As investors become more cautious, there is greater interest in growth-stage venture capital funding, says Isaac Ho of Venturecraft Group.

The number of venture capital (VC) deals globally has fallen as investors hit the brakes on their start-up investments amid volatility in China and a slowing global economy. As investors scale back, one venture firm in Singapore, Venturecraft Group, is betting they will turn towards growth-stage deals.

Venturecraft is a relatively young VC founded by local serial entrepreneur Isaac Ho. It has several big-name backers, including Sun Tongyu, co-founder of e-commerce giant Alibaba Group Holding, and Mike Cai, founder of Meitu. The latter is a China-based photo touch-up app valued at more than US$2 billion ($2.8 billion). Ho recently started a $50 million fund to invest in growth-stage medical technology and the Internet of Things, or IoT, start-ups. This is Venturecraft’s second fund in two years — it previously raised $4 million to invest in early- stage companies.

“I believe there will be a shift towards fundamentals in the next few years,” Ho tells Enterprise. “More resources will go into businesses that [produce] results.”

In Asia, VC deals have fallen for three straight quarters. In 3Q2016, the number of rounds and total funding dollars in the region declined to 323 deals valued at US$7.2 billion, less than half the total number of deals last year, according to “Venture Pulse”, a quarterly report by KPMG and CB Insights released on Oct 13.

Most of the deals in Southeast Asia over the last few years have been early-stage investments. However, as investment monies dry up, these start-ups are likely to face a dieoff. Golden Gate Ventures managing partner Jeffrey Paine said in a previous interview he expects nearly 30% of Southeast Asian startups to call it quits. As for the surviving companies, Ho thinks they would be looking for growth-stage funding right about now.

Local firms and venture capitalists say there is a gap in growth-stage funding, especially in the Series A and B rounds. “While there are investors and funds, the ecosystem is probably not established sufficiently to support all the potential great companies that will take the next leap,” says Wong Mun Yew, founder of DNA diagnostic firm, Asia Genomics. The company’s subsidiary, Imagene Labs, is planning to raise a Series B round of US$20 million.

There is only a small number of venture capitalists in the growth-stage investment space in Southeast Asia. Sequoia Capital, which recently invested in peer-to-peer marketplace Carousell, and SoftBank Capital are among the biggest. “Few funds operate with an investment size of around $10 million for each deal, so they are in a position to cherry-pick,” says Monk’s Hill Ventures (MHV) managing director Lim Kuo-Yi. The firm invests in Series A and B rounds.

As there are more companies seeking investments than VC firms willing to fund them, valuations in Southeast Asia are lower than in other regions. They can be almost 1.5 times cheaper for growth-stage rounds, says Ho. “I believe more VC firms will be looking into this space. Some venture capitalists might even change the split between early-stage investments and later-stage ones in their portfolio.” MHV’s Lim expects about 40% of its fund to go to Series B investments in the future.

There are drawbacks from funding later-stage companies: The returns on investment are not as attractive as with early-stage bets. “There is also a lot less room for unsuccessful investments because venture capitalists make fewer bets in late-stage investments,” says Vickers Venture Partners vice-chairman Jeffrey Chi, “but at the same time, there is a lot less risk because the companies are more mature.” Ho says companies at this stage would have a proven track record and revenue stream. This means they would have a better chance of an exit or buyout.

“We expect most of our companies in Fund II to be ready for an exit or buyout in two to three years’ time,” he says. Venturecraft’s Fund II, which invests up to $10 million in each startup, aims to give investors a return of two to three times their capital.

Fund strategy
Venturecraft, which is an appointed accelerator under SPRING Singapore’s Sector Specific Accelerator Programme, has invested in eight technology start-ups. Seven of the companies, including online publication e27, are from the first fund. The platform recently raised US$2.2 million in Series A funding led by China-based start-up services provider TechTemple Group. Venturecraft also participated in the round.

Another of its portfolio companies is spectrometer- maker Attonics Systems. Ho says the company is on the verge of commercialising its product, which is the size of a pen and is being marketed as the “world’s smallest spectrometer”. With Venturecraft’s help, the startup has seen plenty of investment interest in the past year, its CEO Philipp von Pein says.

“What we like is [Venturecraft] is made up of a diverse team of experts. This is critical to a start-up with limited resources and experience outside of the core business,” he explains. “But just as important, we felt that [Ho] treated us in a fair and transparent manner when it came down to the contractual negotiations.”

Venturecraft has announced its first investment for Fund II. Earlier this year, it led an undisclosed round for MiRXES, which runs diagnostic tests for cancer detection. MiRXES is already profitable, but is still awaiting regulatory approval to roll out its cancer-detection tests across Singapore. “We believe it has the potential to be our home-grown unicorn [a company valued at above US$1 billion],” Ho says.

Fund II will invest in at least six more companies in the next two years. The majority will be in medtech and the rest in ICT. “Three of the companies are home-grown. The rest are American companies that want to break into the Southeast Asian market and set up shop in Singapore,” Ho says. “Among them, there is IPO potential, but not in Singapore.”

He is clearly optimistic about later-stage investments: “Our funds are structured to be evergreen.” Venturecraft does not have an exit tenure for any of its funds, which means it invests in the companies until it achieves a buyout or public listing.

On that note, he plans to start a third fund to invest in late-stage companies or pre-IPO firms. “If the company has a strong value proposition, we would like to stay with it and provide it with funding for as long as it takes [to reach a buyout or an IPO],” he says.

“It also gives us the chance to build a longterm relationship with the founders and board members, who are often fund managers, that we can leverage on in future deals.”

It also makes better investment sense for its investors, according to Ho. “If we were to stay with a company under Fund I, its valuation at that point would be around $5 million. When it reaches growth-stage, it can be around $30 million to $50 million. If it does not choose to sell out quickly, it can raise funds through our Fund III with a valuation of above $100 million. As we have the same shareholders throughout our funding rounds, it gives investors who have invested with us from the start a chance to reap high returns.”

Tapping Chinese market
In just two years, Venturecraft has come to be known for its connection to the Chinese market. It helps Southeast Asian companies break into the Chinese market through its network of investors. It also helps Chinese companies invest in local start-ups.

“My view is, the unicorns in China are reaching their peak,” he says, “They need new markets to grow their businesses, but instead of starting from scratch in Southeast Asia, they are looking for M&A opportunities.” It does help that the valuations for start-ups in Southeast Asia are much lower — “tenfold cheaper”, as Ho claims — than China’s.

Many of these companies are eyeing Singapore start-ups. “We have a lot of R&D talent here, which can produce new intellectual property. There is also a trust factor in our regulatory strength to protect IPs,” he adds. As such, Venturecraft has attracted a host of Chinese investors, including those who have backed e-commerce platform Taobao. com. Other China-based investors have also participated in rounds with Venturecraft. They include Douglas Khoo, who co-founded Chinese travel start-up Qunar. Baidu is invested in Ctrip, a Chinese provider of travel services which has a 45% stake in Qunar.

While Ho’s investors did not want to be interviewed, they collectively say that Venturecraft understands the intricacies of forming partnerships with Chinese companies. “He was a clear choice for helming a regional venture capital firm that will bridge the link between Singapore’s start-up enterprises and high-growth markets like China,” they said in a statement to Enterprise.

Most start-ups in Singapore are looking to expand in Southeast Asia, but a growing number is aiming for the North Asian market. “We help them by introducing them to partners who can validate their products,” Ho says. That strategy makes sense for growth-stage companies that already have viable products in their portfolio.

For instance, Venturecraft is working with messaging platform LINE on the latter’s e-commerce site. Singapore companies that want to break into North Asia will be able to use the platform to test the demand for their products. It also helps companies navigate China’s complicated web of regulations, which differ from province to province. In MiRXES’ case, it successfully brokered a meeting with the Hangzhou government, resulting in the start-up receiving state grants and space to set up shop.

Important factor
When asked what qualities he looks for in his portfolio companies, Ho says simply, “People.” “Even if you have the best idea, if your team is not the right fit, it is unlikely you will make it,” he says. A good team, he explains, will be able to pivot when their ideas fall through, allowing them to command a higher valuation from investors in the future.

Ho is currently travelling regularly to close deals for Fund II. He knows he has to act fast because Southeast Asia’s VC scene will not stay stagnant for long. “I believe the valuation for growth-stage companies will go up as more investors move into this space.”

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

Logistics giant UPS will soon open a 3D printing factory at its existing logistics facility in Singapore. The move might seem strange, as one wonders how transporting freight can possibly relate to synthesising three-dimentional objects by adding successive layers of material. Yet one thing is sure — the company is well aware of innovations in technology that may potentially disrupt its business. And it is taking steps to stay ahead.

On Sept 19, UPS announced plans to expand its on-demand 3D printing network to Asia-Pacific with partner Fast Radius, which will provide 3D printing services, also known as additive manufacturing. Meanwhile, the company’s other partner, enterprise software giant SAP, would integrate its extended supply chain and internet of things solutions with UPS’ 3D printing network and logistics network.

In addition to the 3D printing factory, UPS will establish an advanced solutions team to provide supply chain solutions and promote wider applicability of 3D printing with customers. Businesses can use the Fast Radius on-demand production platform to produce industrial plastic parts, which are then expedited for delivery via UPS’ global and intra-Asia transportation network.

UPS is aware that the world we live in today is constantly changing. People used to rely on postal services as the only reliable means to deliver letters or important documents. But with the advent of the internet, these items can now be sent through emails or shared on the cloud. Similarly, photographs which were once shot using film cameras, are now taken using digital cameras, which allow instant review without any darkroom production. Film cameras have become a rarity today.

The common theme is digitalisation, which is changing the way we live, work and play. Increasingly, this disruption affects almost every industry and business model. Certainly, it is no different for UPS as digitalisation may present a threat to it. But it can also be an opportunity for the company.

“If you were truly only thinking about [delivering] packages, we would be scared of digitalisation. [But] we know [how] profound it means that with a click of a button, I can be in the middle of the US and print a part in Singapore 15,000km away,” Ross McCullough, president of UPS Asia-Pacific, tells Enterprise in an interview.

That would mean that an item produced at a factory need not be packaged and picked up by UPS. It also does not need to be sorted at its distribution centre, loaded on a plane and then flown over. With 3D printing, that can all be replaced with a push of a button. The only delivery required might be the last mile. In short, UPS would be rendered irrelevant and its services unnecessary, unless it adapts and innovates.

Enabling businesses
As the saying goes, if you can’t beat them, join them. But UPS is not turning into a manufacturing services company with 3D printing. Rather, it seeks to be an “enabler” of businesses, says McCullough. Fast Radius will provide the 3D printing services here, while UPS will leverage its physical distribution network throughout Asia-Pacific as 3D printed items may still require delivery for the last mile.

“We also have the expertise to advise customers when and where to apply [3D printing] in their business,” he says. This is offered by the advance solutions team that is available at UPS worldwide. They will be available to meet customers to discuss how 3D printing can be incorporated into their supply chain.

An important consideration is the customers’ parts lifecycle. This relates to the usage and replenishment rate of the parts. If a particular part is rarely used and/ or replenished, 3D printing might be a better option for them. The part can be 3D printed as and when needed. Businesses need not keep a physical inventory of that item but only a virtual one that is the parts specifications. This saves on inventory costs related to warehousing, transportation, insurance and others, says McCullough.

Furthermore, the whole logistics process is significantly shortened. There is almost no physical shipment, but more of a virtual one. This saves time and costs. The savings in resources can be better deployed elsewhere. “So to me, it is capital improvement. And the second is speed,” says McCullough.

Much has changed for UPS since it was founded in 1907 in Washington, US. Back then, the company used bicycles to deliver packages, before moving on to cars and planes. Today, it is an MNC with operations all over the world. Last year, it delivered 4.7 billion packages and documents globally. On a daily basis, it shipped 18.3 million packages and documents.

UPS started its Asia-Pacific operations in 1986, establishing its headquarters in Singapore. The company currently serves 39 countries and territories in the region with more than 3,500 points of access, including UPS Expressive, MBEs (Mail Box Etc), customer centres, authorised shipping outlets and alliances.

Stiff competition
To be sure, the upcoming 3D printing factory in Singa pore is not UPS’ maiden foray into 3D printing. In fact, in 2013, the company launched 3D printing services at six stores of The UPS Store chain of retail shipping, postal, printing and business services centres in the US. It was tailored to support small businesses, start-ups, inventors and artists. The pilot programme was a success, with 60 more stores added in 2014.

That same year, UPS began to take 3D printing more seriously from a mass manufacturing perspective. It acquired a minority stake in Fast Radius, a fast-growing company dedicated to on-demand parts manufacturing. “We try to look out far enough to see things that will change the way we must operate and serve our customers. And our strategic planning group continues to take either minority stakes [in such companies] or just do research in areas where we have to be very knowledgeable [in]. This is one [of them],” McCullough says.

He admits that competition is stiff in the logistics industry. But none of UPS’ major competitors has rolled out 3D printing services in a large and commercial way yet, he notes. That may soon change with TNT Express, which was acquired by FedEx for US$4.8 billion ($6.67 billion) in May. The Dutch logistics company is reportedly working to integrate 3D printing as part of its suite of solutions to customers.

McCullough, who has spent much of his career at UPS, reckons that 3D printing will start to gain traction over time. But for now and in the immediate future, he does not think it will fully replace traditional manufacturing methods as he expects injection moulding and reduction manufacturing to continue dominating manufacturing. He says: “I’m 50 [years old] and I don’t think in my lifetime 3D printing will fully replace traditional methodology in manufacturing.” That said, it never hurts to prepare for the future.

This article appeared in the Enterprise of Issue 752 (Oct 31) of The Edge Singapore.

The 2016 EY Entrepreneur Of The Year campaign came to a glittering end on Oct 21, with the naming of David Low, chairman and CEO of Futuristic Store Fixtures, as EY Entrepreneur Of The Year (2016) Singapore. Low was winner of the category award for Manufacturing Supply Chain. He will represent Singapore at the EY World Entrepreneur Of The Year event in Monaco in June next year.

The other entrepreneurs recognised during the evening were Lawrence Leow, chairman and CEO of Crescendas Group, for the Diversified Industries category; Helene Raudaschl, managing director of cold cuts distributor Indoguna (Singapore) for Food and Beverage Distribution; and Lim Yong Guan, chairman and a co-founder of jeweller Soo Kee Group, for the Lifestyle and Retail category.

EY also presented the Family Business Award of Excellence, co-sponsored by Barclays, to Jebsen & Jessen (SEA), which has businesses in manufacturing, engineering and distribution across several industries. In addition, the EY ASEAN Entrepreneurial Excellence Award was given to Tony Fernandes, Group CEO of budget airline AirAsia.

