Cyberport's plan starts to bear fruit
Designed to stimulate and help the growth of new companies, the city incubator is beginning to see results as entrepreneurs flock to its site
It's no Silicon Valley yet, but Cyberport is making strides to shed its image as an ill-conceived government venture, and becoming a hive for promising young technology companies in the city.
"Two years ago when we started, half the space was empty. But now, it's full," said Keith Rumjahn founder of CoachBase (formerly J-Plus), a company which produces a platform for sports coaches to animate and share game plays and strategies in real time.
Since joining Cyberport in 2011, CoachBase has grown from a one-man show into a 10-person operation that's seen more than 170,000 downloads of its software, including by the producers of the 2012 film Thunderstruck, which starred actor Jim Belushi and NBA all-star Kevin Durant.
"I honestly had no idea what [the Cyberport incubation programme] would be like. I thought, great, they'll give us money and free space ... but it turned out to be much more than that," Rumjahn said.
The incubation programmes are designed to aid the growth of new companies by offering mentorships, training and access to loans and investors. They also help with presentation skills and regulatory compliance needs, among other aspects of creating a new business. Applications for Cyberport's incubation and Microfund programmes were up, said Cyberport CEO Herman Lam Heung-yeung, with more than 300 start-ups vying for this current round of applications.
Private incubators were also setting up shop in the city.
"Hive, Nest, The Good Lab, CoCoon, maybe around 10 or so have started up in Hong Kong over the past 24 months," Lam said. "When the private sector comes in and engages, it means the market is getting stronger."
Incubators are common in the United States and have become a major part of the business culture. Industry names like Y Combinator and TechStars are supporting start-up technology companies like travel site Airbnb, file storage site Dropbox, and SendGrid, an e-mail delivery system using cloud technology.
CoachBase has become one of the latest beneficiaries of the Nike+ Accelerator programme: a three-month intensive training programme powered by TechStars, with coaching from the sports giant's stable of experts.
Most incubators require about six per cent equity in the businesses in exchange for their help, but Cyberport requires no payback from its startups, despite providing up to HK$530,000 and two years of rent-free office space and utilities.
Frenzoo, which created the Me Girl Smartphone games, is now being backed by the creators of Skype. Emagist, creator of Ninja Saga, a game with more than 65 million downloads, has gone from being a four-man operation to one with 50 employees, and is developing new games for the burgeoning smartphone market.
Another start-up, Leovation - which creates interactive and augmented reality experiences and recently ran the Iron Man 3 holographic experience that drew crowds to Causeway Bay's Hysan Place - is attracting clients like China Telecom and cosmetics company SK-II.
But not all companies survive. About a third of the 189 companies that have gone through the programmes or are being incubated at Cyberport are inactive.
"It's still high-risk," said Emagist founder Boniface Lee Shiu-yin, 40. "With the high price of rentals a lot of people like a stable job. When you count the cost of living and transportation, it's not an easy decision to make," he said.
Rumjahn said: "Parents are a big reason many don't get started. My parents hated it. It's a culture thing ... [People think] being an entrepreneur is borderline equivalent to unemployment."
Cyberport has so far mostly incubated those who are involved in mobile phone technology, educational and lifestyle apps and e-commerce programmes.