Novel networking event enables entrepreneurs to learn from others’ business missteps, says Cut The Small Talk’s Angela Ognev.

Joseph Wong, founder and CEO of start-up ForteCentral, has attended many business seminars and inspirational talks. Some were helpful to him as an entrepreneur, while others were not. Yet among all of them, none was as impactful as F***up Night. Wong has attended every session since his first several months ago. He has even cajoled friends and fellow entrepreneurs to join him.

As the name suggests, the event celebrates failure, particularly in the area of business and entrepreneurship. It is a platform — for three to four entrepreneurs each time — to share their story with an audience. The aim is for members of the audience to learn invaluable lessons from the failings of others.

Each speaker is given seven minutes to do so and they may use up to 10 images for illustration purposes. This is followed by a question-and- answer session with the floor. The event concludes with networking among the speakers and members of the audience.

The event is held once every two months at The Hub Singapore, a co-working space dedicated to start-ups and entrepreneurs. It is organised by Cut The Small Talk (CTST), a not-for-profit group that organises events promoting open and candid conversations on taboo and controversial topics.

This writer recently attended the 11th session of the gathering to check out the buzz surrounding it. The speakers for the night were Gametize co-founder Keith Ng, spiritual coach Elyse-Anne and author, speaker and mindset coach Richard Phu.

It was a full house. The attendees were from all walks of life. Some were still in their office attire; others were casually dressed. Each session so far has attracted between 80 and 120 people, estimates Angela Ognev, a CTST co-organiser, who was also the night’s emcee. After getting the audience to do stretching exercises as part of an icebreaker, she gave a brief history of the event and the programme before introducing the speakers. It was the start of a night of candid storytelling peppered with poignant contemplation and the occasional joke. The stories shared, though self-indulgent at times, were very personal.

Ognev tells Enterprise how people have expressed surprise at the openness of the speakers in sharing their failures. As a result of that openness, they often feel very connected with the speakers, she elaborates.

“I think the idea of people just saying something about what’s happening in their lives, the mistakes that they have made, is very attractive,” Ognev says. “We’re hoping that more people can be [more] open [about their failures].”

Celebrating failure
The first such event was held in Mexico in 2012. It was the brainchild of several entrepreneurs whose businesses had failed but who had found meaning in talking about their failures. This informal conversation eventually turned into a formal event, and the idea soon gained traction with entrepreneurs outside Mexico. Today, it is a global phenomenon and is held in many cities around the world, including Singapore.

CTST introduced the concept in February last year. The Hub Singapore asked Ognev if they could collaborate to bring it to Singapore. It offered its premises for free if she would organise it. Ognev, who had heard about the concept and was impressed with it, agreed.

She roped in Adele Sim and Amelie Tan as co-organisers, and CTST was born. The latter two had been involved in organising TedX and TedX Women prior to that and Ognev got to know them through one of the networking sessions at the two events. “They are both very free-spirited and norm-challenging people,” she says. “We weren’t that close as friends before, but I just instinctively thought they would be good people for challenging norms and for having more open conversations.”

Speakers for the event are those who are courageous enough to speak about their business failures. They are usually entrepreneurs, whom Ognev defines as people who see a gap in the market and take action. Hence, they could be business owners or freelancers.

Speakers are usually selected by CTST, although sometimes they are referred to the organisation by other people. In some cases, members of the audience themselves volunteer to speak at the next event. CTST does not conduct a rigorous screening of the speakers, but usually enquires about the topics they intend to speak on. Ognev believes this approach encourages speakers to share their stories freely.

What motivates someone to tell strangers about his failures? Ng of Gametize says while he felt nervous, he was more than willing to share his story as it could be helpful to others in a similar situation.

“If there is an opportunity for me to share them, why not?” he tells Enterprise during the networking session. “I can tell them what has not worked [out] for me.” During his presentation, Ng had related how he attempted suicide after racking up huge debts when his business was doing badly (see below: Gametize’s Ng climbs back up from rock bottom ).

Still, not everyone is candid or brave enough to share such an experience. Some speakers prefer to tell a mixed story of success and failure. In fact, many of the accounts have happy endings or some form of positive progress, says Ognev. “It’s hard for them to be negative all the way through. It really depends on the person.”

On the other hand, some speakers get carried away when relating their stories, or become too emotional. That is why a time limit is necessary, says Ognev. “I think it is a tough balance between being open and dumping an emotional load on someone else. When a speaker is very emotional about something painful, it can be hard for some people to handle. So I think it is good to keep the time short.” That being said, none of the three speakers that night kept to the time limit!

Is it helpful?
Is there anything to be gained from hearing about another person’s failures? Yasser Khan, founder and CEO of propertyagentleads.com, who was attending the event for the first time, tells Enterprise that it presents an opportunity for people to learn from the mistakes of others, which is different from what many other events and seminars offer.

For ForteCentral’s Wong, the takeaway from each session is always different. And sometimes, the advice given by two speakers on the same night can appear to contradict each other. But it is up to the audience to decide what is useful to them, he says. “Whether speaker A or B is right — and they are probably both right — what they give is the context of how to look at things. That is my biggest takeaway,” he tells Enterprise.

Ognev agrees. “I think some speakers are going to be more useful to some people than to others. And people will take whatever is most useful [to them],” she says. Beyond that, what they take away could be something they felt or thought in response to what the speaker said, Ognev adds.

Then again, not all stories shared by the speakers are deemed as failures by the audience, according to Wong. This puts the speaker on the spot and it is interesting to see how he or she responds in this situation, he says. Wong stresses that it is more beneficial to learn from the failures rather than the success of others, as the perspective is different. It is even more impactful when the speaker is “still in the pit” and yet to find success, he says.

The next event is scheduled for Oct 5, but Ognev is already looking forward to it. “I think, in general, but maybe more so in Singapore, people don’t talk much about what’s not going well [or] when they don’t feel well. There is a lot of pressure around success and making ‘X’ amount of dollars a month. So having this space for them is very nice.”

Gametize’s Ng climbs back up from rock bottom

Keith Ng hit rock bottom when he was a budding entrepreneur. Starting a business was not as easy as he thought it would be. At one point, he had only $1.13 in his bank account. He could not pay his utility bills, leading to his power supply being cut. He owed the credit card companies money. Ng was ready to commit suicide.

“These were the lowest points of my life,” he says, recounting his tragic tale at F***up Night. Ng is a cofounder and CEO of Gametize. Founded in 2009, the startup provides gamification solutions to enhance activities, experiences and business functions. It was known as Socialico before rebranding itself under its current name.

Like many start-ups, its initial years were difficult. Gametize was an unknown brand with no track record. Business deals were hard to come by. This led to severe cash flow problems. Gametize was supposed to receive funding from a multi-millionaire US investor, but that did not materialise.

“I was, at this point in time, played out by an investor who was supposed to do a second tranche of investment,” he says. “You wouldn’t have expected him to default on the investment sum of about US$30,000 that was being matched by the National Research Foundation for another US$200,000.”

Desperate, Ng resorted to credit card loans to pay his staff’s salaries. It was perhaps the stupidest thing he did, he admits. “I strongly recommend you not to do that,” he tells the crowd. “It’s incredibly unhealthy, incredibly stressful. The interest rate was just compounding year on year.”

Depressed and suicidal, Ng googled for the easiest and least painful way to end his life. His search led him to realise there was no “easy” way to commit suicide. In fact, the odds of successfully committing suicide were low. He realised he could end up being paralysed or brain dead, a fate worse than death.

What prevented Ng from going ahead was the thought of his mother. A photograph on screen shows him kissing her cheek during her birthday celebration. “Her image just kept floating in my mind,” says Ng, an only child. She is a single mother. Ng says when contemplating suicide, the important thing to remember is your family or whoever else you will leave behind. That saved his life.

Things eventually turned for the better in 2012. Gametize won funding in a now-defunct reality TV show called Angel’s Gate. On the show, entrepreneurs would compete against each other by pitching their business ideas to the judges-cum-investors. Gametize won the top prize of US$200,000. It started to gain more recognition and became profitable as business boomed.

Ng reckons his early failure was a result of several mistakes. “I think I was very naïve. I was dreaming for a very long time. I met a lot of people and got bullshit advice,” he says. “I was very egoistic and thought I could be the next Mark Zuckerberg [chairman, CEO and cofounder of Facebook].”

He is thankful to have a great team at Gametize, including his co-founder, Damon Widjaja. “As long as you find the right guy [as your partner], you can keep  [messing] up.

This article appeared in the Enterprise of Issue 744 (Sept 5) of The Edge Singapore.

The areas of science and business may have different ideals. In some cases, however, the pursuit of science can bring financial returns. This may be the case for Wong Chui Ling, co-founder of BlueRen. The start-up turns plastic waste into carbon nanotubes using a production process that is currently being patented.

Carbon nanotubes are tiny cylindrical structures made up of carbon atoms in a chain formation. They are about 10,000 times smaller than the width of a strand of hair and appear in powder form to the naked eye.

Carbon nanotubes are one of many forms of carbon, apart from well-known ones such as diamond and graphite. Traditionally, they are manufactured using hydrocarbon-based gases such as ethylene. This method of manufacturing is, however, more expensive and less environmentally friendly than BlueRen’s.

The company’s production process is simple. Plastic waste is placed into the vacuum chamber of a chemical vapour deposition reactor. A modified furnace heats up the plastic waste to a certain temperature, turning it into gas. A chemical catalyst is then added to the gas to form carbon nanotubes.

This method of using plastic waste as feedstock substantially reduces production costs. “Our process is [cheaper] because of the raw material,” Wong tells Enterprise in an interview.

There are many uses for carbon nanotubes. Owing to their lightweight and strength-enhancing properties, they are an attractive material for use in many industries. For example, they can be used to strengthen polymer composite- based materials, such as textiles and fibres. This may be useful for items such as sports gear and clothing for athletes, says Wong.

Carbon nanotubes can also be added into concrete to lengthen its lifespan. This reduces the amount of cement added to the building material, making it more environmentally friendly, Wong says. Moreover, carbon nanotubes are conductible. Their miniature size makes them an appealing substitute for copper and gold used in manufacturing electronics, she adds.

The issue of who was the first to discover carbon nanotubes in the 20th century is a matter of contention. Many parties, including US, Soviet and Japanese scientists, have made such a claim. However, it is widely acknowledged that Japanese physicist Sumio Iijima was instrumental in creating awareness of and excitement over their myriad uses in his research paper published in 1991.

Lab experiment-turned-business
BlueRen began as a lab experiment at Nanyang Technological University in 2013. Wong, who is currently a research scientist at NTU, was conducting research on ways to convert plastic waste into carbon nanotubes. As her research progressed, she recognised its commercial value.

Not wanting to leave the commercialisation aspect to someone else, Wong decided to take it up herself. This led to the founding and incorporation of BlueRen in 2015 under NTUitive, the innovation and entrepreneurship arm of NTU. BlueRen means blue lotus, symbolising the start-up’s values to persevere and thrive amid challenges. “This is the path [that allows me to] do what I want to do,” she says.

Wong has been involved in the sciences for over a decade. She completed her undergraduate studies in the field of material science and engineering at NTU. She then pursued her postgraduate studies in the same field, focusing on materials made on a nanoscale. “This is what I did [for] my PhD,” she says. “I learnt how to make materials on the micro and nano scales. The purpose is [to discover] how materials actually perform when created on a nanoscale.”

Wong met BlueRen co-founder Aravind Muthiah, currently a PhD student in material sciences and engineering at NTU, in 2013. They were introduced to each other by Wong’s immediate superior, who is also Aravind’s PhD supervisor. BlueRen is now seeking seed funding for its next step: commercialisation. It recently attended the Clean Enviro Summit Singapore to pitch to potential backers. The start-up, which has yet to commence commercial production, intends to invest in a bigger chemical vapour deposition reactor and new premises to house it.

BlueRen is ill-equipped to embark on commercial production as it is only able to produce a few grams of carbon nanotubes in batches at NTU’s labs. “For large-scale production, [the machine] needs to be able to produce a few kilogrammes [of carbon nanotubes]. With a larger production, we can [even] produce samples for potential customers to try. [This would boost their] confidence in BlueRen,” says Wong, adding that the new machine will be able to run continuously, not just in batches. She adds that the new machine would enable BlueRen to prove to potential investors that it is no longer a lab experiment, but rather, a company with the commercial capability to produce carbon nanotubes on a large scale with a controlled quality.

“A lot of people are asking [us] about this,” she says. “So there is a gap between the lab and commercialisation stage. And this is the gap that we intend to bridge with the seed funding.”

Wong says upon commercialisation, Blue Ren plans to sell its carbon nanotubes to polymer manufacturers that require strength in their products. She is aware of the existing competition, but notes that many competitors are targeting specialised applications of carbon nanotubes. This may present BlueRen with the opportunity to carve out a niche for itself.

Scientist-cum-entrepreneur
Wong admits that taking BlueRen commercial will be a challenge. With their research background, Wong and Aravind have no experience in starting a business. They are, however, taking steps to equip themselves with the skill set and mindset of an entrepreneur.

They have engaged two mentors from NTUitive to guide them on the business aspects. The duo has also enrolled in night business courses at their own expense. In addition, they read articles online to enhance their grasp of business concepts and strategies. Wong adds that they may bring in another partner or employ someone with a business and financial background to assist them.

BlueRen is in talks with NTU on licensing. It will also discuss issues pertaining to royalty and shareholding in time to come. The startup is currently fully-owned by NTUitive, but it will eventually be spun off.

When Wong leaves NTU to run Blue Ren full-time, she expects to still focus on the science aspect of the company. Aravind, on the other hand, will handle production. “His background is in chemical engineering, so he knows processes better than I do,” she says. Nevertheless, the pair will work together on the business and commercial side of things. In line with the meaning of BlueRen, Wong says: “Even though it is a difficult journey moving forward, as long as we persevere, we would be able to see something fruitful at the end of the day.”

This article appeared in the Enterprise of Issue 745 (Sept 12 ) of The Edge Singapore.

The recent boom in start-ups in Singapore, particularly in fintech, has made the country a lot more visible to investors, particularly venture capitalists. Yet, there are not that many opportunities for investors. Tanguy Lesselin, CEO and one of four founders of deal-matching service Finquest, says while there is appetite for tech companies in premium IT services, for instance, the supply does not quite match the demand.

“There is money, what we call dry powder. There is appetite to invest,” Lesselin says. “Now, it doesn’t mean that all projects are going to be financed. Obviously, investors are very discriminating when it comes to where they put their money, so supply needs to increase. When you look at fintech, healthcare investments, they are becoming more and more global. The question is whether the supply is competitive compared with other markets.

Nevertheless, investors outside Asia are on the hunt for assets in the region, and while the boom in tech-related ventures continues, funds are still going to a wide range of brickand- mortar businesses. The appetite for mergers and acquisitions remains strong, as investors look for growth amid a lacklustre global economy and disruptions from technology to traditional business models.

From food and beverage chains in Singapore and Hong Kong to hospitals in Vietnam and natural resources companies in Myanmar, there is great interest from institutions, family offices and even multinational corporations, according to Lesselin.

Asia offers investment options that range from emerging market opportunities to triple A-rated companies, he adds. “Some of them have been in the region for a long time and their strategies are changing. They’re looking for new acquisitions [or] at divesting some divisions,” Lesselin says. “Even the big [private equity firms], which have traditionally been looking [mostly] at buying European assets only are starting to create structures that are in the region, Hong Kong or Singapore, to buy new assets for their portfolio companies.”

Matchmaking platform
Lesselin started his career as a consultant with the Boston Consulting Group in France before becoming a serial entrepreneur who has founded and financed a number of companies, focusing on ventures in content management and e-commerce.

Finquest, in the words of Lesselin, is a “dating service of the M&A world”. It has a paid subscriber base of about 20,000 members, half of whom are investors. A quarter, or about 5,000, are companies and the remainder are merger and acquisition advisory professionals. There are clients who are looking to raise funds, or are seeking joint-venture partners, or are interested in divesting assets with the intention of re-investing the proceeds in another industry.

“We saw demand from European investors to invest in the region, we saw demand from entrepreneurs from the region, at some point, trying to sell their businesses, but not really knowing how to do that. So we saw this huge opportunity in matching and accelerating the time taken for everyone by matching opportunities,” Lesselin says.

The company has a proprietary matching algorithm, developed by Lesselin and another co-founder, and the firm makes the introductions once the matches are assessed to be relevant by its team. The company specialises in mid-sized deals, or investments in companies that range from US$2 million ($2.72 million) to US$100 million in value, which Lesselin says is an under- served market segment.

