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Stanford EE402T 2012: Hong Kong Startup & Funding Between Hong Kong and US

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Stanford EE402T 2012: Hong Kong Startup & Funding Between Hong Kong and US

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Stanford EE402T 2012: Hong Kong Startup & Funding Between Hong Kong and US

  1. 1. Stanford University US-Asia Technology Management Center School of EngineeringEE402T Entrepreneurship in Asian High Tech IndustriesHong Kong Startup and Investment Funding Between Hong Kong and US Part 1 香 Bess Ho Founding Partner of Archimedes Labs Spring 2012 @Stanford 港
  2. 2. Hong Kong
  3. 3. Hong 香 = FragrantKong 港 = Harbor
  4. 4. Official Language• English • British English (Written) • Hong Kong English (Verbal)• Chinese - • Traditional Chinese (Written) • Cantonese (Verbal)Hong Kong
  5. 5. Language• Hong Kong English 港式英語• British English• American English Hong = Fragrant Kong = Harbor
  6. 6. • Before 1842 The name Hong Kong is referred to Aberdeen Harbor - between the Aberdeen Island and the south side of Hong Kong Island.• This small inlet, Aberdeen Harbor, is nick named as “Little Hong Kong”.• First points of contact between British sailors and local fisherman. Hong Kong
  7. 7. Nick NamePearl of the Orient (東方之珠)
  8. 8. Hong KongChina
  9. 9. China Hong Kong
  10. 10. Hong Kong 香港
  11. 11. Hong Kong • China • Macau 香港 • Hong Kong • Taiwan • Philippines • Malaysia • Brunei • Indonesia • Singapore • Vietnam
  12. 12. Hong Kong 香港South China Sea• One-third of the world’s shipping transiting through its water• Hold huge oil and gas reserves beneath its seabed.
  13. 13. China中國 Hong Kong 香港 South China Sea 南中國海
  14. 14. Hong Kong 香港
  15. 15. Hong Kong 香港 • The New Territories (9 Districts) • Kowloon (5 Districts) • Hong Kong Island (4 Districts)
  16. 16. Hong Kong Macau 香港 澳門 • Hong Kong & Macau are two Special Administrative Regions (SARs) of People’s Republic of China (PRC) 中華人民共和國香港特別行政區 中華人民共和國澳門特別行政區
  17. 17. Macau Hong Kong 香港
  18. 18. Macau 澳門Population: 435,235
  19. 19. Hong Kong 香港 Population: 7,061,200
  20. 20. Hong Kong• Land: 426 sq. miles• Population: 7 Million• British Empire Colony after First Opium War since 1839• British Hong Kong - Crown Colony British dependent territory under British Administration from 1841 to 1997• Return to China in 1997
  21. 21. Hong Kong SF Bay Area China including Silicon Valley• Land: 426 sq. mi • Land: 3,524 sq. mi• Population: 7 Million • Population: 7 Million
  22. 22. • Imperial (221 BC -1800s) - Qin Dynasty• British Hong Kong • Colonial (1800s-1930s) • Occupied (1940s) - 3 years 8 months • Modern Hong Kong (1950s-1997) • Hong Kong SAR (Present)HK History Timeline
  23. 23. • British Hong Kong Before 1997• Old Hong Kong Web 2.0 Era 2004-2008• New Hong Kong Post PC Era After 2008 HK Startup Timeline
  24. 24. British Hong Kong Before 1997
  25. 25. Most Admirable Founder • Richest man in Asia (Bill Gates in Asia) • 9th richest man in the world (US$25 Billions) • Assets in15% of Ka-shing Li HKSE 李嘉誠
  26. 26. His Family • His Son Richard Li is Stanford Drop out studyingRichard Li Computer 李澤楷 Engineering
  27. 27. Founder Celebrity • Martial Artist • Follow Bruce Lee • Action-Film Star in Asia • Hollywood Movie StarJackie Chan • Series 成龍 Entrepreneur
  28. 28. Old Hong Kong After 1997
  29. 29. TOM Online• Chinese version of Skype. Online Advertising. Wireless Internet.• TOM group is controlled by Li Ka Shing.• TOM.com (HKG:2383) listed on Hong Kong Stock Exchange via Growth Enterprise Market HKGEM in 2000.• Listed on NASDAQ in 2004.