Futuristic Store Fixtures specialises in customised furniture and fixtures for retailers, and has outfitted the stores of global brand names including H&M and Victoria’s Secret. Indeed, even as consumer shopping behaviour evolves, Low remains upbeat about the prospects of the industry and his business. In his acceptance speech, he credited the company’s success to his employees, and added that he often reminds them not to use the “skills of today for the work of tomorrow”.

In an earlier interview with Enterprise, Low says e-commerce serves as an option for retailers and brands to increase their presence. He believes consumers would still want to touch and feel a product before purchase, which means physical stores would be adding value to a product. And, given the evolution in technology, Low has been planning for the use of augmented or virtual reality technologies to enhance his company’s supply chain management.

Indeed, innovation was a key theme of this year’s awards, as various speakers during the evening pointed to its necessity in the current climes. Global industry is being challenged by weak economic growth on the one hand, and disruption from hitherto unforeseen competitors that have been able to take advantage of new technology and changing consumption patterns on the other. “Technology has levelled the playing field,” says Max Loh, EY’s Asean managing partner. As such, digital-led entrepreneurship could serve as the next leg of growth.

In this aspect, the Singapore government is running numerous programmes to encourage entrepreneurship, particularly in upcoming technologies and fields. For instance, as highlighted by Lawrence Wong, Minister for National Development, Second Minister for Finance and guest of honour for the evening, there is a wealth of public sector grants and support networks for start-ups, including initiatives to help local companies expand globally.

More recently, the government is creating more “incubators” and so-called co-working spaces to help new businesses get going. Following the success of the Launchpad@one-north, where tech start-ups have fully occupied three blocks of offices and three more are being built, JTC is preparing another area in Jurong, which will host start-ups in engineering, cleantech and robotics.

Whatever the case, even a string of crises should not get one down, says AirAsia’s Fernandes. He recalls how the low-cost carrier still saw opportunities in a series of events that occurred over the past decade — from SARS in 2003 to terrorist attacks and the global financial crisis.

“This is the best time to build your brand,” he says, explaining that during the SARS period, AirAsia added capacity and took out advertisements even as most other airlines were cutting back. “I know Malaysians very well. If you put a fare low enough, they’ll risk their lives,” Fernandes jokes.

Businesses will face challenges, but “there’s [still] a window of opportunity”, says Futuristic’s Low. All it takes is “an entrepreneur who can see [it]”.

This article appeared in the Enterprise of Issue 752 (Oct 31) of The Edge Singapore.

GovTech aims to harness disruptive technologies for the public good. CEO Jacqueline Poh talks about the new unit’s ambitions.

Vance Sim, a student at ITE College West, has an app on his phone that notifies him when someone nearby is suffering from cardiac arrest. Called MyResponder, it lets the Singapore Civil Defence Force’s 995 Ops Centre notify volunteers about cases within 400m of their location. That way, they can provide help before the ambulance arrives.

Sim, who can perform cardiopulmonary resuscitation, has responded to about five incidents since downloading the app a year ago. However, he stresses that volunteering is not just about having CPR skills. “You can help direct the ambulance crew to the location, find the nearest automated external defibrillator or even just provide relief by being there,” says Sim.

MyResponder is one of many apps that the Singapore government has introduced in an attempt to tackle public problems with the aid of technology. Other apps include MyTransport Singapore by the Land Transport Authority, which notifies users when trains break down; and OneService by the Ministry of National Development, which allows users to report municipal issues such as faulty streetlights.

Now, the government is bringing its app savvy under one roof. On Oct 7, at a well-attended event at Star Theatre, Communications and Information Minister Yaacob Ibrahim launched the new Government Technology Agency. A spin-off from what was previously the Infocomm Development Authority, Gov- Tech will house the IT functions that were once part of the Government Chief Information Office (GCIO) within IDA. Meanwhile, IDA’s regulatory division has merged with the Media Development Authority to form the Infocomm Media Development Authority. IMDA will regulate both the infocomm and media industries, which are increasingly converging.

GovTech will spearhead the government’s digital and data strategy, and transform public service delivery with the help of data science and analytics, artificial intelligence and machine learning.

“It is probably the only agency of its kind in the world,” says Jacqueline Poh, GovTech’s CEO. “There are few governments where the IT function is so concentrated.”

The start-up approach
There are 2.4 million apps available for download on Google Play Store and two million on Apple’s App Store. You can download a ruler, a metronome and an alarm that only turns off if you give your phone a violent shake or scream at the top of your lungs. One of the most common routes for entrepreneurs who want to build a start-up is to find a problem that can be solved with an app. As Poh tells it, GovTech was created in much the same way.

“I started MyConnection SG. [At the time] IDA was in charge of measuring the wireless broadband connections for the 2G, 3G and 4G networks in Singapore,” says Poh, who was IDA’s managing director. “The way we used to do it was a bit more rudimentary. We had a vehicle which had handsets and instrumentation to test the signal in different parts of the island.”

Poh decided there had to be a better way to do it. “That’s when I pulled together the GCIO team and the regulatory team and said: ‘We’ll have an app!’” The team put together MyConnection SG, an app that crowdsourced the collection of signal strengths throughout the island. Besides reducing IDA’s manpower needs for data collection, Poh says it also gave citizens an avenue to complain about slow speeds. The app collected over 40 million data points from more than 4,000 participants. “It was a good way at that time of blending [the job of] being a regulator and being a developer,” says Poh. “Now, we realise that. So, we started GovTech.”

While part of IDA, the GCIO was responsible for implementing the Singapore e-government Masterplan 2011-2015. It facilitated co-creation among the government, citizens and private sector through apps and websites. GovTech intends to go one step further: Much like the start-ups that develop apps to wake you up or help you sleep, it will strive to build solutions that predict and address the needs of its citizens.

“Together with the fourth industrial revolution — from artificial intelligence to robotics, pervasive mobility and the use of the Cloud — overlay that on top of everything we consider traditional ICT… That in the long run provides more of the solution to the question [of] what does the user need,” says Poh. “That was one of the major impetuses for the formation of GovTech.”

Moving towards a smarter nation
GovTech intends to focus on three areas in its vision to build a smart nation: smart city services, digital government and citizen involvement. In the field of smart city services, Poh says the emphasis will be on improving and optimising services for the issues that Singapore is and will be facing. “[This includes] improving and optimising the workings of our cities in a productive manner, using sensors and IoT (Internet of Things), and using data analytics,” she explains. With the help of additional information, the government will be able to make better decisions and improve operational effectiveness.

“There’s still a lot that can be done in this area, particularly because of the constraints that Singapore will be under in the next few years,” Poh adds. An ageing population and limited land are driving the need to use technology and data to run the city, instead of manpower.

With digital government, GovTech aims to meet the needs of citizens, businesses and public servants in their interactions with each other. “It’s the government’s interaction and engagement with citizens,” says Poh. “To [meet user needs], you have to start asking: ‘What are citizens expecting from digital services?’”

Singapore has a digitally savvy population, which makes it possible for the government to adopt digital initiatives. At the same time, there are higher expectations of how those services are delivered. To meet those expectations, Poh says GovTech will focus on “very good user experience design, effective use of data analytics and good behavioural insight”. She adds: “This is the kind of experience that citizens are used to and increasingly demanding of government services.”

GovTech also aims to make digital services citizen- centric rather than agency-centric. This means thinking of specific cases when people actually make contact with a government agency, and setting up interactions around those events. “It could be anything from starting school, getting married, starting a family, getting a house — all the way to bereavement,” says Poh. The same approach should be used for businesses and public servants, she adds.

One example Poh cites is LicenceOne, a portal for licence application and management. A joint effort by a large number of government ministries and statutory boards — among them, the Agri-Food and Veterinary Authority, the Housing and Development Board, the Ministry of Finance and the Ministry of Manpower — the portal aims to deliver a more user-friendly and efficient licensing experience for businesses. Instead of dealing with each agency via a separate portal, business owners can do everything in one place.

Another initiative GovTech will be responsible for is the CorpPass. “One of the things we realised was that businesses don’t have an identity. Singaporeans have a national digital identity in SingPass… but businesses don’t,” says Poh. “Because we are getting so much more digitalised, we expect the government to conduct more and more business online. The businesses also needed an identity at the heart of it. That’s why we created CorpPass.” Launched in September, it will be progressively rolled out till December 2017.

Finally, in citizen involvement, GovTech hopes to enlist citizens’ help in solving issues. To do so, it is advocating open data movement through its open data platform Data.gov.sg, which houses publicly available data from government agencies for public use. “We try and get more real-time APIs out there for developers, journalists and even primary [school] five kids to use,” says Poh. An API or application programming interface is a set of definitions, protocols and tools for building software and applications.

The minimum viable product
With an agency dedicated to developing new technologies for its citizens, Singapore seems keen to shake off the stereotype that governments are slow to respond. Poh is already comfortable with the Silicon Valley buzzwords in development methodologies, using terms such as “minimum viable product”, “last responsible moment” and “agile” as she expounds on Gov-Tech’s approach.

Minimum viable product typically describes a focus on moving quickly instead of aiming for perfection. Google’s well-known beta products — Gmail started as an invitation-only beta release — are one example. The last responsible moment refers to a concept of delaying commitments in concurrent software development until you have the most information to make the decision. Agile refers to an iterative approach to software delivery where it is built incrementally instead of all at once.

“We have changed the way we build and buy digital products,” says Poh. For a Ministry of Manpower project to revamp the foreign domestic worker application and renewal system, the technology, policy and operation teams charted their progress together with post-its on the walls. “The deputy secretary of the ministry would come down every week and they would have a product to show every week. And if he needed to see the progress, it was on the walls,” she says. “It’s a transparent and collaborative process, and produced a situation where there were very few bugs in the system.”

The new approach demonstrated a better method of software development for front-facing applications as well as strong links to user needs and satisfaction. “It’s a different way of building a digital experience, and we are hoping to use some of that for our upcoming digitalisation efforts,” Poh adds.

Better government through technology
GovTech is not solely about building apps or user interfaces to facilitate citizen-government transactions. As Singapore embraces technology to improve its governance, Poh’s team is at the heart of it all. Gov- Tech’s data science team recently launched Pulse of the Economy, a tool for policymakers. Working with various government agencies, the team pulls data on all kinds of measures: electricity consumption, public transport, and even jobs. The point is to develop new indicators for economic and urban planning, “now-casting” the state of the economy.

“Pulse of the Economy is our endeavour to pull together high-frequency granular data from various sources, and trying again to meet the users’ needs,” says Poh. “We’re looking at different parts of the island to see where are the jobs, where are the job-seekers, where is the economy not doing so well, and what are the early signs that the economy might be in a state of change.

Through six capability centres — application development, cybersecurity, data science, government ICT infrastructure, geospatial technology, and sensors and IoT — it will experiment with and pilot new technologies. It will be responsible for building and operating government infrastructure — not only apps and databases but also large-scale systems. And it will manage the government’s ICT standards.

Given the huge array of responsibilities, Poh says it will be important to know when to cut services that are flagging. GovTech will be deploying a government application analytics platform that will analyse utilisation and engagement for various services. “If you want to be data-driven, it means it must be value for money, which means improving the systems that are working and changing the ones that are not, or, if necessary, informing the owner that it is not needed,” she adds. “And many times when we do that, the owner is surprisingly grateful.”

Will Singapore — and GovTech — be able to stay ahead of the curve? Does it aspire to be a beacon for governments around the world? “Much of the time the race is with ourselves,” Poh says. “If you start with the user need, the race will always be with yourself: How best can the government deliver digital services better? Thankfully, because we have a relatively demanding and digitally enabled citizen base, this keeps us on our toes. As long as we are making them happy, that would be the aim.”

This article appeared in the Enterprise of Issue 752 (Oct 31) of The Edge Singapore.

What if you can order a cancer test kit online? All you have to do then is set a date with the nearest phlebotomist or a GP to have your blood drawn. The sample is sent back to a designated laboratory. Hours later, the results are in the hands of your physician: You are either cancer-free or on the way to a hospital.

This is the hope of local biotechnology startup MiRXES, which has created a diagnostic kit for early-stage cancer.

“Cancer is asymptomatic in the early stages. There is also no accurate blood test for the disease,” says MiRXES co-founder Zhou Lihan. Currently, the most accurate — and costly — cancer tests involve invasive procedures such as a biopsy.

But this can change with microRNA (ribonucleic acid) technology. MicroRNAs are tiny RNA molecules in the bloodstream. Their levels are altered in the presence of diseases, including cancer. MiRXES’ diagnostic kit detects abnormal levels of microRNA.

“A healthy person will have a normal level of microRNA. When a person has cancer, the level can be too high or too low,” says Zhou. MiRXES is developing tests for lung, breast and gastric cancers. The results can be out in less than three hours.

MiRXES is seeking the Health Sciences Authority’s approval for its diagnostic kit pending the results of its clinical trials. “The process will take two years,” Zhou says.

If approved, the test will be made available in the major hospitals and healthcare screening centres in Singapore. The team will have to work with regulatory bodies and build consumer awareness before rolling out a test kit that can be ordered directly by consumers. Even so, consumers may need to meet certain criteria, which vary from country to country, before they can order the test kit.

The order-from-home kit is likely to be available two years after its hospital debut, says MiRXES’ other co-founder Zou Ruiyang. Both Zhou and Zou were formerly from the Agency for Science, Technology and Research (A*STAR).

The race to make a cancer test kit
As blood tests for cancer today generally cannot yield accurate results — except for blood cancer — hundreds of entrepreneurs have jumped on the bandwagon. At least 38 companies are developing or selling some form of diagnostic kit in the US, according to Bloomberg. The market for cancer test kits can reach US$200 billion ($278 billion) a year in sales.

The US government has also fuelled the movement with its new Blood Profiling Atlas project, which aims to jumpstart the development of blood tests for cancer. In Asia, hundreds of start-ups are developing diagnostic tools for cancer detection, according to Zhou, but most are testing for a mutation in DNA.

MiRXES is one of the few companies using microRNA for cancer detection. “DNA testing is used to predict the probability of cancer,” Zhou says. “MicroRNA detects cancer only if the disease is in the body. It tells you directly whether you have cancer or not.”

The firm’s closest competitor is San Francisco- based start-up Microculus. Its 3D-printed device Miriam uses microRNA technology to diagnose early-stage cancer. When asked about competitors, Zhou says, “Some firms use third-party microRNA technology, which will increase their cost and commercialisation risk.”