“No one really sees what happens there because it’s too small to appear on radar screens to have access to the usual visible investors, so they don’t have access to public markets, for example. And yet, they’re big and latestage enough to not be of interest to early-stage financing.”
Finquest has made matches in deals related to renewable energy, education, healthcare, private debt and asset-backed loans in the region. The types of deals are varied, Lesselin says, and no single sector commands more than 20% of the firm’s business.

Emerging trends
Increasingly, a number of investors who show up looking for deals are not the usual clients. “We see even industrial companies turning into investment companies or creating investment arms,” Lesselin says. “As market growth is no longer in the [double-digits], it becomes more difficult to increase the size of the company in a significant way with just organic growth, so we see more and more players getting into building investment, deal-making capabilities to get into these markets.”

He has also observed a growing trend of so-called “club deals”, or family offices banding together to make an investment, “each of them bringing something to the table that brings value to the target company”,  Lesselin says. “Although we don’t see many deals like that yet, there is a strong appetite. So I think it’s a question of time before we see [more] in the market.”

Additionally, these family offices are increasingly making direct investments instead of just allocating their resources into private equity funds  as they did before. “Some players are very mature and have large teams of investment professionals. Others are beginning to do that, building their networks and progressively doing bigger deals.”

One reason for this growing trend, Lesselin surmises, could be investors’ diverging views about where to put their money as well as the high fee structures associated with private equity funds. To be sure, PE funds still have their role to play for quite a while more. But, “we see more and more [family offices’ direct investment] in Europe and the US, or a family who has built up a fortune in certain sectors who are comfortable acquiring a new company without the constraints of the PE fund, [including] how long they’re going to keep the portfolio company for”.

Another trend, according to Lesselin, is that investors are increasingly interested in the potential of businesses related to urbanisation, the rise of the middle classes, and sustainable population growth. These include healthcare and education-related investments, for instance. “For investors outside of Asia, there are big pockets of high growth in Asia.”

Another hot, and somewhat related, sector is investments in sustainable energy resources. There are solar and wind power projects, facilities that convert waste to energy, as well as energy- saving ventures. In a recent deal that Finquest was involved in, a company that specialised in energy-saving and smart-city projects was raising funds to expand globally.

In these areas, Lesselin says interested parties are not just specialised funds that focus on investments in the alternative energy sector, but also sovereign wealth funds and family offices, among others. “You have industrial players, as well as the big energy groups, looking and diversifying into, and learning about, those types of energy production.”

Further, some investors are increasingly employing a “buy-andbuild” strategy, particularly when assets available for investment are valued at more than US$100 million, or become the centre of a price war amid aggressive suitors. This approach involves seeking out a number of midsized assets, priced at around US$50 million or so, to acquire and consolidate into the business. “That’s something we see now because people realise in some ways it’s too hard to have access to the big deals,” he says.

And, while the headline-grabbing deals tend to be in the tech space for now, those should not be the only ones to watch. “It’s becoming trendy,” Lesselin says. “But when you take the size of the entire economy and the investment opportunities [the tech companies are] not the only ones. ‘Old-school’ doesn’t mean they don’t have growth opportunities.”

This article appeared in the Enterprise of Issue 745 (Sept 12 ) of The Edge Singapore.

Equator Pure Nature sees a market for plant-derived household cleaners in Asia-Pacific. Its founder Peter Wainman talks about fundraising and fabric softeners.

In 2010, Peter Wainman was convinced something sinister at his workplace was giving him allergies. He had endured asthma attacks and the skin on his back burned as if someone was holding a lit matchstick to it. The ex-investment banker, who was then advising Thailand’s former steel tycoon Sawasdi Horrungruang, announced he was not going back to the office. “I assumed it must have been some bad chemicals used in cleaning at work,” he says.

Fortunately, Wainman did not have to resort to such a drastic measure. He found out that his allergies were being triggered by an off-the-shelf fabric softener his wife had recently started using. This got the couple thinking about switching to non-chemical-based cleaning products, but they found nothing suitable in the supermarkets of Bangkok.

At this point, most people would have turned to an online supermarket such as Amazon. But not Wainman. The former scientific researcher decided to try his hand at making his own products. “When I could not find household products that were entirely natural, or brands that worked well, I realised there was a market for this,” he says.

Today, Equator Pure Nature makes and sells all-natural home cleaning products — including laundry detergent, fabric softener, floor cleaner and dishwashing liquid — under the brand, Pipper Standard. Pipper was Wainman’s childhood nickname given by his mother. All of his products contain pineapple, water and sugar as base ingredients, he explains. Some products have natural components such as eucalyptus and essential oils. Wainman adds that all of his products work just as well as chemical ones, minus the allergic reactions.

Currently, Pipper Standard products are available in Hong Kong, Laos, Macau, Myanmar, Singapore, Taiwan, Thailand and the Maldives. The company is planning to raise a US$3.5 million ($4.75 million) funding round to expand into other parts of Asia, including China. “This final round should be enough to help us break even by end-2018,” Wainman says.

Going back to nature
Wainman has been doing business in Asia since 1995. He moved to Thailand to live in 2006. Over the years, the American heard many stories about the hill tribes of Thailand. He heard that one particular tribe puts fruit in a jar and leaves it to ferment in the tropical heat. Over time, the liquid produced makes a strong detergent.

Inspired by this story, Wainman decided to put the tradition to the test. He gathered a small team, including a chemist and a microbiologist, and at his big dining table, they tested hundreds of fruits and vegetables. It took them two years to find the correct fruit — the pineapple — and the correct process. “We learnt that you’ve got to ferment the whole pineapple, rind and all,” he says.

Once they got the formula right, the team needed to produce the fermented fruit fluid in bulk. Luckily for Wainman, his in-laws had a farm in the outskirts of Bangkok on which there was a 1,400 sq m warehouse available for rent.

Operations were soon up and running and Equator Pure Nature filed for a patent in 2013. The following year, Pipper Standard products hit the supermarkets of Bangkok. This year, the company has begun exporting its products overseas. Wainman says they are coming up with new products, including a multi- purpose solution and a bathroom cleaner.

A growing market
Natural cleaning products are far from the norm today. In the US, they only account for 3% of all household cleaners sold, according to a report by Packaged Facts. In Asia-Pacific, the market is even smaller, but Wainman thinks consumers are slowly changing their mind. “Making natural cleaning products is a better business only if you have a longterm perspective,” he says. “There is a growing number of people who are more inclined to use natural cleaners today. In the US, 10% of Americans regularly use natural household products. About 20% are trying them out. The same trend is slowly spreading around the world.”

Indeed, while consumers are not necessarily looking for natural cleaners, they are expressing a preference for sustainable, hypoallergenic and eco-friendly brands. At Unilever, one of the world’s largest producers of fast-moving consumer goods, more than half of its 2014 sales came from brands that have strong sustainability credentials.

Meanwhile, a report by Global Industry Analysts forecasts that the next big market for natural and eco-friendly products is Asia-Pacific. Demand for green products will grow by 25% through 2017, the report says. In particular, demand will be strongest in markets such as China and Hong Kong.

According to a Business Navigator Consulting report commissioned by Equator Pure Nature, the natural laundry care market in China, Taiwan and Hong Kong will grow to US$3.7 billion by 2020. And in Asean, sales of natural laundry products are expected to reach US$2.7 billion in 2020.

“While investments in companies producing natural cleaning products in Asia have been limited, we expect these to increase due to the proliferation of allergy- related illnesses in the big cities of Asia,” says Xuong Liu, Shanghai-based managing director of consulting firm Alvarez & Marsal.

Wainman plans to capture much of this growth by aggressively marketing his line of natural cleaners in Asia. He wants them on the shelves of supermarkets as well as on e-commerce platforms such as RedMart. Wainman says the company is spending multiples of its current revenue on marketing and it is paying off. Equator Pure Nature made US$70,000 in June. “We are growing exponentially between 300% and 400% in revenue annually,” he says. “We expect our top line to exceed US$50 million by 2021 from sales in Asean, Europe, the US and Greater China.”

Equator Pure Nature’s initial sales on RedMart have been encouraging, according to the local e-commerce site. “The brand has been growing 15% in sales from month to month. We believe the brand will sell even better when it gets more visibility through advertising and promotion,” says Penny Cox, vice-president of commercial and marketing.

Funding a fabric softener
By most definitions, Wainman has had a successful career in the financial industry. Having started out at US investment bank Donaldson, Lufkin & Jenrette, Wainman later joined hedge fund Bay Harbour Management as its managing director. In 2001, he teamed up with a group of investors to invest US$18 million in telecommunications company NextG Networks. A decade later, US wireless infrastructure provider Crown Castle International bought NextG for more than US$1 billion. Wainman’s investors made a return of 56 times their investment. From 2002 to 2004, he led the New York branch of The Gores Group, a multibillion-dollar investment firm.

But Wainman wanted more out of his career. He wanted to make a positive impact on society through his businesses. This led him to his present position of managing director of Equator Capital Group, an investment firm that invests in socially responsible companies. With Equator Pure Nature, he intends to continue pursuing that goal.

“I did not start this as a venture purely to make money. We do not do stuff like animal testing. We buy all our pineapples from independent pineapple farmers at market price,” he says. “The pulp of the pineapple is used as feed for farm animals. There is no wastage.”

He confesses that it was not easy to convince investors to put money into his start-up. Wainman’s business partner and long-time friend, Sawasdi, and some other associates from his banking days were among the first to invest in his start-up, he says, because they believed he was making a product that could improve lives. Other investors, meanwhile, remembered him as the banker who made them a small fortune in the NextG Networks deal. “They saw me with jars of fermented fruits on my table, and they said, ‘well, at least you are trying’,” he recalls.

So far, Equator Pure Nature has raised some US$10 million, mostly from individual investors. Its 48 shareholders have invested between US$250,000 and US$500,000 each.

Wainman also put together a team of 12 senior advisers, which includes some of his shareholders. “You need to have a board made up of very senior advisers who can help you network with the right people. In return, you give them shares.”

These advisers include Patrick Durkin, former managing director of Barclays Capital in New York, and Alexander Nikolaev, a veteran professional investor. Durkin advises Wainman on financial matters while Nikolaev, who is an old friend of Wainman’s, is helping the start-up break into the European market.

“About 15 years ago, we witnessed the food revolution. People started to seek out healthy, natural food. The same will happen with natural household cleaners. It will become the new normal,” says Nikolaev.

One of the start-up’s earliest believers is former US ambassador and advocate for sustainable business practices, Curtis Chin. He sits on Wainman’s advisory board today. “To succeed in the long run, entrepreneurs must be able to move from ideas to execution, and Pete and his team have done that, delivering solidly on their promise,” says Chin.

Wainman intends to expand his investor base. This month, he is meeting some potential investors and partners here. “Singapore is viewed as a gateway to the region,” he says. “We are now talking to distributors that will put our products on the shelves.”

A pan-Asian play
Although Equator Pure Nature aims to be a global business, Wainman says it makes more sense to operate out of Thailand. Sugar and pineapples are abundant and the warm weather helps reduce heating costs.

“Even if pineapple prices tripled, it would not move the needle for our overall cost,” Wainman says.

The business is also not labour intensive. Currently, the company has 48 employees, most of them in marketing and sales. Only a handful are involved in fermenting the pineapples. The packaging and distribution process is outsourced.

Its “located in Asia and selling to Asian markets” model is attractive to global investors. “American investors see Asia as this big growth story. So, to be considered a pan-Asian play is important from a corporate standpoint. We want to be in all ten Asean markets and Greater China before we expand to Europe,” he says.

And while there are plenty of competitors selling natural household products in the developed markets, there are not many in Asia. This allows Equator Pure Nature to position itself as a market leader. The trade-off is that the selling price is lower in developing markets.

In the long run, the demand for natural products is likely to grow beyond the home. Kuldeep Singh Rajput, a neuroscientist-turned-biotech-entrepreneur, says: “Patients expect to be treated in an environment that helps them heal when they are in the hospital. But most products include chemicals that are hazardous to human health. Some cause cancer, asthma and reproductive danger.”

Hence, firms offering natural, hypoallergenic products such as Equator Pure Nature could capitalise on the growing trend.

Wainman has not suffered a major allergic reaction since the incident six years ago. But he notes that many of Thailand’s children, who make up more than 40% of the urban population, suffer from some form of allergic reaction. And he hopes his products will make a difference in their lives. “I had a terrible allergic reaction before. I would prefer that other people not have that kind of thing happen to them.”

This article appeared in the Enterprise of Issue 745 (Sept 12 ) of The Edge Singapore.

The budding field of finance and technology, or fintech, is not just for tech geeks and entrepreneurs. Deep knowledge and understanding of traditional finance are just as vital to sustain industry development in the right direction. Fintech innovation cannot happen without knowledge of what is required for success in a highly regulated business with social implications, says Henri Guedeney, a partner at executive search firm Eric Salmon & Partners.

Guedeney had spent nearly 30 years in the financial and consulting services industry before embarking on his present role. “What is important to understand is that the typical fintech start-up is very different from a traditional tech venture,” he explains. “A tech venture tends to have a bunch of young guys who are good in IT and other technologies. On the other hand, a fintech venture may have a few of those, but they will also have guys who have spent maybe 20 years in financial services and have worked in key areas such as compliance, risk management, operations, et cetera.”

Experienced people are necessary because of the nature of the business, Guedeney says. “If you are Facebook and do a social media site and get things wrong, the worst thing that could happen is that people are angry because their privacy has been exposed or the things they want to do on the site don’t work. But if, for example, you are doing blockchain technology [for financial services] and mess things up, you might end up losing money around the world, so the consequences are much greater when things go wrong.”

Throw in the fact that traditional banking and financial services firms enjoy a protected position due to the barriers to entry from regulation, and it is clear that a fintech venture faces challenges beyond those of typical start-ups. Guedeney also makes the point that the incumbents that fintech firms are trying to disrupt are themselves well equipped to defend their turf. “There is a huge misconception that banks are not tech-savvy,” he says. “They are very tech-savvy and probably have one of the most technology-intensive businesses of any industry. And I don’t think that it will be the case that all of their businesses are going to be taken over by the fintechs.”

At the same time, the tech revolution is changing the financial landscape in at least two ways. “The overall cost and viability of technology has changed greatly in the past five to eight years to allow certain things to be done that were not possible for small companies to do before,” points out Guedeney. “The first thing is the ability to connect easily with customers through a mobile device. Secondly, the cost of using technology that was previously available to only large businesses has decreased with cloud computing. Today, it’s possible to do mass data processing with just a PC and zero infrastructure costs, so the ability to transform and launch new services has basically exploded.”

Fintech will bring new jobs
What that will bring are new jobs and different possibilities. People with coding and programming skills are obviously in demand, but they will have to be versatile and adapt to developing technologies such as blockchain.

To use a simple analogy, a blockchain is similar to an electronic ledger with a history of financial transactions. It developed initially as a database of Bitcoin transactions on the internet. Now, banks see it as a way to record financial transactions at a lower cost. It also promises to simplify the onerous task of record– keeping and settlements among banks once its development attains a critical mass.

According to Guedeney, there are a number of large international banks working hard at it. “If blockchain is really put in place and there is an electronic distributed ledger among banks, it will pretty much do away with all the payment back offices in the world which support the banks today. And that’s why a number of banks have come together in a consortium to try to make it happen,” he says.

But the development of blockchain is not the exclusive domain of large institutions. Specialised fintech firms with innovations in key aspects of blockchain technology or that work as service providers to participants in the transaction chain will play a part in the financial ecosystem. Many of these smaller firms could fail or end up being acquired by larger players, but some could become so integral to the system that they turn into household names.

Advice for job seekers
For entrants to the workforce considering a career in finance, a lot of transformation and possibly upheaval could well unfold in the years ahead. “I would tell someone today before starting his career that he should learn to write computer code. It will be almost as necessary as being able to speak English in the workplace today — if you don’t learn to do that, you will be at a significant disadvantage in the world to come. It doesn’t mean you have to be a software programmer, but it should be part of your understanding of the way you think about the world.”

He also advises job seekers to consider areas of finance that use technology-related knowledge. “For example, if you want to be in trading, you should go into [quantitative] trading or analysis, which will take advantage of advances in artificial intelligence as they come. Don’t go into areas like quoting bank rates to corporates on a desk that can be done completely by machines in time to come. Those jobs will be wiped out over time.”

But Guedeney is optimistic that the nature of some areas of banking will remain essentially unchanged. “I think the human interaction of some banking services will stay — if you are a relationship manager, the ability to gain the trust of your customer still matters at the end of the day; these are fields that will go on.”

This article appeared in the Enterprise of Issue 746 (Sept 19 ) of The Edge Singapore.

