I have a few lunches with a few people the last two weeks. Somehow, the topics always come back to Web 2.0 in Singapore, either entrepreneurs thinking to start one, investors looking for one or media policy makers.
Sadly, I don’t think Singapore is ready for Web 2.0. Here are three reasons.
1) Singapore do not have the talents.
A decade ago, when I was programming and running my own MUD, like all owners of MUD back then, I thought of starting a graphic MUD (now known as MMORPG). It is sexy and obviously the next big idea (hint: Warcraft :). I look around see if I can form a team, lots of people interested but no computer graphic folks. I can’t even find one who do 2D computer drawings, not to mention 3D modeling. It is not until a few years later that courses was offered but by then, I was on my next venture.
Thats what happening to Web 2.0 right now. Web 2.0, particularly AJAX, pushes the limited of what you can do with Javascripts and HTML. We really don’t have sufficient AJAX talents in the market. I am not saying there is none (there are some self-starter) but they arent enough to go around.
2) Singapore thinks (and is) too small
Singapore is small, 4 millions people on a tiny island. With just over 1 million people online, any Singapore Web 2.0 community is going to be even smaller. As such, entrepreneurs measure successful very small, ie a successful community if you have thousands or tens of thousands people. Sadly, the value of a network is proportional to the square of the number of people so being small is no good.
Thus, any commercial viable Web 2.0 venture must think beyond Singapore, offering something that is “borderless” (to use a term from Jack Welch). The world is your playground but in that space, you would also have to compete with the best in the world.
3) Singapore has no funding for Web 2.0
No, I am not referring to the government. I am pointing fingers at the startup angels, venture capitalists, the investment community in general.
Most money in Singapore is Old Money, money made from property and constructions, from trading – import and export, and from services etc. As such, Singapore investors like business that has solid cash flows, ideally return on investment on 6 months or less. That’s what they used to.
Singapore has very little New Money. There is no Tim Draper who would rather fund “a big vision … that is going to change the world”. We have VCs but there is no Sequioa Capital or Kleiner Perkins kind of VCs who would invests millions in a cash-burning company with little revenue only to be sold to Google for US$1.6b.
Making investment in Web 2.0 defy financial logic. It requires a someone who would say “I don’t know how these guys going to make money but boy, it sound cool and fun. And they remind me of me so what the hell, why not?”. That would normally come from someone who makes (a lot of) money in a similar fashion.
Yes, there are Singapore investors who does that. I met some myself. But the amount they would do for “fun” is sadly too small (20-50k) for a serious Web 2.0 taking on the world.
