
At this stage, I’m unsure what will break this cycle— whatever it is, it will have to be more than writing about it… However a piece of the puzzle, and an opportunity for the future success of HK’s startup scene, will consist of reconciling (1) how well the community can diversify the value it creates beyond education, to (2) how much established entrepreneurs perceive of the community as a place to not only contribute and but also gain value.