My main learning point from Mr Lee Kuan Yew

I feel much sadder than I thought I would at the demise of Singapore's founding father Mr Lee Kuan Yew. I must have shed tears at least 5-6 times in the last few days as I read his speeches and see his life pictures. Not the type of tears one sheds for a loved family member, but tears shed because his was a life worth living and I feel a great sadness that such a well lived meaningful life has to end just like any other life. And as I reflect on what Mr Lee Kuan Yew represents to me, I realize what I learn most from him is that it is possible to dedicate an entire life to a single greater purpose and have no regrets at the end of it.

Mr Lee Kuan Yew was clearly extremely intelligent and eloquent. He also was a natural leader, knowing when to play nice and when to be tough. But there are many other people in the world who are extremely intelligent and who are strong leaders. It is a genetic lottery and there is not much to respect or learn from that. Mr Lee himself believes that over 70% of a person's ability is determined at birth. I totally agree.

What sets aside Mr Lee is his amazing strength of will and alignment of his entire life to the idea of a strong Singapore. The closest approximation to this I have experienced is the way a good entrepreneur sacrifices and obsesses over their business. But we entrepreneurs do this because we own the company and so we tap into our base human nature to love what we possess to drive our obsession.  But Mr Lee is too smart to not know that he does not truly own Singapore but still he consistently chose to subordinate his life towards what he felt was best for Singapore.

And reading all his books and looking at his home and pictures, I can honestly say I don't believe he did it for any monetary reward or creature comfort. His sense of purpose and benchmark for personal achievement is the Singapore story. That explains his now famous quote about giving up his life for Singapore. He had so many chances to take it easy but he never did it. It could be because he has aligned himself so much, he cannot let go even if he wanted to!

So it all boils down to this. That this super intelligent, thoughtful, eloquent, happily married individual can at the end of his life, reflect and say that his life of conviction and service to Singapore is a life worth living and which he has no regrets. This is very unique viewpoint as most people at the end of their lives don't reflect on business or politics but instead wish they travelled more or spent more time with family.

Mr Lee Kuan Yew has shown another path for those who seek purpose in life. It tells me that it is possible for a highly talented man to devote his entire life and talents to a greater non monetary good and be engaged throughout with it as it grows and evolves. And at the end of that life, have no or little regrets.

Contribution to Singapore Conversation

I wrote this for Straits Times back in late 2012. Editor told me to that it covers too many topics and does not dig deep enough into any specific topic. She suggested that i instead write about my entrepreneurship journey. That is how this article came about!




But since this is my blog, i reproduce the old article here :)


My Vision for Singapore

Singapore in 2030 is an economically thriving, well educated, inclusive and compassionate
nation. We are a top tier global city well known for our strengths in areas like wealth
management & banking, system of governance, high density population living, transportation
hub, tourism, high technology industries etc.

Our population is confident with our diversity. We are multi-cultural, multi-religious and multiracial.
We live together in harmony and respect. We have a common set of values that drives
and unites us and this includes hard work and meritocracy tempered with egalitarian ideals,
tolerance of diversity underpinned by broad based education and a rootedness to our nation
and community built on a sense of common destiny and history.

While the vision is easy to articulate it is the details that matter. Below some specific areas
which I would like to see happen.

Egalitarian Society

We recognize that not all people are created equal, nor are they given equal opportunity due to
different genetic and environmental factors. We need to implement policies that ensure that
our less well to do citizens do not become a permanent underclass. We should be willing to
explore more subsidies for lower income healthcare, housing and education. We should revisit
our policy on the minimum wage, capital gain taxes and estate duties on the top 1%
periodically. We should also be willing to subsidize healthcare and education for the underclass.

The trick is in the balance. I do not advocate a welfare state or taxation system which
discourages enterprise and which erodes human drive. But we need to set a tracked metric to
monitor mobility between the income classes and to sometimes send a signal that Singapore is
a nation and not a corporation. For example, a modest 5-10% estate tax on estates values
above US$10M would give a good signal that we care about redistributing wealth as a principle
but it will not hurt the bulk of the people nor will it result in massive evasion since the rate is
low.

On the topic of transfers, I feel it is better to raise wages at the bottom end than to just give
more transfers which is akin to welfarism.

Politics

Singapore is a representative democracy. We have a dominant one party government and it has
served us well with some missteps along the way. I would want to see more communication
and engagement between the existing government, civil service and the people when it comes
to strategic issues and occasionally even for day to day implementations that affect many.
Some examples include foreign population numbers, housing policy etc.