Long road ahead
Since it was discovered in 1993, microRNA has been linked to cancer detection. It can even tell the particular type of cancer. But the use of microRNA is not without its challenges.

There is no standardised method for detecting microRNA, says Nanyang Technological University assistant professor Katsutomo Okamura. “The degree of fluctuation of microRNA levels in body fluids is also not completely understood. This makes it difficult to find microRNAs that can be used as reliable biomarkers.”

MiRXES took two years to develop its base technology and another two years to tailor it for early-stage cancer. The next two years will be spent conducting clinical trials.

So far, more than a thousand patients have used the kit, with between 90% and 93% accuracy for lung, breast and gastric cancer detection. The firm will test up to 30,000 patients in Singapore, China, the US, Japan and South Korea. “It is important to show local data sets to get local authorities’ approval,” Zou explains. “Our data currently shows that the results are consistent in these countries. So, we do not have to develop different kits for different markets.” The trials are expected to cost up to US$10 million.

Zhou says the start-up is focused on developing the test kit for Asia because the application process is shorter and significantly cheaper. “In the US, the development cost of diagnostic tools is US$30 million to US$50 million. And commercialisation in the first three years can go up to US$90 million. It is only a fraction of the cost in Asia,” he says. Commercialisation cost in Asia is around US$20 million.

Accuracy alone is not enough for a new diagnostic kit to break into the market. It has to work with existing medical set-ups, says Zhou. The MiRXES test kit is compatible with current laboratory tools, he adds.

It only requires 2.5ml of blood. “This means we do not have to draw extra blood besides the amount used in a routine blood test,” Zhou explains. The results are also boiled down to a simple scorecard. Patients with scores above 60 have a high chance of having cancer. Patients who score below are likely not to have cancer.

Diagnostics industry is growing
Embattled US-based start-up Theranos made diagnostics a household name. And its fall did not turn investors away from the field. Amazon’s Jeff Bezos, Bill Gates, Sequoia Capital and Lightspeed Venture Partners are reportedly investing hundreds of millions in diagnostics.

In Asia, investment interest has also been picking up in the last two years. “There could be interesting opportunities out there worth picking [in diagnostics]. Investments in this area are longer term, but are more resilient and stable,” says Ong Jeong Shing, investment director of Venturecraft Group. The firm invested in MiRXES.

Industry watchers believe the diagnostics industry is ripe for disruption with newer technologies coming to market. “From an academic standpoint, new technologies outperform the traditional biochemical detection methods… the diagnostics industry may soon be able to provide more accurate and more comprehensive test procedures. I think this trend will continue,” says Okamura.

In Singapore, diagnostics start-ups such as One BioMed are already developing test kits that are cheaper, faster and more comprehensive. “Current point-ofcare testing for infectious disease is not very accurate and cannot test for several pathogens at once,” says CEO Thomas Richards. Based on a new technology — silicon photonics — One BioMed’s kit can detect multiple pathogens in a single sample.

While he is thrilled with the disruption in the diagnostics industry, Zhou is weighing every step he makes. “If you try to expedite the process, you are going to have quality issues,” he points out. MiRXES has learnt from the experience of Theranos and will focus on getting industry players to review its technology.

The firm is working with three institutions in the US, including Harvard University, to validate its test kit. MiRXES also sells its microRNA technology to pharmaceutical companies and research centres for other clinical applications, which will help validate its proprietary platform.

MiRXES is profitable from the sales of its micro- RNA technology. It made $1 million in revenue last year. It expects the number to double this year and reach $5 million in 2017.

If all goes well, MiRXES plans to test up to 10 types of cancer in the future. Ideally, all its diagnostic kits would be made accessible to the general public. However, Zhou says: “We don’t think molecular tests can be done at home for at least the next decade. But consumers can order them [from home] and have the samples sent to laboratories for testing.

This article appeared in the Enterprise of Issue 753 (Nov 7) of The Edge Singapore.

Christopher Quek of TRi5 Ventures works on tapping Asian family offices for funds

Christopher Quek is confident that Singapore can churn out more unicorns. The term, used to refer to start-ups with valuations of US$1 billion ($1.4 billion) or more, has already been applied to four locally based companies: e-commerce player Lazada, gaming platform Garena, gaming hardware maker Razer and ride hailing service Grab. But Quek thinks the start-up ecosystem can produce even more winners if the local business families take an interest in this space.

Quek comes from just such a family. His father is chairman of a locally listed company, so Quek grew up surrounded by the who’s who of corporate Singapore. “I call all of them uncle. They attended my wedding,” he says. And while he does not like to broadcast it, Quek’s family connections were crucial to helping him set up and fund his start-up accelerator TRi5 Ventures last year.

TRi5 (pronounced thrive) Ventures is focused on start-ups in the acceleration stage: They have secured funding from angel investors, built a team and a product and are seeing some traction. But before they are ready to tap venture capitalists for series A funds, these start-ups need additional funds, connections to customers and help scaling their business.

Tri5 Ventures currently manages $10 million in two funds. The Singapore Seed Growth Fund is focused on start-ups that require seed funding of $100,000 to $400,000 in order to grow in Singapore and expand to one other regional market. This $3 million fund was launched last year and funded solely by Quek and Far East Ventures, the venture capital arm of Far East Organization. The Growth Education Schools Fund, launched this year, invests in immersive programming schools. Funding for this fund has come largely from high-net-worth individuals and family offices.

“They are actually traditional [business] families. We consider it a win because it was very hard to convince this group to even invest,” says Quek. “We are proud to say that they have invested much more than what they usually invest. Angel investors in Singapore usually only invest up to $25,000. They put in up to a few hundred thousand.”

As he works on setting up two more funds at TRi5 Ventures, Quek is hopeful that Singapore’s family offices will gradually become more interested in startup investments. The Singapore Angels Fund, to be launched next year, will support start-ups at the initial stages of ideation. It will be tied to a new government grant scheme and will also have links with highnet- worth angel investors. A fourth fund, the Core Asean Growth Fund, will focus on start-ups not just in Singapore but also in Indonesia, Thailand, the Philippines and Malaysia.

A phone call away
Family offices have long been a source of funding for start-ups. In fact, according to The Global Family Office Report 2016, produced by UBS and Campden Research, direct investments in venture capital and private equity make up 11% of the global composite family office portfolio. That puts this asset class in third place by composition, behind developed-market equities (18%) and real estate direct investment (15%).

But Asian family offices are slightly behind their developed-market peers when it comes to investing in fast-growing companies. Quek thinks this is partly owing to a lack of familiarity. “Traditionally, family offices work with very standard products: property, public equity. They find investing in start-ups and new business very high risk. In their portfolios, the majority of the weighting is in the family’s own businesses or related businesses. And these would be non-tech businesses. If you do something like distribution and logistics, you might go into retail or property,” he says. “A lot of them are very new to this.”

Yet, these family offices could actually add a lot of value to the start-up ecosystem, Quek adds. “Family offices tend to ask more questions. And these are more on-the-ground operational questions, rather than strategic questions,” he says. Founders should not see these questions as interference, but as part of the mentoring process. In fact, start-ups that can tap the knowledge of the entrepreneurs behind these successful family offices would be getting a good thing. “One of the challenges entrepreneurs face is getting more credible people to sit on their boards. And it’s really tough to get people to even commit. If family offices are willing to sit on the board, I think it’s a very positive thing.”

Business in Southeast Asia also tends to be driven much more by family-owned companies than in developed markets. Quek has been able to put his family connections to good use at TRi5 Ventures, opening doors for start-ups that the group has funded. “In Asia, it is all about family connections. To me, it is not difficult to just pick up the phone and call someone who runs a large property group here, or a large retailer,” he says. One start-up managed to install its IoT sensory network at a local mall because Quek helped make the connection. “Now, the mall has a lot of data. And the IoT start-up has a very credible client.”

For most start-ups, Quek says, it would have been nearly impossible to get such a meeting. “Large organisations can be very resistant to innovation, which makes it very tough for start-ups. It’s much easier if someone can make a phone call. I say: ‘I’ve seen this, I’ve vetted this and I think it’s great.’ And they give you a chance. There is no guarantee that the organisation will accept the idea. But at least, the door is open.” Quek says the co-founders of TRi5 Ventures have been able to help make a connection for most of the start-ups they invest in. “It’s about two degrees [of separation] to get to the right person.”

Growing the ecosystem
Quek started his entrepreneurship journey with an e-commerce company, which he started within his father’s group. “I sold books and sold beauty products in Malaysia,” he says. The business was profitable initially and did well enough for Quek to turn his attention elsewhere. He later dabbled in the F&B and education industries too. “But I decided to call it quits when I saw Rocket Internet arriving and throwing money everywhere. That is not a game I was interested in. As a traditional businessman, I only believe in making profits. But with the new generation [of start-ups], it’s all about attracting customers.”

In recent years, Quek has turned his attention to the vibrant start-up scene. Since 2012, he has been director and incubator of Angels Gate Advisory, a community pro-bono advisory service supporting entrepreneurs. AGA has advised more than 500 start-ups and helped many of them get government grants and angel funding.

Quek’s interest in pro-bono work was motivated by a desire to pay it forward, a mindset that many entrepreneurs and investors here say has helped Silicon Valley build a formidable ecosystem. Given the nascent stage of many of Singapore’s start-ups, it will take more than the likes of Roger Egan, Darius Cheung and Eduardo Saverin to build a comparable network of funds, mentors and founders. Egan is one of the founders of online grocer RedMart, Cheung created and sold a mobile security app to McAfee, and Saverin co-founded Facebook.

One way to build a stronger ecosystem more quickly, Quek says, is to harness the wealth and experience of the tycoons who built Singapore’s businesses. “That is the only way that the Singapore ecosystem can get bigger. Right now, it’s at a level where there are a lot of experts and new-generation VCs. But [our] VC funds are really small,” he says. Golden Gate Ventures and Jungle Ventures reportedly have US$110 million in assets under management each after launching two funds. Venturra Capital, which is backed by Indonesia’s Lippo Group, launched with US$150 million in venture funds. “The wealth of the traditional families cannot be neglected if we want to get bigger rounds of funding,” notes Quek.

His ambition for TRi5 Ventures is to birth five new unicorns from the Singapore ecosystem. “By having these unicorns, you can inspire a whole generation of entrepreneurs,” he says. Funding alone will not do it. But getting everyone involved will.

This article appeared in the Enterprise of Issue 753 (Nov 7) of The Edge Singapore.

Heinrich Jessen, chairman of J&J SEA, talks about the guiding principles that made the company this year’s winner of the EY-Barclays Family Business Award of Excellence.

Heinrich Jessen, chairman of Jebsen & Jessen Group of Cos South East Asia (J&J SEA), is keenly aware of the contrasting fortunes of family businesses. There are some on both ends of the spectrum, but many are mediocre. “A family can get the best out of its business, [but] it can also bring out the worst,” Jessen says in an interview with Enterprise.

There is no question on which end of the spectrum J&J SEA stands — the family-held multi-industry group has been named winner of this year’s EY-Barclays Family Business Award of Excellence. “The award is for a family business that got it right,” says Jessen, a member of the company’s third generation, with quiet satisfaction.

J&J SEA traces its roots to 1895. Danish cousins Jacob Jebsen and Heinrich Jessen (Jessen’s grandfather, with whom he shares a first name) founded a Hong Kong-based trading business.

Business was hit during World War II. It recovered during the post-war boom but the internal political climate in Communist China then cast a shadow over Hong Kong’s free market economy. As a result, the three partners who were running the company decided to diversify into new markets. One remained in Hong Kong, another set up base in Hamburg, while the third, Arwed Peter Jessen, Heinrich’s father, moved to Southeast Asia in 1963. The companies maintained separate profit and loss accounts, but shared ownership, and remained privately held.

J&J SEA, which has its corporate headquarters in Singapore, oversees an Asean-wide group of companies in businesses ranging from the manufacturing of cranes to the distribution of food ingredients. It is one of the three main components of the Jebsen & Jessen Family Enterprise. The other two are Jebsen & Co, which is based in Hong Kong and is focused on the Greater China market, and Jebsen & Jessen (GmbH & Co), which is based in Hamburg, Germany, and is largely in the trading business.

J&J SEA was built upon the group’s capability of helping its business partners distribute and market various industrial and consumer products in the region. Instead of working with one partner/distributor for each market and product line, the companies could appoint J&J SEA to handle all of it.

As Asean industrialised, J&J SEA moved up the value chain from being a distributor. For example, it progressed from being an agent for a German heavy crane manufacturer to being its joint venture partner for building cranes in the region. Over the years, this venture, MHE-Demag, expanded into the design of the cranes as well. J&J SEA’s ventures have grown to include the making of feather bedding in Singapore, oil pump production in Indonesia and the distribution of luxury watches.

Joining the family business
With his family’s business network, it was natural to assume that Jessen would join the company one day. His interests, however, lay elsewhere. Passionate about environmental issues, he participated in projects in the jungles of Indonesia and Papua New Guinea.

Interestingly, it was during this time that Jessen’s interest in the family business was sparked. On one of the many long evenings in the jungle, during which he had little to do, he read a book that chronicled his family history. The account of his grandfather and grand-uncle’s achievements put into context the casual conversations he had shared with his father on the subject.

According to Jessen, it was at that point that he decided to enter the family business. This he did in 1995, after completing his post-graduate studies in industrial environment management at Yale University. He was put in charge of its environmental health and safety programme, which oversaw its chemicals, protective packaging and other industrial activities.

Focus on Asean
Under Jessen’s watch, J&J SEA has become a continually growing and nimble entity, hiving off business units that no longer made sense and investing in new ones. From its humble roots, it now has a turnover of more than $1 billion.

He believes the company’s advantage today still lies in what prompted its success here decades ago: its ability to move around the different markets. “Our value proposition is that we know how to navigate this fragmentation right. When you move products from one Asean country to another, when you are approaching the market in one country or another, be it a small or big economy, [our advantage is] we know the local markets,” he explains.

He also believes that the proximity of the markets to each other makes it efficient for J&J SEA to do business. For example, certain products, such as specialised machinery or engineering equipment, sell only a small number of units in each country. As such, rather than hire product specialists for each market, only one is required to service the region, resulting in cost savings.

Like most businesses, J&J SEA is feeling the effects of the current economic slowdown. “Definitely, it was not as rosy as say, five years ago. We struggle like the others,” says Jessen.

For a Singapore-headquartered company, it is telling that of all the Asean markets it is operating in, Singapore is facing the strongest headwinds, with Malaysia and Thailand close behind. There are some bright spots, however. For example, Indonesia is doing well, so much so that Jessen is “putting in a lot of effort” to make it the biggest market for the company. In addition, the Philippines and Vietnam are growing “nicely” as well.

