HOWEVER, If I were to meet an established businessman who trust in me and see the potential of my experiences and capability to partner me to start-up in Singapore, it will be a different story. We can be founders together, leveraging on each other’s strengths. To be honest, I did receive similar request, but the timing to execute is also important. Keep striving and dream goes on…
Will I Become An Entrepreneur Or Encourages My Children To Be One in Singapore? (Part 2)
This is a follow up on Part 1.
It is going to be a long post but, bear with me.
Yes, I love to be entrepreneur, but risk and feasibility have to be assessed, especially in Singapore.
You can call me “chicken” or one that talk big and no action but only write long posts in my blog or asked, “I am so good, why don’t I run as next MP?” The truth is you don’t know me! Also, the quality to be an MP is more than just good. You need to be people’s person, compassionate, grounded with integrity, and popular, and above all, not afraid to speak the truth etc. Or simply join the right party or GRC to be a free-rider?
No one should be reckless and just jump to become an entrepreneur, for the sake of becoming one. As a father and husband, I have immense responsibility towards my family.
Anyway, the purpose of this blog is also not to please readers with sugar coated words or to boast how good I am or how big my portfolio is. Instead, with clear conscience and responsibility, this blog endeavours to relay the truth as much as possible, and for a large part of it, is based on real life experiences. I sincerely hope it benefits my readers including my own family members, who will remain genuine and humble to seek the truth to have the right mindset and integrity in life.
I WAS AN ENTREPRENEUR IN SCHOOL
I was a “tiny entrepreneur” in primary school, and started earning money by catching spiders at forestry areas near railway tracks, and selling the fighter spider at good profits. My top fighter “Blue Artillery Powder” cost S$8. Not too shabby back in the 80s!
As a boy, I was competitive and mastered many skills. One skill is “Marble or GoLi” games, and I tend to bring back more coins with sand in my pocket than what I brought out, each day. The other skill is “Eraser Flipping” techniques and winning erasers to sell.
While I loved collecting stickers, such as “Know Your School, Ghost Busters, World Cup” etc. but I can barely afford to buy many. Filling up sticker album was not my objective. Instead I accumulated stickers to selling classmates who are short of the specific sticker at a higher price!
In my secondary school days, my sister worked in a popular Polo-T company “Burberry”. As staff, she can purchase apparels for up to 35-40% discount in the initially loose company policy. I will then show the catalogue to my wide network of friends, and sell the shirts at 15-20% discount to market pricing and yet, still earn the 15-25% margin.
MOST START UPS FAIL
As a result of my business venture as a boy, and together with experiences of managing real business in my career, sometimes I do feel that I have the DNA and what it takes to build a business.
Yet, I have to be realistic and the hard truth is that most start-ups fail. While we may have seen countless success stories in the news, they belong to the meagre minority. I have personally witnessed many friends who started on their own after 2005 with great vigour and enthusiasm. In the beginning, some even won awards, with stories covered in Newspapers. However, after several years or even a decade later, almost all ended up losing capital and precious time, that will otherwise be utilised more effectively. Most return to become employee with no aim of going back into business anymore. Thereby making their start-up experience of very little use.
IT IS TOUGHER IN SINGAPORE THAN ELSEWHERE
Singapore is for bigger companies to thrive, not SMEs!
Please don’t misunderstand that I am afraid of failures and is negative towards entrepreneurialism in Singapore. The truth is we have to be practical and come to sense and ask, “if Singapore has an environment suited for start-up entrepreneurs to create a sustainable business without any forms of support?” Or “if Singapore has an environment that is created to suit MNC or big establishments, rather than SMEs? Isn’t it obvious that who is having the big pie of the lucrative businesses in Singapore? What is left for Singapore SMEs who are normally at the bottom of the supply chain competing with prices? Ok… I admit that this is not just in Singapore, but it is the general trend that the big and rich will become bigger and richer.
Singapore is not strong in technology and innovation
Today, Singapore economy is built on the basis of financial services and real estates. We are generally not strong in engineering and technology compare to smaller European countries such as Norway, Denmark, Finland, Sweden, Netherlands, Switzerland etc, or Korea and Taiwan who can produce exceptional electronics companies.
Hence businesses here tend to be less niche and have thinner margins due to heightened competition. In those European countries mentioned, they have a lot of incentives for innovation, and often starts in University.
No social benefits
Also, many successful entrepreneurs are created in the aforesaid Europe countries when they get retrenched by their companies. This because they have good retrenchment benefits. On top of that, if they are not working, they received social benefits, and that is when they have the time and support for 1-2 years to innovate and be creative to build their first business venture.
Support from Singapore is “one time”, often cheering success rather than focus on grooming
The support needed for a sustainable and innovative company is not just “one-time capital rebate from government”.
For example, I have a Singaporean friend who build his business based on technology for food supply here. He received CAPEX rebate from the Singapore government agency, as well as awards and news coverage from the media. After all the hype, the reality is the business is finding hard to sustain. This is because local companies big or small, will only buy base on pricing rather than his pitch for innovation, quality and freshness. On the contrary, those European countries I mentioned earlier, have stronger local content for sustainability i.e. local companies giving orders to local start-ups based on technology and innovation, despite the lack of track records and sometimes higher pricing.