The Singapore economy is anything but upbeat, with economists in a recent Monetary Authority of Singapore survey predicting that it will grow only 1.8% next year, down from the June forecast of 2.1%. But Tiam-Lin Sze, director of Intellectual Property Intermediary (IPI), thinks the downturn is the best time for local small and medium-sized enterprises (SMEs) to throw their weight behind innovation.

“We are in a downturn and the economic outlook is uncertain. Singapore SMEs see their margins squeezed as a result of stiffer competition, rising costs of doing business and manpower shortage,” he says. “SMEs must make an effort to take on some risks to invest in innovation in order to seize new business opportunities.”

IPI, an agency under the Ministry of Trade and Industry, is something of a broker between SMEs and start-ups. Started in 2011, it matches Singaporean companies with partners to develop new processes, solutions or products. So far, it has made 92 successful matches. The local firms that have approached IPI are mainly from the service, advanced manufacturing, environmental and healthcare sectors. About 70% of them are SMEs, and some are public-listed firms.

One of IPI’s earliest success cases was in late 2012 when it helped an ailing electronic rack system company. The SME was about to fold. IPI was a last-ditch resort, but Sze and his team pulled through. “We found a technical expert at Nanyang Technological University who could redesign their racks,” Sze says.

The racks born of the collaboration have better cooling features, which slash electricity costs by 25%. The SME went on to become a partner in IDA’s Green Data Centre programme.

Today, SMEs are the hardest hit by the economic downturn. The SBF-DP SME Index, a half-year forward-looking index that measures SMEs’ sentiments, has been the lowest since 2009 for the third quarter this year, a marginal improvement from an all-time low in 2Q.

“Many local companies generated revenue from the past years when our economy was ‘double-digit’. Most of them are cash-rich,” Sze says. “It is a question of how they roll it now when the business is down. If they work with start-ups or other partners and succeed, it can translate into revenue [recovery].”

Sze adds that the start-up scene in Singapore is vibrant, with more new players than before that can help SMEs break into an unfamiliar market or take on new business opportunities. For instance, IPI is helping a local contract manufacturer and a start-up use 3D printing technology for customised foot insoles.

The agency now has more than 80 partners in 23 countries. In April, IPI, together with IE Singapore and Singapore Manufacturing Federation, partnered Enterprise Europe Network. The collaboration will give SMEs here access to another 600 global partners.

Working with start-ups
IPI is not the only agency matching SMEs with technology partners. But not many organisations specialise in matching start-ups and SMEs. For instance, the Technology Adoption Programme created in 2013 helps SMEs raise productivity with ready-to-market technologies only from the public sector and research institutions.

Start-ups should be a major consideration for SMEs as well. “They are nimble, and they come up with new ways of doing things quicker,” Sze says.

One of the matches made by IPI is between Singapore- listed Matex International and a relatively young start-up from NUS Enterprise. Matex, which makes specialty chemicals and dyes, operates in Singapore, Malaysia and China. As global awareness for the green movement grew, Matex wanted to find ways to reduce its carbon footprint. The start-up created a wastewater treatment technology for Matex, which was tested in the latter’s plants. Matex is now working on commercialising the technology.

“Nowadays, the world is so connected. Innovation happens at a much faster pace. It is not enough to rely solely on a company’s R&D. Co-innovation reduces business risks,” says Dro Tan, executive director of Matex.

On the flipside, Sze thinks SMEs can offer startups a shortcut to an established market.

Take, for example, the match between The Good Water Company and Asxban Technologies. The former provides affordable solutions, such as a water filtration system, to marginal communities in developing countries, such as Nepal, Cambodia and India. Asxban happened to develop an arsenic absorbent technology, which has very little use in Singapore or other developed nations, but is a crucial tool in areas with an inadequate sanitation system. “The partnership gave us access to our target market immediately,” says Desmond Kang, general manager of Asxban.

Take risks
Sze spent his entire life trying to catch the next wave of technologies. Twenty years ago, he was a data miner (before it became a thing in China). His doctorate research in the late 1990s was about robotics and artificial intelligence. When he returned to Singapore, he could not find suitable jobs in those fields. He landed work in industrial automation and eventually joined Exploit Technologies, the commercialisation arm of A*STAR, before becoming the director of IPI.

What he is truly good at in his decades-long career is discovering emerging technologies, and now he brings them to the companies knocking on IPI’s door. But not all partnerships will result in success stories. About 80% of the partnerships brokered by IPI faced some degree of “trial and error”. SMEs should start with a small stake when trying out new technologies, Sze recommends.

“We have to be realistic. By stage two, if there is a 50% chance it can work, we should take our chances,” says Ng Ling Ching, managing director of Mase International Marketing Services. The collaboration is at least two to three times more expensive than Mase’s in-house R&D cost. Most SMEs, IPI says, put in between $50,000 and $100,000 in the partnership.

Mase manufactures and distributes hair products to salons and malls in Asia. But it was hitting a roadblock in coming up with a better hair dye for greying hair amid a shortage of talent. IPI matched the company with Dr Saji George, a senior lecturer at the School of Chemical & Life Sciences at Nanyang Polytechnic. They are now creating hair dye using nanoparticles, which remains in the testing phase.

Culture also plays a crucial role in IPI’s success rate. “When we meet the company, the first thing we do is to learn about their culture. Are they risk-takers? Or are they the ‘once bitten, twice shy’ type? Once we get an idea, we match them to a start-up or institution that shares a similar culture,” Sze says. Both Mase and Nanyang Polytechnic were the trusting types, which made the collaboration easier. Mase was willing to share its hair dye formula from the get-go, while Nanyang Polytechnic made no reservations about disclosing the nuts and bolts of its technologies.

Now, Sze is determined to help SMEs thrive through these partnerships. He is working hard to bring to his network of partners newer and more groundbreaking technologies, such as a wall-scaling robot suitable for the inspection services. “This is one way to stay competitive,” he says.

IPI is organising meetings and matching sessions in the upcoming TechInnovation on Sept 20 and 21.

This article appeared in the Enterprise of Issue 746 (Sept 19 ) of The Edge Singapore.

An entrepreneur today is almost always taken to mean a 20-something-year old who has started a new company that has a technology component and the potential to raise millions of dollars in funding from venture capitalists even before commercial success.

Yet, in Singapore, the entrepreneurial community has recognised the hard work and success of four of their own who have built up their businesses into established names and, more importantly, are astute about preparing for challenges ahead, digital or otherwise.

This year’s EY Entrepreneur Of The Year category winners are Peter Lim, chairman of jewellery retailer Soo Kee Group; Helene Raudaschl, managing director of cold cuts distributor Indoguna; Lawrence Leow, chairman and CEO of Crescendas Group, whose businesses span hospitality, technology and manufacturing; and David Low, whose company Futuristic Store Fixtures is responsible for building the striking boudoir interiors of Victoria’s Secret stores.

One of them will later be named EY Entrepreneur Of The Year 2016 Singapore and go on to compete with contenders from more than 60 other countries at the awards in Monte Carlo next year.

This year’s programme will also recognise Tony Fernandes, group CEO of budget airline AirAsia, for entrepreneurial excellence in Southeast Asia, and will give an honorary family business award to 53-year-old industrial conglomerate Jebsen & Jessen (SEA).

The winners may hail from comparatively traditional businesses, but Max Loh, EY Asean and Singapore managing partner, says that they “have been agile in driving innovation, whether in business model, market and customer strategy, or product and service development”.

In an interview with Enterprise, Loh notes that leaders need to be able to spot the trends that affect their businesses, and adapt accordingly. “This year’s entrepreneurs are unique in how they established their businesses, then continually transformed them. It drives home the message that you cannot stay still,” he says.

Nevertheless, Loh believes that in the coming years there will be more digital technologyrelated businesses that will emerge as EY Entrepreneur Of The Year contenders. “Because that’s a reflection of what the economy is going through,” he says. This is particularly so in Singapore, where the government has placed much emphasis on a technology-driven economy.

Loh says he “will be disappointed” if there are not more of such companies becoming category winners within the next two years. “I do not believe that companies who do not embrace [digital technology] would in fact be successful. That’s the only way to be relevant,” he adds.

The EY Entrepreneur Of The Year awards is in its 15th year and has helped foster a growing entrepreneurial community. Indeed, according to the Global Entrepreneurship Monitor, Singapore has a “lively” entrepreneurial scene with total early-stage entrepreneurial activity of 11%. This refers to the percentage of the population aged 18 to 64 who are either nascent entrepreneurs or owner-managers of new businesses.

According to government statistics, 64,911 businesses were started in 2015, about 16% less than in 2014 but 21% more than in 2010. A large number of the businesses, or about 25%, were in the wholesale and retail trade industry. The next largest group of start-ups, or about 9,800, were involved in professional, scientific and technical activities.

To be sure, more than 48,800 businesses shut down last year — up 19% from 2014. Loh says the number of new businesses being set up despite the tough business environment shows that people still see opportunities and are willing to take risks.

Most importantly, entrepreneurs are a big part of Singapore’s economy. According to SPRING Singapore, the Ministry of Trade and Industry agency set up to help local enterprises grow, the 180,000 local small and medium-sized enterprises contribute nearly half of GDP and employ 70% of the workforce. Starting a business is hard, but recognition such as the EY Entrepreneur Of The Year awards could serve as motivation for successive generations of entrepreneurs.

This article appeared in the Enterprise of Issue 746 (Sept 19 ) of The Edge Singapore.

The company has provided consumers worldwide with its beauty and household products for almost 180 years. How does it plan to keep going?

The SK-II beauty consultant lifts the red dome resembling a child-sized motorcycle helmet from its dock on the counter and places it over one side of the customer’s face. A few clicks later, a digital photograph of the customer’s face appears on a small screen, with little markings highlighting the condition of his or her complexion. Wrinkles, spots, dry patches or dull and sagging skin, if any, are highlighted and given a score out of 100% — the higher the score, the better the condition. Based on the results, the beauty consultant may then recommend the customer skincare products that are purported to address the skin issues.

The SK-II brand is best known for its Facial Treatment Essence, a bottle of which is sold every 23 seconds somewhere in the world. The red device is dubbed the Magic Ring and described as a skin-counselling tool that measures the current state of a customer’s skin, as well as projects the state of the skin in the future. It is a clever marketing tool, but nonetheless one that is a result of significant R&D by scientists at SK-II’s parent company, Procter & Gamble.

Indeed, R&D, along with innovation, is taken seriously at P&G. The Cincinnati-based company is behind a whole range of household and beauty products that promise solutions for consumer concerns from cleaner clothes to clearer skin. “It is through innovation that we’ve been able to sustain our company for over 178 years,” says P&G lifer James Kaw, director of the Singapore Innovation Centre. “We look at innovation as transforming inventions and ideas into meaningful solutions that improve the lives of consumers. And that gets translated into loyal consumers for our brand.”

There are thousands of scientists — physicists, chemists, biochemists, materials scientists — at R&D centres around the world who are involved in studies that could be used across P&G’s stable of household and beauty products. The scientists work in-house or in collaboration with other researchers. There is a 10- year study, for instance, that tracked the skin changes of a group of people in Akita prefecture, Japan. The Akita study helped P&G’s beauty scientists settle on the key measures of skin condition used in the Magic Ring.

“It could be understanding a new ingredient, or a finding about how skin ages, or what aggravates dandruff,” says Colin D’Silva, P&G’s associate director for beauty sector communications. D’Silva is also one of P&G’s “beauty scientists” in Singapore. He has a doctorate in microbial biochemistry, and was a research scientist with the governments of Canada and Japan before joining P&G. “With the Magic Ring, for example, it would have been scientists looking at skin imaging or skin analysis.” Once the scientists publish their findings, the company looks across their products to determine where the best fit would be.

The other crucial process in creating new products or improving on existing ones is understanding people and their needs well, “whether they are articulated or not”, says Kaw. “So we do a lot of observations.” Researchers in rural parts of China, for instance, visit homes to see how women wash their long hair using just a bucket of water. That process is likely to call for a shampoo formulation different from the one used by women standing under a running shower — conditions that are replicated in a small room in the Singapore Innovation Centre. “It’s through observing them that we are able to uncover areas that they may not be aware of and we can help them with, [then] guide them to the right product.”

Kaw, for one, knows how Japanese women wash their hair — sitting on low stools with their heads tipped over and finger-combing hair conditioner through. There are other researchers who, for example, spend time examining people’s scalps to determine the degree of flakiness. “That’s not even the worst job,” Kaw quips.

Rejuvenating growth
P&G is the world’s largest maker of consumer goods. Its staggering stable of products cover 10 categories in household care, grooming and beauty, and healthcare. The household names range from Gillette shaving razors and men’s grooming products to Pampers baby diapers, Head & Shoulders anti-dandruff shampoo, Pepto-Bismol for upset stomachs, and Tampax tampons. P&G also has licences to perfumes from brands such as Gucci and Hugo Boss.

There are 22 so-called Billion Dollar brands, up from just 10 in 2000. These are products that generate at least US$1 billion ($1.36 billion) in sales annually, and include Bounty paper towels, Crest toothpaste, Olay skincare and Pringles potato crisps. There are another 19 brands that generate more than US$500 million in annual sales; among them are SK-II, Febreze air and fabric fresheners, and Herbal Essences hair products.

Yet, sales have been weakening, and the company has been criticised for being too big and too slow, especially in emerging markets. In FY2015, the New York Stock Exchange-listed P&G generated US$7.04 billion in earnings after generating US$70.75 billion in sales. Turnover was 5% lower y-o-y, while earnings were down nearly 40%, owing to costs related to restructuring.

North America accounted for the bulk of sales, at 41%; Asia-Pacific contributed 8%, while Greater China made up another 9%. Fabric and home care, with products such as Tide laundry detergent and Febreze, is the largest business segment, contributing 32% in sales. Baby, family and feminine care products accounted for 29%, while beauty products generated 18%.

In FY2016 (the company has a June year-end), P&G saw sales fall 7.7% y-o-y, although earnings jumped nearly 50% to US$10.51 billion. Excluding the oneoff losses from its discontinued operations recorded last year and the currency impact, core earnings per share in FY2016 was 2% lower than the year before. P&G’s management says it expects sales growth of just 1% for FY2017.

Meanwhile, competitors such as Unilever, the British- Dutch group that has some 400 brands including Dove soap and shampoo, Lipton tea, Wall’s ice cream and Persil laundry detergent, are also looking for more ways to grow. Unilever also boasts a formidable R&D operation, claiming there are some 6,000 scientists, engineers, chefs and technicians stationed at its R&D centres worldwide.

In 2015, Unilever posted a turnover of €53.3 billion, a 10% y-o-y increase. Core earnings per share rose 13%. Emerging markets accounted for 58% of Unilever’s sales; Asia, Africa, Russia, Ukraine and Belarus accounted for 42% of total turnover, one percentage point more than the year before. The biggest sales generator over the past five years or so has been the personal care segment, which contributed 38% of sales, or €20.1 billion, in 2015.

In July, Unilever paid US$1 billion for the Dollar Shave Club, a Californian subscription service for no-frills razor blades that started in mid-2011 and was lossmaking, but had direct access to 3.2 million men. Analysts noted that P&G saw its market share for razor blades being cut to 58% last year, from 71% in 2010.

To be sure, P&G has also grown through acquisitions. In 1985, it thwarted Unilever’s bid for Richardson- Vicks and bought it instead, with its Olay, Clearasil and Vicks products, for US$1.2 billion. In the early 2000s, it acquired Clairol and Wella; Gillette was acquired for US$57 billion in 2005, and four years later, in 2009, P&G acquired Miami’s The Art of Shaving, which focused on premium men’s grooming products and services.

Yet, a number of those acquisitions are on the way out, if not already. Frederic Fekkai’s brand of hair products, acquired in 2008, was sold last year, reportedly at a huge loss. The company had, in July last year, reached an agreement with New York-based Coty to sell it 41 of its beauty brands, including Covergirl cosmetics, and Wella and Clairol hair products. The sale is expected to be completed by October. Meanwhile, in 2014, P&G had already hived off its Camay and Zest soap brands to Unilever, the Duracell battery unit to Berkshire Hathaway, and most of its pet food business to Mars.

Indeed, P&G has been on a strategic restructuring drive in a bid to become less unwieldy as well as to restart growth by focusing on its bestsellers and divesting the others. Last November, P&G appointed a new president and CEO, David Taylor, who moved up from his role as president of P&G’s global beauty, grooming and healthcare sectors. Taylor, who has been with the company since 1980, has pledged to make the company more nimble in its decision-making processes, particularly in seizing market opportunities. He has given more autonomy to regional managers, for instance, while tying business unit leaders’ bonuses to the performance of their units.

