At CoCoon, a sprawling work space in Tin Hau, entrepreneurs – mostly in their 20s and 30s – are toiling away in front of their laptops. They speak to one another in muted voices, take breaks on beanbag chairs, go to the vending machine for box drinks, step off to quiet corners for phone calls with clients. But the loci of their attentions, the homing centres of their swirling paths of movement, are their laptops. Venture anywhere and the laptops go with them.
CoCoon is privately owned and run as a social enterprise; start-ups and other small businesses can use its premises for a monthly fee of HK$1,000. Enter, and you’ll see what a Hong Kong tech start-up looks like.
I suggest to Ken Chan, one of the entrepreneurs, that setting up an online business doesn’t seem particularly exciting. “You can’t say it’s not exciting. It’s exciting in our minds,” he says, emphatically. “It just takes time.”
Often schooled in the ethos of California’s Silicon Valley, Hong Kong’s young tech entrepreneurs are undaunted by uncertainty – even by the prospect of failure – as they strive to stake their place in a local start-up scene that, according to those active within it, has come alive in the past five years.
While their backgrounds and expertise vary, one thing they can agree on is that Hong Kong needs more examples of online businesses that make it big – as in, make big money.
Armed with laptops and ideas, the entrepreneurs at the Tin Hau office are having their go at making it big – in some cases, their second or third go.
“In Silicon Valley, people are used to working in a company where even the founder isn’t sure if the ideas are right or wrong. So people are very open,” Chan says.
Chan, 34, who has an electrical engineering degree from the University of California, Berkeley, was working for a dotcom company when the bubble burst in the early 2000s. After his firm went bust, he returned to Hong Kong and took on a few “normal” jobs: working in information technology for finance companies and the government.
This year, he started WholeDayBuy.com, which roughly translates in Chinese to “a very good deal”. The site is a place to find local restaurant and shopping deals, a Groupon focused on small companies and incorporating feature articles and games.
Chan’s short-term goal for the site is to garner 10,000 users by the end of the year. He is using Hong Kong as a test bed for his business and is looking to expand the concept to other cities.
That is the beauty of online businesses – unbound by the geographical limitations of the storefront, they can reach across regions and the world. “If you’re a success, it multiplies the success,” Chan says of the internet’s commercial potential. “But it’s also more competitive.”
In Silicon Valley, failing a few times is almost expected before you hit on the right idea. It’s a culture that clashes, Chan says, with those of Hong Kong’s finance industry and other traditional businesses, in which professionals follow money-making formulas to the tee.
“In banks, the job is to find the best practice and follow it. In startups, you never know what’s going to happen,” he says.
It is a frequent complaint among young entrepreneurs: the local banking industry steals away talent.
“It’s a challenge finding programmers [to build a website]. Graduates in those fields go to operations and tech support at a bank,” says Vicky Wu, 25, co-founder of ZaoZao, a crowd-funding site for fashion designers that launched in late September. Crowd-funding allows inventors to raise the capital they need to manufacture a product by soliciting small donations and pre-orders.
There is not a great deal of drive in Hong Kong to launch an online business, says Wu: “There are more lucrative choices out there that are not that difficult to get.” She would know. After graduating from Harvard University with a neuroscience degree, she worked at Goldman Sachs in Hong Kong for a couple of years before starting the site with Xiangling Cai, also 25, who had previously worked at fashion houses Gucci, in Hong Kong, and Oscar de la Renta, in New York.
The conception of ZaoZao (zao can mean “early,” “find,” or “make” in Putonghua) was a matter of throwing around business ideas, seeing an opportunity and quitting their jobs.
“It was also just the sheer excitement of being 24 at the time. Doing your own business is really cool,” Wu says.
Wu was born in the United States and grew up in New York. Then came Harvard, where success stories and inspiration abound.
“I was friends with the guy who founded Facebook,” she says, matter of factly.
Eduardo Saverin was one of five co-founders of Facebook. He fell out with Zuckerberg and Facebook, and, in 2009, moved to Singapore.
Wu says that exposure to the tech industry in the US fosters a mindset different to that which is prevalent in Hong Kong.
“I have a greater appetite for risk. I like trying new things,” Wu says.
“I might be a little crazy but I think it’s all worth it.”
Her site offers a few dozen products that need funding, and nearly half have been fully covered by buyers. For example, a handbag designed for Hong Kong brand Artessorio reached its full goal of US$1,025 in funding from five customers, each of whom paid for a bag to be made and shipped, at a cost of US$205 apiece. The aim is to have a diverse range of products, including fashion accessories and works of art, by designers from across Asia.