  30. 30. SuneVision 新意網集團有限公司• SUNeVision (HKG:8008) listed on Hong Kong Stock Exchange via Growth Enterprise Market (HKGEM) in 2000.• IPO priced at HK$10.38 per price• IT company under Sun Hung Kai properties, largest property developers. Internet services, security surveillance system, etc.
  31. 31. • Alibaba.com • Google.com $1.7 Billion IPO $1.67 Billion IPO in Hong Kong on NASDAQ in Stock Exchange 2004 (HKSE) in 2007
  32. 32. Alibaba 阿里巴巴網絡有限公司• World largest online Business-to-Business (B2B) trading platform for small businesses.• Founded by Jack Ma and 18 people in 1999.• Tony Yiu, Hong Kong co-founder, once CIO• Biggest IPO by a Chinese Internet Company.• Underwritten by Deutsche Bank AG, Goldman Sachs Group Inc. and Morgan Stanley.
  33. 33. Alibaba 阿里巴巴網絡有限公司• IPO raised HK$13.1 Million (US $1.7 Million). Priced at HK$13.5 in 2007• Sold 858.9 Million Shares ~17%• Company valuation HK$8.8 Billion
  34. 34. Belle International Holdings Limited 百丽国际控股有限公司 • No.1 women’s shoe retailer in China • Founded by Deng Yao in 1981 in Shenzhen, Guangdong Province. • IPO raised HK$1.1 Billion on HKSE in 2007
  35. 35. • Chinese version of Skype. Online Advertising. Wireless Internet.• TOM group is controlled by Li Ka Shing.• TOM.com (HKG:2383) listed on Hong Kong Stock Exchange via Growth Enterprise Market HKGEM in 2000.• Listed on NASDAQ in 2004.
  36. 36. New Hong KongPost PC Era 2008-Present
  37. 37. According to Business Weeksreport in 2011, HK topped theWorld Economic Forums 2011index of financial marketdevelopment, supplanting U.S. andU.K. from the highest rankings forthe first time. HK jumped fromfourth making it the first Asianfinancial center to lead the 60-country index, helped by IPOs andinsurance.
  38. 38. Startup Funding Process Micro Seed Angel VCFunding Funding Funding FundingMerger / Acquisition Initial Public Offering (M&A) (IPO)
  39. 39. Successful Startup Micro Seed Angel VCFunding Funding Funding FundingMerger / Acquisition Initial Public Offering (M&A) (IPO)
  40. 40. Successful HK Startup • No.1 in Asia Smart Card supplier • Top 3 in PC- linked smart card reader
  41. 41. Advance Card Systems (ACS) • Found in 1995 • Incubated at HK Science & Technology Park • IPO in HKSE • SEHK:8210 Danny Wong CEO & Founder
  42. 42. Advance Card Systems (ACS) • Winner of Product Quality Leadership Award • Forbes Asia’s “Best Under a Billion” - Sales between US $5M-1Billion
  43. 43. Success Elements • Lowest cost. Closest to manufacturing factory • Go outside HK / China, Worldwide • Go to new markets first & faster worldwide • IPO at HKSE to establish business credits • Good solid business reputation • Spend 60% on R&D Innovation - new products • Family Businss - 300 EE Worldwide
  44. 44. Hong KongStartup Story
  45. 45. Hong KongStartup Story
  46. 46. Research Tour
  47. 47. PearsonHong Kong
  48. 48. GSMAGroupe Speciale Mobile (GSM)
  49. 49. 1GSMA Mobile Asia Congress App Bytes’s MAC App Planet Sponsored by WIP Connector Hong Kong Convention and Exhibition Centre
  50. 50. • The Muther! of all Hackathons at Computer History Thibaut Rouffineau MuseumVP Developer Partnerships attracted over WIP Connector 500 mobile Moderator developers