When Joseph Schooling reach the finals in Olympics, some of our leaders were so eager to take business class to fly to Rio to cheer him on. It is good that we are cheering for success, but for most times, we overlook that his family spend a million to groom him overseas, and the sacrifices and commitment made over the years.
I am doing the same now with my own money, time and commitment for my kids in Sports. The relevant Singapore sports association is not only NOT helping but instead make it compulsory to pay monthly fees to join the association’s sub-par coaching, in order to qualify for selection for Junior Development Squad (JDS).
THE HIGH COST HERE SIMPLY MAKE IT NOT FEASIBLE
Consider I don’t have rich parents, and after graduation, I have over 40K of student and expenses loan to repay all by myself. Next up is marriage, honeymoon holidays, house and car purchases, renovation costs etc burdening our shoulders. A typical Singaporean at the age of 30, will think he/she finally will start to have money, but they will actually be pretty broke!
Housing and associated costs in Singapore undoubtedly are one of the most expensive in the world. Small HDB in Singapore cost more than 400KSGD, while Malaysia, SEA, Europe, US cost significantly cheaper with a bigger house. Above all, raising a child properly requires not just plenty of money, but a lot of time and commitment, in a highly competitive education environment.
Cost of living in Singapore is way too high that you may not necessary fail in business start-up but, fail in the sustaining of livelihood.
For example, I have many Chinese friends who own businesses in Malaysia. Fail start again, they said. Why is it possible? Entry employee salary is quite pathetic even if you work in a bigger organisation in Malaysia. To balance the lower salary, cost is extremely low if you are frugal. You have very little to lose comparatively transiting from employee to employer. Furthermore, rental of shop/office is also much cheaper than Singapore. Most employer in Singapore will struggle to pay rental of office spaces let alone sustaining the cost of their employees’ salary.
HIGH SALARY WORKING FOR BIG COMPANIES HERE
Our government devised the seduction model so well that Singapore has so many foreign MNCs or locally owned Temasek MNCs that can pay rather high salary.
This makes opportunity costs of being an entrepreneur even higher, if you are one of the high paying employees.
Why should I be an entrepreneur in Singapore when I know the outcome is that SMEs will forever be vendors in the low-low supply chain, at the mercy of big foreign MNCs or Temasek Owned or stat-board organisations. Then, being squeezed dry with low margin, and in time of crisis, faced high possibility of bankruptcy.
In addition, if Temasek-owned companies also find it hard to have a global footprint with their prowess and mighty support, what makes me think that you can an entrepreneur in Singapore by your own effort, thinking that you can be successful to build an international company. There are successes, but low percentage!
In my opinion, there are comparatively bigger successes found in Singaporean entrepreneurs who started from working in MNCs or overseas and finding support from powerful businessmen, rather than those entrepreneurs who started locally after graduation or merely with a few years of work experiences, with small network.
For e.g. John Lim, founder of ARA left his MNC salaried job at the age of 45, invested S$700k of his own money while Hong Kong property conglomerate Li Ka-Shing-backed Cheung Kong Holdings pour in $300k to start ARA in 2002. Later Lim also obtain the support of Chew family of Straits Trading.
Dymon Asia founders Danny Yong and Keith Tan worked as fund managers in MNC with overseas experience prior to the support of US billionaire Paul Tudor Jones, who poured US$100 million seed funding just before the GFC.
Espressif Teo Swee Ann worked for MNC overseas in US/China before establishing his company in China and thrive there instead of Singapore. Not sure if he has any support?
Not negating his ability, Grab Anthony Tan also have super-rich and powerful parents to start with, before finding Grab. In any case, Grab has been making huge losses since inception, but the garnered support from Soft Bank and DiDi Chuxing
In today business environment where customers have more choices and are more demanding, aside your entrepreneurial ability, you also need to have “Gui Ren – lucky star”, i.e extremely lucky to meet someone in your career who is powerful enough to support you. Otherwise you need to have a rich parents to help you in your family expenses, and then hope that, way before the business can become sustainable, you can receive a huge injection of seed funds with complementary high Salary.
I am in my 40s now with a big family to feed. To be an entrepreneur without too much worry on daily expenses, I can sell one of my properties and stay in a smaller one, cashing out quite a huge sum. Together with my decent-sized investment portfolio and a working wife, I should be in a financial comforting zone to start a business.
That said, all my children are still schooling, and with a relatively good paying job, what is my incentive to become an entrepreneur using my own money and network?
Is the risk taking in a pretty adverse entrepreneurial environment like Singapore, worth the try? And will the local-squeeze-local culture going to frustrate me as an entrepreneur more? The bad low paying ability and relatively bad paymaster of ASEAN countries are not going to help as well?
Typically, I feel that this way of entrepreneurialism in Singapore is easier to produce start-up that will be comparatively more successful and sustainable.
Last but not least, I will definitely encourage my children to be entrepreneurs, if I can continue to be financially sound when they grow up. In this way, even if my own entrepreneurial dream fails to take off, I can put piggy bag on them. Nevertheless, I will not give them stress and let them follow their true passion.
The day when they are ready to enter the working society, I will encourage them to have work experiences in small SME and global MNC first, rising to at least a managerial post, or at least knowing what business is like, before transiting to find their own business with my support.
And perhaps, not in Singapore, but in China or Vietnam!