I would love to see more diverse, talented and ethical individuals answer the call of politics. For
starters, the dominant party should make a serious attempt to woo talent from outside the
military, grassroots and civil service spheres. It is not about money, it is about having a vision
that inspires top talent. This will help prevent allegations of groupthink and perhaps even end
up revitalizing and changing the image of the ruling party. We should seriously consider why
our current political service is unable to match or beat the allure of a career with Google (Do No
Evil) when the results of political service has as much if not more impact on people than Google
does.

Population

For Singapore to be a thriving city, we need a strong domestic economy. While current
sentiment is for population to be capped, we should be broad-minded enough to periodically
review this number and make adjustments as infrastructure and new technologies become
available. I see a large population possible in Singapore if we are creative in our land-use and if
we are able to build a harmonious consensus for high density living. The ability to adapt and
thrive in a high density environment can even be exported worldwide.
We have an ageing population. Let us make sure our healthcare, transport and housing sectors
are upgraded to adjust to our increasing number of older citizens. But let us not also underestimate
the value of our elderly. This is the same population which has brought Singapore
from 3rd to 1st world. I believe strongly that my parent’s generation will continue to add great
value to Singapore as business advisors, family care-takers, capital owners, evangelizing tourists
and more!

Immigration should be used sparingly as a complementary policy to encouraging child birth and
not as a replacement policy. Singaporeans will happily have more children if they believe that
Singapore is a great place for rearing children and that Singapore is not a stressful place to live
in. We need to educate a population that believes in itself, that is confident and that knows
how to maintain a good work life balance. This brings me to the most important area to we
need to work at.

Education

Our future is in our people. We need to ensure that each Singaporean is trained to think
critically as a citizen and individual. Our education system has to be fine tuned constantly to
move with the times. Independence and creativity has to be encouraged even if means we have
mavericks pushing our social boundaries often. I would much rather prefer a noisy marketplace
with competing ideas than an apathetic nation of complainers.

For our national discourse to be effective, the learning of philosophy, national history and
economics are actually rather critical subjects which are omitted in our schools. They should be
mandatory learning at secondary level and up. Do away with early streaming of children if
possible and expose them equally to all subjects. Do a detailed and transparent study tracking
GEP/Top student career outcomes and evaluate with a critical eye. If something needs to give
way, then let it be our obsession with ever better academic grades. Seriously, I do not for one
moment think the current generation of straight A students are any wiser or smarter than the
generations before. They just study a lot more.

A thinking population with a well rounded education in the social sciences, arts and sciences is
our best bet against any future economic, social or political challenges Singapore may face.

Economy

We need more local champions whether government owned or private citizen owned. We need
our Nestles, IKEAs and Asus. This can only happen if a sufficient number of top talent in
Singapore choose entrepreneurship as a career. SPRING , ACE and all the other initiatives are on
the right track. We must continue to encourage entrepreneurship and continue to fund coinvestment
schemes until a critical mass is achieved in multiple industries.

There is a fundamental difference between an MNC who is here because of tax benefits and
infrastructure and a locally owned MNC or SME who is here because the owner is Singaporean.
The latter will stay through thick and thin as the decision making includes emotional ties. The
former will leave when the going gets too tough and profits go down. A good litmus test will be
the current manpower policy shifts. As a local business owner, I understand the need to raise
productivity and hire more locals. I too want to pay locals at the bottom more. They are my
fellow Singaporeans.

Community

We need to have an integrated and harmonious society. Current laws on racial or religious
speech, housing quotas should remain. But the solution lies not with rules, laws, harsh
punishment and enforcement. We need more integration of our peoples.

National Service is the great leveler and nation builder. I am a strong advocate to continue NS
for our young men just purely on this basis alone. Perhaps we can consider a similar but shorter
1 or half year stint for our young women too. SAP schools should have a quota of non-Chinese
in them so that racial integration starts in those key formative years. Having gone through a
SAP school, I think this is one area which if implemented will create even more well-rounded
students.

Summary

The Singapore I envision is a confident, compassionate and top tier nation. We build on our
strengths and play a valuable role on the world stage disproportionate to our population size.
Our people lead fulfilling lives in the spheres of work they choose and our children and elderly
are well looked after. For this to happen, I strongly believe the points I raised need to be
looked into. Not everyone will agree and I hope opponents to my views will add their voice and
reasons to this discussion.

Commentary about Singapore's prospects

Hey... i am quite prescient if i may say so. Predicted very accurately the following :

1) Widening income gap. So bad it has become an election issue.

 2) Accelerating income of top tier. Top 1% of wage earners now have median wage of 700K vs just 60K or so for middle wage earner.

3) Property market went crazy from 2007 to 2013. Many properties doubled in value or more. And now middle class housing and condos exceed 1000psf routinely.

