12. However, we’re not seeing
many tech success stories out
of Hong Kong or other small
countries
13. HK ranks well globally in terms of competitiveness
1. Switzerland
2. Singapore
3. USA
4. Netherlands
5. Germany
6. Sweden
7. UK
8. Japan
9. Hong Kong
10.Finland Source: World Economic Forum 2016-2017
15. Billionaires per capita suggests significant wealth
Billionaires Per capita
Monaco 3 12,600
St. Kitts & Nevis 1 55,000
Guernsey 1 65,150
Hong Kong 33 132,075
Cyprus 5 171,600
Switzerland 29 284,690
Singapore 19 287,879
Iceland 1 329,740
Sweden 23 425,411
16. Historical sources of economic value creation
Financial services
Trading
Real estate
Tourism
Logistics
17. Interesting advantages
Deep pools of talent in financial institutions & professional service firms
Buccaneering history of trading conglomerates, i.e. Hutchison, Swire, Wheelock,
Jardines
High professional standards
Whilst small market, completely aware, savvy, demanding consumers
Hidden connections globally - Education, family and ethnic connections in China,
Southeast Asia, UK, USA, Canada & Australia
Doorstep to China
18. The US and China still dominate the league
tables for unicorns, save for a few exceptions
19. Do a few hundred thousand
engineers in Beijing and
Silicon Valley have the unique
ability to be visionary whereas
everyone else is a schlepper?
They alone know the recipe of
the secret sauce?
20. Or, is it situational?
Proximity to market? Critical mass of talent?
Correlation vs. cause & effect? Success proves
vision, not the other way?
21. Important elements have favored local players in big markets
Elements Impact
Pools of risk
capital/VC
Invest in local businesses which has a TAM that is sizable enough to justify the massive risk
(historically only big markets had viable VC ecosystems)
Pools of
human talent
Build localised products (only big markets had enough universities and could justify the investment
in people, research to build products, etc.)
Local market
expertise
Access local distribution and marketing channels (distribution and marketing historically was local)
Proximity to
consumers
Understand local consumers (in the past, consumer preferences varied from country to country)
Technology Understand latest developments (virtuous cycle of big markets which have enough variety of tech
developments, investment, etc.)
Know-how Manage effectively in local environments (managing is very local)
Size matters At the time, only big markets had the scale to justify high level of investments
22. Dutch disease...too rich for our own good
Easy money from too many easy opportunities, i.e. investment banking,
market entry, intermediary businesses, real estate, rent seeking
Third-generation issue (First makes it, second spends it, third loses it)
富不過三代
Incredible mobility...HK talents are all over the world
Yes, there are some HK-specific issues
23. Needless to say, the next wave of unicorn
successes will come from companies operating
in multiple markets, and many of those
successful teams will be from smaller,
competitive eco-systems, like Hong Kong,
Sweden, Singapore, Finland, etc.
24. Pools of capital are everywhere, although lumpy
Distribution and marketing channels are global, such as the App Store, Google, FB
Technology has disseminated quickly around the world. Most CS and engineering textbooks are in
English, which many students around the world are proficient in
Many cloud-based, off-the-shelf and open source solutions means no need to build from scratch
Consumer preferences are mostly converging, i.e. millennials in Germany or the US are equally as
pretentious, self-entitled and smartphone-addicted as those in China (there are still some differences but
not as great as before)
In other words, entrepreneurs don’t need the scale of a single large market to support investment in
technology, platforms and the formation of world-beating companies
Many of those key elements are less important
25. We’re optimistic we will see successes emanate
from Hong Kong and other small markets and
ecosystems.
27. What can Hong Kong startups do to be ready?
Utilise HK advantages
• Proximity to various regional markets
• Proximity to Shenzhen
• Hidden connections across the region
• Highly educated workforce
• Asynchronous information flows to accelerate learning
Commitment
• Willingness to take bigger risk...avoid the Morgan Stanely problem (most jobs nowadays don’t offer
much stability)
• Commit to a 10-year, 3-startup adventure
Generational moment
• The next generation is cured of the Dutch disease
28. Consumer vs. enterprise vs. government
• Consumer provides fantastic opportunities, albeit there are still nuances and require localisation
efforts
• However, enterprise (B2B) and government (healthcare, transportation) might be more suited for
cross-border market opportunities
People & asset light approaches
• Cloud-based, off-the-shelf and open source solutions
Deep traditions
• Exploit our buccaneering traditions: hop on a plane and meet 20 people in an ecosystem
What can Hong Kong startups do to be ready?
