EHK Talks to Angel Investor Simon Squibb – Part II

EHK Talks to Angel Investor Simon Squibb – Part II
Comments Off, 16/07/2014, by , in Funding Tips

This interview with Simon Squibb was conducted by Nathaniel Suen and condensed by Maria Antonia Mier and Selena Li of EntrepreneurHK.

 6. Do you invest in Silicon Vally-clones?

I do not invest in Silicon Valley clones. we dislike the model of copying other people. In my opinion it goes against the whole concept of startups. It’s where you try to change the world and use your imagination to be unique. It goes back to building something you love, if you build something someone else did, then really often you are just doing it for the money.

However there is a very delicate line here between copying and innovating, or an evolution of an idea. For example if you look at MySpace, you will be asking: was Facebook copying MySpace? Some would say it was, but really it was an evolution of an existing idea. This is what I think is a good idea: if you see something in the market that you can do better, use your experience and make it better for people. In fact I think startups often build on that. Look at Uber, it is looking at taxi business and improving how it is done. So are they copying the taxi business? No, they are looking at it in a fresh way, in a modern way. But again they are not copying.

When startups from Asia go to Silicon Valley, the first thing people say to me is ‘ Wow! an original idea from China’ – as if China is copying everyone else. Of course, that is not true. Alibaba could be considered an evolution from Yahoo. So I think that is the way to go, the evolution of ideas as opposed to copying someone else’s idea. I do think different pockets such as Euro, US and China have different ways of operating. You can’t exactly clone an idea and make it exactly the same in another market. There are organizations making money that way, people raising money that way. There is a model out there that works. Is it ethical? I do not think it is.

 NEST is somewhat similar to Y Combinator, but we have adapted it, not copied it. I like their model though; I like their intent on helping entrepreneurs, I like the way they give support, not only capital; and I like the way they help them raise money afterwards.

 We have taken the essence of the good that company did and then we innovated. For example, we don’t do it in batches here in Asia. Instead, we do it monthly. We don’t expect them to suddenly quit their jobs like they do in the US to start a startup. Here we do it gradually and they ease out into the startup. Maybe 4 or 5 months later they do join it fully instead of just part time.

 We have adapted our model to be more Asian focused and we have tried to improve it by adding things, such as corporate partnerships, which they don’t do in America. So we bring in corporate environment. They power up these business in a different way. My bottom line is that I warn entrepreneurs that it is an easy line to fall into, that you see something successful in another market like America and think let’s just do it here. But actually the best thing to do it make sure that you evolve it, that you improve it, change it to suit your own personality, dreams, desires and ambitions.  And make sure that whatever business you build has a core mission that you resonate with. Not with the guy in the US that started it, it has to resonate with you because you will be the one running it here in Asia, you will be driving it and it should be your passionate project. It’s something that means a lot to you and often that does not mean copy.

  7. Compare to Hong Kong’s startup ecosystem, Singapore’s startup infrastructure is more developed with more government support, more mid-to-later stage money (ie. Golden Gate Ventures, Jungle Ventures, etc.), government-linked corporations setting up their own venture arms (ie. SingTel Inno8). If you could time travel back to day one, where would you start NEST, in Hong Kong or Singapore?

 

When I first decided 4 years ago that I was going to be a full time investor in startups, I spent some time travelling to all the options that I had. So I went out to Silicon Valley and looked at their market and look at Asia, thinking: ‘Wow! I know Asia can be an influence in Silicon Valley with my understanding’.

 And then I went to London where my family lives when there was a startup scene and also thought that maybe I could do it there in London with my family and the buzzing startup ecosystem. And then I went to Singapore and heard about the government funding and learned about all the different schemes that the government was pushing to make the startups happen.