Am i happy with Singapore as it is now? I think we face some really challenging issues and our current political leaders (PAP and WP) have talked about it a lot. I believe if we stay true to our goal of building a nation, we will get through this fine. Key is to think long term while still making sure short term issues are resolved. Sort of like running a company. ====================================================================== (article first posted on sgentrepreneur Oct 2006)

Want to share my thinking on Singapore’s prospects. I actually feel very positive about Singapore for the next 3 years. I started my business in 1999 and went through some really down times all the way until 2004. And for 04,05,06, I could sense Singapore riding a huge wave of growth and optimism. I believe this wave will continue until end 2008 or 2009 at the very least. Here are the everyday signs.

 1. Property market surging on high end and select areas. I think over next 2 years, we will see trickle down to middle class housing and condos.

2. Stock market at all time highs about to breach 3000.

3. Go to any mall or shopping centre. People are buying and they are all very crowded.

4. Employment market very tight. Bonuses and wages will be higher this year.

Personally, I know most SMEs who are service line or high tech are doing very well. At least 30-50% growth this year with strong projections for next year. And going forward, here are the factors which will continue to drive this momentum.

1. Trickle down effect not in full force yet.
2. IRs and a construction and property boom with even more trickle down effect.
3. Singapore’s reasonably successful move to diversify our economy. Our firms are doing better overseas now.
4. Continued boom in high end service/product. Singapore’s cementing as a private wealth hub.

The downsides?
a) Disparity between rich and poor will only widen.
b) Disparity between middle class (sandwich group) and top earners will only widen.
c) We must ensure that as we pursue $$ and growth, we do not disenfranchise our less educated and less fortunate citizens. Otherwise, not only is it ethically wrong, we are creating future social and political problems.

Case in point, I know a early 30s year old who is riding the entrepreneurship wave, his family earns a yearly income of $400-500K. Same as any IB friend or admin service friends of his. His peers who did not ride the wave are still doing decently. They are professionals/ graduates who have worked 6-7 years. Their families earn $100K a year. Those friends will naturally seriously have some envy issues. But that is still ok, since all are doing well.

How about his cohort peers who are not educated (O levels, ITEs) and working in manufacturing lines. Their families are earning 30K annually. Not much saving here already. Go one step down to those who for some reason could not complete studies, and the picture becomes dismal. I know the government is acutely aware of this issue and is moving to do more even as they encourage the growth of the high end side. But sometimes I think the trickle down effect is very slow and perceptions need to be managed very well. My two cents.

Comments from anyone

7 years on and still no YouTube in SG?

Looks like i was quite right back then to say that the environment conspires to ensure that our startups do not scale into the You Tubes of the world. Things are improving with recent exits and higher valuation rounds. But we are still stuck at the 10-100M valuation and exit area. The geographical constraint and market size is really a major determining factor. And with some many other startups operating in their home country in bigger markets, it is hard for SG based one to win in say China or USA or Europe.

 And i still stand by the good university statement. In fact the recent bunch of funded startups in Singapore are all from good schools and are founded by academically smart people. ======================================================================== (Article First posted on sgentrepreneurs Oct 2006)

I have been reading with interest about the recent debate in Singapore about whether we will ever produce our own YouTube type of company. Here is my take of the issue. I will confine my discussion to just dotcom type of companies since that is the area I believe I am qualified to comment on. To be brief, I believe it is difficult but not impossible for a local startup to duplicate what YouTube has done. That is to say, gather tremendous momentum over a relatively short few years and sell out to a larger firm for a world class payout. That means companies like my own – JobsFactory, Hardwarezone, Shareinvestor are all out of our league. 7.1M give or take 5M is not a world class, attention grabbing payout.

Here are some factors I believe are most important. Many have been debated before.

1) Size of market and relevance of local content.
Sad to say, this is a very real problem. Singapore market is way too small and SE Asia is too non-homogenous for effective economies of scale, even online. The way I see it, this is the major obstacle for any wannabe YouTube based in Singapore. Even the big names that succeed in USA find it tough to penetrate a non-english market easily even with cash and brand. Ebay failed in Japan, Google is losing to Baidu in China etc. Even between USA and Europe, there is difficulty. So I believe for a firm to succeed in Singapore, the concept has to be deceptively simple. Ala google style such that is does not require too much localization across the regions and more importantly, it has to be built for the big markets like USA or China. And you will probably need to start with one or the other since language and styles are so different. Chinese sites are messy with loads of flashing banners which US visitors hate.

