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Building Innovative Country

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Building Innovative Country

  1. 1. SMART NATION- Bangkok Beta - Government meets design Powered by Anix Lynch at the request of Board Committee of Digital Economy Sep 2015
  2. 2. 2 @anixlynch Engage. Minimum Viable Product. Disrupt! Prototyping a new Economy Finding “Best Practices” to build a “Tech Ecosystem” is easy. Problem comes from Localization, Prioritization and Engagement of all the right parties to really deliver on promises. We are in the right place and the right time to prototype Smart Thailand 3.0 (Ver.1, aka ”Digital Economy”) Failure is part of a journey, but also a door to breakthroughs. The risk is highest if we do nothing. Bangkok Beta @anixlynch
  3. 3. 3 @anixlynch IMPACT* 2025 of Thailand’s GDP’s contributed by tech startups (*+USD$19B) Valuation equals to 5% of current SET stock exchange value in 2015 (50B valuation) Startups created Scale-ups > $1B Valuation (Superstar) Jobs created Effect in Economy Startups Superstars Jobs Economic Impact * Globalise LLC has created a model to assess the economic impact in the economy of tech startup While the model shows linearity and direct output based on input, this is unlikely to be the case due to the very nature of startups, where a black swan like Uber can add up to a valuation larger than all the other startups combined, so it is a numbers game that can change from one year to another. However the model helps us understand risk and reward mechanisms and help us make decisions. 43,000 jobs 1-2 Unicorns, 30 centaurs 2,500 startups created 20-50B USD, mostly from top unicorns.
 Attraction of tech multinationals. New type of foreigner. Talent growth for traditional enterprise. higher general productivity 5% Assumption:
  4. 4. 4 @anixlynch Deep dive and test drive the key changes for Thailand Regula*ons Capital Open  Market One  lead  agency Talents Remove obstacles Add incentives Early Stage accelerator and seed funding (>$20M USD) Sufficient follow-on round (> $250M USD) Capital for traditional companies R&D 
 2nd time entrepreneurs angel investment: Smart Money Angels: 
 See SEIS program in UK Registration/Exit market Diversity/Immigration FDA/FTA/IP/R&D Investor protections Private Equity Laws Intellectual Property Law enforcement Ease of doing business Low regulation zone (Drones, Sharing Economy, Bitcoin, freedom of speech) High transparency Lean operation For entrepreneur by entrepreneur Centralized authority No silos No redundancy Shared mutual goal One stop shop One Shared Goal: entrepreneurs first! Why our most successful entrepreneurs are setting up their holding companies in HK or SG? and exit in Japan? Homegrown. Imported (Engineer, talents) Call back diaspora. STEM reform Support Wannaprenuers Silicon Valley Ambassadors Entrepreneur visa Risk Taking Culture Maximize Research/University English!
  5. 5. 5 @anixlynch 2025 Milestones Plan pilot through user-led design, Bangkok Beta MVP 2016 DIY dream team >100 startups per year High Volume of startups 2017 2018 2019 2020 2025 Thai lead agency is formed by alliance of private sectors High-profile investors decide to move to Thailand Large companies set R&D centers in Bangkok Over 100,000 English speaking engineers 2015 High volume of high quality startups Active trade sale of deals over $200M Center of ”Agri Tech” “Mobile Tech” “SE Tech” Birth of “Google of Food” Prefer AEC over China and India. Entrepreneurship become a desirable career choice Phase 1: Expense. Investment Fully support until ecosystem becomes self sustained Phase 2: Revenue. Social Impact Futuristic and affordable co-working space opens right in downtown BKKFull year-round accelerators, events Thai first unicorn Corporate VCs/FTA are considered as alternatives to in- house R&D >$200M Fund of Funds are announced on TechCrunch Free English, STEM, Growth Hacking courses become available World class university setup in Bangkok Thai unicorns become MNCs Diaspora /Veteran mentors /2nd time entrepreneur returns to be a force in the digital economy Thailand launches VC-friendly matching scheme Top 10 Ease of doing business index Top 15 Ease of starting business index Better ranked than Malaysia AirBnb acquihire Thai startup. Set developer base in Bangkok to dominate tourism sector Visualize Thai new economy “Thai entrepreneur visa” rank high in Google’s search