 And then I came back to Hong Kong and looked at its market and thought to myself, ‘it’s interesting, when everyone is running away from something, you run towards it’. The market which is overlooked is Hong Kong. The reason I decided, out of all these other options, to go for Hong Kong was mainly that in Hong Kong at the end of the day it has a very straight forward structure, as I have said before: you put your money into Hong Kong you get your money out, it’s a good rule of law. People want to live here and it’s a wonderful test market with multiple cultures.

 Actually, Singapore will end up having a problem. Singapore has asked us many times to set up in there. But when you look at the system, you will never know whether it is a good idea for government to own shares in startups. In my opinion, it won’t work.

 When you look at it initially as an investor you put your money in and it sounds awesome. But the truth is, it means inflated valuation, bad ideas stay alive longer than they should. And in the end you look at Silicon Valley, there is no government intervention or involvement. If there is a good business a private enterprise will fund it. In Hong Kong, money is not the problem; people have plenty of money. It needs more good ideas. And that is what’s happening now, entrepreneurs are taking a jump, they are not going to be working in banks or as lawyers, they are going to have their own business and that creates more opportunities for investors.

 

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Simon at our EHK event

8. Simon, you’ve been an entrepreneur. What is the one most prominent success story you wanted to share with all the entrepreneurs out there?

 This is a question about what is success and what isn’t. Often, when you are looking at success you might talk about how much money you made. But I think it’s about what impact you had on the world. I have done a lot of businesses and I really have enjoyed businesses where we succeeded with a crazy idea that no one thought would work.

 Many years ago we invented a concept called ‘coaster adds’ where we got the normal coaster in the bar used by Heineken and decided to turn it into an app platform. At first no one believed it would work, no one would advertise or put their brand with a drink on top. At last, United airlines bought it for millions and turned it into an advertising platform. It was a huge success. I like stories like this.

 Many people say Hong Kong can’t be a good startup environment, that there are no entrepreneurs here. But I like to remind people that Hong Kong actually has no natural resources and this city was built on entrepreneurs. It may have lost its way with the success and finance and people may have followed that instead of founding their own business, but the people here have the entrepreneurship in them naturally.

 So for me, success is not just a form of financial perspective. If I look back when I started that agency years ago I never expected it to be the ‘Creative Agency of the Year’ 15 years later, a very successful product and a brand. I am very proud of that business; I am proud that it makes money but I am actually most proud of its ethics. It has pioneered a concept that you can create a creative agency that has values, that does not rush things. It may not be the cheapest product or service in town, but it has integrity inside its production cycle, which the people inside the company actually care.

 However, I look at a company like Fluid, the one I have built over the years as a failure in a way. Fluid as a service company is very hard to scale. It’s frustrating sometime because if I wanted to scale that same business in other countries, it would be very hard to do. It has built a reputation in Hong Kong, but if I pick up that brand and take it to London it would take another 10 years in that market to success like it did in Hong Kong.

 9. What about biggest failure?

 I personally learned much from my failures and success. Success always comes from the purpose of your life. Life with a purpose is the answer in my opinion.  So I feel most satisfied if we tried something with a purpose. And maybe we make money maybe we don’t but it has its core values.

 For me, failure is not trying at all or looking at something negatively. For example planning on how much money you are going to make. It might make money but it does not necessarily mean it’s a success.

 10. Give me one advice for all the startups.

 This is quite hard because I have quite a few. But the one thing I can say to entrepreneurs from an investors perspective is that a lot of people pitch their businesses to investors, they want investors to invest in. That is great, it’s how we make a living and we need it.

 But I always say to people to make sure when you are pitching your business that you are actually pitching something you believe in. Make sure whatever you do, you do it for yourself and you do it for humanity. Don’t just build a business that you can sale; don’t just build a business thinking what people will invest in. Spend your time building a business for you, building something that gives you purpose. Maybe you don’t need investors like me, maybe you just need to get you head down and do something you care about. But don’t pitch the business to make me happy or anyone other than yourself. And that is the biggest piece of advice, to live a life with a purpose.

Make sure you also read our interview with the NEST team

NEST-investment-team-e1404265518669

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