  51. 51. • Facebook announce to open a Sales office in Hong Kong in Feb 2011 • It’s Facebook David Lim 2nd office inMobile Partner Engineer Asia. 1st office Developer Relations & Asia HQ is in Facebook Singapore. Panelist
  52. 52. • Airpush is first mobile ad network based on push- notification • Android based only Inman BreauxVP of Publisher Relations Airpus Panelist / Sponsor
  53. 53. Mobile Monday Hong Kong MoMo HK
  54. 54. WTIA HKWDCHong Kong Wireless Technology Hong Kong Wireless Industry Association Development Centre
  55. 55. 1
  56. 56. Hong Kong Roles 0 1Book Author Speaker
  57. 57. 2
  58. 58. Hong Kong Roles 0 1 2Book Author Speaker Judge
  59. 59. Where to buildHong Kong Startup Dream
  60. 60. 31st Official Hong Kong Startup Weekend
  61. 61. HK Startup Hero
  62. 62. Fri Sat Sun• Pitch Idea • Hack • Hack• Form Team • Hack • Present • Hack • Judge
  63. 63. Day 1
  64. 64. Fri Sat Sun• Pitch Idea • Hack • Hack• Form Team • Hack • Present • Hack • Judge
  65. 65. 1st Prize Winner AwesomeShip
  66. 66. 3 NO. 1 Engineering HKUST NO. 1 Design HK PolyTech University
  67. 67. Hong Kong Roles 0 1 2 3Book Author Speaker Judge Lecturer
  68. 68. Winning is onlythe beginning
  69. 69. 1st Global Startup Battle48 Winning Teams from each Country
  70. 70. Within 2 Weeks
  71. 71. After Newspaper Reporterwinning
  72. 72. After Media Interviewwinning
  73. 73. 1st Global Startup Battle Grand Prize Winner
  74. 74. Winning is onlythe beginning
  75. 75. Global Startup Battle Prize Demo Asia @Singapore
  76. 76. Hong Kong Roles Within a month of Promotion 0 1 2 3 4Book Author Speaker Judge Lecturer Adviser
  77. 77. Minimal Viable Product (MVP)Within 3 Months
  78. 78. Hong Kong Startup Weakness InsufficientPitch / Stage Demo
  79. 79. Global Startup Battle Prize Launch Conference @SF
  80. 80. Teddy ChanCEO / Hacker
  81. 81. Andrew ChanProduct Marketing
  82. 82. Dante TsangCTO / Hacker
  83. 83. HK Startup Story Video
  84. 84. HK Startup Story Video
  85. 85. AwesomeShip Pitchhttp://youtu.be/6uKLh_7hKgs
  86. 86. AfterShip Producthttp://www.youtube.com/watch?v=Xq8cbCCoC3M
  87. 87. Nov 2011 1st Qtr Feb 2012 3 Month BabyAwesomeShip AfterShip Code Name Official Launch
  88. 88. http://itunes.apple.com/app/aftership/id507014023?ign-mpt=uo%3D6&mt=8
  89. 89. Hong Kong Roles Within a month of Promotion 0 1 2 3 4Book Author Speaker Judge Lecturer Adviser
  90. 90. Winning is onlythe beginning
  91. 91. Hong KongStartup Events
  92. 92. • Organizer of Startup Monday • Organizer of Startup Hong Kong • Organizer of HK Startup Weekend Jonathan Buford • Founder of Boot HKCo-Founder of Makiable
  93. 93. • Organizer of HK Startup CollegeJonathan BufordStartup Founder
  94. 94. • Organizer of HK Startup Weekend • Organizer of Japan Startup Weekend • Former MSFT MSN & Yahoo! Nicholas WangCo-Founder of Makible
  95. 95. • Organizer of Startup Leadership Program Miranda GaoHKUST Business Student
  96. 96. HK Founder Institute • SLP is nonprofit founded by VCs in Boston • Biweekly Session on Sat 2-5pm • Focus on StartupStartup Leadership Program (SLP) Leadership Skill
  97. 97. • Instructor • School of Design at Hong Kong Polytechnic University Gino YuMultimedia & Entertainment Technology HK Polytech University
