‘Everyone wants to build a unicorn’: Hong Kong start-ups should clone more foreign success stories, says former Groupon target
Entrepreneurs in Hong Kong should prepare to expand globally rather than making the mistake of drawing up a blueprint suited just to the city’s small, unique but ultimately limiting market, local start-up founders said this week.
But for some business models, focusing on building a strong base in Hong Kong first can prove successful, according to Khailee Ng, managing partner at 500 Startups.
Ng co-founded GroupsMore in Malaysia in 2011 and Groupon snapped it up five months later. He said this formula of copying popular foreign models and localising them could be used as a stepping stone to future projects.
“This opportunity is not talked about enough because it's not cool, it's not sexy. Everyone wants to build a unicorn,” Ng said, using the investment industry term for a start-up whose valuation has risen above US$1 billion.
“If you're an entrepreneur in Hong Kong today … and you quickly clone a business model that's successful somewhere and there's a good chance someone will buy it, even if they don't buy it, never mind, try again."
EasyVan’s Chow Shing-yuk, a former professional poker player, said entrepreneurs should look further afield to either mainland China or Southeast Asia to further their chances of success.
“One thing that I've learnt is that when you start a start-up in Hong Kong, you've got to think of more than just Hong Kong,” said the founder of the van-for-hire and professional delivery service company.
“You don’t build a start-up for a population of 7 million, and Hong Kong being unique means it’s harder to make what works here work elsewhere.”
After it got started in Hong Kong, EasyVan has since expanded to six cities in mainland China, as well as other destinations in Southeast Asia, Chow said at the Young Entrepreneur Forum hosted by Bloomberg Businessweek on Wednesday.
Earlier this month, the company raised US$10 million in funding to expand to another dozen Chinese cities, thus doubling its funding for 2015 so far.
The company operates as EasyVan in Hong Kong, Huolala in China and Taiwan and Lalamove in Singapore and Thailand.
Chow’s view was echoed by David Chung, chief technology officer for Cyberport Management Company, which runs an incubation programme for start-ups.
Chung said the programme now advises companies in the scheme to look for international markets immediately, and sends teams overseas to learn about conditions in various countries.
Gene Soo, co-founder of Start-ups HK, said entrepreneurs in Hong Kong should combine manufacturing experience in mainland China with their knowledge of Western business practices to reach international audiences.
“That’s why, for start-ups out there, as we think about expansion and creating products that appeal to the international market … what we should be doing is integrating capabilities in China and Hong Kong’s branding know-how to really drive products beyond Hong Kong,” Soo said.