  6. 6. 6 @anixlynch Game on! UK Got $300K? Love FinTech? 3 years visa! Chile Government gives away $40K without taking equity! China Heavily subsidized. Tencent launched + 100M USD Corporate VC. Alibaba is actively hiring female MBAs who speak Chinese. Business can be started in 4 days. Let’s skip HK! Japan Gree. Rakuten. Softbank set up offices in the U.S. Abe PM sent 200 representatives from Japanese old-fashioned companies to the Valley to learn and later come back to reform Japan. Secure $93K and be recognized as high potential startup to get 2 year visa Ireland Singapore Hungry for knowledge? MIT. General Assembly. TechStars , JFDI. BASH, Plug n Play, ASTAR Canada Permanent Visa granted only by securing $45K of grant from angel investor. Malaysia MAGIC. Stanford, Grabtaxi! Diasporas are welcomed! “The Race” to attract the stars Create 3 full time job to get 2 years visa. No fancy business plan is required. New Zealand
  7. 7. 7 @anixlynch Top 5 Winners 2015 USA Singapore Israel Ireland UK Source: Compass, Aug 2015 @anixlynch
  8. 8. 8 @anixlynch Same as the World Cup.. building an innovative country is about battling for superstars.. Unicorn $1B+ in value Centaurs $100M+ in value Little Pony $10M+ in value
  9. 9. 9 @anixlynch Real Madrid : Getting Google’s Full Attention? 2010 ENISA: Debt to startups and R&D of Companies. 1000s companies funded 2011 2012 2013 2014 2015 First exits edreams, buyvip (amazon). Spain in the map. FondICO to support VCs 2 year-old Wallapop become the First unicorn SpainStartup Manifesto 100,000 engineers per year. New private universities and Hackademies Start to think about Startups. Request of law changes. GoogleCampus setup in Madrid TetuanValley, SeedRocket, StartupBootcamp, Telefonica Wayra accelerators Free co-working spaces across the country UPM, UPC top engineering schools, initiate startup competitions IE, IESE, top MBA schools, initiate startup competition Free Legal support offices Entrepreneur Visa VCs setup in Spain, Barcelona: Kibo, ActiveVP Telefonica Amerigo 300m fund of funds Diaspora back from 500startups, etc. Mentorship. Barcelona Mobile World Congress Exodus of engineers to UK, USA, employees at top startups Spain Startup Summit 2008 Law of Entrepreneurs. Ease to start a company
  10. 10. 10 @anixlynch Silicon Valley - The Storyboard ’79-‘96 Led by Netscape Cisco, Apple+100 firms were active ’97-‘00 ’01-‘08 ’09-‘13 2014 2015 Xerox, Apple Internet commercialization Semi-conductor Boom +50 firms Subprime Crisis Circuit commercialized Stanford, Nasa, HP, US Defense Internet Bubble 50s-70s Cold War New Power Rule: +100 social media firms Crowd wisdom. sharing economy, casual T-Shirt Harvard/MIT rejected offers from McKinsey and JP Morgan to launch a start-up UBERISM We are an Uber of “—“ Add the word “Tech” on everything FinTech, InsureTech, RetailTech, AdTech HBO’s hit show “Silicon Valley” FB - Oculus VR the future of Mobile and TV? Alibaba Biggest Ever IPO Obama hired +140 Silicon Valley geeks at White House! Everyone wants to work at Google YouTube disrupted schooling Just “Google it!”
  11. 11. 11 @anixlynch Israel: The Pioneer. The Coach International Cooporation e.g SIIRD Import goods exempt from BAT and indirect tax Support R&D Centers of foreign companies Employment Grants Birth of technology applied by Google, IBM, Microsoft Launch of Yozma program Pre-competitive and long term R&D, e.g.. MAGNET, TLEM Entrepreneurs and Government jointed effort in building economic miracles Tel Aviv University becomes an innovation machine. 20% Investment grants. R&D and tax benefits World’s 2nd most innovative country Pre-seed and seed program (e.g. TNUFA, NIBN, Life Science Fund) Eliat Free Trade Zone Offer World-class Education Found technologies for earth sustainability (Water, Food Cyber security, medical etc ) Inspire “Entrepreneurship” around the world Leader - Smart City
  12. 12. 12 @anixlynch Singapore: 2002* 2006* 2008* 2010* 2014 2015 IDA (Government) run by American Tech Business man Steve Leonard No.1 Asia’s SMART NATION Free IP 40M funded to regional VCs Government opened startup branch in Silicon Valley Launch of I Jam and accelerators Singapore startup received follow-on investment by U.S top VC Sequoia >7x return 1995 Put Southeast Asia on the World’s Geek Map Over $2B to attract top US VCs Private Equity Hedge Fund Law reform NOC Program by NUS TIS Matching Scheme by National Research Foundation Free co-working space at Block 71 as “Singapore’s Silicon Valley” The 1st Exit Top University set up campus in Singapore Min Kian and Tony Tan started to work on startup Started ACE Startup investment S$1.7B S$8 M digital inclusion fund Started IIPL’s iGazelle One Stop Shop enterpriseone.gov.sg MIT launched program in Singapore Not working Tried again 97% access to computer 87% access to broadband Japanese funds rushed to Singapore >146,000 tech talents (corporate partner, NICF) >8,800 data release to public as data.gov.sg, OneMap. *Estimated Year