A good local example is wholivesnearyou.com. I think it is a wonderful local site with great traffic. I estimate they are doing 5-10M page views per month which is very decent for a local site. They are very web 2.0 and very community led. However, it looks too local to me and obviously is focusing on local market.

2) Lack of vision or rather a different vision for local startups
Most entrepreneurs in Singapore do not have a vision to be a YouTube. I think our vision is to grow a good business, impact people in a good way and make good money. It is not to change the entire world. Again, I think most people in the world are like that. Americans, China PRCs are different, by default of their market size and population, doing well in their market, means conquering half the world already. Frankly, I feel there is nothing wrong with being happy and contented with what we have. One other observation I have is that many who do have world beating dreams are usually very very young startups who seriously have not done anything significant with their company. Once their company has some success, I think the environment conspires to reduce the scope of their dreams. We have exceptions of course, Ron Sim, Sim Wong Hoo, Wong Peng Kin are good cases to learn from.

 3) Lack of access to good quality funds.
Even if a firm overcomes the above two and has a great product or service which is global in outlook focusing on one of the major markets that has scale. And the firm has a strong founding team with brains, strategic prowess and management depth, they will still need money to make it all work. Now, frankly if a company has such traction in a major overseas market, then I believe they will get funding from valley investors rather than local ones.

The above 3 factors to me are the most pertinant in the discussion. There are of course others I am sure.

So does that mean we have no hope? On the contrary I believe we do have hope, it is just that we are against a gradient. So if any company does succeed, I truly applaud them. Some examples which I think can have hope? The characteristics I venture to guess will be as follows : Built with a larger market in mind. Either China or USA. But business can be based in Singapore for development, taxation, IP etc purposes. Web 2.0 community led concept. Spread like wildfire across the targeted market. May not even be known in Singapore. Probably focused on young. Esp since young are slightly more homogenous across the world thanks to cross cultural influences. Simple software and at least American standard designs and branding. Many local sites (mine included) are not up to standard still. We have basic grammatical errors, branding not looked into etc.

World class credentials from management team. Sorry guys, but I do not think a couple of fresh graduates will make it unless they are from Stanford, MIT or harvard, or maybe IIT, Bei Da, Oxbridge. Pedigree attracts pedigree. It’s a fact. There are exceptions of course, but I am taking an educated projection here. Funding from similarly well known firms. Perkin, Sequoia etc.

Unedited Version - First published on Straits Times 1st Jan 2013

Reflections of a Singaporean Dot Com Entrepreneur

Mr Lim Der Shing, 37 is currently the CEO of JobsCentral Group. He co-founded the company in 2000 during the dot com crash and grew it into one of the largest online career media companies in Singapore. JobsCentral was acquired by CareerBuilder in 2011.   He is happily married with three very energetic boys. This article is written in his personal capacity. 

Background

My cofounder & I started work full time on JobsCentral Group during the dot com crash of 2000. It was a tough time as nobody wanted to fund us and so we had to bootstrap our business. I can still recall our first sale which was for $9 and we actually cashed the cheque when we received it.  We paid ourselves a monthly salary of S$500 for the first 9 months. Fortunately for us in 2001, we pivoted our job portal business and found a good niche in campus recruitment. We executed on that plan and managed to bootstrap our business to cross S$1M in sales by 2004.  We also got other co-founders with complementary skill sets to join us in those very early years. 

In 2005, we made a major decision to expand our business back into the job portal business. Leveraging on our 5 years of campus recruitment experience, we expanded quickly and by end 2010, we were one of the largest locally owned dot com with over 1M jobseekers and 10,000 employers using our services. In 2011, we were acquired by the #1 job portal in the USA – CareerBuilder for the price of a small listed company.

Currently, my team and I still run the regional business as professional management. We all give back to the startup community as angel investors and by sharing our experiences as mentors. I have gathered some key learning experiences in my twelve year journey and I would like to share them below.

Attitude & Mindset

I have lost count of how many times I have obsessed over some minor detail throughout the day.  Whether it is a watching out for competitor advertisements, or vexing over a small feature bug or even just checking the site every 30 minutes to ensure applications are working fine. I have found that being obsessive ensures success. I also found that when I am obsessive over my business, the various short and long term problems and issues are percolating in my mind all day long. Then sometimes, as if by magic, a solution or path will present itself that frequently works well for the business. And this usually happens when I am doing something totally unrelated like jogging or even sleeping.

Besides being obsessive, most successful entrepreneurs I know are street smart, curious, very competitive and take failure in their stride. Of course, being well educated helps too. This is especially important when scaling beyond 100 staff as many business school type principles and work process issues start to become increasingly relevant.  