Against that backdrop, P&G’s R&D is only going to be more important. While there are products that could be better left alone — the formulation for SK-II’s Facial Treatment Essence has been untouched for 36 years — Kaw says there is always a “programme” in place to upgrade existing products. “It’s an ongoing job. It is something that we know that the competition is also trying to do. They would also be looking to take business away from us or to grow the business, so we do need to always anticipate that’s going to happen, so we are on a continuous search to improve our products.”

Making it easy
The P&G Singapore Innovation Centre at Biopolis is a labyrinth of research laboratories, product-testing pods and various small manufacturing lines producing batches of hair conditioner and product packaging.

There is also a Consumer Hub, or what is known as an in-context research facility. One room is configured to resemble a compact but comfortable apartment, complete with a kitchenette, bathroom and twoway mirror. Different groups of people track through the facility at various times during the week — from Japanese housewives testing dishwashing detergent to people with discriminating noses sniffing out the intensity of room fragrances.

There are some 450 scientists based here, where the Magic Ring and hair conditioners across the various P&G brands are developed. Most recently, Kaw says, the company is in the process of introducing an upgraded version of an existing dishwashing detergent into Japan. Work on the improved formulation had begun at the innovation centre in Singapore.

Kaw did not specify the brand, but the company’s Joy dishwashing liquid has been a bestseller in Japan since its introduction in the mid-1990s. It reportedly has a following of housewives grateful for its superb cleaning properties while still being gentle on skin. Joy is formulated for hand-washing dishes and contains emollients, or moisturising chemicals; it has also been credited for starting the trend of citrus-smelling detergents. Marketed as being five times’ more powerful than other brands, the formulation “beats the competition”, Kaw asserts.

To be sure, apart from the science, Joy’s success also stems from how consumers actually use, and like using, the product. And such insights are perhaps best gleaned from studying the consumer and her or his habits. With laundry soap, for instance, someone may say there is no problem with it, but then proceeds to pre-treat and scrub clothing before putting it to wash. So P&G created a one-step laundry soap — Tide Pod — that combined stain remover, detergent and colour-brightener.

“We always say that innovation is the lifeblood of the company,” Kaw says. Still, “it has to be something that consumers find useful and meaningful. And when they are able to use the product [well], they see the magic behind the brand”.

This article appeared in the Enterprise of Issue 746 (Sept 19 ) of The Edge Singapore.

Drivers who have been irritated by traffic bottlenecks due to roadworks could one day be thanking Yang En-Hua. The assistant professor and his team at the Nanyang Technological University (NTU)-JTC Industrial Infrastructure Innovation Centre (I³C) have found a way to make a stronger, more durable type of concrete that dramatically shortens the time needed for road and paving works. Called ConFlexPave, it is bendable yet stronger and longer lasting than regular concrete. “Construction using conventional concrete takes weeks, if not months. But now we are talking about hours or days,” says Yang.

I³C was established in 2011 to boost the research and development of innovative building and infrastructure solutions, leveraging on NTU’s technological knowledge and Jurong Town Corp’s engineering and business expertise. JTC provides the research team with problem statements and helps them understand industry needs. It also makes available its estates and facilities for test-bedding in order to bring these innovations to market more quickly.

Yang shares that the team at I³C began working on this new-age concrete project in 2012 following discussions with JTC. The intention was to find ways to improve productivity in the construction sector by reducing construction time and manpower requirements. And one way to do that was to produce better construction material.

ConFlexPave has twice the load resistance of conventional concrete. Less concrete can be used for the same type of work, making it easier to transport and lay the necessary material. At the same time, it fulfils current construction standards. It has sufficient skid resistance as well as drainage and noise reduction capabilities.

Currently, repair work for pavements requires the steel reinforcement to be replaced first. Then, the newly laid concrete needs time to harden and gain strength. The whole process entails approximately two to three weeks of road closures. But with ConFlexPave, road closures can be reduced to a single day, or even mere hours, Yang says.

Experimenting with new materials
Unlike conventional concrete — which is a mixture of cement, water, gravel and sand — ConFlex- Pave is made up of certain types of hard materials mixed in with polymer micro-fibres. The inclusion of these special synthetic fibres allows the concrete to flex and bend under tension, while also enhancing skid resistance. The addition of special surface textures helps to reduce noise emission while improving drainage capability.

Key to the team’s success is knowledge of the interaction between the materials that form ConFlex- Pave. Yang says it is all about understanding how the different components interact with each other on a microscopic level to sustain heavy loads.

“Without the knowledge of these interactions, without understanding the mechanics on a micro-scale, it will just be a constant process of trial and error. It is the knowledge of the interactions that allows us to easily tailor the ingredients for different applications. And key to that is also to understand the requirements of each specific application,” explains Yang.

“In certain applications for example, you may need higher strength but this may not be as important a factor in other applications. Also, skid resistance would certainly be more important in building roads compared with the construction of buildings.”

ConFlexPave has the added benefit of being more environmentally friendly. The base material for concrete today is cement, which is a carbon-intensive material. “One tonne of carbon dioxide is produced for every tonne of cement made. The world consumes a lot of cement annually, and that means a lot of carbon dioxide is produced as well. To reduce and counteract the effects, a more durable material is required for the manufacture of concrete,” Yang says.

Yang says concrete is the most used man-made material in the world due to its low price and easy availability. “On average, every person uses about three tonnes of concrete every year. That’s approximately 18 billion tonnes of concrete consumed every year. While it’s unlikely that the world will move away from concrete, it is possible to reduce the environmental effects of concrete by using alternative materials as a binder.” ConFlexPave does not use any cement.

Scaling up
Despite its potential, Yang is realistic about ConFlexPave’s ability to disrupt the construction industry. From a technological viewpoint, ConFlexPave represents a leap forward. But any large-scale adoption is likely to take time. For one thing, ConFlexPave will inevitably be more expensive than conventional concrete on a per-unit basis, although the overall project cost may actually be lower in the long term.

“The project cost is dependent on the overall resources put in. By reducing the amount of material used, and using precast technology, manpower and construction time are reduced,” he says. “All these add up in terms of project costs. Moreover, if this material can last longer and does not require frequent repair, the life cycle cost of this whole system could be lower than conventional concrete. We have yet to do a complete life cycle analysis of the numbers. But given that this material can last longer, we are expecting a significant reduction in manpower.”

Also, the construction industry has what Yang calls “high liability”, as evidenced by the abundance of codes and standards. He expects it will take time for regulators as well as the general public to feel sufficiently comfortable and confident to embrace a new material. “Every time a new material is being pushed for adoption in the construction industry, it needs to fulfil several codes and regulations before it can be adopted.”

Meanwhile, Yang and his team are not done with their project. Having successfully tested ConFlex- Pave in tablet-sized slabs at NTU laboratories, they will be testing it over the next three years at suitable locations within JTC’s industrial estates and at areas in NTU where there are human and vehicular traffic.

Yang knows he has his work cut out for him. “In any industrial application, scaling up is a very big step. We will also need to understand the different interactions that may occur when a material is brought from the laboratory to the field. In addition, we will also need to design joints to link the surroundings slabs together. As you can see, there is still plenty of engineering work left for us to do.”

This article appeared in the Enterprise of Issue 747 (Sept 26) of The Edge Singapore.

When former JPMorgan banker Kelvin Lee co-founded Fundnel, he never intended for it to be just a crowdfunding platform. Even at the peak of the crowdfunding hype in Singapore, he was careful to distinguish Fundnel from the other players.

“We are a private investment platform,” he says. “Crowdfunding is just one channel we use.” The distinction is now even more crucial as Lee lays the groundwork to start a private stock exchange for unlisted companies under the Fundnel banner. The exchange, which is part of a long list of big ideas under Fundnel Experiments, will allow investors to buy and sell stocks of private growth companies.

This is similar to the US’ SharesPost. The online marketplace, which was started in 2009, offers investors access to a portfolio of late-stage companies and claims to have closed more than US$2 billion ($2.72 billion) worth of transactions. Lee says SharesPost’s only drawback is that share prices are only disclosed upon buyers’ requests. He believes transparent pricing, which will be a key feature for his exchange, will create a more robust private exchange market.

For Lee, the private stock exchange needs to come up soon as interest rates have fallen amid a slower economy. In the 1990s, he says, people could rely on bonds to make healthy returns. And in the early 2000s, it was largely a combination of stocks and bonds, plus a little exposure to private equity. Now, “without an allocation to private equity investments, it will be hard for most investors to make the same returns as they did two decades ago”, he says.

Investing in private growth companies may offer higher returns as the companies are rapidly expanding, he says. “By the time they reach the public market, there is little upside left.”

“[So, the exchange for private companies] can help investors normalise their returns and hopefully reduce inequality. This is because, traditionally, this asset class is only accessible by a certain class of society,” Lee says.

Currently, Fundnel offers debt and equity products. A major investor — usually an institutional body — anchors each transaction, taking a stake of between 30% and 90%. The remaining deal is crowdfunded on the platform. Deals currently range from US$0.5 million to US$2 million, but Lee wants to grow them to between US$3 million and US$20 million. Fundnel has closed 14 transactions worth US$27 million, with average target returns of 15% annually.

Fundnel takes a roughly 5% cut on every successful deal. So far, only one company has defaulted.

Building a new ecosystem
Lee’s team of 11 consists of a mixed bag of young go-getters. Many have worked with firms like JP Morgan, Temasek Holdings and Standard Chartered while some are entrepreneurs themselves. Justin Chow was a strategic consultant for Ogilvy & Mather while owning a bar, Jekyll & Hyde, and a pedicure parlour, Manicurious.

Chow says the team is working hard to grow the private investment ecosystem. Fundnel is engaging start-ups and growth companies in the region to build a robust pipeline.

One of the team’s notable start-ups is Spark Asia — a company that prints eight complimentary photos a month for you if you let them rubber-stamp advertisements on the reverse of the photos.

“We saw promise in Spark,” Chow says. “But it was not investor-ready.” So the team coached the two co-founders, giving them topical lessons — from how to approach investors to how to engage the press. Nine months down the road, Spark Asia closed a $60,000 seed round. It has also secured a partnership with online photo printing service JustKapture India.

Lee says Fundnel is exploring ways to help other start-ups. “Even if they are good companies, they may need some tweaking to be investable,” he says. “This is what I used to do in my banking days. You never sell a company at its current price — it is always about the future growth story. This part takes a bit of imagination and experience, and this is where we hope we can help.”

Fundnel is also building the ecosystem in other ways. It is working with Singapore Management University to develop a screening tool to help evaluate the companies seeking funds through Fundnel. The new software will be used to pre-qualify companies before they reach the investors.

Lee says there is growing interest in the space from the financial institutions amid a slowing public capital market. “One year ago, I do not believe a private bank would have approached [us] to teach about private investing. But it happened recently. Credit Suisse wanted the second generation of their ultra-high-net worth clients to get more involved in investing and asked us to teach them,” Lee says. He conducted a similar session for Malaysia’s investment fund Khazanah Nasional and will be doing the same for Goldman Sachs’ private banking clients.

The National Institute of Education and some polytechnics have approached Lee as well, asking him to run information sessions on financial technology (fintech) and private investment for their teachers and students.

To Lee, these are positive signs that his exchange for private companies will take off.

The case for a private exchange
Some five years ago, Eric Reis, who wrote the best-selling entrepreneurship manifesto, The Lean Startup, touted the idea of a long-term stock exchange, reported Bloomberg. To Reis, investors flee when a company falters, and the stock plunges. As a result, most companies focus on short-term performance. Or worse, they stay away from the stock exchange. Some highly valued start-ups are now shying away from conducting an IPO. This is where a private exchange may be useful, according to Lee. “A private exchange is less costly than going for an IPO. It takes a shorter time as well.”

Others in the private investment circle agree with him. Joe Cho, chairman of private investment firm Marvelstone Group, says, “In the long term, this can build new investment opportunities and add more liquidity by attracting investors from overseas.” Its Singapore arm, Marvelstone Tech, recently raised US$12.5 million to grow its financial technology business. It has plans to list in Singapore.

A private exchange will generate more interest in start-ups too, says Lim Kuo-Yi, a partner at venture capital firm Monk’s Hill Ventures. “It definitely can be helpful in a nascent ecosystem like ours to show value in stock options, hence enhancing the attractiveness of working in a start-up.” If it happens, Lim expects it to be regulated to a certain degree, similar to the crowdfunding space.

Lee’s exchange will also spur interest in other crowdfunding sites, says Roger Crook of crowdfunding platform Capital Springboard. “Any successful P2P fintech platform that caters for the underserved market will certainly be a game changer in the investment ecosystem,” he says. “There is potential for investment dollars to be made available for the private companies, which will spur innovation.”

Lee will probably have to jump through dozens of regulatory hoops, deal with the Monetary Authority of Singapore and so on before the platform can take off. But for now, he is focused on building the ecosystem and growing his network of investors in the region. “In places where the capital market is not working as well as ours, this will be a critical tool for nation building,” he says.

This article appeared in the Enterprise of Issue 747 (Sept 26) of The Edge Singapore.

The shuttering of Joyful Frog Digital Incubator’s (JFDI) accelerator programme on Sept 14 came as a shock to many in the Singapore start-up ecosystem. CEO and co-founder Hugh Mason says financial sustainability was one reason behind the decision. “The acceleration worked really well… It’s just that the business itself wasn’t capturing enough value quickly enough.”

Mason adds that the time was probably right to move on anyway. He will be focusing more on working with corporates to groom start-ups instead. Accelerators in the region need to move beyond being educators, and train start-ups in more sophisticated skill sets beyond the current emphasis on investor pitches. He says delivering value to both corporates and startups will be key in the future.

Indeed, there is likely to be plenty of demand for JFDI’s particular brand of expertise. Increasingly, large corporations are piling into the start-up business by setting up accelerators or innovation labs of their own. And, some industry players say the companies often have little idea what they are doing. “Using Singapore as an example, we have many ‘innovation’ labs. Is there much innovation coming out of them? I leave you to judge,” says Steven Tong, managing director of Startupbootcamp Fintech Singapore (SBC Fintech). “Worse still, some of these labs are treated as props for traditional corporate innovation theatre.” Tong admits there are a few outstanding examples, but “they are the rarity rather than the norm”.

Yet, these corporate-backed accelerators have a better chance of survival over the long run. Professional accelerators such as JFDI and SBC Fintech groom start-ups as a business. That means, ultimately, the start-ups have to generate returns. Accelerators set up by corporates and government agencies “don't need to have a proper business model to back them up”, Tong says. “It ultimately boils down to having the right business model to sustain operations and providing equal value to the start-ups and investors.”

Jamie Camidge, head of strategic partnerships and alliances at Muru-D, an accelerator backed by Australian telco Telstra, says investment payback tends to take a back seat to building new competencies, business models and products for Telstra. But, Camidge adds that Muru-D has seen a return of 1.7 times on its investment so far.

Meanwhile, Ken Ng, CEO of insurer NTUC Income, says: “An accelerator allows us to embark on co-innovation with entrepreneurial teams to quickly scale and commercialise ideas leveraging our industry knowledge and expertise.” NTUC Income has partnered Infocomm Investments to form accelerator programme Future Starter.

Corporate innovation
So, are corporate-backed programmes the best way forward? If so, what might be the impact on Singapore’s start-up ecosystem? Will they, for instance, compete with venture capitalists here for quality start-ups?

Venture capitalists whom Enterprise spoke to say they welcome such corporate accelerators and do not see them as competition for deals. “The real issue is in the quality of those deals,” says Justin Hall, principal at Golden Gate Ventures. Lim Kuo- Yi, managing director of Monk’s Hill Ventures, adds: “The question is, are there enough quality start-ups to feed into these programmes?”

As corporates fund new accelerator programmes, they have added to what is seen as an already-crowded space. Mason says this has increased the danger of saturation and the possibility of building “dud” start-ups. Because there is so much funding available, start-ups that fail to get accepted into one accelerator programme can always turn to another. Yet, they may not actually have the right ingredients for success.

This not only raises issues for venture capitalists, who will have to sift through more candidates to find the right investment, but it may also steer individuals in the wrong direction. “There’s no question that there are far too many and it is also very confused. If you are going to [run an accelerator programme,] you need to know what you’re doing, because it is people’s lives and time,” he says.

James Tan, managing director of venture capitalist Quest Ventures, is less concerned about this aspect. Accelerators provide a “soft landing ground” for start-up founders, and those who fail to build their own start-up would have gained experience for their next venture.

Moving into a new phase
Alex Lin, head of government investment arm Infocomm Investments Pte Ltd, believes the local start-up space is on the cusp of yet another evolution. He calls this “Generation Five”, in which the ecosystem accelerates as a whole (see infographic).IIPL is the investment arm of the Infocomm Development Authority and has helped fund several local accelerators, including SBC Fintech, SPH Plug and Play and Rockstart Singapore.

