Hong Kong start-up boosters and doubters lock horns at StartmeupHK festival
In the first of a two-part series examining the city’s expanding start-up ecosystem, we look at the annual festival and talk with its key speakers and local enterprises and investors
Brett King wears many hats: he’s a best-selling author, radio host (his show and podcast Breaking Banks is the top-ranked fintech (financial technology) show, start-up founder (CEO of mobile-based banking app Moven) and a contributor to The Huffington Post and BBC.
He’s also very tired, which is not surprising considering his gruelling schedule the past few weeks has included stops in the US, Kenya and Europe.
“One day my body will tell me that I have to stop,” says Australian-born King from his base in New York. “I told my agent the other day that I was feeling overwhelmed and he replied, ‘dude, look at your schedule’.”
King, 48, has big shoes to fill. Last year, festival-goers were heard key speaker Elon Musk, the billionaire businessman behind Tesla Motors and SpaceX.
“I have a few duties while in Hong Kong: to speak about the major technologies that are going to affect our lives in the next 20 years, and how they will disrupt society, health care and education. I’ll also be talking about my latest book [Bank 2.0: How Customer Behavior and Technology Will Change the Future of Financial Services] and about how China is becoming more representative of what fintech can do – more so than what we are seeing in Silicon Valley.”
King is an optimist. He says the future’s bright, with artificial intelligence (AI), robotics, embedded technology and mixed-reality technology being the way forward.
And the smart thing to do, according to King? Adapt or die.
“People who are prepared to adopt technology such as AI will succeed. Yes, there’s a lot of retooling and rethinking that goes with automation, but those who are resistant will fail. If we look back over 300 years, no government or society has effectively been able to stop advancements or developments in technology.”
In a 2014 speech, King said the most powerful smartphone on the market had roughly the same processing power as HSBC as an institution had in 1985. “These super computers we carry around in our pockets are incredible – they are two and a half million times the processing power of the spacecraft that took Neil Armstrong and Buzz Aldrin to the moon.”
He says the rise in automation will hit China hard. He predicts 45 per cent of jobs in the US will be affected by automation; in China, it will be about 70 per cent.
But instead of burying our heads in the sand, the way forward is to create new jobs based on new industries and technologies. The good news is the changes mean cheaper health care with shifts from a treatment system to a preventative one based on such advances as wearable technology.
“Why stop now, when the speed of change is so great and impact so important? We must adopt and adapt.”
(He cites Donald Trump’s plan to take steps backwards with industries such as coal and oil as head-in-the-sand policies.)
Jayne Chan, head of StartmeupHK at InvestHK, sees this week’s festival as a way to help the city keep its head out of the proverbial sand.
“The festival covers a lot: retail innovation, fashion tech, digital health, smart city technologies, fintech and much more, presenting through keynote speeches, interactive how-to sessions, hackathons.”
The city is a prime place for the event, with its start-up scene, albeit a small one, growing fast. InvestHK says the number of start-ups in the city rose from 1,558 in 2015 to 1,926 last year, with local ownership increasing from 50 per cent to 62 per cent.
The scene was boosted by the government’s HK$2 billion Innovation and Technology Venture Fund, but one of the most obvious signs of the rise is the proliferation of shared workspaces and in entrepreneurial support networks such as Metta and Nest.
The government should ... implement more tax offset schemes ... to help entrepreneurs get their innovations off the ground
Chan says the city’s strong entrepreneurial spirit is genetic. “Hong Kong has a history of entrepreneurship, supported in the 1960s by the influx of people from [China] trying different businesses in a bid to thrive in a new environment.
“This heritage and the fact that Hong Kong is attractive to entrepreneurs from overseas, particularly from western Europe and the US, have fuelled growth.”
As a major financial centre it’s not surprising that fintech and IT lead the way. But this dominance is problematic for other sectors.
“Hong Kong is a unique location to build a global business but the economic landscape and social atmosphere puts too much emphasis on the financial services sector, driving lots of talent away from tech and innovation,” says festival-goer Hong Wai-lun, CEO of local start-up Snaptee, a technology-driven apparel brand that allows users to download and create T-shirt designs using photos and text through its app.
“Everything is more efficient and fast-paced in Hong Kong as opposed to Sydney, where the start-up hub is still trying to gain more of a community feel,” says Grana, who moved from Sydney to Hong Kong to grow his business. “There is more government and non-government support here; you just have to ask and be determined. But the government should create and implement more tax offset schemes towards R&D initiatives to help entrepreneurs get their innovations off the ground, support loans and be guarantors for entrepreneurs and government grants.”
Chan says like other start-up hubs around the globe, Hong Kong faces core challenges : funding, talent and market access.
Bianca Ho, co-founder of Hong Kong retail banking start-up Clare.ai, says raising seed funding was her biggest challenge.
“In Hong Kong there is a lack of experience sharing, although this is improving as people return from overseas, or join US/Europe accelerators,” says Ho.
She wants improved education and availability of more investors and mentors to support early-stage start-ups. “We must create a start-up community, focus in specific areas like fintech, AI, hardware, health ... founders sharing and supporting.”
One of the things I often see in the younger generation is their overly conservative parents
Another Hong Kong firm attending the festival is banking platform Kyc-Chain. Its founder, Edmund Lowell, says Hong Kong’s financial authorities must continue to support fintech firms to remain relevant and competitive. And they should not be too conservative.
“As more start-ups mature, there will be improvement in core skills needed by the next generation of workers and SMEs. The successful start-up entrepreneurs will pass along these skills and make angel investments. This creates an ecosystem effect you see in other start-up hubs.”
Alvin Hung, who founded GoAnimate! in 2007, says it was difficult to raise funds in Hong Kong back then. “After meeting between 50 and 70 investors, I received funding from angel investors from the US. We now have 65 people in Hong Kong, Taipei and the San Francisco Bay area. The fast growing use of video from small businesses to large enterprises is what enabled us to be successful. This media transformation is tremendous. In five years, more than 50 per cent of the posts we see on Facebook will consist of video.”
He says one problem for the local start-up community is pressure from older family members wanting the young generation to focus on more traditional careers such as law and finance.
“One of the things I often see in the younger generation is their overly conservative parents. People often don’t take risks because of their parents’ expectations. This is sad,” says Hung.
A University of Hong Kong paper, “Hong Kong as A Start-up Hub: Mavens, Connectors and Salesmen”, released last yearcalled for a change in mindset – from the government, businesses, investors, start-ups to parents and the younger generations – if Hong Kong is to become an epicentre of start-up activities in Asia.
“The number of micro-businesses, inventions and start-ups continues to increase ... millennials and Generation Y are doing things they are passionate about. Technological advancements and intense competition require innovation and a mindset of making changes and taking challenges – this is entrepreneurial spirit. All of these will encourage more people to embrace entrepreneurship.”
Tomorrow, Enid Tsui asks if Hong Kong has what it takes to nurture a supportive ecosystem for start-ups and the creative industries
