Dynamism and diversity in start-up ecosystem
Start-up hub Launchpad@one-north has become a dynamic ecosystem, with many start-ups entering and leaving it, as well as an evolving range and profile of start-ups. This was one of the key observations which Professor Wong Poh Kam, Director of NUS Entrepreneurship Centre at NUS Enterprise, shared during TechSG Insights at BLOCK71 Singapore on 2 August.
Led by Prof Wong, the TechSG team conducted a census of Launchpad tenants housed in Blocks 71, 73 and 79, over two periods from October to November 2015 and again from February to March 2017. The results were encouraging, showing a substantial 65 per cent increase in tenants in the Launchpad ecosystem — the number of start-ups grew by 67 per cent, while facilitators, defined as players in the entrepreneurship ecosystem which work with start-ups such as angel investors and venture capitalists (VCs), grew 56 per cent.
Highlighting the role of dynamism in the ecosystem, Prof Wong said, “The reality of a vibrant start-up community is that firms die, new firms come in, firms graduate and move out, and it is this dynamism that’s actually important.” A diverse ecosystem with different kinds of start-ups and players was also important for Singapore at this stage of our growth, he added.
Prof Wong’s team analysed the movement of start-ups in Launchpad. Of those housed in Block 71, close to half (49 per cent) moved out or ‘graduated’ from Launchpad; 39 per cent remained in the ecosystem; while 13 per cent ceased operations or became inactive. There was also a high degree of movement among the tenants in Block 71, with 71 per cent of them joining the Launchpad ecosystem within the last 15 months. A similar trend was observed in the other two blocks.
During the period of the study, Launchpad start-ups have also shifted away from internet, mobile, media and lifestyle applications towards biomedical, fintech, business analytics and business information services. The number of start-ups engaging in financial and business services increased from about a quarter of the total number of start-ups to close to one-third. Although there was a drop in the numbers for internet, mobile, e-commerce, media, lifestyle and leisure start-ups, they continued to dominate, making up a third of the ecosystem at the end of the census period.
Prof Wong also shared insights from another survey of high-tech start-ups in Singapore, which included current or former Launchpad tenants. In terms of average sales growth, existing and former Launchpad start-ups generally performed better than other tech start-ups. Launchpad start-ups also tended to gravitate towards emerging markets, such as Indonesia and Thailand, more so than other tech start-ups. This was unlike the situation some five years ago, when start-ups were keener to venture into China, Europe or the US.
Following Prof Wong’s presentation, a panel session featuring start-up founders, a start-up founding member and a venture capitalist shared their views on how the Launchpad could be made even better. Mr Vinod Nair, co-founder of MoneySmart and NUS Overseas Colleges (NOC) alumnus, highlighted the value of connections for start-ups, saying, “It’s all about quality connections, not proximity to the VC.” It was important to find a VC who believes in the founding team's capabilities and is prepared to support the start-up in any way possible, he explained.
Co-founder of e27 and NOC alumnus Mr Mohan Belani echoed the important role which diversity played, saying, “I think the beauty of Launchpad is the fact that there’s always new people coming in and people going out. There’s a constant flow of people. It’s the software like the people that makes this place amazing.”
This edition of TechSG Insights is the third iteration and was attended by more than 100 representatives from start-ups, venture capital companies, research institutes, institutions of higher learning, government agencies and industry facilitators.
See media coverage.