IIPL’s strategy of nurturing accelerators to boost start-ups has paid off, Lin says. At least 62% to 87% of start-ups today are able to secure funding for their next phase of development, up from 2% to 8% before. Now, Lin says, start-ups have more options. And they will increasingly be looking outside the country. Accelerators may not be part of that picture, or they may evolve from their current form.

Golden Gate’s Hall says, over time, accelerators with the best reputation and most success should survive. And if none does? “Acceleration as a fund model for Southeast Asia will fall out of favour [given inconsistent results] and we won't see it anymore,” he says.

Quest’s Tan thinks there is likely to still be a small increase in accelerator numbers in the next three to five years. “Through SG-Innovate, there will be more accelerators tackling different verticals,” he says. SG-Innovate is the new agency announced in the 2016 Singapore budget; it was formed to connect entrepreneurs to industry, research and venture capital as well as helping in accessing new markets.

Lin adds that IIPL will continue to focus on building the start-up ecosystem. “The focus is now on shaping and forming the innovation enabler in Gen 5 and driving innovation in a truly global start-up ecosystem consisting of an interconnected web of ecosystems around the world.”

This article appeared in the Enterprise of Issue 748 (Oct 8) of The Edge Singapore.

David Low took a calculated risk to give Futuristic Store Fixtures the big break it needed. The winner of the EY Entrepreneur of the Year Award in Manufacturing Supply Chain shares how he can help retailers meet the challenges they face.

Big, transformational deals do not come often, but a skilled entrepreneur will recognise one when he sees it. David Low, founder and group CEO of Futuristic Store Fixtures, should know. In 2002, Low hosted executives from Bath & Body Works who were visiting Asia on a trip to locate new suppliers. Low was asked whether he could manufacture store fittings for the US retailer of body care and home fragrance products.

Not only was the multi-million-dollar contract big, but it was to be delivered within a very tight deadline. Once the deal was sealed, the client expected delivery to start in just five weeks. It also meant there was no room for error. The whole process, from manufacturing to delivery across the Pacific, had to move without hiccups.

Low, winner of this year’s EY Entrepreneur Of The Year — Manufacturing Supply Chain, knew this contract was his company’s big break to specialise in store fixtures — a niche but growing business. Low tells Enterprise, “It was risky, but I did my sums and it showed a certain percentage. So I said, yes, let’s bite.”

It was an extensive undertaking for his company then, with more than 30,000 pieces of fixtures to be made and shipped. With just a small factory, it lacked the capacity needed to take on the job. Fortunately, Low had a network of contacts that he had built over the years. He travelled from Johor to Penang in Malaysia, and managed to persuade seven factories to set aside what they were doing and allow him to outsource this contract to them. “Our reward was a statement that said we made a mark in North America,” he says.

To make the contract even hairier, Bath & Body Works did not place a deposit with Low — that would have meant a total loss for him if the company cancelled on him. “It was a mission impossible. Nobody in his or her right mind would do it. Anyone who does is insane,” recalls Low with a laugh.

That contract put Futuristic on a rapid path of growth, creating a niche of building fixtures for retail stores worldwide. It has more than 600 employees globally and has rolled out more than 6,500 retail stores across 56 countries. From a combined manufacturing and warehousing space of more than 500,000 sq ft in Malaysia, China and North America, Low serves a list of blue-chip retailers such as Victoria’s Secret, La Senza, H&M, Gap, Uniqlo, Levi’s Strauss, Adidas, Reebok, Borders and Telstra.

Would he accept such a contract again? “That's a very good question. To do it again, I need to have a strong heart. I keep my heart pumping every day, as I sometimes take on deals people don’t dare to touch,” Low says.

Heliconia’s investment
Futuristic’s growth has drawn interest from other parties. In January this year, Heliconia Capital Management, an investment firm that is a wholly-owned subsidiary of Temasek Holdings, announced that it was taking a stake in Futuristic.

Low says contact was made as far back as in 2013, meetings were arranged and both parties got to know each other better. Heliconia was further impressed by the scalability and sustainability of Futuristic’s business model. A visit to its Shanghai facilities was made and more in-depth discussions were held.

Initially, Low explained that he did not really require a cash infusion, as the company was managing well on its own resources. Heliconia pitched from a different angle. “They convinced me that they were looking for a company that could be a globally competitive. I guess we fell into that category,” he says.

It is easy to see why Heliconia was drawn to Futuristic. The latter is a proxy to the global consumer growth story.

This consumption theme is one that fits nicely with Heliconia’s investments, which include JUMBO Group, a leading seafood chain that is making chilli crab popular in growth markets such as Shanghai. Heliconia is also invested in Razer, maker of computer peripherals used by gamers; Star 360 Holdings, a leading distributor and retailer of sports and fashion brands such as Birkenstock, Nike and Polo Ralph Lauren; and FNA Group International, a leading chocolate distributor and retailer with a strong presence in airport duty-free shops in the region. Incidentally, FNA’s co-founder and group CEO Loo Lip Giam was overall winner of the EY Entrepreneur of the Year awards in 2013.

The courtship process between Futuristic and Heliconia took two years because Low was cautious. “We looked at what Heliconia could bring to the table — more than money or liquidity — to help take us to the next level.”

So far, Low’s new investor has proven to be “very, very active”. Even before it officially came on board, it was already introducing Futuristic to companies and brands that it was directly in contact with, as well as Temasek’s portfolio of investments and companies across the globe. “We saw a strong ecosystem that we could tap. That’s why we walked into this deal,” he says.

Things moved pretty quickly. For instance, in March 2015, Temasek and GIC each put in CHF450 million into Dufry, an airport retailer. Dufry, in turn was raising funds via a rights issue to fund the acquisition of a 51% stake in Italy-based World Duty Free Group for €1.3 billion from the Benetton family. “Once we got the news [about the acquisition], we asked for the person in charge to be linked up,” says Low.

More recently, in July this year, Temasek announced an investment in Italian luxury fashion brand Moncler for an undisclosed sum. The company, noted for its winter clothing, was set up in 1952 and operates in more than 70 countries worldwide. Connections were made right away. “They are very active,” notes Low.

Now, even though there is a lot of potential business in the pipeline, Low says it is not about making quick sales in this business. “Our business is more of a medium- to long-term partnership model. We start the process slowly, before getting into a deal with them.” Besides pricing, there are other details to consider such as design and brand value.

Low is already investing in additional capacity so that the company will be ready to take on more contracts. The money from Heliconia will come in handy as Futuristic doubles its manufacturing capacity.

New normal
The popularity of online shopping may be seen as a challenge for physical retailers, but Low points out that consumers benefit. “You used to pay $1, but you now pay 70 cents, plus, the product is better. At the macro level, e-commerce has actually increased the spending power of consumers.”

He notes that ever since e-commerce became popular, it was thought that shopping malls would die a natural death. “But, human beings are also about leading a lifestyle. You have to go out. Look at Pokémon Go: People took to the streets; it’s crazy. People can’t just stay at home and click their mouse to order all their stuff online. If you do just that, after a while, you will find that life has no meaning.”

Low sees the online space as an option for retailers and brands to increase their presence in what is a “new normal”. For example, people can buy the iPhone 7 online, but does that mean Apple Stores are no longer relevant? Why is Apple still opening physical shops?

The reason, Low says, is that consumers want to be able to touch and feel the products before deciding whether or what to buy. The purpose of the retail shop is to add value to the product.

“In the past, without that space, you would walk into a shop. If you didn’t want to buy, it’s okay, that’s your choice. Today, it [adds to the experience] of making a purchase. There are people serving you, talking to you, doing the best they can to sell. Yet, the decision is yours. You can buy from this shop or you can buy online.

“If you buy online, it will go into my left pocket; if you buy from the shop, it will go into my right pocket. What does this mean? The brand, by engaging consumers online and offline, is able to capture a bigger market and will be able to grow even more revenue.”

Low adds, however, that there are certain product categories where retail outlets are especially pertinent. For example, the so-called fast fashion that’s dominated today by three big brands: Sweden’s H&M; Spain’s Zara, and Japan’s Uniqlo.

Here, the physical presence is there to address a necessity: Women usually prefer to try on clothes before buying them.

Meanwhile, retailers can enhance the shopping expe rience by improving how the store interior looks or creating an environment that is welcoming, friendly and personal. “Consumers like to be served; they want to feel like a queen,” says Low.

At the end of the day, for all the talk about whether physical shops can co-exist with online sales channels, much of it boils down to how retailers adapt with the times and how they can be more savvy in capturing new customer segments or holding on to existing ones. “They have to be engaged, make their customers comfortable and want to come back. The brands we deal with love this online space. It gives them room to expand, instead of killing retail space,” says Low.

Not all retailers were able to manage the shift as quickly, though. US bookstore chain Borders was one of Low’s big customers. No thanks to the likes of Amazon.com, Borders’ business suffered because it did not move as quickly into selling online, unlike Barnes and Noble, another leading book retailer.

Borders went under in many markets, including the US and Singapore, but is still in certain markets such as Qatar. Low managed to continue his relationship with them, and he is happy that the existing owners are doing certain things right. “People still need to get out there. The new owners made changes and have shown that books are still relevant. I think they are doing fine.”

Education, reading
Low did not have much of a formal education. That’s a badge of honour that few successful entrepreneurs today can claim. “Primary one, I failed, and got pushed to primary two, three, four, failing all the way to primary six. I was retained; I failed again, retained, I failed again. Then they pushed me to secondary one, I failed again; got pushed to secondary two, I failed again. They kicked me out,” Low says with a mock grimace.

He had a good reason for not doing well: His father made him help out at the family’s factory, leaving him with little time to study. “I was told to do anything: furniture, painting, dismantling, anything. Immediately after school from noon until midnight, I was free labour. That shortened my childhood,” he recalls.

Low’s father’s insistence that he put aside his studies to help out with the family business was the norm in those days. He was the eldest and had two sisters and a brother who was seven years younger. “I am the only one who suffered that much,” he says.

Low became more conscious of his lack of formal education after he joined his uncle and aunt at their interior contracting design business in 1979, when he was just 18. In their line of work, they had to deal with interior designers, who spoke English, whereas he could hardly speak the language. “What are you going to do? I learn. And I’ve been learning for the past 37 years,” he says.

When he learns, he is indulging in his hobby and addiction: reading. “I am so crazy, I love to read books on politics, economics, business; the success stories of General Electric Co, and so on. I love to read and analyse.”

From his expansive reading diet, he has two standout favourites. The first is One Man’s View of the World by Lee Kuan Yew, which Low says helps him see the dynamics of the global economic and political system and offers valuable insights for running his expanding company.

He also loves the Dalai Lama’s The Art of Happiness, which he has read at least three times. The book helped manage his mindset. He says, “It is a constant reminder for us to stay calm in dealing with issues, especially in the very, very challenging environment we face today. I learnt how to stay cool, stay calm. Every morning, when you wake up, you will have all sorts of news, both good and bad. When the news is bad, don’t be affected; when the news is good, don’t get too excited.”

Low makes it a point to keep up with trends and he has been eagerly learning about new technologies as well, thinking about how his business can tap them instead of suffering from disruption.

For example, he is thinking about using augmented reality or virtual reality technologies to come up with what is called “live extension”, to enhance his company’s supply chain management.

Using AR and VR, customers in one location can “walk through” the finished fittings even though they are still on the drawing board. This method can translate into savings in labour costs, and better efficiency in design and installation. Low says, “We continue to think out of the box. There are many things that technology can help us with; it’s just amazing. I am a tech-crazy person.”

If Low can tap these new technologies and run a more efficient business, he will have greater impetus to expand into even more locations worldwide. “We plan to put representative offices in key cities such as Hong Kong, Shanghai, Dubai and London; we want to expand our reach to the brands globally,” he says.

This article appeared in the Enterprise of Issue 748 (Oct 8) of The Edge Singapore.

Elena Ionenko used to make lending software for banks under the banner of a European company she co-founded. Two years ago, the Russian entrepreneur changed tack when she identified a bigger, more lucrative market: Southeast Asia’s non-bank lenders.

The likes of peer-to-peer platforms and micro-lenders are growing at an exponential rate in the region, fuelled mainly by new start-ups in Singapore, Malaysia, Thailand, Indonesia and the Philippines. The region raised US$46.6 million ($63.6 million) in alternative financing last year, four times the amount raised in 2013, according to a report by KPMG and partners.

It is still early days yet for the industry, however. Most alternative lenders vet borrowers using a combination of third-party tools, which range from credit rating agencies to experimental software by research institutions. But as the industry grows and competition intensifies, Ionenko is betting that many of these lenders will look for more personalised tools to set themselves apart from the competition.

“There is little technology tailored specifically for smaller non-bank lenders today,” she tells Enterprise, “And they cannot afford the [technology] used by the banks, which can cost up to hundreds of thousands of dollars.” In 2014, after exiting the company she co-founded, Ionenko started Turnkey Lender, which is based in Singapore. She believes Singapore is the ideal spot to bui ld a reputable brand name with which to reach other Southeast Asian countries.

The company’s software is an online lending platform that automates the entire loan process for non-bank lenders. “We took all our expertise in making lending software for banks, from credit scoring, decision automation and smart analytics, and condensed them into one platform,” she says. Turnkey Lender already has 27 clients, ranging from the biggest online lender in Switzerland, eny Finance, to micro-lenders in Indonesia.

Turnkey Lender was part of accelerator programme The FinLab, which is jointly run by United Overseas Bank and Infocomm Investments. The programme invests up to $30,000 in each start-up for a small equity stake.

Disrupting banks?
Turnkey Lender is among a handful of financial startups that build solutions dedicated to alternative lenders. Others include Cloud Lending Solutions in California and Credit Online in Lithuania. Industry watchers expect more to join their ranks soon, driving down the costs of taking out a loan.

“There is a definite trend in providing cloud solutions that bring the same level of technology used by large companies, to firms of various sizes to expand their business with minimum infrastructure, development costs and faster time-to-market,” says Paul Griffin, associate professor of Singapore Management University’s school of information systems.

These start-ups do not pose a threat to banks, however. Instead, banks regard fintech firms as an avenue to tap new markets. For example, Oversea-Chinese Banking Corp works with fintech companies through its innovation centre, The Open Vault. DBS Group Holdings, meanwhile, has partnerships with crowdfunding platforms such as MoolahSense and Funding Societies. In addition to the FinLab, UOB is collaborating with equity crowdfunding platform OurCrowd.

“Such partnerships are mutually beneficial, with banks achieving faster time-to-market while fintech start-ups are provided with growth and business opportunities,” UOB’s head of group channels and digitalisation, Janet Young, tells Enterprise.

But as the lending industry grows, experts believe stiffer competition and price wars will be the order of the day. “Some banks will sooner or later begin to utilise fintech tools to compete with the start-ups. Whoever can do a better credit analysis at a low cost will prevail. Being a bank or not isn’t the determining factor,” says Duan Jin-Chuan, a professor of finance at NUS Business School.

Personalised tech
lonenko claims Turnkey Lender’s software is fully customisable. For the smallest lenders, it provides a basic credit score card that differs from country to country. “For developing markets, you cannot rely on what people write on their application forms. So we add other layers of checks,” she explains. The software can, for instance, draw data from blacklist databases and source information about potential borrowers’ online activities. Lenders can also set their own criteria, which can be added into the credit scoring system.

The accuracy of the scorecard is evaluated by her team, which is based in the Ukraine, every quarter. The team will make adjustments to the scoring system to ensure it caters specifically to a particular lender. “Over time, the scorecard will become personalised to the customer base that the lender caters to,” Ionenko says.

Turnkey Lender’s software has the same capabilities as banks’ credit management systems, she says, but also comes with other less conventional elements. For instance, it includes data on online spending, phone bill payment patterns and social media activities.

The company also has a unique business model. It does not charge for its software, instead taking a US$1 fee for each performing loan every month. “People think US$1 is a small amount, but if you have tens of thousands in volume, it can be a massive number,” Ionenko says, “It is why we are in Southeast Asia — because it has the volume.” The company generates revenue of US$70,000 a month, part of which comes from IT support and maintenance works.

NUS’s Duan expects firms like Turnkey to have to come up with particular specialisations over time. He points out that credit risk varies significantly across different geographies and sectors, and it would be close to impossible for a universal platform to fit all lenders.

Machines replacing people
Following the fintech playbook across the world, Turnkey Lender is investing heavily in automation and artificial intelligence. Will these platforms eventually put credit analysts out of a job? Ionenko believes this will happen, but only to a degree.

“Artificial intelligence works well with a large volume of data. When you do not have big data sets, especially in developing countries, it can result in inaccuracies,” she says, adding that Turnkey Lender’s software uses a combination of manual and automated analysis.