Myanmar, touted as the last frontier, is growing at the quickest pace, albeit from a tiny base. Serge Pun, founder and chairman of the SPA Group, one of the go-to companies for investors keen on Myanmar, sits on J&J SEA’s board as a non-executive director. “There are plenty of opportunities there. We’ve taken a very opportunistic view, investing in a lot of things that we normally won’t invest in,” says Jessen.

Share ownership
Regardless of the kind of new business activity or market J&J SEA might venture into, it abides by several guiding principles. For one, ownership is not an automatic right. In fact, no family member can be a shareholder unless he or she works in the company. To raise the bar, a family member can work in the company only if he or she is accepted by the non-family management.

Such principles help ensure J&J SEA’s long-term good health. This is a task especially pertinent to Jessen, who is a member of the third generation. He is well aware of the Chinese saying that wealth does not last beyond the third generation. He is also familiar with the four Ds cited as the factors that tear families and family businesses apart: death, divorce, disability and disagreement. “When families get in the way of the business, it can get quite messy,” he says.

“On the other hand, when the family is part of the business, this provides continuity, as shareholders and management are aligned. In this case, they generally have a long-term perspective and that’s when family businesses can do very well and instil loyalty,” adds Jessen.

The family is clearly wary of possible pitfalls. For one, if every family member were given shares and wanted a say in how things were to be run, there can only be chaos and no clear leader.

Jessen estimates there are now about 300 family members from both the Jessen and Jebsen sides of the family. Yet, only three are shareholders. This is a result of the shares not being inherited, but paid for. “This helps to show that if you are joining the business, you have to make an investment and put money upfront. Or, in my case, [I had to take] quite a sizeable loan from my father that I spent years paying off,” he says.

This requirement of buying shares is to ensure that whoever enters the business is serious about committing his or her time and effort to work in the company. “These are sacrosanct principles that I think have served us well,” Jessen says.

“The philosophy here is that you are not a shareholder living somewhere else, at a distance, with little interest or no interest, merely waiting for dividends. One area where a family business can fail is when the appetite for dividends exceeds the need for funds for the business,” Jessen cautions. In addition, shareholders are required to sell their shares when they retire or resign. “That basically also means share ownership is more a form of stewardship. You don’t bring your shares into retirement; you don’t hold on to them when you no longer work in the business,” he adds.

However, he does acknowledge there are some growing practical concerns. As the company grows in value, it is increasingly difficult for a new shareholder to pay an outgoing one to take over his or her share of ownership. “So, the valuation that we will decide on will be, let’s say, somewhere between the nominal share value and the market share value. [And] it certainly has to be substantial enough that the share purchase is not taken lightly,” Jessen explains.

While the vast majority of the family does not own shares, they are given the opportunity to work at the company. Some might just want working experience before building their careers elsewhere; others might have an eye on eventual share ownership. Professional managers and non-family employees form the vast majority of staff members, and the only ones receiving dividends from the company are the three shareholders.

This might lead to the question: If most of the family does not work, own shares in or receive dividends from the company, what is there to bind members of the Jessen-Jebsen clans together?

Jessen assures us the family is very much what a family should be: Everybody is taken care of. For example, family foundations have been established with the purpose of assisting members in areas such as education and home ownership. “There is a safety net but not everybody needs it,” he explains.

While it is inevitable for many family businesses to mix work and family, this is not the case at J&J SEA. “We have very close relations, many family reunions. Our reason for getting together is not the company; similarly, when we work in the company, the centre of that is not the family. These two are quite separate. [Ours is] not the typical model,” he says.

This article appeared in the Enterprise of Issue 753 (Nov 7) of The Edge Singapore.

Fresh graduates looking to make their mark in banking could consider applying for the Compliance Professional Practicum at Credit Suisse, conducted by the Swiss bank’s in-house Compliance Academy. The academy is led by Alice Ng, Credit Suisse’s Asia-Pacific head of the monitoring, surveillance and testing unit. Earlier this year, Ng was appointed to the additional role of global head of Compliance Academy.

The academy runs a two-year programme that combines both classroom learning and two on-the-job rotations in various compliance functions. Lessons cover the technical aspects of products and regulations while stressing the soft skills required of a career in compliance.

Trainees are encouraged to complete the relevant classroom training in the first year. Concurrently, they also embark on the first of their two job rotations, each spanning a period of one year. The bank looks at the trainees’ background and strengths before placing them in various compliance divisions.

At the end of the first year, trainees are subjected to a performance appraisal, just like any regular employee. In the second year, trainees will be asked to list their rotation preferences. The bank will then try to accede to their requests, subject to the manpower requirements of the different divisions.

A few months prior to the programme’s completion, trainees are informed of the vacancies within the different compliance divisions and invited to apply to fill those positions. While Ng would like all trainees to be permanently posted within the compliance divisions, she concedes that there are occasions when supply far outstrips demand. Trainees will then be posted to other suitable positions within the bank.

Some trainees have, in the past, gone on to fill positions in the front office or become assistant relationship managers in the private banking space. Ng says the conversion rate from traineeship to permanent employment within the bank is about 80%.

At the end of the programme, trainees graduate with an International Diploma in Compliance, issued by the International Compliance Association. This professional qualification is an industry-recognised accreditation that can be used in partial fulfilment of the Institute of Banking and Finance’s advanced certificate courses.

Once the former trainee is posted to a permanent position, progression is as with any other Credit Suisse employee. “But [the trainee] has the advantage of their two-year training taken into consideration. Some of the trainees actually stick to the same job rotation, so they have two full years of that particular role. By the time they are in their permanent role, maybe they do another year; so, that’s three years,” says Ng. “If they meet all the promotion criteria and they have the sponsorship of the manager, we usually put them up. But that doesn’t mean they will be guaranteed a promotion, because we still go through a process in the promotion committee. And they will compete with people in the division but who did not go through the compliance academy programme.”

While promotion is competitive and based on merit, Shane Cleland, a compliance officer in the bank’s Asia-Pacific financial crime compliance risk and controls team and a graduate of the Compliance Academy, says trainees who are willing to work hard will be rewarded for their efforts. Cleland says, “If you come in with the right attitude and put in the hard work, the bank makes it very clear that they want to grow you.”

While declining to provide numbers, Ng says the bank’s remuneration for compliance officers is “competitive”. A survey by recruiting firm Kelly Services in May found that vice-presidents of compliance and risk functions in the banking and finance industry can expect to get between $10,000 and $17,000 a month. How it began Credit Suisse’s Compliance Academy came about following a discussion Ng had in March 2011 with Eoin O’Shea, the bank’s chief central compliance officer. The two noted the growing need for professional compliance officers in Asia and competition for well trained candidates.

Ng also wants to ensure that Credit Suisse has ready access to a pool of resources when it needs them. “We want to be prepared,” she says. “We train them now, so that we have the resource when we need it.”

The academy has trained 91 participants, 15 of which graduated this year. It took on an additional 19 new trainees this year, 12 of whom were women. Thirteen of the trainees are fresh graduates and the rest are mid-career movers.

Taking into account the 26 trainees from the 2015 batch, there are 45 trainees in Singapore undertaking the programme. Encouraged by the results of the acade my in Singapore, Credit Suisse plans to roll out similar academies in countries such as the US, Switzerland and Poland. The bank also set up an academy in Hong Kong earlier this year.

The right fit
Ng says a financial background is not a requirement for a career in compliance. The Compliance Academy takes people from different backgrounds. Ng says trainees have included engineers, mathematicians, IT executives and even teachers. “We look for people with different backgrounds so that they bring in different skill sets. For example, we take in people with a technology background so that, when they come in, they are able to help us with the IT issues that arise from surveillance and monitoring. We also had people with a teaching background and they became very good trainers, delivering very good compliance training to the front offices and compliance divisions. We see skills in various areas, so we do not limit our intake. We just explore the talents that they bring in.”

Ng looks out for mature individuals who know how to carry themselves professionally. “It’s not all academic results but also the way they speak and present themselves.” Ideal candidates also do some preparation beforehand. “We do ask quite a lot of questions about compliance. If they are able to articulate, if they have reached out to compliance officers and understand their lives and can explain it to us, that is a demonstration of their initiative and those are the people we will select.”

Competition for the academy’s limited intake is stiff. Ng says the academy received more than 500 applications for the 2016 intake, further evidence of the keen interest in a compliance career. Indeed, at a recent forum on the future economy, Minister for Education (Higher Education and Skills) Ong Ye Kung made the point that there is a need for at least 1,200 professionals in finance, mainly in IT and compliance.

One of this year’s successful applicants is Cheryl Chan, a recent graduate from the Singapore Management University. Chan’s interest in compliance stems from the role’s alignment with her personal values. An umpire with the International Table Tennis Federation for the past five years, Chan says her officiating duties have cultivated a strong sense of fair play in her. “What I saw during my education was that I could actually do something similar for the banking industry. It doesn’t have to be just the sporting industry. It’s a meaningful job because people in compliance spend their time every day doing the right thing.”

This article appeared in the Enterprise of Issue 754 (Nov 14) of The Edge Singapore.

The Singapore Venture Capital & Private Equity Association is the oldest of such bodies in Southeast Asia. Now, chairman Jeffrey Chi says change is necessary if the country is to remain the No 1 spot for VC deals.

When Jeffrey Chi joined venture capital firm Vickers Venture Partners in 2005, he was looking for a job that would allow him to do consulting for businesses “but with some skin in the game”. An engineer by training, Chi had gone back to school during the dotcom craze, as he felt he “didn’t quite understand what was happening in the world” at the time. Upon graduating with a PhD in organisational knowledge and systems engineering, Chi joined a management consultancy. But he felt something was missing. “We talk a lot. But at the end of the day, it’s not my problem.”

These days, Chi has more than just some skin in the game. Vickers Venture Partners is currently ranked 11th among the world’s best-performing VC fund managers. It is also the only Singaporean firm in the Preqin list of consistent top-performing VC fund managers. Meanwhile, Chi has gained respect in the industry. On top of his role as Asia vice-chairman at Vickers Venture Partners, he sits on multiple boards and is chairman of the Singapore Venture Capital & Private Equity Association (SVCA).

His career has taken off in tandem with a surge in start-up and VC activity locally. According to an Infocomm Investments report, the number of local start-ups nearly doubled from 24,000 to 42,000 between 2005 and 2013. VC investments in Singapore-based tech firms totalled US$1.7 billion in 2013. Investments in Singapore- based start-ups represented 19% of VC funding in Asia, putting Singapore ahead of Japan, South Korea and Hong Kong. Singapore also led the way in VC deals, with a 40% share of all deals in Southeast Asia.

Chi says the industry has grown significantly since he first got into the game. “The big pivot came around when the National Research Foundation… decided to back R&D, back businesses in selected industries, in a big way. That was really what changed the way people thought about VCs and start-ups,” Chi says. “Prior to that, there were a handful of us investing in the market. There weren’t that many deals.”

In 2008, after a study to identify weaknesses and gaps in the local entrepreneurial landscape, NRF came up with the National Framework for Innovation and Enterprise. Some $100 million has since been allocated to help entrepreneurs through funds and grants such as the Early Stage Venture Fund and the Technology Incubation Scheme.

Now, as Singapore becomes a hotspot for start-ups, the VC industry is flush with funds. In July, Vickers Venture Partners announced it had raised $86 million for the first close of its Vickers Venture Partners Fund V, set to be the largest to be raised by a Singapore- based VC firm. The liquidity has meant more competition for start-ups, however, and Singapore is not the only country in the region that is attracting attention. In Indo nesia, investments more than doubled to US$18.9 million ($26.3 million) in the first quarter of this year, from US$8 million a year earlier, according to a report by The Wall Street Journal. Funding is also up in Malay sia, Vietnam and Thailand.

Competition for start-ups, funds
With all that money sloshing around, Chi says it is getting more difficult to find great start-ups. “In the early days, there was less noise. You saw a good company and you recognised that it was a good company very early on. These days, everyone wants to and thinks they can start a company, and so it’s a lot more work filtering out the real deals. I guess it makes our work a little tougher. It has become somewhat more competitive in nature as well.”

Chi is not complaining, though. “That’s the sign of a healthy industry actually,” he says. And the rise in the number of start-up incubator and accelerator programmes has helped cultivate better start-ups too. “For us particularly, in the early stages, the more companies that come out of accelerators and incubators the better the business for us because we have a broader list of companies to select from.”

What Chi is concerned about is whether Singapore is keeping up with the rest of Southeast Asia and the world. “I don’t think we are doing anything wrong. It’s just that other people aren’t staying still. Governments across Southeast Asia have seen what Singapore has done and are following suit. They are beginning to pay attention and say: ‘Hey, this is important. Why should Singapore benefit from all of this?’”

Chi thinks Singapore should therefore rethink its regulatory regime. In fact, SVCA has suggested to the Monetary Authority of Singapore that some improvements be made. He says, “Generally, among countries that have VC regulations, because some countries don’t regulate VCs at all, Singapore is actually not too onerous.” But SVCA members worry that this may not be enough. “Other countries are actually trying to attract VCs.”

For instance, MAS currently requires VC firms to get a licence before they set up shop. Chi says smaller VC firms may choose to bypass Singapore altogether if they have to be licensed. “If you really want to make Singapore the hub for start-ups and VCs in Southeast Asia, then you have to be a lot more aggressive than having okay-ish regulations.”

In August, MAS managing director Ravi Menon said the government was reviewing rules for VC firms.

Chi says changes in the tax regime could be helpful too. In the US, the VC industry has been helped by tax incentives. Managers of VC and [private-equity] funds pay a lower rate of tax on their long-term capital gains than households pay on regular income. Chi says this move has helped boost the VC industry there. “[VC investment] is already a bit more risky and less liquid,” he says. Tax incentives therefore give investors a greater reason to invest.

Singapore has a taxation regime that is slightly favourable to VC funds and managers. Approved VC fund managers receive a 5% concessionary tax rate. But Chi believes the country’s favourable tax regime is not as well communicated as it could be. Also, he sees potential to further encourage investments. “It’s like when they set up [real estate investment trusts]. They made dividends from REITs tax-free. If there were a similar scheme, it would certainly help. That among the international community is more effective.”

Tax incentives are important because Singapore is disadvantaged as a venue for VCs to set up shop. “We don’t have a very large market,” Chi says. While a VC might choose to operate from Singapore, the companies it invests in will have to come from around the region. “So, does it really make sense to set up in Singapore? That’s one disadvantage. The deals themselves tend to be not only in Singapore.” The cost of operating a company in the city state is relatively expensive as well, he adds.

