In Singapore, a Failure to Fail
Singapore, although far from Silicon Valley, has a vibrant entrepreneurial ecosystem, and I’ve been impressed by passion and talent of its entrepreneurs since my wife and I moved here a year ago.
The government plays a big role in the city’s ecosystem — administering grants and programs that provide financial support for startup companies. Innosight benefits directly from one of these programs. Our IDEAS Ventures fund is a joint arrangement with the National Research Foundation as part of the National Framework for Innovation and Enterprise.
Government support is beneficial, but venture capitalist investor Mike Maples recently made a point in a conversation with TechCrunch that crystallized a nagging concern that I’ve had about Singapore: it’s too hard for companies to fail.
One topic of Maple’s discussion was whether it is too easy to start a company (a point I riffed on back in August). Maples’ research shows that the number of breakthrough companies launched at any given time is relatively fixed. More people starting companies therefore could mean that great talent is locked up in flawed companies.
I’ve certainly seen this play out in Singapore. Last summer, my colleague Pete Bonee and I met with a young Singaporean entrepreneur. Let’s call him George. George was impressive — whip smart, good entrepreneurial instincts, and a presence beyond his years. He needed a few hundred thousand dollars to keep his business going. But it was pretty clear to us that his idea was in the wrong industry space. It is always possible that the iterations that characterize early-stage startups would have eventually led him to success, but we decided not to invest in his company. The rest of the local VC community had the same reaction.
Recently, however, I learned that he scored a grant from the government to keep the business going for another 18 months.
Scott D. Anthony is managing director of Innosight Asia-Pacific.