In fact, the start-ups that use its software are hiring fewer people from the start, with some operating on a lean team of five. “The software makes lending more affordable for ordinary people. On the one hand, some jobs will be replaced by this technology. On the flip side, society will benefit because they will have greater access to finance, and they can develop their own businesses, which will spur the economy,” Ionenko says.

Turnkey Lender is raising a Series A round of US$2.5 million to expand in Southeast Asia and open sales offices. “We have got verbal commitments from a couple of [institutional investors]. Plus, Infocomm Investments is also interested in investing if we can find a lead investor,” she adds.

This article appeared in the Enterprise of Issue 749 (Oct 10) of The Edge Singapore.

Finian Tan, chairman of Vickers Venture Partners and an early backer of internet giant Baidu, likes big ideas. Sitting in his Sentosa Cove penthouse, he rattles off a list of start-ups he and his partners have screened recently, though they have yet to make a commitment to invest in any of them. The ones that stand out are an ambitious company that is developing a cure for Hepatitis B, another that is experimenting with cold fusion technology and a drug delivery company that uses nanotechnology.

Not long after speaking to Enterprise, Vickers announced that it was leading a Series A round of funding for $4.8 million in a company called SiSaf. The biotech firm claims that its silicon- based nanoparticle platform can package and deliver medicine that was previously highly challenging to formulate.

To Tan, big ideas alone are not enough. He looks at their potential to become high-growth companies. SiSaf, for instance, is trying to solve a multibillion-dollar problem within the drug industry, and the market for nanotechnology in medical application is expected to grow to US$528 billion ($723.6 billion) by 2019, says BCC Research.

Vickers, which invests in early-stage and growth start-ups, is not structured like other venture firms, according to Tan. It does not take annual fees, but only earns a profit if its portfolio companies perform, which is why it is focused on high-growth firms.

“It is like a baseball game,” Tan says. “If you hit the ball out of the park, you get a home run. Most of the time, people miss. Supposing you only pay the baseball players if they hit out of the park, they will whack as hard as they can even if they miss.”

Co-founded in 2005 by Tan, Vickers’ existing funds are worth more than US$754 million in gross value, which is 3.3 times net multiples over capital. Its current fund (Fund IV) has a gross return of eight times and a net return of 5.1 times. Its four existing funds raised a total of US$185.3 million.

A third of Vickers’ investments are in China. A third is in Southeast Asia and India. The company had previously invested in TWG Tea, MatchMove Pay and Cambridge Industrial Trust in Singapore. The rest of its investments comprise global life sciences companies, mainly based in the US.

Nearly three-quarters of Vickers’ investments have been successful, Tan says, and half of them are “home runs”. Home runs are high-growth companies with more than five times multiples. There are also some unicorns (companies valued above US$1 billion) in its portfolio, including a clean tech firm in China on its way to an IPO. Its IPO price could be above US$2 billion, according to previous media reports. Another is a stem-cell regenerative therapy firm called Samumed, which is valued at US$12 billion.

No fixed formula
Tan says he tries not to have a fixed formula for how Vickers invests. “If you have a blanket policy about investment, you will reduce the failure rate, but chances are you will also reduce the success rate. We are all about home runs.” It does help that top venture capital firms are usually the first to get a preview of any new deal, he adds. “It’s a virtuous circle; if you are good, the best deals come to you.”

Vickers is currently raising Fund V, which is likely to close next year. The firm is reportedly on track to beat its target of US$250 million, which will mark one of the largest rounds ever raised in Singapore. Fund V has a hard cap, or maximum size, of US$400 million.

Fund V will invest in 25 to 30 companies, with no more than 20% in a single start-up. In addition, part of Fund V may be used for follow-up investments in its current portfolio companies. It has closed three deals for Fund V and will likely close another six deals this year.

Tan declares that he will go the distance for his portfolio companies and so will his partners. “My partner cooks dinner for the entire team at one of our start-ups — every day. If need be, my fiancée will babysit their kids. When we raise money for a company, we fly all around the world on our time and spend millions just to sell their story.”

One of these companies is M-Daq — a multi- currency trading platform that wants to make cross-border transactions more transparent and less costly. In 2012, co-founder Wong Joo Seng was on the verge of striking a partnership with a major stock exchange and CitiVentures. The latter two could not reach an agreement and while waiting, M-Daq ran out of money. Wong did not even have enough cash to pay his employees when Tan approached him to invest in M-Daq. In 2013, M-Daq raised $21.8 million in a Series B round with Tan’s help.

“We were out of money and Vickers could have low-balled us and given us a lower valuation,” Wong says. “But they gave us the valuation we were asking for — US$100 million.” He left M-Daq in 2015 after the firm raised a Series C round of US$82 million from Ant Financial — an affiliate company of Alibaba Group Holding— and other investors. Wong joined Vickers that same year.

Tan says he picks entrepreneurs who have a long-term view of their business. “Do they want to create a billion-dollar company? Do they want to change the world? Is he or she egotistical?”

He pays particular attention to the goals of entrepreneurs before making a deal. For instance, he does not think money should be the sole target. “Because at the sight of the first few millions, the person is likely to exit and sell the company. The goal we are looking for is a lot more complete,” Tan says.

He finds a likely candidate in MatchMove Pay’s Shailesh Naik. The e-payment financial start-up started out by offering virtual cards for online purchases. It expanded into physical stored-value cards recently. Naik believes Southeast Asia is still an untapped market for future e-payment offerings because most of the populace still depend on cash. According to Tan, Vickers has invested US$11.5 million in the firm.

Sustainable business model
Tan says it is also important to find out whether a company has a sustainable business model right from the beginning. “If you sell your products below cost, there is a chance people will stop buying them when you stop subsidising,” he explains.

On the flipside, if a company is not making money because it is investing in future infrastructure needs, it may still have a sustainable business model. Amazon.com, he says, is barely making a profit because it is investing in warehouses and technologies for a bigger operation in the future. “If you take out the future cost, you might get a different picture,” he points out.

Vickers pumps about 30% of its money into Southeast Asia and India. Most of these companies are headquartered in Singapore. Tan believes Singapore is “punching way above its weight” in growing its start-up ecosystem, but says it is still trailing far behind Silicon Valley in innovation. “We don’t have enough risk- takers in this country. I believe the alignment of interest is not there.”

A large part of Singapore businesses is intertwined with the government and the best talents go to these companies. “As a result, the number of entrepreneurs is not high,” Tan says. “These employees make a lot of money, but not as much as an entrepreneur. If you make a mistake and you get sacked, then the tendency is not to take risks.” He points out that the risk appetite in Singapore needs to change to spur innovation.

This article appeared in the Enterprise of Issue 749 (Oct 10) of The Edge Singapore.

Helene Raudaschl brings a love and lifelong knowledge of the gourmet food industry to her role as MD of Indoguna Singapore. The EY Entrepreneur Of The Year category winner gives a glimpse into this ‘unglamorous’ world.

Helene Raudaschl strides out of her office and down the narrow corridor towards the test kitchen, where her staff have just arranged sprigs of thyme on a charcuterie display with an array of cured and smoked meats for a photoshoot. The display had been done quickly and expertly as the team often prepares a similar spread for clients who come in to taste and evaluate the products, and discuss and develop menus, before placing their orders.

Raudaschl, tall, striking and immaculately styled for the photographs, is managing director of Indoguna Singapore, a purveyor of gourmet foods. Its operations are located in an industrial park in Senoko. Here, the company’s air-drying, curing and packing facilities are just a corridor away from the sprawling, no-frills open-plan office; staff have butcher charts showing the different cuts of beef taped at their desks.

Raudaschl has just been named EY’s Entrepreneur Of The Year for the F&B distribution category. It’s not her first award — there are shelf-fuls of accolades in the company’s large conference room, and more awards line the walls of other rooms.

For more than 20 years, Indoguna has been supplying a smorgasbord of gourmet foods to top hotels and restaurants in Singapore. They include fresh seafood and choice cuts of beef, smoked meats, caviar, pâtés and Italian cheeses. A big selection of its products — from its Carne Meats-branded ham and salami to blood sausages — is processed at the Senoko facility while some others, such as Iberico ham, are imported. Fresh oysters are picked up at 4am every day from Changi, packed in Senoko and delivered to restaurants by 8am. Its Ocean Gems-branded seafood is also packaged at the facility before being sent out to customers.

The company was founded in 1993 by Raudaschl’s two other business partners; Raudaschl came on board in 1997. She now holds a majority stake, having invested in the company over the years.

Early education
Raudaschl’s “education” in the gourmet food business began as a child. Her mother, Elena Tang, founded Hong Kong gourmet food supply company Lordly in 1987 to import delicacies into Asia. Today, Raudaschl’s sister runs Indoguna’s Hong Kong operations, which supplies to the Greater China area.

Young Helene and her sister often accompanied their mother on business trips around the region, sometimes hauling suitcases full of produce. On other occasions, they would join their mother at international food exhibitions, where they would be enthralled by the new food and cultures on display. Raudaschl still remembers, vividly, attending a Scotland extravaganza at a hotel in Hong Kong when she was about six years old. Apart from the display of wild game, she had been tickled at the sight of men in tartan kilts.

This early experience piqued her interest in the food sector. Raudaschl tell Enterprise that a passion for the business is imperative as it is hard work — you either love it or hate it.

The knowledge and experience she gained over the years have helped Indoguna stay at the top of its game.

“The food business is not just about buying products. It’s not just about eating. There is so much science and knowledge [involved], and skill sets and things to learn before you can actually put somebody’s dinner on the table. If you are not interested in the [intricacies] of the food business, that kind of process is actually quite boring to learn,” she says.

“It’s not glamorous, [the way we] process our sausages and meats. Just the specifications alone, there are thousands, and if you don’t have the interest to learn why, it will be tedious. It’s kind of like being a doctor. It’s well-respected but the process of getting there is not what many people would enjoy.”

Sense of taste
Indoguna’s customers have a mind-boggling array of specifications. This year, for instance, it procured Tajima Wagyu beef sirloin, flown direct from Hyogo prefecture in Japan, for chef Simone Fraternali of il Lido at the Cliff on Sentosa, as well as the Kaluga Queen caviar that tops a juicy scallop creation by chef Julien Bompard at Scotts 27 restaurant.

“We are not commodity buyers,” Raudaschl stresses. As such, one of Indoguna’s biggest challenges is obtaining products that are consistent in quality. This has become increasingly difficult as farming practices worldwide change and some unscrupulous parties resort to tricks and shortcuts to produce subpar food. Indeed, the global food industry has been rocked by one scandal after another in recent years. Among them: Forty-year-old meat sold as “fresh” in China, silicone- coated vegetables in India, transgluta minase or “meat glue” used to bind meat scraps that are passed off as premium steaks in Australia, and horse meat “beef” burgers in the UK.

Raudaschl says most of the company’s suppliers are trusted business partners, and their working relationships go back decades to the time she was working with her mother. Nonetheless, there have been a few bad eggs that have supplied food that was not up to standard. Once differences in quality emerge, “we would just choose not to do business with them”, Raudaschl says.

She visits the farmers and producers who supply to Indoguna to ensure the goods’ quality as well as to build up business relationships. In fact, “I’ve seen great products in China,” she adds. One way to try to eradicate the problem of poor-quality or downright dangerous food, is to educate people about what they consume, Raudaschl believes. “If we don’t support all the crap, people won’t make it.”

Raudaschl asserts that Indoguna’s products are top quality, which is why they are more expensive than the competition. “If we tell you it’s a chicken hot dog, it’s 100% chicken,” she says. “All our sausages are essentially good pieces of meat, ground up just like burgers, with spices added, and popped into a casing.”

To suit the modern market’s tastes, Indoguna now sells products that are gluten-free or nitrite- and nitrate- free. Nonetheless, salami — a cured, dried meat, and one of her personal favourites — still has to be made with nitrates, Raudaschl says. Whatever the case, Indoguna focuses on providing quality food at various price points. “As a company, we supply premium food, but it doesn’t mean that it is all luxury or expensive products,” she says. “Even at the economical range, you can still get good quality.”

To be sure, quality products will cost more to produce and hence cost more than similar products in the market. Raudaschl says Indoguna will not be drawn into a price war with other food suppliers. “Price is, of course, relevant, but I believe that if the quality [of the food] isn’t good, it’s not cheap. Because if you have a product that you can’t use, or doesn’t bring back your customers, no matter how low the price is, it will still be too expensive,” she says.

“If I put 100% chicken in my sausages, I cannot compete with people who put only 50% chicken in theirs. It’s not even the same product. If you’re cheap today, tomorrow there will be somebody cheaper.”

Extending links
Obviously, Indoguna has been doing the right things. Revenues have grown from about $7 million in the 1990s to $63.7 million in 2013. Raudaschl declines to say how the company, which supplies discretionary food products, was hit by the global financial crisis or slowing economic growth now. She does acknowledge, however, that as in any business, there have been ups and downs, and some difficult years for the company.

Indoguna has also been hurt by some customers who do not want to pay for goods received, as well as others who turned “arrogant” after becoming successful. “I don’t think about it,” Raudaschl says, preferring to soldier on. She adds that even during crises, Indoguna has never retrenched employees. The management and staff took temporary paycuts to reduce costs until the troubles passed.

Now, as the company and the industry grapple with issues such as cost productivity and a manpower crunch, Indoguna has invested in machinery such as a meat slicer. Raudaschl says the company has deferred making heftier investments, such as in more automated functions or robotics, until the investment cost can be justified, particularly as a major chunk of Indoguna’s products are made to specifications.

In any case, Indoguna has evolved and diversified its customer base, supply chain and range of products. Carne Meats and Ocean Gems products are available at supermarkets for home cooking. Indeed, having a wider range of offerings would also protect the company from the vagaries of market demand. “Our business model has changed. We don’t cater only to the gourmets at the highest levels. People move up and down the ‘chain’ — today you might go to a fivestar fine-dining restaurant; tomorrow you might have a bowl of hokkien mee.”

Even McDonald’s is changing its business model, she says, noting the fast-food chain’s move toward salads and now, gourmet burgers. Indoguna is working on supplying to McDonald’s, “hopefully soon”, Raudaschl says. If this materialises, it would certainly mark the company’s diversification across price points.

Looking ahead, Indoguna is banking on its most recent investment — an $8 million manufacturing facility in Dubai — for its next leg of growth. Indoguna has been distributing products from Dubai since 2005, but in recent years, has taken advantage of the demand for Asian food in the region. The factory was built to produce halal-certified dim sum, under the Masterpiece brand, for the Middle East markets.

The way Raudaschl sees it, there is significant potential for Indoguna to manufacture and supply quality food in that region. “If you look at Qatar today, it’s just two hours from Dubai [but] the difference in the supply chain is huge.”

Ultimately, a lot has changed for Indoguna in the last 15 years, she says. And, it will continue to do so. “We’ve built so much because of market demand and how Singapore has developed. Then we went overseas, and that excitement that comes with building something is quite contagious. It doesn’t stop.”

This article appeared in the Enterprise of Issue 749 (Oct 10) of The Edge Singapore.

In a corner of a US retail store, four 3D printers are giving off a low hum. They are printing insoles for shoes, and each pair would be ready in less than two hours.

Each pair of insole is different. By using a 3D foot scanner, the insoles are customised based on the foot structure and lifestyle of their users. Intelligent Mobility, the start-up running the show, says it is among the first in the industry to offer shoppers so much control over a set of footwear.

Glen Hinshaw, founder of the consumer footwear firm, says: “3D printing is a viable way to offer consumers mass customisation for something they can see done before their eyes while reducing manufacturing costs.”

The printers are available in six retailers in the US and have already made more than 1,000 insoles since March. Hinshaw wants to be in 100 retail stores by next year, with each site producing 15 to 20 pairs of insoles a day.

Unbeknown to many, part of its technology is made in Singapore. Intelligent Mobility joins a long list of companies that have sought out the city-state for its know-how in 3D printing. Some of these firms have gone on to make Singapore its 3D-printing operational centre.

Last month, UPS and Fast Radius said they were launching an on-demand 3D-printing facility in Singapore by year-end. The facility will make items for small and medium-sized enterprises, delivered by UPS ideally within 24 hours. Food Ink, the restaurant that 3D-prints its food, is reportedly coming to Singapore after its time in London. Rocket maker Gilmour Technologies, which uses proprietary 3D-printed fuel to reduce the cost of rocket launches, is already based here.

“The universities here produce talented graduates with lots of experience in 3D-printing technology,” says Adam Gilmour, co-founder of Gilmour Technologies. “The corporate tax and regulatory system here are great, as is the absence of capital gains tax. Plus the country is safe, secure and politically stable.” The start-up received “six-figure” funding from the Singapore University of Technolo gy and Design.

