Hong Kong start-ups should 'look to China', not the US, to grow their businesses
Hong Kong’s entrepreneurs should turn their sights to mainland China rather than the United States or Europe to expand their markets, according to entrepreneur-turned-investor Edith Yeung.
Yeung, a partner at the 500 Mobile Collective Fund, which focuses on investing in mobile phone apps, said the vibrant mainland market has a lot to offer tech start-ups, particularly in mobile internet and e-commerce.
“I want to challenge any Hong Kong entrepreneur, just being so close to China, to really take some time to learn what is going on in the China market. It’s very fascinating, especially in mobile internet,” Yeung said during a visit to Hong Kong for the Digital Entrepreneur Leadership Forum at Cyberport.
“Understanding this landscape [in the mainland] would position Hong Kong really well, but I think that most of the young entrepreneurs end up just wanting to look at Hong Kong… or many of them will start thinking about the US,” Yeung said.
Hong Kong’s limited market size has already seen some local start-ups, including custom mobile phone case firm Casetify, move part of their operations to the United States.
A lack of investment in Hong Kong start-ups was identified as a limiting factor for entrepreneurs in the city, according to a study by the Chinese University of Hong Kong Centre for Entrepreneurship and Google released earlier this month.
Between 2007 and 2012, local start-ups received 3 per cent of institutional investments made by Hong Kong-based corporations against 16 per cent in the United States, the report said.
Yeung was born in Hong Kong, moved to the United States at the age of 16 and is now based in San Francisco. She spent 10 years building software for companies including computer technology firm Oracle before deciding at the age of 30 to switch to a career she felt passionate about.
In 2011, she joined Dolphin Browser, an internet browser for the android operating system with more than 150 million installs. She later founded angel investment firm RightVentures.
Yeung said one challenge for mobile start-ups seeking investment is the mindset of traditional investors in Hong Kong who are more familiar with the concept of price per square foot than monthly active user figures.
“A lot of traditional businesses or investors are really curious as to what’s going on, but the same time very uncomfortable with the business model,” she said.