Start-ups here run by older bosses
THANKS to Facebook, and now HBO's start-up sitcom Silicon Valley, the popular image of an entrepreneur is very much Mark Zuckerberg-inspired: a male, socially awkward geek in his early 20s, a tad unkempt and whose "uniform" consists of a pair of jeans and a hoodie.
This stereotype is, of course, only a part of the entrepreneurship story. In Singapore, it is increasingly likely that entrepreneurs are older - 35-and-up adults who are abandoning their nine-to-five jobs to start their own companies, backed by accumulated savings and knowledge of a certain industry, said observers.
The findings of a poll of 102 Singapore start-ups conducted by The Business Times squares with this perceived trend. The number of start-ups here founded by entrepreneurs who were aged at least 35 in the year that their business was launched has generally risen since 2006.
Hugh Mason, co-founder of start-up incubator JFDI, said: "It's as if they did what their parents told them to do when they were young - take a 'sensible' job. But now that their own kids are independent, they want to leverage the deep domain expertise they've built up in a certain industry, to tackle issues that just aren't getting resolved in that industry."
This was certainly the case for Patrick Goh and Sam Koh, who co-founded luxury-bedding distributor Intero when they were in their mid-40s. Having jointly spent more than 50 years in the bedding industry at that point, they had noticed an absence of designer and luxury brands in the market. Intero was set up to plug that gap.
Amit Anand, a founding partner of entrepreneur-backed venture firm Jungle Ventures, attributed the rise to a dramatic and favourable shift in the risk-reward ratio for launching a start-up in the last 11/2 years.
An increase in funding options and the chance for a successful start-up to get listed or be bought out for huge sums down the road are enticing more experienced folk to dump their cushy, salaried jobs for a shot at entrepreneurship, he said.
Just two months ago, local live-chat start-up Zopim was acquired by San Francisco customer-support company Zendesk for up to US$30 million (S$38 million); in September, video-streaming site Viki was snagged by Japanese e-commerce giant Rakuten for US$200 million in the largest-known exit for a home-grown start-up.
Chong Chee Wah, co-founder of technology commercialiser and incubator Clearbridge Accelerator, said: "Several macro factors are definitely aligning. Government support in terms of grants and more prevalent news of success stories today have prompted older entrepreneurs to pursue their dreams. Even though they have financial commitments like family and housing loans, they have also accumulated sufficient savings and done a more comprehensive risk assessment before taking the plunge."
Industry watchers say that older entrepreneurs are superior in business experience, credibility, interpersonal skills, networking and the ability to raise money.
However, Arnout Mostert, a partner at incubator AccelerAsia, said that experience can sometimes work against such individuals. "This is especially if they get stuck in the 'we've tried that before and it doesn't work' mentality, and miss an opportunity," he explained.
If an older entrepreneur has no experience with start-ups, he is not likely to have any advantage over younger peers, said Lim Kuo-Yi, a founding partner at Monk's Hill Ventures.
"Working in a multinational corporation, for instance, with systems in place and resources available, is quite different from starting a company from scratch," he added.
Mr Chong has started 11 companies since he was 37 years old - eight in biomedical, medical tech and materials, and three in information security. He noted that he has rarely seen younger people get into such high-tech start-ups.
"Such technologies require a certain level of experience to judge and develop products. Perhaps, as entrepreneurs age, their breadth of tech start-ups increases," he said.
Younger entrepreneurs tend to focus on app and Internet start-ups. They also have the benefit of energy and optimism, are less encumbered by family and financial commitments, and are generally more willing to take risks, said observers.
Younger entrepreneurs are better at coming up with innovations that are more "business-unusual", said Desai Narasimhalu, director at the Singapore Management University's Institute of Innovation and Entrepreneurship.
He said: "Older entrepreneurs are better at identifying opportunities in mature product or service spaces, and can offer incremental or disruptive innovations for that industry. It would be very unlikely for them, though, to create a Facebook-equivalent (unlike their younger peers)."