The start-up has recently moved operations from CoCoon to the Science Park’s new Incu-App Centre, part of a government-funded incubation programme that provides cubicle-like office space in a hi-tech building. This one features facial-recognition security.
For ZaoZao, the opening of the Incu-App Centre in late September was well timed. After passing an application process, the fledgling business can stay at the Sha Tin location for 18 months, during which time it can claim up to HK$300,000 to cover costs.
This kind of funding is crucial to a vibrant start-up environment.
Support from family and friends helps, too.
“In general, everyone’s really supportive,” Wu says. “But in a way that’s like, ‘It’s great that you’re doing this, but I would never do this.’”
Hence one of Rayfil Wong King-yip’s mantras: “Be a rebel”.
“Innovation is doing things differently from what other people are doing.” Of Hong Kong’s youth, Wong says, “People are still appeasing their parents.”
Hong Kong-born Wong, 34, who also attended Berkeley, got an unconventional start as an entrepreneur. He auditioned for the US television show American Inventor – basically American Idol for creative types. The show’s producers taught him that exuding energy is key to selling oneself. He did make it onto the small screen with an anti-drink-driving device but was eliminated in the first round.
In Hong Kong, Wong created an app for sharing food photos.
Despite the passion among locals for taking pictures of their meals, the venture failed.
“I miscalculated how I would make money,” he says.
Undeterred, Wong continued to go it alone. His latest project, a selfhelp electronic children’s book for the iPad called The Brave Unicorn, was a response to the suicide of a cousin. The book, which is available for download at Apple’s iTunes store, is, appropriately, about overcoming challenges and failure.
Wong hopes to sell 250,000 copies by the end of this year, which, at US$4 a download, will bring in revenue of US$1 million. The plan is to then approach Disney or the Cartoon Network with the view to them acquiring the characters and growing the brand. Wong sees The Brave Unicorn as joining the pantheon of children’s greats, lining up alongside Hello Kitty and Thomas the Tank Engine.
“I’m more grand vision than other people who are just authors.
Honestly, they don’t make money that way,” Wong says. “It’s just natural unrelenting ambition to get this off the ground.”
And he’ll need a lot more of that, by the looks of it; since it was published in July, The Brave Unicorn has sold fewer than 50 copies.
At 23, Jah Ying Chung feels old.
“Older than when Mark Zuckerberg started Facebook,” she says.
Chung describes her start-up, LaunchPilots.org, as a “Groupon for social good”. It will be a mobile app that connects companies with a social agenda to people looking for ways to contribute to worthy causes.
“Instead of buying deals, they join an action,” she says. Bands and other artists looking for corporate sponsorship could also make use of the app.
“Our vision is of every young person being able to pursue something they really care about.”
The app is to be launched this month and Chung hopes to have five to 10 “actions” on offer at any given time. Her goal by the end of this year is to have 1,000 users.
Success, she says, will not be measured in monetary terms. Although she’ll have to make enough to survive, the true success of the venture will be based on social impact.
Unusual among her CoCoon peers, Chung’s background is purely local; she had her first experience of building a social enterprise as a student at the University of Hong Kong, which led her to join 350.org, an organisation devoted to combating climate change.
“I want to empower young people to do things in society and be recognised for it,” she says.
Her days of leading a start-up, which involves managing parttime workers in the mainland, India and Cameroon, see her holing up in CoCoon to work on the website, testing it out on fellow entrepreneurs and meeting with mentors, clients, potential customers and team members.
“Sometimes I give talks at schools and other places – to inspire people,” she says with a laugh.
It seems remarkable that someone as young as Chung is taking up the mantle of supplying inspiration where, according to many of these young business owners, there seems to be such a dearth of ideas, mentors and support.
Co-working spaces, incubator organisations and technology groups are cropping up quickly to fill the void.
“Our mission is to create a start-up culture in Hong Kong and make people realise there is another way to make big money instead of just working at a bank or in property or even the stock market,” says Simon Squibb, chief executive of Nest, another incubator in Sheung Wan that is modelled on Silicon Valley lines.
Squibb says his model is unique in Hong Kong because it focuses on individual entrepreneurs, rather than a specific sector, “and the idea is more a secondary part of the process”.
Entrepreneurs such as Chung appreciate all the support they can get, even if it is just the comfort of being around others with the same aspirations.
“It’s such a good feeling to be around people who know what I’m doing,” Chung says of CoCoon. “I guess it’s how bankers always feel in Hong Kong.”