Getting organised
As VC and PE activity picks up in the region, Chi says, SVCA is getting better organised to help its members and promote local development of the industry. “In the last year or so, we’ve set up an advocacy committee. We are now able to more readily enter into discussions with regulators,” he says. “Prior to this, we were very reactionary.”

For instance, when the government put out consultation papers, the SVCA secretariat would send these papers to certain members, collate the responses and submit them. “We now have a panel of lawyers and accounting firms that reviews this and is a little bit more thoughtful about how we respond,” Chi says.

SVCA is also trying to facilitate collaboration with its peer associations in neighbouring countries. “We recognise that if the final destination for investment is not Singapore but across the region, then we should work more closely with our counterparts across the region,” Chi adds. In August, SVCA and the Indonesia Venture Capital & Startup Association signed a memorandum of understanding to form the Asean Venture Council. The two parties will collaborate and leverage each other’s strengths, synergies and best practices in a bid to further strengthen, promote and support the regional entrepreneurial and financial ecosystem across Asean. AVC will assist its member associations and promote VC activity across the region. In October, the Thai Venture Capital Association joined AVC.

Chi says most of the money flowing into start-ups today still comes from Singapore. “About half the deals across the region are somehow related to Singapore, whether it’s a company registered in Singapore or a VC based in Singapore. But this is down from more than 60%. It’s slowly eroding. That’s why it’s important from Singapore’s perspective to try and solidify our position in certain areas.”

AVC would help facilitate discussions with governments in the region. “We now are able to have dialogue with the Indonesian and Thai governments through our partner associations,” Chi explains. Meanwhile, associations in other countries would be able to tap SVCA’s experience and talent pool.

“We’ve been around for 24 years. We are one of the more experienced. The Indonesian association was just founded earlier this year. The Philippines doesn’t have an association yet. We are one of the more established associations in the region. In a way, they look to us for guidance and for some resources,” Chi continues. “One of the things we offer is the ability to tap our advo cacy committee. If you think about it, our committee comprises lawyers and accounting firms based in Singapore, but most of them practise across the region anyway. So, they’re familiar with the laws and regulations in these countries, the difficulties of how to operate in some of them. We can quite easily extend help to them as well.”

Looking for the exit
The other initiative SVCA is working on is the public market for fast-growing companies. In Singapore, there have been few successful VC exits via an IPO. “There’s no viable IPO market in Southeast Asia yet, and that’s something the association is also working on with the Singapore Exchange to see whether we can improve the situation,” Chi says. “But it’s not an easy problem to solve. The biggest hurdle is probably educating the market so that they see value and the potential in companies that don’t turn a profit yet but are gaining very good traction.”

Nasdaq-listed Amazon.com has had a spotty record of profitability — it turned a profit in two of its last five financial years. Yet, the stock has gained nearly 250% in the last five years. It currently trades at 173 times its trailing 12-month earnings and has a market capitalisation of close to US$360 billion. In fact, the US market is home to many unprofitable companies that are worth billions. Box, an online file-sharing services provider, is worth close to US$2 billion. JD.com, an online retailer, is worth US$34 billion.

Singapore investors have taken much less kindly to companies that do not make money. To be fair, the Singapore market lacks a listing with the size and pedigree of an Amazon or even JD.com. Among the startups that Singapore can boast some kind of association with, the only ones with significant international scale are gaming platform Garena, gaming hardware maker Razer, online retailer Lazada and ride-hailing app maker Grab. But many market watchers expect these companies to shoot for a listing in the US. According to a recent Bloomberg article, Garena is aiming for a US IPO in two to three years and possibly a secondary listing in Southeast Asia.

Chi says a US listing would make the most sense for investors. “Take a company like Garena. If they were to list here versus in the US, where would they get a better valuation? The answer today is without a doubt the US. No one in their right mind would say ‘let’s do SGX’ instead. If you have half a dozen companies trading at [high] multiples and the local investment community agrees to back [these start-ups], only then will it work.”

Wouldn’t international investors be just as willing to buy Garena stock if it were listed here instead of in the US? “For now, it’s not proven. Is it a risk they’re willing to take? The impact on valuation is extremely high. If they’re able to trade on the Nasdaq at 50 times [price-to-earnings] and here they trade at 20 times PE, it’s a big difference,” Chi explains.

Picking winners
At Vickers Venture Partners, the strategy is not to worry about exits. Chi says, “When we invest in companies, we never have a predetermined exit strategy. Our fundamental belief is that you build a good company and the exit will sort itself out.”

To pick winning investments, Chi prefers to focus on the team behind the company. “The biggest risk in funding a company is really understanding the entrepreneur.

Even though we do our due diligence, some things we don’t figure out until we actually get in bed. And so companies that we like, we will continue to back,” he says. “Even though we are an early-stage investor, as long as we still believe there’s upside, there’s no reason for us not to continue funding a company.”

Chi says the Vickers Venture Partners investment team spends a lot of time trying to understand the entrepreneurs. “[We look at] the make of the team, what drives them, what inspires them, their integrity levels, at all the different things you can try and decipher,” he says. Companies that the firm invests in should typically be operating in a space that Vickers Venture Partners believes in. “They need to have a competitive advantage that will allow them to take market leadership in that space. The most important [factor] is still the team.”

Sometime ago, the firm invested in a company in China and it was later sold to Baidu. The founder served a two-year management contract with Baidu, then left to start another company. “Because we trusted and liked the entrepreneur, we decided to invest in the company,” Chi says. “He’s had the experience. He’s been through it before. So, he’s a little wiser. He is someone that we felt comfortable working with. We understand his style of working. We understand how he overcame the problems in his previous company. There were many things about him that were appealing.”

More than a decade after Chi joined the VC industry, a great deal has changed. When it comes to evaluating investments, however, the fundamentals remain the same.

This article appeared in the Enterprise of Issue 754 (Nov 14) of The Edge Singapore.

SINGAPORE (Nov 29): Metech International will be the first listed company to raise funds through bonds on homegrown crowdfunding platform, FundedHere.

Metech, the e-waste management solutions provider, aims to issue $2 million worth of bonds at an annual coupon rate of 8% over 24 months. The company will use to proceeds to expand its supply chain business.

SGX’s Central Depository will be used for the bonds issue and bondholders will receive interest payments in their CDP accounts.

FundedHere will be the first private funding platform to use CDP as a depository.

This follows FundedHere’s announcement in July that its platform was open to listed companies to raise up to $5 million in bonds with tenure of 12 to 24 months at a coupon rate of 8% to 9% per quarter.

Companies using the platform need not issue a prospectus.

“It’s not easy for some listed firms to raise funds via other traditional channels given the current market environment,” says Michael Tee, chief executive officer, FundedHere.  

“So we are extremely pleased to have the support of CDP as FundedHere becomes an alternative fundraising platform for these companies,” he adds.

“Due to the low share prices currently, it may not be practical or possible for some listed companies to issue new shares to raise capital,” says Simon Eng, chairman of Metech.

FundedHere provided us with a viable alternative, one that is simple and hassle free,” he adds.

Shares of Metech are trading flat at 0.3 cent.

SINGAPORE (Nov 29): Singapore banking salaries are set to grind to a 3% growth rate, falling behind the 4% growth in tech sector salaries for 2017, according to the 2016 Asia Pacific Salary Budget Planning Report by Willis Towers Watson.

This is reflected in Asia Pacific as well, with banking sector salaries set to grow by 4.8% in 2017, the second slowest rate of salary growth among industrial sectors in the survey. The survey received responses from 4,000 respondents across industries and job grades.

"The data, allied with what we're hearing on-the-ground, shows that as traditional banks move services online in the hope of staying competitive, by better meeting customers' evolving demands via digital transformation, they are competing for the same pool of skills as the traditional high-tech sector," says Sambhav Rakyan, Data Services Practice Leader, Asia Pacific, Willis Towers Watson.

As business become more data and technology driven, the competition for talent in technology now comes to the forefront, maintaining tech salaries while others decline.

"What the data is telling us is that, amid a general slowdown in the banking sector and more broadly across the financial services sector, salaries for digital roles within the financial sector are holding steady," says Sambhav.

"It doesn't mean tech talent will necessarily get more in a monetary sense, but it does in percentage terms," he adds.

Banking has now fallen out of favour as an industry of choice among top-tier university graduates according to Greg Kuczaj, Asia Pacific Head, Global Financial Services practice, Willis Towers Watson. Technology firms are increasingly attracting key talent at the mid and senior management position a well due to less regulation, innovative and entrepreneurial work environments and competitive total rewards packages.

"There is continued attraction and retention pressure from non-financial services firms, such as those in high tech or fintech, as the pay premium in financial services has decreased to where it is no longer a major attraction," says Kuczaj. 

In this day and age of digital transformation, therein lies a need to review and redefine talent strategy to identify key skills and differentiate compensation for talent in key roles.

"In Silicon Valley, for example, top talent is often rewarded with equity in addition to a competitive base salary and annual bonus. It's very compelling," says Kuczaj.

"To truly compete, financial services firms will need to think beyond merely using pay to attract and retain talent.  Career opportunities, organisational reputation, security and manager/leadership effectiveness are all critical drivers of attraction and retention," he adds.

SINGAPORE (Nov 30): The Infocomm Media Development Authority on Tuesday launched PIXEL Studios to put online content creators such as YouTube stars and game producers under one roof to foster a community of creators and help them create more innovative content.

PIXEL Studios, a 25,000 sq ft space at the Pixel building in one-north, has a full suite of facilities for both gaming and digital content productions. The two-storey studio boasts some 10 filming sets, green screen studios, hot-desking spaces as well as make-up and changing rooms. It has production areas that resemble old diners and kopitiams, with a Star Wars Battle Pod, smacked in the middle - just in case the creators gets bored.

“Through the programmes, facilities and resources available, this will be a common place for content creators to meet with like-minded people from diverse backgrounds… [to] experiment with new ways of media content creation and storytelling,” says Minister for Communications and Information Dr Yaacob Ibrahim who officiated the launch.

The studio will play host to a series of workshops, networking sessions and hackathons for content creators. IMDA and Maker Studios is starting a boot camp for some 50 short form video makers, including both filmmakers and game producers.

StarHub, which signed a new partnership with IMDA, will open a call-for-proposal for the community at the studio. It will also run workshops on new media technologies. Sony Interactive Entertainment will loan development kits to startups that want to produce games for the PlayStation, while Samsung is providing creators with its virtual reality technology.

Starting next year, 17 game startups will move into PIXEL Studios. “We can work with [online content creators] to do marketing, and voice acting for games,” says local game startup Kaiju Den’s co-founder, Leslie Ng. He adds that more online games today are being played like a game show where audiences can interact with the person playing games through live streaming.

IMDA adds that there will be plans to roll out more facilities for the content creators. Nanyang Polytechnic will manage the studio.

Smart lock maker igloohome wants to do more than partner players in the sharing economy. The company is starting to explore potential partnerships with those in the on-demand services economy, which can be mutually beneficial.

igloohome was founded on the idea of making home sharing easier. Its founders understand the pain and hassle that comes with traditional locks and keys. “The challenge is that when you need to let your guests in, you need to coordinate the check-in time with them. Unfortunately, they might be late for whatever reason, but you still need to be around to pass the key,” Anthony Chow, CEO and co-founder of igloohome, tells Enterprise in an interview.

Chow was once a host on popular home-sharing site Airbnb, just like his co-founders Walter Wang and Kelvin Ho. Wang is also igloohome’s chief operating officer, and Ho is chief technology officer. In trying to solve the logistics of providing accessibility to their guests, the trio could not find a viable solution to their problem. Thus, they decided to devise one of their own.

igloohome’s smart lock uses an eight-digit PIN code generated by the igloohome app. The PIN code only needs to be entered into the keypad of the smart lock to unlock it. Users can share the PIN code through SMS, WhatsApp, email and even social media to provide accessibility to others. Alternatively, the Bluetooth key on the app can be used to unlock the device. However, in case of emergencies, the smart lock still has a traditional keyhole, which can be unlocked with a physical key.

igloohome formed an official partnership with Airbnb last November. The latter helps promote the purchase and usage of igloohome’s smart locks among its hosts who are based in Asia-Pacific. This helps hosts offer their guests a better accommodation experience. Those who use igloohome’s smart lock can share the PIN code with guests via the Airbnb platform once a reservation is made. It is valid for only the duration of stay and will expire on the check-out date. All of this provides convenience and ease for both parties.

“If you are a host, Airbnb will recommend you igloohome: Why don’t you try it to enhance your guests’ check-in experience? If you are a host in Singapore, Malaysia, Thailand, Australia, Japan, China and other countries that we operate in, you will be able to purchase the smart lock and install it on your door,” says Chow.

igloohome also has a similar partnership with Airbnb’s Chinese competitor Xiaozhu. It is currently in talks with another Chinese competitor Tujia to forge such a partnership, according to Chow.

Similar pain points
Chow, Wang and Ho previously worked on the “analytics side of things” for Singapore Telecommunications. After participating in and winning a hackathon, they joined a start-up accelerator in the US called Dream- It Ventures, which helped them connect with Airbnb. igloohome pitched the idea of collaborating with them and the rest, as they say, is history. “[Partnering] Airbnb was like a beachhead into the smart home business,” says Chow.

Now, Chow thinks partnering players in the on-demand services economy will help the company tap a whole new customer base. These could be people who are not into home sharing, a base igloohome is currently missing out on. Chow says igloohome is talking to app-based cleaning, laundry, food delivery and other such companies — not just in Singapore, but in the region too.

Essentially, igloohome is still addressing the same pain points. Home residents still need to find an efficient and effective way to provide access to cleaning, laundry and food delivery personnel. “It might be problematic to pass a regular key to [guests] so that they can enter the house. With a smart lock, however, you can remotely allow people to enter the house,” says Chow.

Chow reckons that the opportunity for growth here is attractive, as there is synergy between the convenience provided by igloohome’s smart locks and those of on-demand service companies. Moreover, the on-demand services industry is growing. “The value proposition is there and they see it too,” he says.

igloohome is also talking to hotels, serviced apartments and property developers. But a deal might take longer to hash out, as they are quite particular about how the smart locks can be customised to fit into their respective ambience and interior design. “The easier market for us is still the residential and people doing rentals,” he says.

Hardware and software
igloohome does not manufacture the hardware of its smart locks on its own, but outsources it to original equipment manufacturers. The start-up also works with locksmiths to help with installation works and provide other hardware support services. What igloohome brings to the table is the creation of its software such as the app and PIN code generation.