  98. 98. Hong KongBiggest Developer Event
  99. 99. • Founded in 2007 at Yahoo! HK • Biggest Developer Event - Unconference • Regard as Best Barcamp in Asia Ben Crox • Attract 500Organizer of HK Barcamp Developers
  100. 100. Hong KongHacker Space
  101. 101. HK HackerDojo • Hackers / Makers • Co-working Space • Startup Event • Startup Accelerator Program
  102. 102. Boot HK Silicon Valley • US$100 Membership • US$500 Table Space Boot HK • ~HK$500 (US $64) Membership • ~HK$2,000 (US$256) Table Space
  103. 103. Boot HKBoot HK19 Floor Hang Wai Commercial Building231-233 Queen’s Road EastWan Chai, Hong Kong
  104. 104. Hong KongIncubators
  105. 105. Role of Hong Kong Government in funding Startup
  106. 106. HK Stanford StartX • Co-working Space • Startup Event • Startup Incubator
  107. 107. M-Lab • School of Design at Hong Kong PolytechnicM-Lab UniversityUnit 601 & 604 6/FInnoCentre72 Tat Chee Ave • AppliedKowloon Tong, Hong Kong Research • Digital Entertainment Laboratory
  108. 108. Cyberport • Cyberport Creative Micro Fund • HK$100,000 grants for 5 winning startup • Each HK $20,000 (US $2,564)
  109. 109. Cyberport Creative Micro Fund
  110. 110. HK Science & Technology Park • Co-working Space • Startup Event • Startup Accelerator Program
  111. 111. Attracting Startup Founders Doing Business in HK
  112. 112. Attracting Startup Founders Doing Business in HK • Raised $9M Round • Foundry Group David Merrill • True VenturesCo-Founder of Siftable
  113. 113. Attracting Startup Founders Doing Business in HK • Funded by Archimedes Labs Idan BeckFounder of Incident Tech • Guitar Hero for Guitar Player
  114. 114. HK Startup Challenges Micro Seed Angel VCFunding Funding Funding FundingMerger / Acquisition Initial Public Offering (M&A) (IPO)
  115. 115. Signs of Improvement HK Gov Micro Seed Angel VCFunding Funding Funding Funding
  116. 116. • Cyberport CCMF HK$100K• PolyU Micro Fund HK$100K• Hong Kong Science Park HK$100K Hong Kong Government Supported Micro Funds US$13K Grants / No Equity Matching Fund Not 100% Reimbursement Spend first
  117. 117. Hungry Games Micro Seed Angel VCFunding Funding Funding Funding
  118. 118. Hong Kong BusinessAngel Network (HKBAN) • HK Government supported effort to organize angel investors in investing in HK Startup
  119. 119. Signs of Improvement HK Gov HKBAN Micro Seed Angel VCFunding Funding Funding Funding
  120. 120. Hong Kong BusinessAngel Network (HKBAN) Hong Kong Incubators • Cyberport • HK Science & Technology Partk
  121. 121. Hong Kong BusinessAngel Network (HKBAN) Hong Kong Top 4 Universities • HKUST • CU • HKPU • HKU
  122. 122. China Hong Kong 香港 Euro US$Malaysia Singapore
  123. 123. Wonder why those US tech companies put Singaporefirst, HK second? Heard there are more IT talentsthere. True or not?Google, Linkedin put Singapore as SE Asia’sheadquarterFacebook open Singapore office first then Hong Kong
  124. 124. Signs of Weakness• Not enough mentors to guide HK startup founders• Not attracting experts and talents from Silicon Valley• Good example: HK is losing Jason Hoffman to Singapore Jason Hoffman Co-Founder & CTO of Joyent Angel Investor Conference Speaker
