“Hong Kong’s startup ecosystem, is there really something missing?”
After the launch of the Visa scheme for Startups reactions were mostly positive, but sparked also the discussion what else is needed in Hong Kong
. In this and the next few posts I will set out, IMHO, which things are “missing” or where we should pay attention to at this point, additional suggestions based on this are welcome. But let me make clear: we don’t need to be on the list of top cities to do your startup, or make it too easy on startups to start.
A lot of discussion is pointing at the government, which is only partly true, the government can make a lot of the changes, but like as in other startup hubs, there is much more what an ecosystem can do itself.
What is needed to start a startup? (and get it to a least a MVP stage?)
1. Creative and innovative founders
2. A problem worth solving
3. Supportive mentors and investors
4. A safe place to be
These 4 items are the basis of a startup, and only number 3 and 4 are more or less ecosystem related.
1. Creative and innovative founders
Usually founders start with their startup in the place they already live. Only in a more advance stage they move, usually to the place they “found” investment. Changes in the ecosystem will definitely help, but the start on this point should be from “within” on this. Hong Kong founders are working on this: Divide, 9Gag, Shopline, Gogovan, AfterShip, etc…. Also don’t forget the expat community, from recent 12 founders that graduated from the Founder Institute, one was HK local, 5 were Overseas Chinese (海外華人), others were westerners.
I will talk more about (startup unfriendly?) family culture in Hong Kong in later blog posts.
2. A problem worth solving
Hong Kong has few pillars when it comes to knowledge:
But your “problem” isn’t mandatory to be in these spaces, something Divide and 9Gag proved. Especially the Gateway To China is a broad item, look at Brinc.io a HK based incubator focused on IoT. With Shenzhen just an hour away on metro, this hardware capital of the world provides all the needs for IoT startups and from Hong Kong the international city outside out the GFW, you can test and scale.
The ecosystem can have influence on your problem, but it’s a minor factor.
3. Supportive mentors, and investors
I first had my doubts, but having run the Founder Institute last semester I’m sure “we” have great mentors residing in Hong Kong. Maybe not Paul Graham or Andrew Chen, but for sure high quality and knowledgeable mentors and advisors in all directions. This “network” of mentors and advisors is wide and deep and great mentors can sometimes be found in unexpected places. Also often I hear complaining about investors, and yes, maybe not in the amounts of Silicon Valley or even Beijing, but there are Angels and VC’s in HK. Also with the stagnation of the property market you see now that family offices are looking beyond the brick and mortar and are getting interested in startups, companies like Alibaba, Xiaomi (only 5 years old, #3 cellphone maker in the world) and the growing number of well funded startups are helping them getting into this market.We only have to work on the pipeline to create viable startups to invest in, because there aren’t enough scalable startups in Hong Kong. (more about this in later blog posts)
4. A safe place to be
Now we are getting to a point the government could play a bigger role. There are some good initiatives (some could have a better execution) by the Hong Kong government or affiliated organizations like InvestHK, Cyberport, HKSTP, etc, providing incubators with cheap or free office space, reimbursement schemes and micro-funds. Also the recent launch of the Hong Kong startup visa scheme where I recently wrote about, is a good step. But an ecosystem needs more than that.
I’ve been saying for some time now that [someone] should have or buy a building in Hong Kong with the following layout:
Ground floor: Coffee shop
1st floor: co-working space
2nd floor: meeting rooms
3rd floor and up: bunk-beds / hostel.
And is willing to support the ecosystem by running this hub non-profit or against a loss for PR purposes.
The reason why is: housing costs. While there are ways in Hong Kong to get cheap office space, co-working space, maker space, lunch for US$5, cheap public transport (the tram takes you from east to west on HK island for only US$0,30) and cheap bars (looking at you 7–11), housing is an issue. I had several interns struggling to find acceptable housing, not mentioning rooms for US$650 with lice, cockroaches and moist. One founding team of 3 I knew rented a 3 bedroom apartment for US$1,300, but it was an hour away from the co-working space and most of the Central focused events. And that was 2 years ago, rent only increased since then.
So while “we” don’t have to be in the top 20 (that will only attract wantrepreneurs) there is still one basic thing (housing costs) that should receive help.
Let me know your thoughts and if you like this discussion, recommend or share this post to get a broader opinion about the startup ecosystem in Hong Kong.
Picture: “Hong Kong Victoria Harbour Pano View from ICC 201105” by WiNG – Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.