Initially, the early iterations of the smart lock were using Z-Wave and ZigBee, which are home automation communication protocols connected through WiFi. These are used to transmit information between the app and smart lock. That changed, as Chow realised that WiFi coverage was not strong enough throughout Asia-Pacific.

Also, WiFi connectivity has its own set of challenges. Not everyone who buys the smart lock can install and use it straightaway because a WiFi router is required as well. And too often, the router gets disrupted by thunderstorms.

“So, we just went with Bluetooth connection because it has low energy usage too,” says Chow. Using the smart lock has not been all that smooth. The igloohome app, which can be downloaded and used on most iOS and Android devices, has encountered software glitches. According to one user from Hougang, his Samsung Galaxy S7 smartphone could not unlock the smart lock using the Bluetooth key, but it operated just fine on an iPhone.

Still, asked whether he would recommend igloohome’s smart locks to others, he tells Enterprise: “Yes, why not?” He believes igloohome will eventually fix the software bugs like it did previously when he encountered software installation problems with his smart lock.

Meanwhile, igloohome has released the pre-order campaign for a new product, which it claims to be the world’s first smart lockbox. Users can store up to six keys or seven keycards within the device. Again, they can retrieve the items with a PIN code or Bluetooth key. igloohome is expected to launch the smart lockbox at the Airbnb Open 2016 event this month in Los Angeles.

This article appeared in the Enterprise of Issue 755 (Nov 21) of The Edge Singapore.

Professor Rick Smith describes his first day in human resources (HR) as “the worst day of my life”. It was more than two decades ago, when some of the employees at his company’s manufacturing plant were attempting to take union action. And Smith’s place in the company baseball team was seen as an asset in negotiations.

Overcoming his initial difficulties, Smith says he managed to get the union to stand down. The incident left him fascinated with human behaviour. “That episode essentially took my career in a whole different direction, focusing on people in business,” says Smith. He went on to pursue a Master’s degree in organisational behaviour and a subsequent career in HR, including stints at consulting firm Accenture, where he was a partner in the US and managing director in Singapore. Now, Smith is hoping to inspire a new generation of students that is similarly interested in the human aspect of organisations.

Smith is associate dean for general management programmes and a senior lecturer in strategic management at the Singapore Management University. Earlier this year, he was also appointed academic director of SMU’s new Master of Human Capital Leadership programme. The course was designed in partnership with and is accredited by the Chartered Institute of Personnel and Development, a professional body for HR and people development. Graduates will obtain the top-level CIPD Level 7 Advanced Qualifications Diploma, an internationally recognised professional qualification in human capital leadership, and will start their journey towards the Chartered status of the CIPD.

The evolution of human resource
The role of the HR department has evolved considerably over the years, says Smith. The early HR movements achieved recognition of the labour force as more than just cogs in a machine, and the development of labour policies and standards within organisations. In the 1970s and 1980s, formal HR departments were born. Besides ensuring that company regulations were adhered to, they also saw to the training and career growth of employees. “Now, we are seeing another evolution towards [the concept of] human capital,” says Smith. Employees are seen as a capital asset, necessary for a company’s success.

Smith says companies are at different stages of evolution. Factors such as management orientation, the nature of the industry and even the culture within a company may affect each company’s point on the continuum. In comparison with other companies in the region, he adds, companies in Singapore are very progressive in the way they think about developing and retaining their talent. Companies are also receptive to bringing value-added skills such as analytics into the workplace.

Where local companies do lag is in flexibility and mobility. Smith says companies in Singapore usually have a “one size fits all” contract. “We don’t have flexible contracts and we tend to have pretty rigid work hours and structures.” And given the high quality of life in Singapore, employees find it hard to leave to explore opportunities elsewhere. “We offer people opportunities to work in neighbouring countries as a development assignment, but many a time there is no interest,” he notes.

Changing job description
As the concept of HR evolves, so has the job. Smith says many people choose a career in HR because they consider themselves a “people person”. But the modern HR professional must be able to meld people skills with big data skills. “When I tell some of my students that the future of HR lies in analytics, they get discouraged because they chose HR not because of the math, but because of the people,” says Smith. “But the reality is that if we do analytics, we can demonstrate our value more conclusively.”

With HR departments being a cost centre rather than revenue centre, Smith says, one of the key challenges facing them is justifying their relevance within the company structure. As such, above and beyond administrative tasks, adding value has become a priority for many HR departments. One way to do that is through data analytics.

The HR department of a retail establishment, for instance, could apply predictive evaluation and modelling to distribute employees among stores. “Given that these are the people we have, where and when do we want them in the stores? How can we schedule more effectively such that we can reduce our costs and increase our sales?” Smith says. “This would have a positive impact on the company’s strategy.”

To make time for such analysis, HR departments must move more rapidly in their adoption of automation. Over the years, Smith says, HR has become a “catch-all” for all things administrative within a company. This has placed a strain on the already-limited resources within HR. He identifies certain responsibilities such as payroll and changes in home address that are now ripe for automation. In fact, larger companies can derive greater benefits from implementing automated shared services, says Smith.

“That’s the productivity savings we want to focus on. That’s the part where we want to spend less of our time on, such that we can make time to apply those analytic tools and thinking,” he says. He also suggests setting up various centres of excellence within the HR department. Each centre should focus on developing deep expertise in some of the core competencies of HR, such as compensation, and learning and development.

Preparing for disruption
Will the roles of the HR department one day be fully automated? Already, companies are adopting automated recruitment processes. Résumés are screened and candidates tested by systems that filter them according to pre-set criteria. “Candidates are getting ‘thanks’ and ‘no thanks’ replies, when in fact no human has come into contact with them or their résumés,” says Smith.

He believes automation will free up more time for higher-value-added work such as strategic thinking. Moving forward, the profession has to redefine its roles and responsibilities. “We sort of have a common idea of what HR is about, but the boundaries are not clearly defined yet. Does ‘dinner and dance’ fit into our job scope? How about mobility and relocation issues? So, the longer-term challenge is how to define the profession.”

As HR professionals work more closely with other company managers, Smith says they will need to fix language barriers. HR professionals, he notes, like to use HR terms such as employee turnover, employee engagement and performance optimisation. “But this is a different language from what our business partners are speaking. We need to speak the business language. We need to talk about capital efficiency and return on investments. We need to understand what drives the business, what drives profitability, the risks involved and how to mitigate them,” he says. “We need to be able to listen to and understand the business needs of other functions within the company, and then translate the HR view into the numerical, quantitative view of business.”

Proper accreditation within the industry is another important issue. While many professions are governed by standards agreed upon by conventions and professional bodies, the HR profession continues to play catch-up.

“If you think about the history of our orientation towards humans in the workplace, it has evolved over the years. But the profession is still struggling to catch up with that evolution. Indeed, there is still much work to be done,” Smith says.

This article appeared in the Enterprise of Issue 755 (Nov 21) of The Edge Singapore.

Garena is expanding into e-payments and e-commerce. Both industries are well populated with players that do not seem interested in making money. Is Singapore’s most valuable start-up likely to come out ahead?

Singles’ Day sales in China are running out of steam after eight years. The oneday shopping bonanza saw growth slow to a modest 32% this year, compared with 60% in 2015. But consumer confidence in Southeast Asia is still holding up, with some industry watchers expecting the numbers to climb this year, as more consumers — armed with smartphones — are swinging towards online shopping.

In Southeast Asia, sales on Singles’ Day increased 167% last year, with Singapore at the top of the list, according to advertising and market research firm Criteo. Singapore-based Zalora’s overall sales was 30 times more than on an average day, and Alibaba Group Holding backed Lazada saw orders triple in Thailand, based on data compiled by Tech in Asia.

This year, a newcomer joins the ranks to capture a slice of the online shopping pie: Shopee, powered by Southeast Asia’s most valuable start-up Garena. During its inaugural 9.9 Mobile Shopping Day sale this year, orders increased fivefold.

In fact, Shopee has been gaining ground in the Southeast Asia e-commerce space. The two-year-old start-up is present in six Asean markets, as well as Taiwan, and has an annualised merchandise volume of US$1.5 billion ($2.1 billion) — a touch above Lazada’s 2015 gross merchandise volume of US$1 billion.

There are about 1.5 million registered sellers on Shopee, while 70% of the user base are repeat customers. Garena recently raised US$170 million in Series D funding to help Shopee grow in Southeast Asia.

But the rise of flash sales and online shopping also signals an underlying problem in Southeast Asia: Many e-commerce platforms have not started to think about profits. Meanwhile, retailers and logistics partners are starting to feel the pinch from lower margins as competition among marketplaces grows.

Over the years, Garena has built a sucessful e-sport and online gaming business. The company grossed revenue of more than US$300 million last year and its gaming business is profitable, says an industry source. It counts Tencent Holdings as a backer and is valued at US$3.8 billion today. But the company is trying to grow beyond the gaming industry. Last year, it started Shopee, and in 2014, an e-payment services firm, AirPay, as an attempt to transform itself from a gaming arena to an internet consumer giant — much like Tencent.

Although both Shopee and AirPay have seen some early success, the cards are still up in the air on whether Garena will be able to replicate the same long-term success it has had with games amid the stiff competition and razor-thin margins in the e-commerce and e-payment spaces.

Garena in the making
Founded in 2009, Garena started as an online gaming company distributing popular titles such as League of Legends and Fifa Online 3. League of Legends has been a major contributor to its success. The game has helped the company amass a user base of more than 40 million gamers and turned Garena into an e-sports powerhouse in the region. Its e-sports business contributes more than 70% of the company’s total revenue. Company officials say the group’s total revenue has grown 90% per year from 2011 through 2015.

The man behind Garena’s vision is Forrest Li, an ex-Motorola Solutions manager and a lifelong gamer. He rarely assumes the public face of Garena today but keeps a tight rein on the company’s business direction and corporate culture.

Nick Nash, a former private equity investor with General Atlantic, says: “In 2014, before I joined Garena, Forrest sent me a copy of the company’s manifesto [he created], which is a list of values that Garena stands for. It took me by surprise because it is the only company I know that states staying humble as a core value.” Nash’s former firm backed Garena. The same year, he hopped over to Garena and became both its group president and public spokesperson.

The company has already raised more than US$500 million and plans to go public in the US in two to three years. It is mulling a secondary listing in Southeast Asia, but Nash plays down the possibility that the listing will happen soon.

He shows plenty of confidence in the company’s e-commerce venture, saying: “In the last 25 years, the most sustainable business in the e-commerce space is one that is asset-light and skewed away from electronics [like Alibaba]. Shopee follows this model.”

Garena has not always been successful with new ventures. The use of BeeTalk, an online chat app launched in 2013, is still mostly confined within Garena’s own gaming circle. For now, AirPay and Shopee seem to have better luck. AirPay, which works like an EZ-Link card, reportedly has an annualised gross transaction volume of US$510 million. It has also added 130,000 locations to its regional network, where customers can top up their e-wallets.

Building marketplaces in Southeast Asia
For gaming companies, growth mostly comes in two forms: diversification into other fields and building different types of games. “Companies in the gaming industry operate in a ‘high risk for high return’ environment. Diversification strategies can help reduce capital risk,” says Wang Joongshik, EY Asean transactions leader for technology, media and telecommunications.

Nash believes the answer for Garena lies in building marketplaces, such as e-commerce platforms. Although online marketplaces see stiff competition, Nash says Garena has some advantages. At its fundamental level, the technical skill sets required to build e-commerce or e-payments platforms are not significantly different from an online gaming arena. It also helps that Shopee and AirPay can tap into Garena’s massive user base.

“In the process of building the game business, we got involved with a diverse range of consumers, from cities to remote villages in Southeast Asia. It gives us the opportunity to learn about their needs and demands [beyond games],” he says. The insight helped shape the services on Shopee and AirPay today.

Wang says it may be easier and quicker for Shopee and AirPay to acquire customers compared with many of their peers in the region. “This helps to mitigate a common challenge faced by B2C digital companies in Southeast Asia, where they burn cash mostly to grow the customer base. So, when the game company has a loyal customer base, it should benefit from entering new businesses even when the profitability of the industry is relatively small,” says Wang.

But Sim Hwee Hong, a partner at PwC Singapore, says pure e-commerce and e-payment businesses may still be able to grow faster than a game company. “The target audience and technical capacity between gaming platforms and retail marketplaces are different,” he says. “[As such, the latter have more resources to focus] on developing the optimal platform for customers and suppliers.”

E-commerce should be a means to an end
In Southeast Asia, industry watchers are generally optimistic about e-commerce. Most believe there is still a lot of room for growth, citing various market reports that project a doubling or tripling of e-commerce values in less than a decade.

What is clear is that there is no dominant player in the Southeast Asian e-commerce space. Tokopedia, Carousell and Shopee, to name a few, would have to duke it out for the top spot. According to App Annie, Carousell and Shopee are equally popular. Tech firms such as Facebook and Instagram are also slowly moving into these spaces. Earlier this year, Facebook allowed authorised Facebook groups to sell products.

Christopher Quek, managing partner at Tri5 Ventures, says Southeast Asia will not be an easy stage to conquer. “Many e-commerce companies fail, as they regard Southeast Asia as a single market, when in fact it has 10 different regulations and non-homogenous cultures and shopping habits,” he says.

His solution: E-commerce start-ups need to integrate with other types of businesses. For instance, Carousell uses its e-commerce platform to raise capital to acquire other companies, which helps it become something a lot bigger, he says. Amazon.com, too, is branching out into cloud services and logistics. “Garena should maintain its strategy for Shopee and AirPay to stay within Garena’s core business and not just be isolated businesses,” he says.

About 30% of AirPay’s transactions come from Garena’s main platform and Shopee. A large number of Shopee’s customers came from Garena’s gaming platform. Nash plans to add “lending services” on AirPay for Shopee’s merchants.

“Many of our sellers have working capital [issues] to deal with when they encounter a mismatch between payables and receivables,” he says. “As their e-commerce platform, we have direct insights into how much credit they may need and the [interest] rates to give.”

On its own, Shopee is focused on building communities as a way to gain customer loyalty. “We bring in merchants with prior experience in selling online [on sites like Facebook],” says Shopee CEO Chris Feng. This provides a better customer experience for buyers, particularly in dealing with queries or when a transaction goes wrong. Shopee has also made it easier for merchants to transfer the products they post on Instagram to their Shopee accounts in certain markets.

The e-commerce platform is also one of the few that uses Escrow services to prevent fraud. “Only when buyers are satisfied with their products do we release the money,” Feng says. He has a team of 40 data scientists to screen for fraud as well.