Hinshaw came to Singapore in 2013 to look for help to refine his 3D foot scanning system, which came partly from a technology he licensed from the Massachusetts Institute of Technology (MIT). Essentially, the foot scanner measures the shape of the foot using a gel pad and captures images of the foot using cameras to produce a 3D display.

The Intellectual Property Intermediary (IPI), an agency under the Ministry of Trade and Industry that matches companies with local firms, introduced Hinshaw to Nanyang Polytechnic. With NYP’s help, the scanner was made more accurate and can be uploaded quickly to its app.

The 3D foot scanners are now part of its offerings in the US retail stores. Hinshaw hints that he may manufacture its future 3D scanners and printers in Singapore.

“Singapore can be an expensive place to build 3D systems, but if you are looking for precise manufacturing, this is the place,” he says. The firm was previously considering China, but was put off by a string of continuous quality-control issues.

‘3D era is all about customisation’
3D-printing across the world is becoming popular, especially in wearables. US-based company Feetz is making 3D-printed shoes. Others are making 3D-printed clothes, jewellery and watches. Venture capitalists and experts say the obvious advantage is that products can be made cheaper, yet be fully individualised. Some industry watchers are sceptical, however, reportedly calling the trend a “passing fad” that will wither as investment monies run dry.

Yeong Wai Yee, aerospace and defence programme director at Nanyang Technological University’s Singapore Centre for 3D Printing, says: “The consumer’s understanding and acceptance of 3D printing for a durable product have yet to be established. The consumer needs to be able to understand, appreciate and have confidence in the technology and material to allow sustainable growth of such companies.”

Others believe 3D-printing firms need to establish market value, not just technology capabilities. Paul Santos of venture firm Wavemaker Partners, says: “While technology per se can be interesting, what gets us excited is discovering industry applications that create meaningful value.” Wavemaker Partners has invested in Structo, which builds 3D printers for dental applications, and Santos says it is developing newer versions to replace conventional milling processes.

To that end, the insole market seems ripe for disruption. “Over-the-counter insoles are a bad fit for many people,” Hinshaw says. “Customised ones can take up to three weeks to reach customers and can be very costly.” Intelligent Mobility’s insole is priced between US$150 ($207) and US$300 — a tad lower than most customised ones in the market.

To be sure, they are not the only ones 3D-printing insoles. Wiivv is launching its line of 3D-printed insoles that can be ordered directly through a smartphone. Long-time insole maker Superfeet is getting in on the action as well. It has partnered manufacturer Jabil to introduce its version of customisable 3D-printed insoles.

“It is not an easy industry to enter,” Hinshaw says. “A lot is riding on the accuracy and capability of the 3D foot scanning system.”

Hinshaw’s son Chase reckons consumers might need two to three tries before they find the perfect fit, but adds that Intelligent Mobility currently has a 95% customer satisfaction rate. “Once they get the perfect fit, we will have their foot profile, which can be used to make insoles for other kinds of footwear such as high heels and sandals,” says Chase, who heads marketing for Intelligent Mobility. The company is planning to roll out 3D-printed insoles and other products for high heels and sandals next year.

Enchant VC points out that investment interest in 3D-printing start-ups is growing. Sequoia Capital and Google Ventures have made investments in 3D manufacturer Carbon 3D; Desktop Metal, a firm that 3D-prints metal, has raised US$47 million from Kleiner Perkins Caulfield Byers and others.

“3D printing will play an increasing role in 2016 in small- to mid-size businesses that use 3D printing in their manufacturing process,” says Enchant VC’s Gene Berger. The firm invests in hardware start-ups out of Singapore, including 3D-pen maker Creopop. Consulting firm Wohlers Associates says the market is set to exceed US$20 billion by 2020.

3D printing is also changing how consumer goods makers such as Intelligent Mobility view their supply chain. Most of its operations will take place in the retail stores themselves, which means it does not need a large amount of space to handle its operations. He plans to use refurbished shipping containers to handle its overflow. Even after accounting for capital expenditure, he expects the firm to make at least US$500,000 in profit for the first 3,000 insoles and other footwear support products sold.

Cyclist-turned-entrepreneur
Hinshaw’s interest in 3D printing was accidental. Some 20 years ago, the track cycling medallist experienced pain in his feet. His orthopaedist made him a pair of insoles. He recalls, “I was shocked about the way he went about making it, using plasters and casting that resulted in weeks of waiting. I thought the process needed to be digitised.”

Hinshaw was an engineer by training but spent most of his adult life handling public and private investments for Prudential, HSL Financial Group and his own Hinshaw Financial Group. He also owns a retail bike store, medical technology firm and tour production company that counts the likes of The Rolling Stones and U2 as clients.

At the same time, he was experimenting with insoles. “We tried all sorts of materials and technologies that did not quite fit or were too expensive,” he says. With the help of technologies from MIT and Singapore’s NYP, Hinshaw assembled its line of gadgets today. “We made pre-made and adjustable insoles in 2007 and refined it further in 2013,” he says. “This year we rolled out fully customised ones.”

Intelligent Mobility plans to raise Series A funding of US$20 million next year to build its 3D scanners and printers.. It also plans to branch out overseas in the next few years, and Singapore is likely on his list.

How to 3D-print insoles
Customising insoles is still a new concept today, with only a handful of players in the market. Glen Hinshaw, founder of consumer footwear firm Intelligent Mobility, explains how it works:

A customer steps on the 3D foot scanner that uses a polymer gel pad. The proprietary system is said to be able to measure the shape of the foot with one millimetre of error.

The 3D image is captured and displayed through its software, usually on a tablet. An assistant will guide customers through the customisation process, walking them through questions about pressure points, alignment issues and lifestyle priorities — that is, activity level and health issues. It all happens within a few minutes, says Hinshaw. In the future, customers will be able to call up an orthopaedic surgeon for consultation using telemedicine.

Once the design is set, the 3D printer will get to work. It uses elastomeric polymer, a rubber-like texture that offers flexibility and support. When the insole is ready, a layer of micro fabric is added on top of it for comfort.

This article appeared in the Enterprise of Issue 750 (Oct 17) of The Edge Singapore.

Five years ago, John Tan invested in a company peddling a restaurant reservation system. Chope had been founded by a friend and former neighbour, Arrif Ziaudeen, and Tan saw potential in both the company and its founder. He says, “I understood and could see the need for a restaurant reservation system. Arrif was also one of the people I knew would be successful, and it was this confidence in him that primarily led me to invest in Chope.”

The investment also launched Tan into the world of angel investing. Since then, he has put money into at least 16 investments, including custom shirt maker Marcella, online grocery delivery service RedMart and a programming school he co-founded called Saturday Kids. The school provides coding lessons for children aged five to 12.

He is increasingly looking for startups outside the country. In fact, Tan has not invested in a Southeast Asian company in the last 12 months. “Many of the local start-ups are taking ideas from the US and trying to make it work here, particularly the B2C [business-to-consumer] start-ups,” he says. But Southeast Asia is a much more diverse market. So, ideas that work in the US may not work uniformly across the region. “It’s not so easy to expand across a region that has a combined population of 600 million across 10 countries, each with its different practices and rules.”

Tan prefers to look for new and original ideas. One start-up he is currently invested in is Mashgin, a US-based company that is building an automated checkout kiosk. Mashgin’s system uses computer vision and 3D reconstruction to scan multiple items on a tray and check them out all at once. This does away with the need to scan individual barcodes. Unlike the self-checkout machines currently in use at many supermarkets, no human intervention is required with Mashgin’s machine. The company has a working prototype on trial in some cafeterias in the US.

It is start-ups such as Mashgin that Singapore needs to build, Tan says. “The government is always talking about Smart Nation and has even set up an agency called SG-Innovate. While the naming of the agency suggests the focus is on generating greater innovation, I have yet to see a Mashgin coming out of Singapore. Most of the things I have seen thus far are marketplaces for me to book a spa session or a haircut. It no longer excites me and this is one of the reasons I have not invested locally in recent times.”

Silicon Valley advantage
Tan says a possible reason for the lack of quality ideas is that entrepreneurship has recently become cool. “Increasingly, many young people are jumping on the bandwagon simply because they are sold on the idea of being an entrepreneur. But not everyone has the tenacity to make it work and even fewer know what they are really doing.

“To begin with, are they solving a real problem? It’s usually a case of my wanting to be an entrepreneur, so let me go find a problem that does not exist, or that exists for a small subset of people, and build a business around it.”

Tan adds that many entrepreneurs are so enamoured of the idea of building a start-up that they have unrealistic expectations of how difficult it is, of their company’s true valuation and even of the validity of the problem they are trying to solve.

Tan, who regularly participates in Silicon Valley-based accelerator programmes, says this is in contrast to the scene there. The valley has the advantage of a deep pool of engineering talent. Many successful entrepreneurs in Silicon Valley also have prior experience working at other start-ups, where they gained an intimate understanding of their respective fields before striking out on their own.

An acceptance of failure in Silicon Valley has also contributed to its success. “Venture capitalists expect you to fail fast. They would rather you go out and spend the money to see whether your idea works. If it doesn’t, then shut it down and go on to something else. The valley embraces failure as a learning process or as part and parcel of building a successful start-up,” Tan says. “In Singapore, we’re starting to see a change in the culture, but failure is still somewhat taboo. Some parents would be supportive of their kids when it comes to the first startup, since they are young and have no real responsibility. But, at some point, usually at the two- to three-year mark, if the start-up has not yet taken off, that’s when parents would start asking their children whether they are going to get a real job, as if being an entrepreneur is not a real job.”

It helps that Silicon Valley has a longer history of producing successful start-ups. He adds, “This means there are a lot more mentors who can provide real advice to start-ups. I’m not dissing all the mentors in Singapore. I’m just saying there are many successful entrepreneurs in Silicon Valley who now spend their time investing in and mentoring younger entrepreneurs. These people have been there, done that and written books or started their own funds.”

Tan notes, however, that Singapore has already begun to build its own pool of successful entrepreneurs-turned-VC. Monk’s Hill Ventures, a local VC fund that has committed to investing $100 million in technology start-ups primarily from Southeast Asia and Silicon Valley, was founded by Ong Peng Tsin and Lim Kuo-Yi. Ong started out in Silicon Valley founding start-ups such as dating site Match.com and Interwoven, a software company that went public and was later acquired by Autonomy. Lim is former CEO of Infocomm Investments, the private venture capital arm of the Infocomm Development Authority.

Advice for budding entrepreneurs
Entrepreneurs who want to increase their chance of success should therefore look for what Tan calls “smart money” when it comes to seeking investors. “Smart money could be someone with deep domain knowledge of the market you are trying to break into. For example, if you have a potential VC who has a portfolio of companies you can work with, that’s smart money. Another example of smart money is VCs who provide early stage or Series A funding but are also well connected to later- stage funds. That’s smart money because these are VCs who can help you raise your next round.

“Smart money can also be investors who know what your exit plan is. Entrepreneurs like to think they can eventually have an IPO, but in reality IPOs are a rarity. The more likely outcome is an acquisition. But most entrepreneurs do not know who their potential acquirers are, nor do they have the necessary network. So, smart money is also investors who know who your potential acquirers are or have the contacts within these companies to introduce you to.”

As for those who aspire to be angel investors one day, Tan recommends gaining work experience first. “To be credible, you have to go out and run a business. It doesn’t have to be a tech company, but if you have the experience of running a business, you will have a better understanding of the difficulties of starting up, and that’s when you can give good advice and provide useful mentorship.

“This is coming from feedback given to me by some of the entrepreneurs I have invested in. They value what I say, not necessarily because it’s the best advice but because I have run businesses before. Even if my ventures have been not hugely successful, the fact is that I have gone out and done it, and that has given me a degree of credibility.”

While angel investing is fulfilling, Tan warns that it is also hard work. “It’s so time-consuming to weed out the wannabe entrepreneurs from the serious ones. It’s a full-time job,” he says. “It’s easy to meet five entrepreneurs in a week, write three cheques and you’re done. But if you want to make good investments, then you really need to research a lot of companies and entrepreneurs, and pick the ones you think will work.”

It also takes a long time to generate returns. “The reality is that it takes five to seven years to see whether an investment will reap any return. The typical lifetime of a VC fund is seven years. So, you can write those cheques very quickly, but you are not likely to be in the game for long if you can’t wait it out.”

This article appeared in the Enterprise of Issue 750 (Oct 17) of The Edge Singapore.

Crescendas Group’s Lawrence Leow, this year’s EY Entrepreneur Of The Year — Diversified Industries, on why diversification has served him well and what he is looking at next.

Business scholars have spent years pondering the pros and cons of business diversification. Multinational, multiindustry conglomerates are often seen as the epitome of stability and growth. Yet, at times, having an entrepreneur’s laser- like focus on fast-growth areas is touted as the greater virtue.

For Lawrence Leow, being named this year’s EY Entrepreneur Of The Year — Diversified Industries shows where his preference lies. He believes that moving into different sectors is not just a way to grow in different areas but also of protecting himself.

“When your business is doing okay, when you are profitable and sustainable, then it is a good time to look for other opportunities and become diversified,” Leow, chairman and CEO of Crescendas Group, tells Enterprise. “That’s my way of risk management. When one sector is down, it is hoped that the other sector isn’t affected and you can ride through the ups and downs — and that’s what I want to do.”

Leow has built up businesses in five major sectors over three decades. His property portfolio includes commercial developments such as Biopolis and Print Media Hub as well as residential projects Holland 100 and East Coast Residences. He is also into hospitality, having opened five Aqueen Hotels & Resorts in Singapore and one in China, as well as Arena Country Club and Canareef Resort Maldives.

Leow, who started his business venture in logistics, is also into distribution, with Adviva Logistics, and manufacturing, with Singpellet and Central Panel. More recently, he has invested in technology, and key companies under this sector include Osteopore International, Singnergy and E2green.

While many businessmen prefer to keep a low profile, Leow has taken up volunteer positions to help advance the interests of the wider business community.

A Nominated Member of Parliament between 2005 and 2006, Leow is better known as a long-serving president of the Association of Small and Medium Enterprises, the voice of local companies. He was first elected to that post in 2002 and re-elected for four terms of two years each. During his tenure, membership rose from just 100 to about 6,000.

After stepping down from ASME, Leow has remained active by becoming involved in other business associations. For example, he is now honorary treasurer of the Singapore Business Federation. Since 2012, he has been serving as chairman of the SBF-SME Committee, acting as the key conduit between policymakers and the SME community.

By being involved in the community, he believes he is in a better position to bridge the gap between businesses and the government, and strives to resolve the concerns of business owners through mentoring, and drawing on and sharing his experiences with them.

Ramp up
Unlike some prominent business figures, Leow was not born into a rich family. His father passed away when he was just 14 and his mother worked as a dishwasher to raise the family of six. After completing his national service, Leow got his first job as a sales engineer. As an employee, he found that he could not avoid office politics and decided he could not stay on. The alternative was to start his own business.

With limited start-up capital of just $10,000, however, Leow’s options were confined to businesses that did not incur high overheads. He bought a motorcycle, rented warehouse space and started a courier company. The early years were tough and, to keep the business going, he had to ask his mother for financial help.

Nevertheless, he managed to find his footing soon enough and, by 1985, the courier company had so much business that he had to hire 80 despatch riders to cope with demand.

Leow demonstrated his savvy in management. For example, he introduced what was basically a performance-based remuneration scheme. His riders either drew a fixed salary or their pay was pegged to the number of deliveries made. Either way, they drew the higher of the two. Clearly, this was designed to motivate them to make more deliveries, thereby driving more business for the company. This was also an effective way to keep his people.

Leow’s business acumen manifested in different ways. He recognised that he had a growing need for warehousing space, and if he were to continue renting, it would be a recurring cost. He figured it would make more sense in the longer term if he were to develop and build his own warehouses instead.

That big, bold step was not that easy to take, though. He struck a deal with the contractor. If Leow could not pay up when the construction was done, the contractor would take over the warehouse. While construction was going on, Leow managed to obtain backing from banks and potential clients, which led to the successful completion of this project — thus securing a solid platform to grow his subsequent businesses further and faster. He was just 24.

To be sure, Crescendas was not the first to develop warehouses locally, but Leow was savvy enough to introduce significant ways to make his properties more attractive.

For example, the company was among the first to build a ramp-up warehouse in Singapore. Such warehouses allow big trucks to drive up right next to the storage space to load and unload easily, whether the space is at the second level or higher. Having these ramps might entail some sacrifice in the total built-up area, but tenants need not hire additional manpower to load and unload the goods into cargo lifts.