  125. 125. Signs of Improvement HK Gov HKBAN Micro Seed Angel VCFunding Funding Funding Funding
  126. 126. HK Based Startup Micro Seed Angel VC Funding Funding Funding FundingSeries A Series B Series C Series D Roughly within 18 months US$ in range of US$10 Millions or more Mobile First
  127. 127. Pure Metal Cards• British Hong Kong Based Startup founded by Richard Buckley in 2011. From idea to launch is 8 month.• Custom business cards made exclusively out of metal from stainless steel to 22 kt gold.• 2 weeks before arrival in HK to search for company names. A few signatures on arrival with accountant and actuary. 15 min meeting with HSBC to open bank account.• Thailand requires foreigners to hire 2-4 locals for every foreigner to hire. It’s high overhead for startup.
  128. 128. US Hong Kong HIGH TAX LOW TAX• One time corporate tax • Personal Income break 35% Tax 2% - 17%• Corporate tax & • Corporation income tax are 16.5% higher than most countries • Unincorporated 15%
  129. 129. Virtual Office Silicon Valley• Business address • US$100• Access to meeting rooms Hong Kong• Internet access • HK$400 (US $51)
  130. 130. Service Apartment Hong Kong• Month to month • Lowest HK $6,000 (US• No contract $769)• No maid service • Average HK• Living space more $12,000 (US personal than hotel $1,538)• Most are located in popular districts near public transportation
  131. 131. Transportation Hong Kong• Taxi • Travel every part of HK• Mini Bus within an hr• Tram • District to district is• MTR within• Train walking distance • Travel within Asia within 6 hrs flight
  132. 132. Hotel Hong Kong • Average HK• Higher than SF $1,560 (US $200) Rent• Same cost as SF & NYC
  133. 133. Living Expense Hong Kong• Breakfast • Cafe lunch HK $10-20 (US• Lunch $1.3-$2.6)• Dinner • Restaurant lunch HK• No Health Insurance $60-80 (US $7.7-10.3)• No Copay• Doctor Visit HK • Hotel Buffet lunch HK $200-300 (US$25-$38) $120 (US$15) including drugs
  134. 134. Hong Kong BusinessAngel Network (HKBAN) Hong Kong Top 4 Universities Incubation Funding • Hong Kong University of Science & Technology (HKUST) • Chinese University (CU) • Hong Kong Polytech University (HKPU) • Hong Kong University (HKU)
  135. 135. Talents Hong Kong • HK University• Most live with parents Graduate HK $6,000 (US• Or married with two $770) - $10,000 (US$1,282) incomes • Experience• Do Not work for equity Engineer HK $13,000 (US• Indian Engineering US $1,700) - $3K (No exp) - $5K (0-1 $20,000 (US yr) $8K (Exp) $2,600)
  136. 136. Biggest Investors Micro Seed Angel VCFunding Funding Funding Funding
  137. 137. Hong Kong Startup Next Step?
  138. 138. This is my HK Dream 0 1 2 3 4Book Author Speaker Judge Lecturer Adviser
  139. 139. What’s your Dream?
  140. 140. Startup Adviser @Bess Bess@archimed eslabs.com http:// www.slideshar e.net/bess.ho Mobile Architect Instructor Startup Adviser Angel Investor
  141. 141. Archimedes Labs• Seed-stage startup incubator• Founded by Keith Teare & Kambiz Hooshmand as Founding Managing Partners• Focus on Consumer, Social & Mobile• Accept pitch from startup teams looking for angel investor

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