Other e-commerce players like Carousell also have “group features” to connect buyers and sellers. Recently, Carousell launched a new feature: sub-categories specifically tailored to the different markets in Southeast Asia. “We want to be more than just a platform to transact on, and we pay a lot of attention to offer our communities a localised experience,” says Chai Jia Jih, Carousell’s international vice-president.

Battle for dominance in e-payment services
The e-payment market is set to grow, says Igor Pesin, investment director of venture capital firm Life.SREDA, which backs a string of Air- Pay-like companies. “In 2015, e-commerce had US$11 million in total retail sales, with shares of 35%, 25% and 20% taken by Indonesia, Thailand and Singapore respectively. It’s expected that by 2025, the total sales volume would increase by eight times and, as a result, would facilitate the growth of complementing activities such as e-payments,” he says.

But as what is similarly happening in the e-commerce sector, e-payment start-ups are facing pressures. Competition is brutal as it does not take much to start an e-payment company, says Pesin.

Margins are also poor — between 1% and 1.5% on average, says Paddy Tan, founder of InterVentures Asia. “Providers that will stand out are those that have offerings beyond [e-wallets]. Not just paying for online purchases but day-to-day usage such as utility bills and buying a movie ticket.”

The e-payment start-ups also face competition from emerging B2B tech companies that want to help start-ups build e-payment capabilities. MatchMove is an example. “It is a payment operating system that enables companies to quickly create their version of PayPal or AliPay, thereby sharing in revenue transactions,” says Finian Tan, co-founder of Vickers Venture Partners. The firm is a backer of MatchMove.

“AirPay still has a head start,” Nash says. “First, our in-house businesses use AirPay. Second, we have more than 130,000 top-up locations. It will be very hard for an independent start-up to reach that scale quickly.” He plans to double or triple the number of top-up locations in Southeast Asia in the near term.

While AirPay is profitable on a “gross profit” level, Shopee is not. When asked, Feng is secretive about revealing exactly how Garena plans to monetise Shopee. “We plan to charge value-added services such as promoting [a listing],” he says. It is hoped that, by the time Singles’ Day rolls around next year, the picture will be a lot clearer.

This article appeared in the Enterprise of Issue 755 (Nov 21) of The Edge Singapore.

Autodesk sees a future in which machines design furniture for 3D printers. Do designers and manufacturers have a place in it?

Yuki Ogasawara, a 16-year-old high school student in Tokyo, saw the Fukushima disaster unfold on national television with his family in 2011. While many of his peers expressed their grief on social media, Ogasawara went to his room and began working on a drone for disaster relief.

Five years later, Ogasawara is showing off a 3D-printed drone at an Autodesk University conference in Las Vegas. “3D printing allows for the drone to be fully customisable to meet different needs in relief operations,” Ogasawara tells Enterprise. His drone, which weighs less than most commercial ones, has been made possible by Autodesk’s technology. Among other things, Autodesk produces software that is used in designing and printing 3D products.

Not long after the disaster, Ogasawara did an internship at Japanese robotics company exiii. There, he met Yuji Fujimura, who leads strategy and marketing for Autodesk. “I told him he could use Autodesk technology to take his drone to the next level,” Fujimura says.

Indeed, 3D printing is making it easier for people such as Ogasawara to jump-start their creations. It is being embraced by large companies seeking answers to engineering challenges too. Last year, Bastian Schaefer, innovation manager at Airbus Group, collaborated with Autodesk to build a 3D-printed partition for an aircraft. The final product is 45% lighter than an ordinary partition.

“The partition takes 900 hours to print, and it is only possible using 3D printers,” Schaefer says. He plans to partner with JetBlue Airways to try out his partition. The biggest challenge is to make the product affordable. Currently, he needs to print 116 pieces. He hopes to reduce this number to about 10 and cut production time to less than 100 hours. He reckons that cost will come down by 50% as 3D printing becomes more of a mainstay in the manufacturing sector.

As more individuals and businesses use the technology, it could have greater implications for the manufacturing sector. For Singapore, in particular, new manufacturing technologies have the potential to alter the fabric of the economy. “As manufacturing gets more digital and compact, you could see urban factories in a densely populated environment such as Singapore,” says Diego Tamburini, Autodesk’s industry strategist for manufacturing.

Over the years, escalating labour costs have led numerous local manufacturers to relocate to cheaper markets such as Vietnam and Malaysia. Labour costs currently make up between 20% and 31% of all expenses for Singapore businesses, says the Ministry of Trade and Industry. But this may change with 3D printing, also known as additive manufacturing. “Labour becomes less of a factor,” Tamburini says. “Instead, the key factors would be technology capabilities, access to skills and distance to customers.”

Local industry watchers say there are opportunities to turn Singapore into a smart unmanned manufacturing hub as the city state embraces more automation and develops its capabilities in fields such as 3D printing. “As the manufacturing industry moves towards a highly automated and increasingly labour independent one, markets such as Singapore, Japan and Australia with a high cost of labour can get back into the game to produce high-quality products with a minimal labour force,” says Isaac Ho, founder of venture firm Venturecraft Group.

The country has some advantages over its regional peers. In the last five years, the government has launched a host of initiatives to encourage the use of 3D printing technologies locally. This includes the $200 million National Additive Manufacturing Innovation Cluster, which aims to help local businesses enhance their products with 3D printing. “NTU’s Singapore Centre for 3D Printing has 102 PhD students conducting research related to the field,” says Associate Professor Wong Chee How of Nanyang Technological University.

As a result, a small but fast-growing industry focused on 3D printing has sprung up. A few local startups are even developing their own printers: Gilmour Rockets is working on 3D-printed parts for use in the aerospace industry while Structo is doing the same for dental devices.

Manufacturing as a service
To be clear, additive manufacturing is not meant to replace traditional manufacturing. “It is too tedious to use additive manufacturing to make tyres, for instance,” says Jeff Kowalski, chief technology officer at Autodesk. “But it would make sense to 3D-print the mould to make the tyres because you can add cooling channels throughout the frame using 3D printing. Cooling channels will allow the tyres to be produced 10 times faster than conventional methods.”

Meanwhile, a more affluent middle class is increasingly demanding customised products instead of mass-produced goods. “Increasingly, we see shoppers who are willing to pay a premium for tailored products,” says Tamburini. But making goods in small batches, often with intricate designs and complexities, can be costly. “With 3D printing, goods can be manufactured as close as possible to the customer, which reduces inventory [and logistics] costs for businesses. In some cases, customers can print the items themselves in hardware stores,” he says.

Today, small businesses that make products on 3D printers reportedly have profit margins as high as 50%. There are not many of those businesses in Singapore. Industrial-grade 3D printers tend to be too expensive for many start-ups. According to Chua Chee Kai, executive director of the Singapore Centre for 3D Printing, a printer for industrial production can cost about $1 million.

There are government schemes to defray the cost, such as Innovation and Capability Vouchers, and the Capability Development Grant. The latter covers up to 70% of costs. But the number of applicants that intend to buy 3D printers remains small.

Autodesk reckons there are opportunities here for entrepreneurs to offer 3D printing facilities. “Smaller companies that are producing less than 1,000 units cannot afford the factory-grade equipment. A service like that will lower the barriers to entry for more start-ups and businesses to adopt 3D printing,” says Tamburini. In the US, commercial spaces where anyone can go to print an item are much more common than they are here.

Recently, logistics firm United Parcel Service joined forces with manufacturing 3D printing company Fast Radius to launch an on-demand 3D-printing facility in Singapore. It will make items for small businesses, which will be delivered by UPS ideally within 24 hours. Amazon.com, which will reportedly set up shop early next year in Singapore, has already filed a patent for mobile 3D printing trucks.

Another challenge that stands in the way of 3D printing adoption is the lack of standards. “It is still a nascent technology suffering from growth pains,” says NTU’s Wong. “There are many hurdles to overcome, such as multiple print heads to speed up the process and developing new types of materials. There is also the lack of international standards and process certifications that preclude its wider-spread adoption.”

Tamburini says there is a gap between software capabilities and printers. “There are designs that printers are capable of, but there are no software tools that can create them,” he says.

The next step: Generative design
Even as 3D printing is changing the manufacturing field, new generative design tools are hinting at a different way of inventing and designing products for the manufacturing industry.

Also on exhibition at the Autodesk University event was a chair, proudly designed by Autodesk’s generative design tools. A designer set certain parameters, ranging from the choice of materials to the method of construction. The designer also determined the furniture style by feeding the software with sampler products. Then, the software took over, churning out hundreds of designs. This list was culled by the designer and the software made some improvements. The result: a sturdy chair with a curved back rest and slim legs.

Autodesk says computer-generated designs can produce something that a designer would never have thought of, or a product so complex that it would have taken a much longer time if a human designed it.

James Stoddart, a designer with Autodesk, says the company is experimenting with the use of generative designs to construct buildings. “We can put sensors in a building to gauge the places with most traffic. We can also run surveys to measure employees’ happiness and productivity level. These data points go into the software to generate an ideal design for the occupants of the building.”

Robots, AI as superpowers
If generative design software takes over a big part of the designing process and additive manufacturing eliminates more than half of the workforce needed on traditional factory floors, should product designers and factory workers be prepared to be made redundant?

“In our lifetime, we will confront, some day, some form of intelligence, maybe in a limited domain, that is greater than our own. It will be awe-inspiring and fear-inducing,” says Kowalski. But he insists that robots are not taking over our jobs. They are merely worthy collaborators to produce grander things.

“We are trying to flip all that stuff around, so that robots will be aware of their environment and each other and, ultimately, us, and collaborate across the board,” he says. For instance, designers can still override the designs created by generative design software.

The nature of work will change, though. Technologies such as generative design will allow non-designers to be part of design projects. “Teams will become global and more fluid, meaning people will come together for a project, and then disperse to use their skills in different types of projects,” he says.

Lee Chew Chiat, a public-sector industry leader at Deloitte Southeast Asia, says organisations must be prepared to reinvent work processes. “Instead of the number of cases handled by a call agent in a call centre, the call centre will measure how well the service recovery is from the customer standpoint as an intelligent virtual assistant replaces the call agent.”

To Autodesk, the biggest challenge is to prepare the world to work with new technologies. There seems to be a gap between the skill sets today and what is required of the workers of tomorrow, says Tamburini.

And it is crucial that companies and employees step up quickly, says Kowalski. “In an increasingly volatile and complicated world, human guidance alone would be insufficient. We really need this superpower more than we should be afraid of it.”

Construction sector to see greater disruption
The building industry seems to be on the verge of change. Traditionally, it has been among the least digitised industries in the world. Paper blueprints and spreadsheets are still commonplace at many construction sites. But in the last five years, the sector has seen a burst of new technologies, says Stacy Scopano, Autodesk’s senior strategist in building and construction.

Faced with a diminishing labour pool, rising costs and stiffer competition, many construction companies are looking for ways to help workers do more with less. “We are seeing a shift in technology used in the construction site in areas related to productivity and safety,” he says.

Some of the new products that are being made for construction sites include augmentedreality helmets and suits that reduce the risk of overheating. US-based company Daqri recently developed a US$15,000 ($21,361) safety helmet that comes with an augmented-reality lens, cameras, speakers and microphone. It can be used to guide workers remotely on the site. Its thermal cameras can be used to detect risky areas such as chemical leakages.

The use of virtual reality tools is also growing in the construction sector. Autodesk’s Live Design software simulates dangerous environments on the construction site for training. “It can simulate a 17-storey-high beam. The quality of the experience has matured so much that your brain cannot help but think you are 17 storeys above ground when you walk on the beam,” says Scopano.

To companies, he says, the biggest challenge is to figure out how to use these technologies in a way that would positively impact their bottom lines. “The real expense is to have someone on point understand and learn how to use it, and figure out its utility for Daqri’s safety helmet comes with an augmented-reality lens, cameras, speakers and a microphone the particular construction firm,” he says

This article appeared in the Enterprise of Issue 756 (Nov 28) of The Edge Singapore.

When Loren Lim was still an industrial design student at the National University of Singapore, he had to pick a topic for his final-year project. Rather than choosing something trendy, he chose to design a modular set of kitchenware items for people with only one functioning arm. His project was called Oneware.

“I find designing Oneware to be more meaningful because it solves a need [rather] than is a good-to-have [kind of thing],” Lim tells Enterprise in an interview.

His inspiration was his late uncle, who had suffered a stroke. Lim used to visit him every Sunday as the latter loved to cook meals for the family. Unfortunately, his uncle had only one good arm to rely on. But that did not deter him from cooking.

“When he started to handle things in the kitchen, I thought there was something we could do about it, although he didn’t [mention] all the issues he faced. [Perhaps] he felt it was a small problem and did not want to trouble others,” Lim says.

Winner of Dyson award
Oneware consists of a main frame that fits into most sinks in Singapore. It has two modular units. One is a special chopping board that can anchor food items in place so that they can be cut with one hand. The second unit is a silicone net for the washing of utensils. The net keeps plates and bowls in place, allowing them to be scrubbed and washed with one hand.

Lim’s final-year project was an academic success at NUS. And it went beyond that. This year, he took part in the James Dyson international student design competition and was the Singapore winner. The James Dyson Award comes with a prize of £2,000 ($3,553).

The competition is aimed at encouraging young people to “think differently, make mistakes, invent and realise their engineering potential”. It is open to university-level students or recent graduates in the fields of product design, industrial design and engineering, who “design something that solves a problem”. It is held in 22 countries, including Singapore, by the James Dyson Foundation, a non-profit organisation.

Lim says he was surprised at winning the award. “I didn’t really expect to win. Hopefully, [the prize money] can be used to bring [Oneware] further.”

‘Intense’ research
Lim, who recently graduated, shares that Oneware was the culmination of plenty of hard work and effort. He spent six months of “intense” research to identify the problem by meeting many people on the ground. From interviews with them, Lim realised that many of them faced the same difficulties at home, especially in the kitchen. “Dishwashing is the most common [activity they find challenging],” he says.

Lim reckons beneficiaries of Oneware would include new amputees, stroke patients and those with temporary injuries to the arm. Even mothers can benefit as they may be carrying their baby in one arm while using the other hand to prepare food or wash dishes. The common element between the users is the loss of one functioning arm.

For people who were born with only one functioning arm, however, Lim thinks they are unlikely to use Oneware. This is because they would have adapted to the condition since young, he says.

Like everyone else, most people with one functioning arm aspire to be independent, says Lim. Unfortunately, the assistive products currently available in the market are not quite ideal for that. Some chopping boards, for instance, use nails to anchor food items, he says. They are effective, but dangerous too. Moreover, assistive products tend to be expensive. These factors caused many to just rely on others for help.

