As National University of Singapore students drifted to the college bar for Wednesday’s “Ladies Night,” Ishan Agrawal sat in his dorm’s common room, working out how to harness the Internet to fight corruption in India.
Agrawal, 22, is one of 90 hand-picked students at N-House, a residential block modeled after the dorms of Stanford University that once housed Google’s Larry Page and Yahoo co-founder Jerry Yang. Their Wednesday evenings brainstorming new ideas or pitching to potential investors are part of a $13.1 billion effort by Singapore’s government to build a tropical Silicon Valley.
“It’s like a big dating party, bringing everyone together, which is what Silicon Valley does,” said Agrawal, from Dehradun in northern India, who interned for a year at a Bay Area startup and took classes at Stanford as part of the program. “Here, you sit in the kitchen and discuss entrepreneurship ideas. You discuss entrepreneurship in the bathroom.”
Singapore became Southeast Asia’s only advanced economy by moving up the technology ladder, turning a trading port into the region’s biggest banking center and a manufacturer of electronics, petrochemicals and pharmaceuticals. Now, the nation is looking to gain a bigger share of a software industry that raised $28 billion in initial share sales last year.
N-House, which opened in August 2011, is one strand of a five-year plan by the government that includes offering new technology companies grants of as much as $500,000, supporting venture capital funds, and encouraging high schools to teach business and entrepreneurial skills, in an effort to groom the next big tech entrepreneur.
‘Something different’
“Singapore looks quite favorable,” said Josh Lerner, a Harvard Business School professor who has written about efforts to boost entrepreneurship. “If a program doesn’t work, they’ve been willing to abandon it or fine-tune it and try something different.”
So far, successes have been few. The standard-bearer for the program is Darius Cheung, 31, who sold his first company, a security program that protects mobile phone data, to McAfee for more than $10 million in 2010.
His latest company, BillPin, is among more than 100 in a refurbished public housing block called Blk71 funded by the government and Singapore Telecommunications, the nation’s largest telecoms company. BillPin allows users to divide shared expenses like rent and bar tabs via an Internet account.
Blk71 companies get subsidized office space and free legal and accounting advice. They share space with Edgar Hardless, chief executive officer of Singtel’s multimillion-dollar venture fund, which backs mobile-related startups. More than 90 percent of the tenants are developing Internet-based software and mobile apps, said Lily Chan, chief executive officer of NUS Enterprise, who helped develop N-House and Blk71.
Singapore is “a relatively good place to be doing a tech startup,” said Cheung. “The talent pool, the capital – it’s a lot more available than when we first started.”
Facebook connection
With more Internet-connected mobile phones and residential broadband subscribers than households, the island makes an excellent testing ground, said Andrew Roth, who relocated to Singapore in 2011 from Hawaii. His Perx application, designed to replace store loyalty cards, is backed by Facebook co-founder Eduardo Saverin, who moved to Singapore in 2009 and renounced U.S. citizenship last year.
Saverin, now a permanent resident, introduced the startup to Singtel, Roth said, leading to a partnership announced in October where the telecom company bundles the program with other apps.
While Singapore’s level of development helps test new programs, some companies find its size limiting.
“One of the targets we set was to be out of Singapore within six months,” said Vincent Ha, who moved his company, Gushcloud, to California. The program gets social media users to help retailers advertise in exchange for store discounts and benefits.
“We thought we knew everything, but when we went to Silicon Valley we realized that there are thousands more trying to solve the same problem,” he said.
Conscious choice
“There are more jobs than workers, so there are many who need to be encouraged to make a conscious choice to be an entrepreneur,” says Teo Ser Luck, minister of state for Trade and Industry. “We are breeding a group of young entrepreneurs who are open to and embrace technology.”
Teo also chairs the Action Community for Entrepreneurship, or ACE, which has approved 37 applications for its smallest business grant, about $40,000, since last February.
“We’re pretty liberal about approving them,” said BillPin’s Cheung, who sits on the grant committee. “Relative to any other country, Singapore is definitely right there at the top in terms of how easy it is to get initial capital.”
That may be a drawback, according to Palo Alto venture capitalist Adeo Ressi, whose Founder Institute helps startups in 37 cities, including Singapore.
“Singapore has done the best job of any government to spawn an entrepreneurial ecosystem,” said Ressi, who travels to the city about three times a year to meet with government officials. “However, I think they’ve gone a little bit too far in making it easy. If they can’t actually raise money from people privately, they probably aren’t worthy of being in existence.”
The island of 5 million people, ranked the easiest place to do business for seven straight years by the World Bank, is the second-easiest place in Asia after Hong Kong for entrepreneurs to gain access to capital, according to a study by the Milken Institute published in 2010.
Homegrown effort
Other Asian nations also are trying to foster startups. Taiwan’s National Youth Commission lent a record $72 million to 2,661 young entrepreneurs in 2011, according to the agency’s website. In contrast, China and India, the region’s biggest economies, spawned global software companies such as Baidu and Infosys Technologies with little initial financial backing from the government.
Targeting home-grown startups is a departure for Singapore’s 5-decade-old economic policy of attracting global companies such as Exxon Mobil to set up plants and offices in the city-state. The government is trying to foster five local enterprises with annual revenue of more than $800 million, according to a research paper by the Ministry of Trade and Industry.
“We will continue with our strategy of foreign direct investment,” said Low Teck Seng, chief executive officer of the National Research Foundation, the country’s research and development body which works out of Prime Minister Lee Hsien Loong’s office. “At the same time, if our innovation and enterprise efforts are successful, there will be a pipeline of companies that grow.”
Sharon Chen is a Bloomberg writer. E-mail: schen462@bloomberg.net
Singapore dorms foster entrepreneurs
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