  13. 13. 13 @anixlynch Government is partially run by non-Singaporean, business man, geeks and entrepreneurs Big fishes and small fishes support each other. Healthy ecosystem Free market. The more competitors the better. Social Recognition PM honors entrepreneurs and tech ecosystem contributors. VCs are recognized as “Innovation Management Pro” English!! Expat over 5M. English is an official language. Broken Singlish OK! Ambassadors& Entrepreneurs to The Valley Friendly Competition Accumulation of small things that changed big things Singapore’s cultural makeover Government Diversity & Informality To learn, to bridge, to convince top VCs, MNCs, startups and diasporas to start in Singapore. “If Japanese can speak English, even broken English,.. Japan will leave Singapore and China in the dust” Mikitani Hiroshi, Rakuten CEO, Abenomics Advisory Board ”Power to Compete”. April 2015 “Entrepreneurs are the modern age Warriors” Lee Kuan Yew Lee Kuan Yew: The Grand Master's Insights on China, the United States, and the World, February 2013 “it’s not just of talent but of insatiable questioning of authority, of determined informality” Senor, Dan; Singer, Saul Start-up Nation: The Story of Israel's Economic Miracle ”, September 2011
  14. 14. 14 @anixlynch
  15. 15. 15 @anixlynch Partially agreed. Not sure Thailand-only headache Only genius knows (Breakthrough opportunities here!) Low Hanging Fruit- Proven solutions Most solutions are already known and proven Ride the learning curve of others Focus on “Low Hanging Fruit” (LHF) execution Re-group short/mid/long term solutions 1 year 3-5 years 10 years LHFs Partially Agreed Only genius knows Thailand-only headache
  16. 16. 16 6 month-bangkok beta Assemble Dream Team Gearing  team  5  people  to  Plan.Do.   Research.  (1  month)   PreparaBon  closely  with  True.     Set  advanced  assumpBons  (5  keys)    to  finalize  Advisory  Panel  members     Engage  3rd  party  facilitators   ,secretary  team  (Legal,  Finance)   and  government.   1st MVP Wrap  up     2nd  MVP  prep     (1  month)   Executors  and  stakeholders   incenBves  design.   Engage.   Keep  the  momentum  going!       Prototyping Implement    LHFs   Test  drive  (4  months)     Re-­‐assess  (1  month) Design Lab 3 days Panel  and  gear  team  to  deep   dive  into  5  keys  challenges.     Re-­‐group  problems.     Re-­‐adjust  Bmeline/KPI/ Milestones   Engage  executors   Set  budget  to  execute  LHFs @anixlynch
  17. 17. 17 @anixlynch With  ecosystem  building   experience    in:   USA,  France,  Spain,  UK,   Israel,    Malaysia,   Singapore,  Indonesia,   Ireland,  Japan 5 champions each from each quadrant, breakdown into small diversified groups each to tackle 5 key challenges for 3 days in Bangkok, facilitated by world-class facilitator Mix of advisory panel to come to BKK Governments Singapore.  Thailand.  Israel Academics Private  MNCs     +  Tech  Entrepreneurs VCs/Accelerators MREP  MIT  (Entrepreneurship)   Tel  Aviv  (Tech)   Chicago  (Economics,  Public  Policy)   NUS  (Block  71)   Sasin  or  KMUTT  (LocalizaBon)   Khaffman(VC  Investment) From  pony  to  unicorn,  both   domesBc  and  overseas.  MNCs   Khun  Supachai
  18. 18. 18 @anixlynch - Great research. Cool stats. Nice presentation. - Analytics of public data by management experts. - Limited implementation - End Product = Research and recommendation - Less interactive learning process - Relying on top down - One size fits all. - Project can be abandoned due to low engagement - Strategic influence. 6 month beta. Low Hanging Fruit first. - Analytics by ecosystem experts/entrepreneurs - Motivate executors through ownership of solutions. - Localization and country fit-focused - End Product= Champions who can potentially run. MVP - Grow what works. Repeat - Impact through interactive process. - Facilitated by world’s top tier executive academics - Localized by experts with experience with Thai governments - Executor-thinker. Bottom up. - Ecosystem building experience over 15 years. - Proven record of execution Traditional Our approach
  19. 19. 19 @anixlynch To be disclosed and selected after project assignment. Daily rate/Flights of advisory panels are included Advisory Panel/Potential Operators (N= 20) SAMPLE  FRAMEWORK
  20. 20. 20 Insert your picture here! LEGACY!