Lim spent six months conducting prototype testing. He observed how people used Oneware. This was important, as some people were not entirely honest in their feedback because they wanted to support what Lim was doing. “So, I find that observation is very helpful when it comes to developing products because I will actually know whether they work.”

During this time, Lim introduced multiple product iterations for testing. Each iteration was different in order to find out which one worked better. For instance, he brought three different silicone nets with different thickness to test the optimum tension level. “Having a lot of models is the way to gain invaluable insights,” he says. “It’s the tiny things that make a lot of difference.”

Lim also conducted role-playing, but acknowledges it has its limitations. “Role-playing doesn’t fully help us understand things; it’s just to get a feel of what it’s like [living with a disability],” he says. “When I role-played with one [functioning] hand, I took half a day to pretend to be a patient with an injured arm. I went to the supermarket and found that people tended to help me around. But when I roleplayed as a stroke patient, people were not so aware of me because I looked normal.”

Yet to be commercialised
Lim, who recently took up a research assistant post at NUS, is grateful he studied industrial design. “I have a feeling I might have produced something less user-friendly if I didn’t study industrial design. I might not even know about the properties of materials,” he says. Currently, the Oneware prototype is made using a generic type of silicone called SK20, which is not suitable for food handling and preparation. Foodgrade silicone has to be used for Oneware to be safely used in the kitchen.

Lim has plans to commercialise Oneware. But he has yet to start commercial production. There are some kinks to iron out. First, he has to talk to manufacturers to figure out how to produce Oneware on a mass scale. This might lead to further tweaks to the prototype.

From a business perspective, Lim is less clear on how to commercialise Oneware. He is taking it one step at a time. For now, he is considering selling the product directly to customers. “From there, I will see how to move forward. It depends on people’s response to the product. Right now, I’m getting insights from people to change, edit or modify my product, so that it suits the market better,” he says.

This article appeared in the Enterprise of Issue 756 (Nov 28) of The Edge Singapore.

If you are looking to earn some additional income to fund your next exotic overseas trip or buy that fancy gadget you have been eyeing on your weekly trip to the mall, here’s a lobang for you. Crowdsourced hedge fund Quantopian is seeking interested individuals to join its 90,000-strong and rapidly growing army of freelance quantitative programmers. Freelancers work from the comfort of their homes, have flexible hours, no deadlines and no deranged bosses breathing down their necks.

The financial sector has long been the dominion of “too big to fail” firms with deep pockets and talented labour pools. But in recent times, these incumbents have found their dominance threatened by innovative young upstarts. Disruption is the new buzzword, driven by huge advancements in computing power.

Quantopian’s ambitions lie in the hedge fund space, where founder and CEO John Fawcett has a lofty plan to upset the status quo of existing powerhouses such as New York City-based Two Sigma Investments, which has US$38 billion ($54 billion) of assets under management.

At Quantopian, Fawcett is touting a proprietary online platform that allows data scientists, mathematicians and programmers to develop, test and execute their algorithmic trading strategies. The platform also includes a data catalogue of 60 sources that can be used in the algorithms: market sentiment analyses, clinical trial data and datasets from other regions or exchanges. Creating algorithms using Quantopian’s tools is free. The company generates revenue from traders who use its tools to make trades. So, the more programmers it can attract, the better.

A game-changing platform
Fawcett studied materials science at Harvard University before moving to San Francisco to work for a software consulting firm, where he managed a video-encoding project for Major League Baseball. He later moved to Boston and took a job at a hedge fund. There, he started writing software to automate the analysis of information for portfolio managers. In 2002, he left to start a software company for fundamental stock analysis. After his company was acquired, he turned his attention to quantitative analysis, where his background in analytical software made even more sense.

Quantopian was founded in 2011 and raised a seed round of US$2 million from Spark Capital and GETCO. The former was an early investor in traffic reporting company Waze, now part of Alphabet; the latter is a high-frequency trading firm. In July, Quantopian announced that it had secured US$250 million in investment capital from Point72 Ventures, the venture capital firm of billionaire investor Steven Cohen.

Some of Quantopian’s funds have been deployed in trading. It currently runs its own fund with 17 component strategies. But Quantopian is also using its cash to attract talent. The company holds monthly contests, dubbed the Quantopian Open. Algorithms submitted are subjected to a two-year back test using historical data, and then one month of paper trading with live data. The back test and paper trading performance are each scored on six mathematical criteria, which are then combined into an overall final score. The author of the winning algorithm receives US$100,000 in trading capital, and any profits generated over the next six months are entirely his to keep.

Ultimately, Quantopian’s goal is to build a community of winning managers and accumulate a giant database of data on the way various algorithms perform under varied market conditions. Quantopian will then select the ones that best match its investment strategy, package them into a multi-manager portfolio of about 30 algorithms that are individually weighted and selected for minimum correlation, and sell that as a fund to external investors. Authors of the component algorithms retain the intellectual property rights to their programs, which Quantopian will license in return for 10% of any returns generated from the algorithms.

A shortage of talent
As Fawcett tells it, quantitative analysts have become hot property. “It’s a very tight talent market, so everything we do is really focused on making sure that we give the best deal to the quant. We want to make it easy for people to use our platform, which is why our platform is delivered via the web, so anyone with an internet connection can use it,” says Fawcett.

“At the same time, we are offering a unique equity structure whereby we give the authors 10% of the profits we generate from their algorithms,” he adds. “And we are paying people who may have only one idea a year, which makes them not sufficiently prolific to run their own fund or work full-time at a fund, but who are nonetheless creating very valuable strategies that we can put together. The combination of access and the ability to do it flexibly while they are doing something else is our strategy for getting started. As our asset base rises, we can then allocate larger amounts of money to them so that they can earn a good living. And that’s the key to getting more and more people to do this full-time.”

Quantopian’s strategy of outsourcing analysis allows it to operate with a very small team. Of the 50 permanent staff on the company’s payroll, 40 are dedicated to working on platform technology and product management. The remainder are on the investment and trading team.

Quantopian has also developed a lecture series in conjunction with a professor from the Massachusetts Institute of Technology, and the company is on a worldwide search for instructors to conduct workshops for people interested in quantitative investing. In Singapore, Quantopian is working with Anthony Ng, a senior lecturer at Nanyang Polytechnic.

Ng holds workshops on behalf of Quantopian using content from the lecture series. The entire curriculum comprises about 50 lectures, divided into introductory, intermediate and advance levels, and are run on Quantopian’s platform.

Participants may also choose to self-learn by accessing the educational materials online. The company says 1,684 Singaporeans have used the online educational content over the past year while about 250 have completed face-to-face educational events with Quantopian, mostly through Ng’s workshops at Nanyang Polytechnic.

Excelling in the field
Fawcett believes the hedge fund industry will evolve to become increasingly automated and dominated by quant techniques. While jobs will still be available in the industry, they will require individuals with specialised training and unique insights in portfolio construction. And, they will need to be willing to work hard.

“A common trait among successful quants is that they work extremely hard,” Fawcett says. “It’s a field where effort really matters. It’s not enough to just have an idea, but you really have to invest effort in realising it. It also takes a lot of creativity; you have to recognise a pattern or have a unique insight.”

Prospective quants should also note that competition in the industry is extremely stiff. “[Quants] are incredibly competitive. The results are quantitative, so it’s very easy for you to compare yourself with others. There’s a natural competition when that happens, so you really have to be driven to keep advancing,” Fawcett notes.

He dispels the notion that the best quants are math nerds who spend all their time in front of computer screens. “Successful quants talk with each other about how they can apply what they have read. That is a big part of the creative process as well. Also, those who are creative tend to have plenty of outside interests, be it music or a sport or just some kind of extracurricular activity. It helps them to come up with analogies or new ideas.”

This article appeared in the Enterprise of Issue 756 (Nov 28) of The Edge Singapore.

SINGAPORE (Dec 13): Two and a half years were all Patrick Grove needed to know that he was not meant to be an accountant.

“All I [ever] wanted to do was to build and grow [companies], whereas all an accountant does is to count,” he tells Enterprise in an interview. “It just wasn’t for me”.

So in 1999 as the dotcom bubble was rapidly expanding, Grove left the now-defunct Big Five accounting firm Arthur Andersen to found an online search engine and portal in Malaysia called Catcha.com. He was just 24.

Fast forward 17 years and Grove is now the group CEO and co-founder of Catcha Group, a global investment company focusing on building internet businesses in emerging markets.

Catcha Group has over 60 investments - many in public-listed companies - that are held directly or indirectly as the sole, majority or minority shareholder. Altogether, Grove says, Catcha Group has total assets of about US$1.5 billion ($2.1 billion) and hires 3,000 staff within its operations that span Asean, the Middle East, Africa and Latin America.

The group has been likened to the Asian version of the German internet company Rocket Internet – founder of Zalora and Lazada — because of its focus on creating new companies.  “We launch our own businesses. We have the balance sheet to fund [them]. Usually, our aim is to launch one company a year. It is not a must, but historically, we have done that on average,” Grove says.

So where is Catcha’s growth coming from? And what does he see as the next big thing in technology? Read about it in this week’s copy of The Edge Singapore (Issue 758, Dec 12), available at major bookstores, 7-11 stores, and selected petrol stations.

(Dec 20): It starts with the idea that kids must be trained early to prevail over robots in the workforce. Then it snowballs from there—US$3,000 ($4,335) a year for tuition, US$350 for a Lego robotics set, and US$7,300 to test the newly acquired engineering skills in a competition in the US.

That’s what Zhuo Yu is spending on her 10-year-old son for a so-called STEM education in China—a problem-based approach to learning that combines knowledge in science, technology, engineering, and mathematics. The concept created in the US is now stirring a craze across China, where about 10 million students are being fast-tracked for STEM success.

That number is poised to swell to 50 million by 2020 as parents seek to give their children a head start in computer coding and robotics, according to consultant JMD Education. It predicts the demand will create a US$15 billion STEM-learning industry in China that’s already attracted companies such as text-book publisher Pearson Plc, Lego Group, and Sony Corp.

“I don’t have a cap on my budget,” said Zhuo, who works in the internet industry in the eastern city of Hangzhou. “Yes, I’m investing a lot in his robotics education right now, but you have to take a long-term perspective and look at what opportunities it can bring him after he turns 18.”

Her son, Wang Yizhuo, will enter one of the most competitive job markets on the planet after he finishes college. By 2030, China is predicted to have as many as 200 million graduates—more than the entire US workforce. As it is now, 40% of tertiary students in China obtain a STEM qualification, compared with less than 20% in the US and France.

Future-job angst has helped spawn at least 500 institutions or startups in China offering out-of-school tuition in coding, robotics and 3D printing, according to Wen Jing, a researcher at Beijing-based JMD Education. It’s an industry with little regulation or oversight.

That means parents often need to navigate a sea of choices—from legitimate providers to dodgy scammers, said Xiao Dun, co-founder of Beijing-based online education platform 17zuoye.com, which is introducing courses from Minecraft and Sony Global Education in China.

“Even classes that dig worms will tell you it’s STEM education because, all of a sudden, it’s a biology-related class,” Xiao said. “People all think this is the fancy new thing, and there are a lot of rich parents who are eager to spend on their children.”

Private education providers are helping to plug gaps in state-provided teaching. The world’s second-largest economy lags behind at least 16 countries in Europe and the US in putting coding and robotics on the national school curriculum.

Nora Yeung, founder of Creative Coding in Hong Kong, said coding could become a basic required skill for the future.

“For them to get a job in the future it’s almost like any literacy skill or language skill it’s going to become a basic need that they need to learn," said Yeung. “We need to prepare these kids for jobs that don’t exist yet.”

Beijing is testing the benefit of giving parents annual subsidies of about US$60 per child to help fund programmes to nurture their children’s creativity. The money doesn’t go far though, as lessons can cost as much as US$50 an hour in the national capital, Wen said.

Costs may continue to climb, based on trends in Singapore, where the value of a STEM-focused education has been recognised for years. The city-state this month topped a global education survey by the Organisation for Economic Co-operation and Development on science, reading, maths and collaborative problem-solving.

Ana Ow said she paid about US$300 for five robotics lessons for her 8-year-old son—the cheapest tuition she could find in Singapore.

“I count myself as a ‘tiger mom’ and I have worse ones among my peers,” said Ow, who began sending her son to robotics and coding holiday camps three years ago. “I’m very well aware that digital innovation is the new frontier.”

The sentiment is shared by parents around the globe. US President Barack Obama pledged US$4 billion in January to aid computer science in schools. There were 1.02 million software developer jobs in the US in 2012, according to the Bureau of Labor Statistics, which estimates that number will jump 22% by 2022, spurred by “a large increase in the demand for computer software.”

Hangzhou mother Zhuo said getting her son to compete in contests has been one of the better ways to evaluate and encourage his learning.

“He showed a real interest in robotics, so we told him, ‘why not figure out where you stand via some tournaments?’” said Zhuo, 37. “Because competition comes with pressure, it really forced him to think whether he wanted to devote more time to it.”

She had no expectations at the beginning, she said. Her son started putting in hours after school to complete tasks, and became increasingly keen to apply what he learned in class to his robotics projects.

That helped him work better with others, and his team finished fourth in an Intel Corp.-backed RoboRave competition, which necessitated a US$7,300 trip to the US, Zhuo said. The event that started in 2001 has attracted students from Mexico to Germany to India to participate.

A competitive focus isn’t always healthy, cautioned Reynold Ren, who has taught coding to more than 1,400 students in Beijing this year and said he’s been approached by some institutions to help them win at all costs.

“This should be all based on interest, not some unhealthy way for students to improve their chances of getting into better schools,” said Ren, whose startup is in the process of creating US$29 robots to enable more families to buy them for educational purposes.

The tuition fees and technology extracurricular STEM lessons means the digital divide between the wealthy and poor could widen, said Jasen Wang, founder of Makeblock. The Shenzhen-based startup is one the largest providers of equipment for robotics education. The company’s products can run up to US$800.

“In regions where there’s a lag in basic infrastructure, it’s quite hard for schools to provide education of this sort,” said Wang, who added that 60% of his company’s revenue comes from overseas, including the US. “It’s a significant investment, and the outlook could get worse.”

Zhuo isn’t going to interfere if her son wants to compete in more contests, she said.

“By the time he grows up, his generation needs to become much more creative and independent-thinking,” Zhuo said. “I’m not sure what specific skills they will need by then, all I can do is provide him with the basis to improve his chances.”