New markets
Besides industry sector diversification, Leow makes it a point to build businesses in markets outside Singapore as well. He is already in Malaysia, Indonesia, Laos, China, Australia, Sri Lanka and the Maldives.

Leow is now especially interested in three markets, although he will be doing different things in each. First, he has his eye on Sri Lanka. While many investments in South Asia have gone to India, the much larger market, Leow envisions lots of potential for the smaller country to grow.

He sees the country playing catch-up, following years of stagnation caused by the 26-year war between the government and the Liberation Tigers of Tamil Eelam. With the government’s victory, he believes things will change for the better. “They are starting to take off, following the end of their civil war. That war has slowed the country by so many years. I want to be an early bird there,” he says.

Leow already has a hotel there. He sees a shortage of Grade A office properties, as demand from businesses will recover as more investors return to do business. He is confident that Sri Lanka will rebuild quickly, pointing out that its people have high literacy rates and speak English. Presenting Singapore’s first budget in 1965, Lee Kuan Yew had said his ambition was to have Singapore’s economy surpass the growth rate of Sri Lanka in five years.

For Ceylon, as the country was then known, had been way ahead of Singapore. Leow says, “It is one of those countries where you see a lot of potential to grow. Sri Lanka will be one of our key markets.”

Meanwhile, Australia is already a popular destination market for Singaporean investors of property. Numerous companies, drawn by the familiarity of Australia as a favourite holiday destination for Singaporeans, have invested significantly in Melbourne and Sydney.

Following years of growth, however, Leow agrees that the Australian property market is now facing a correction, as the once-booming mining sector is still in a slump and has undermined investors’ confidence. Perth, the largest city in Western Australia and where a lot of the mining action has been taking place, has taken a bad hit.

Leow is seeking to differentiate himself from mere property punters out for a quick flip. “When you are investing in a country, you are looking at the long term. So, when the sector is down, that’s when you go in.”

He observes that certain parts of the Australian property market are still “too costly”, and he will have to find the right time to move in — whether it is the residential or commercial sectors. “When we want to enter a country, it doesn’t mean we must go in tomorrow… but we will do so at the right moment.”

Leow is keen to invest in the German property market as well, which is unusual in that most property investments in Europe tend to be in London, which has liberal laws on foreign ownership.

“There are opportunities in every country. London is very good, but we’ve also analysed Germany. The German property market is a bit boring, but very stable. We are looking to buy assets that can give us a good rental yield, which will boost our recurring income,” he explains.

In other words, he is not looking for a quick capital gain. The German market may seem unexciting, but its stability, underpinned by the country’s strong rule of law, suits him just fine in seeking a steady income stream from fixed assets such as property. “These assets can’t be moved; we can’t bring them along. So, we have to make sure that we do it right.”

Leow may have set his sights on overseas markets, but he is not ignoring his core and largest market, Singapore. He says that, while it is not the most bullish now, even as the broader economic slowdown has gone on for some years with scant signs of recovery, the local economy was able to rebound quickly from previous crises quickly, and with less volatility.

He is optimistic and believes every sector has its bright spot. For example, the half-yearly government land sales still see healthy demand, and office properties in the prime areas are doing well, as are industrial and business park spaces.

Also, Singapore’s very open economy, which makes it vulnerable to external swings, has conditioned the domestic market to react quickly to market conditions.

Leow lauds the government’s quick moves to introduce cooling measures. Although the measures affected transaction levels and put a rein on rising prices, borrowings have not surged to unmanageable levels. He says, “As a whole, we are safe. All those measures put in place early by the government have enabled us to sail through the crisis.”

While certain industry associations have been calling for the measures to be removed, Leow urges caution on such calls. “We have to be very careful. If the market is properly managed, everybody benefits — including developers. When you don’t have a sound strategy, everyone suffers. If there’s a huge collapse, that will be worse. Some people in the property market have been affected [by the cooling measures,] but, in the bigger scheme of things, we are doing okay.”

Growth engines
To be sure, not all entrepreneurs like to diversify too much. Many have come full circle — starting with a core business, building it up then venturing into initially related new areas before moving into unrelated ones, and finally spinning off or exiting these businesses to refocus on their core business after some years. Leow acknowledges that different people have different strategies. Some prefer to focus on one industry; others, like himself, think it is better to diversify. “You pick and choose what you want to be,” he says.

For example, he was in electronics before, but abandoned it when he realised it was no longer “relevant” and he wanted to move into new areas. In other words, he is making changes when needed. Yet, such business transformations are not always easily done. “When you are doing well, you can transform; but when you are in trouble, and then you start to diversify into new things, that’s too late.”

There are also smart ways to expand. For example, if Leow lacks the right expertise in a sector he wants to invest in, he will invest in people and companies with the expertise. “We don’t start everything on our own. What we can do on our own, we do; when we can’t, we work with partners,” he says.

Leow agrees that one reason entrepreneurs are sometimes cautious about expanding into too many areas is that they cannot assemble a competent management team. After all, the entrepreneur cannot do everything himself. As such, Leow believes it is more efficient for him to go into complementary businesses such as real estate and hotels.

“There are complementary aspects; both involve buildings, space, assets. The expertise to build a building or hotel is also complementary, so there’s synergy.” Leow has invested in energy performance management as well via a company called E2Green. This subsidiary can be tapped to provide energy-efficiency systems for Leow’s properties, thereby helping drive energy savings, he adds. His clients benefit as well: For example, a recent project cost the building owner $5 million, but with the energy-efficiency system, the owner now saves $1 million in annual energy costs.

Eye on technology
So far, the sectors under Leow’s watch are contributing revenue fairly proportionately. For now, technology investments have the lowest absolute sales, but he believes they have “huge potential” and can be expected to double or even triple in the coming few years.

For example, he is invested in a company that specialises in “plasma fractionation” technology, a process in which components of blood plasma are separated for analysis, giving healthcare professionals a better understanding of certain issues that patients might have. Leow says this technology can result in higher yield, thus providing an advantage over the competition. Some of the company’s products are already approved by the local heath authorities and have started making sales. “Global demand for this technology is huge. We believe this will be a very successful investment of Crescendas.”

The growing prevalence of digital technology has not escaped Leow, whose two iPhones buzz continuously during his interview with Enterprise. Indeed, he is actively looking for ways to capture a piece of this growing pie and has seen encouraging results from entrepreneurs like himself. He says, “I heard this company made a small investment, but they now have $10 million in revenue in just 10 months and profit has reached half a million.”

He is keenly aware that not all mobile apps will automatically mean fast money. For now, he is interested in apps that offer services — such as those in the shared economy space — that can help lower costs. “You have to know where the need is in the market and also how to fill it, and do it efficiently.” In other words, Leow’s guiding principles still apply: Diversify into new areas, but be selective.

This article appeared in the Enterprise of Issue 750 (Oct 17) of The Edge Singapore.

As a young boy, Pulkit Jaiswal loved to accompany his father, an air traffic controller, to work. In the control tower, he would observe how pilots were guided in the air to land and take off. It was an experience Jaiswal likens to a trip to Disneyland. “It was amazing to see the dots moving across the screen. And when you looked up, you could see the planes landing on the ground.”

These days, Jaiswal is managing his own fleet of winged machines. The founder and CEO of SwarmX, a Singapore-based drone start-up, is building an autonomous drone system that allows users to manage a fleet of drones from a single interface. Unlike other systems currently in the market, Jaiswal says SwarmX does not require pilots to control and fly individual drones.

SwarmX has achieved this by mounting infrared sensors on its drones. The sensors work with an all-weather docking bay called the Hive that triangulates and guides the drone to its precise landing location. It is more accurate than using GPS, Jaiswal says. “If you have used the GPS on your phone, you’ll know how inaccurate it is. You literally have to recalibrate it all the time. It’s the same with drones. If you make a drone return home, its home position will probably be off.” This is due to the technological differences between military and consumer GPS systems.

Jaiswal says the ability to land drones accurately within a small pocket of space is probably SwarmX’s biggest engineering feat to date. The Hive will also transfer and read data to and from the drone while it is recharging its batteries. Data is cross-referenced with those drawn from other Hives and collectively interpreted. All this is done without any human intervention.

The result can be greater cost savings and higher productivity. Companies using SwarmX’s drones for surveillance and monitoring could get the same amount of work done in a shorter period of time. The system is currently on trial with DNV GL, a Norwegian firm that provides asset monitoring, advisory and certification services to a range of energy providers across the maritime, oil and gas and renewable energy sectors. DNV will use SwarmX’s system to monitor wind and solar assets within its portfolio of renewable energy providers in Southeast Asia.

Drones that think
Drone systems typically rely on computer vision to read and interpret data. SwarmX is looking to deep learning systems to make its drones smarter. A new area of machine learning, deep learning attempts to teach machines to think more like humans and move them closer to artificial intelligence.

“You can teach a computer to recognise a zero. But sometimes the computer cannot recognise it because someone drew an incomplete circle. So, we trained [our drones’ computers] to think like a human being by exposing it to a hundred different handwriting styles. The end result is that when it sees the number zero, it can tell that it’s a zero even if the circle is incomplete,” Jaiswal explains.

According to Jaiswal, SwarmX is one of the first companies in the world to implement deep learning in its drone solutions. He is confident that the system’s accuracy in recognising objects is unparalleled. “The computer we have on board our drones has the brain capacity of an eight- to nine-year-old kid. It is a self-thinking system,” he says. “The system is constantly learning. So, if it makes a mistake, the system will learn. And the next time it flies, you can be sure that it will never make that mistake again.”

Ultimately, the goal is to remove the need for a human to analyse data coming from the Hives. “If we can train a computer to make the sort of decision that a human makes, then you are also replacing the analyst. At the end of the day, all that is needed is for the end user to get the alert. By cutting out the middlemen, companies are able to save more in terms of cost.”

Nature as inspiration
Jaiswal got an early start in the world of technology. At 15, he sold his first piece of software to his father’s company. Now 23, he was recently listed by MIT Technology Review as one of 10 “Innovators Under 35 Asia” at the 2016 EmTech Asia conference. French magazine Futuremag named him one of seven “young innovators to watch”.

In 2013, he decided to turn his hobby of flying drones into a business venture. His company, Garuda Robotics, provided unmanned surveillance and fault detection services to several big agricultural companies. But the company’s growth was limited by a need to hire pilots who could fly the drones and change their batteries.

Jaiswal likens that stage of drone usage to the early days of the computer industry, when large mainframe computers were introduced. These computers needed specialised operators. And they would often break down. “There was a constant need for people to troubleshoot and fix problems that came up,” he says. So, even though computers provided strategic advantage, they were not always the cheapest or most efficient way to solve problems. But then personal computers arrived in homes and offices. “We stopped having to hire people just to make computers work for us.”

After two and a half years of running Garuda, Jaiswal realised that eventually someone would build something to replace the drone pilot. “And I thought that that person should be me.” He turned to nature for a solution and found it in bees, which he says work a little like his drones. “Bees go out and gather nectar, which is then processed into honey. Drones, on the other hand, gather visual imagery, which is then processed into workable information. I also studied how bees gather and communicate with each other as a group, which I thought was really efficient,” Jaiswal says. “So my vision was to build a physical hive for drones.” This led him to found SwarmX in April 2015.

Fixed-wing aircraft
SwarmX is currently working on expanding its suite of unmanned flight capabilities. The company plans to roll out a fixed-wing model in 2017. Currently, its drones can only remain in the air for a maximum of 30 minutes. The new fixed-wing drones should be able to fly for two hours and cover a distance of 200km, greatly enhancing their ability to conduct extended surveillance activities, particularly for oil and gas pipelines that stretch for hundreds of kilometres.

The company is also working on a larger version of the Hive, called the Hangar, for use by fixed-wing drones. It will allow for quicker landing and take-off as compared to current solutions for fixed-wing drones, which require a runway. The fixed-wing drones will therefore be able to land in small spaces.

Even as he looks forward to SwarmX’s expansion, Jaiswal says he is thankful for the upbringing that has led him this far. “As a kid, I was constantly experimenting with new things. And my parents were supportive in the sense that if I needed a certain component, they would finance it because they believe that experimentation is part of my development,” he says. “They also taught me to question authority. So, if a teacher told me something, I would always question it even if it were right. I believe that being inquisitive — constantly asking questions — is the most important quality of being an entrepreneur.”

This article appeared in the Enterprise of Issue 751 (Oct 24) of The Edge Singapore.

In 1990, Craig Perrin was sent to London by his company, a leadership development consultancy based in California. He spent seven months in the English capital devising products for the European market. London’s gloomy weather was a stark contrast to sunny California, but that period stands out as one of his most memorable work experiences. And, he credits his then manager, Jack Zenger, for giving him the opportunity and autonomy to carry out the assignment.

“He was an empowering leader,” Perrin says of Zenger, who founded and headed the leadership development firm Zenger Miller, and whom he considers a good leader. “He lived what he advised others to do. And, obviously one of the guiding principles of effective leadership is to lead by example.”

Perrin is now head of product development at Achieve+Forum. The company was formed following the merger of sales and leadership training firm AchieveGlobal and organisational change specialist The Forum Corporation.

He believes that with the right training, just about anybody can become a leader. However, “there is a finite group of skills that are really the foundation of effective leadership”, Perrin elaborates. Among these skills is a desire to work with others and to support them in their efforts to become successful while at the same time giving them autonomy. “Typically, people who like to micromanage may be able to achieve short-term goals, but they are not going to have happy, highly engaged employees, and as a result they are not going to be truly effective leaders.”

Indeed, a survey by Achieve+Forum last year showed that people, by and large, expected the same traits in their line managers. The questionnaire asked workers worldwide to cite a positive example of what a leader did in order to illustrate a particular skill.

It emerged that people regard a good leader as one who is involved — who seeks and responds to feedback and collaborates with employees to solve problems; is encouraging, and recognises and incentivises performance; is a guide, who provides constructive feedback and leads by example; and is one who is more of a mentor, developing employees and their skills, and challenges them with opportunities and independence. “It was the same all over the world,” Perrin says.

US President Barack Obama is another example of someone who is a good leader, he adds. “It seems to me that one of the most important things for leaders to do is to respect diversity,” Perrin says in an interview with Enterprise. “One key characteristic [of a leader] is respect for, or an ability to, leverage diverse people to work together for results.” Managers who are perceived as good leaders also make firm decisions, and “give some clarity on what needs to be done”, he adds.

Social intelligence essential
Significantly, despite the emphasis on technological competencies today, “technical” skills did not feature in the responses. “[The respondents] were really talking more about social, interpersonal skills, the way [leaders] interacted with others and set people up for success — creating assignments and putting guidelines and guardrails in place so that people were likely to be successful,” Perrin notes. “As you rise higher in the organisation, technical expertise becomes less important, and social intelligence becomes far more important.”

Perrin notes that a manager’s level of social intelligence is essential in the evaluation to become a future leader in the organisation. In fact, he says many organisations make the mistake of promoting leaders based on their field expertise. “The issue is they may not have the social and organisational skills. They may not understand fully what they are accountable for in a leadership role,” he explains. Consequently, some of these managers may end up struggling in their new role.

As such, what’s crucial in an organisation is someone, or a group of people, who possess what Perrin calls a “master skill” — that is, the ability to develop leaders. “[It is] the ability to recognise potential and to put people in situations in which they are going to grow as leaders, and therefore be able to fulfil these higher-level positions,” he explains. Such a competency should come from a company’s human resources department or senior leaders who are already successful.

Succession issues
When looking to fill a top job, one issue companies face is whether to promote from within or hire someone from outside the organisation. In Perrin’s experience, companies tend to hire talent [from outside] to fill the roles. “We see this as a general problem, that there isn’t the will or capacity to develop leaders from within.”

Companies also need to figure out what the strengths or weaknesses of the current leadership are, and to address them. “If those master skills are missing, it is easier to just go find somebody who already has these skills.”

But that may not work out as hiring from outside may have a detrimental effect on employees’ morale. Or, more importantly, “[the company is] not leveraging from within, not leveraging the years of experience people have gained from working within the organisation”, Perrin says.

In any case, how should companies groom their employees for higher-level roles? Perrin suggests a “period of testing” for those being considered for these roles.

“It’s a period of giving people stretch assignments, putting them in somewhat uncomfortable situations that are in some ways parallel to the kinds of situations they will face in their new role and seeing how they perform,” he says. They should be observed to see if they are able to deal with disagreements or unify people, for example. “Are they going to be able to deal with the shocks, internal or external, that hit organisations all the time? How [will] they adjust? How [will] they perform under pressure? Are they emotionally stable?”

They should receive a certain level of “coaching” to help them understand the implications of their actions. “It really is work, developing leaders from within the organisation,” Perrin says.

This article appeared in the Enterprise of Issue 751 (Oct 24) of The Edge Singapore.