  21. 21. 21 @anixlynch SAMPLE  KEY  CHALLENGES  ASSESSMENT  (TALENT)
  22. 22. 22 @anixlynch SAMPLE  CURRENT  MARKET  ANALYSIS
  23. 23. 23 @anixlynch SAMPLE  COUNTRY  FIT  ANALYSIS
  24. 24. 24 @anixlynch SAMPLE  GDP  IMPACT  ASSESSMENT * Globalise LLC has created a model to assess the economic impact in the economy of tech startup While the model shows linearity and direct output based on input, this is unlikely to be the case due to the very nature of startups, where a black swan like Uber can add up to a valuation larger than all the other startups combined, so it is a numbers game that can change from one year to another. However the model helps us understand risk and reward mechanisms and help us make decisions.
  25. 25. 25 Some of the below items can potentially be managed through ground level change, but also effective public relations exercises. The first item, for example, is not going to change overnight. That said, the policy of attracting in-bound investment, for example, has been a stable policy despite changes in government. This message can be underscored in communications about the proposed program. An equally important communication may be that many of the macro political and economic factors referenced below will be addressed for the program, by putting in place effective counter measures. That is, ring-fencing the program with effective governmental controls, private sector involvement, governance etc. In short, the program becomes an example of what Thailand CAN do, with the effectiveness of the program (governance etc.) expanding out across the economy generally in terms of private sector activity and governmental behaviours. Structuring an effective program in a new and limited sector is easier than changing an entire economy and political framework. 1. Political and policy instability (a) This will negatively impact the ability to attract capital; venture capital, in particular. (b) Overly interventionist, policy driven governments – particularly one that is military – are of concern to investors, as such intervention distorts market efficiency and predictability (witness the current concern over China). There is a need to underscore policy consistency in Thailand, and a government focused on facilitating the investment / tech ecosystem, with private sector involvement in picking the “winners”. (c) The concomitant security concern also: (i) creates additional investment risk that impacts both the willingness to invest, and pricing; and (ii)is a disincentive to attract and retain talented human capital. (d) It should be highlighted, however, that despite the lack of political stability, there has been relative policy stability in respect of investment and the innovation. 2. Excessive red tape and lack of transparency (a) Although Thailand has improved its global competitiveness ranking, “inefficient government bureaucracy” is still ranked highly as the most problematic factor for doing business in Thailand. (b) Bureaucracy, especially if lacking in transparency is a disincentive to invest or locate in a country due to the increased set up costs and the perceived risk of uncertainty. (c) There are a number of organisations in Thailand involved in innovation type activities – both government departments and private sector. A central coordinating authority should greatly improve economic and administrative delivery efficiencies and transparency. 3. Failure to attract and retain human capital (a) Lack of repatriation incentives for Thai expats with relevant experience overseas (b) Lack of incentives to attract foreign workers with relevant experience (c) Complexity / unwarranted hurdles in obtaining a VISA 4. Failure to continue and expand improvement in the legal / regulatory regime in Thailand (a) Corruption, is a significant concern amongst investors and businesses that might seek to locate in Thailand. (b) Lack of adequate intellectual property protection is also a concern, particularly if the innovation focus is on business that are largely driven by development of intellectual property. Singapore’s IP regime is a strong incentive to technology-based start-ups to locate there, along with the attractive tax regime around IP. 5. Failure to distinguish itself from competitor markets: Singapore, U.S., Israel, and hence losing the competitive battle (a) In short, Thailand needs to be seen as either best in class against what Singapore, the U.S. and Israel do, or as a viable alternative because of what it can offer that the others do not (or cannot). Examples of this might be: a strong relationship with China and Chinese capital, a gateway to South East Asia Ibid., p.360. See fn 4. Thailand scores 38 on Transparency International’s Corruption Perception Index 2014, https:// www.transparency.org/cpi2014/results, sighted 28 July 2015. “0” being highly corrupt and “100” being very clean. By comparison in the Asia Pacific region, Indonesia scores 34, China 36, Sri Lanka 38, Malaysia 52, Hong Kong 74, Japan 76, Australia 80 and Singapore 84. Thailand’s score of 38 is a marginal worsening from its score of 35 in 2013 and 37 in 2012. Relative to other countries, however, it has raised its ranking to 85 out of 174 countries, from 102 in 2013. Corruption ranks as the number one most problematic factor for doing business in Thailand: World Economic Forum, Op. Cit.1. p.360. Thailand ranks 104 out of 144 countries for intellectual property protection, with a score of 3.1 out of 7: World Economic Forum, Op. Cit.1., p.361. Singapore, on the other hand, ranks at 2. See: EY Global Tax Insights, “As and IP Hub, Singapore Can Offer More”, https://taxinsights.ey-vx.com/archive/ archive-articles/as-an-ip-hub-singapore-can-offer-more.aspx, sighted 28 July 2015. Barrier to delivery & Disclaimer
  26. 26. SMART NATION- Bangkok Beta You don’t have to be great to start, you have to start to be great

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