We frequently read about successful entrepreneurs whose core motivation is to solve a problem or scratch an itch. Most I have met are driven to build an empire and many simply like to win. I once had a dinner with a very wealthy entrepreneur and he let slip that there are about fifty families ahead of him in terms of net worth in Singapore. I laughed at that time, but upon reflection, I realized that he is dead serious. Net worth is how many entrepreneurs keep score even if they will not admit it.

Are there many potential entrepreneurs in Singapore with such traits? I believe so. We are a highly competitive, well educated society and are famous for being willing to work hard. We just need more success stories where entrepreneurs of varying educational and economic backgrounds succeed spectacularly. With these role models in place, a safe and well paid job with a MNC will seem less and less attractive.

Team Selection and Management

My team works well together. We have clearly defined roles and the team is willing to report to one person. Each member of the team is better than me in what they do and frequently, all that is needed from me is to get out of the way. What works is to be totally transparent in terms of how each person is paid and also to be transparent when it comes to the accounts of the company. Every year, we collectively review and agree on our own pay and bonuses. Once the trust is built, then we can all focus on improving the business.

I have found that managing a team of talented owner managers requires me to manage my emotions very well. There have been many incidents where I have to swallow my pride or put aside anger or disappointment in order to make sure that the best decision is made for the business. It gets easier with time but it is still very much a challenge. I believe that is why some entrepreneurs chose to do it alone and just pay professionals to do the key functional jobs. You can always remove a professional manager but it is much harder if that person is also a significant shareholder.

Most startups I see today are a team. I think a team makes the most sense still especially if you intend to raise funds. Investors like to know that there is a team that complements each other and that their money is in the hands of not just one person. New startup teams need to have a clear idea of roles. They should decide who is the leader, how will pay be decided and sign a joint legal agreement called a shareholder’s agreement to spell out these details and contingencies.

Fund Raising

Back in 2000, nobody wanted to fund us. We were a bunch of fresh graduates with no money or experience.  As such, we were forced to grow organically with just $100K funding from savings, family and friends.  We built a habit to always be cash flow positive in all we do and to grow at our own pace. We kept focusing on clients and what they needed. Fortunately for us, it worked out well.

The usual silicon valley model is to raise funds via angel investors. Once the product has traction, the company will raise further funds via Venture Capital firms (VCs).  This model works well if the business is very scalable and can grow revenues rapidly. However, after observing and speaking with many local and regional startups, I feel there are not many that can meet the rapid growth and large market criteria for raising VC funds.  Generally speaking, the final exit has to be at least worth S$25M to justify a Series A round at S$5M valuation. The only exception is unless the exit happens in 1-2 years like the Tencube or Hungrygowhere case.

In terms of raising capital up to S$600K, there are many options nowadays thanks to the plethora of co-funding schemes from MDA, SPRING, ACE and NRF. A good skilled team with a viable business model should be able to find funding up to this level. What is missing is the Series A round from S$1M to S$5M.  However, I feel this is a consequence of our market rather than something that the government should step in to help on. Entrepreneurs should use their angel round and grow to justify their next round. Very often, it will mean they have expanded into an overseas market and/or are breakeven or profitable in Singapore already. In both cases, they will need to show a clear path and vision to grow to an eight digit valuation to justify a VC round.  We do not want to waste taxpayers money and end up funding many S$1M to S$5M rounds which cannot scale to the required exit size.

Overseas Expansion

We are a conservative bunch of entrepreneurs. We take only calculated risks.  So we did not expand overseas until 2009 when we were clearly profitable in Singapore with sufficient management resources. We have since expanded into Indonesia this year and will enter more ASEAN markets. Many entrepreneurs expand far more quickly and it depends on many factors like whether they are first movers, expected capital investment, market readiness, management team depth etc.

The current situation is that many startups feel a need to go global from day one. They believe that having a regional story is of utmost importance. To some extent this is true especially if the startup is trying to raise money. However, it would be best to have at least firmed up their home market processes and basic business model first.  This ensures that the business does not end up failing on both home and foreign markets.

Mergers & Acquisitions

We had a grand total of 4 possible buyers during the five year period from 2003 to 2008. What I found out is that the valuations offered by Asian firms are really quite poor compared to western suitors. We were offered valuations that ranged from 5 to 10 times PE even though we were growing at 40% per year. The attitude I found that works best is to not plan for an acquisition. Before we were cold called by our current shareholder, we already decided to just hunker down and build the best possible business. Since we were already profitable, there was little pressure to sell or raise more capital.  This also helped us much when negotiating since we staying happily private was always an option for us.

Today, while there is definitely more activity in terms of M&A in the region, entrepreneurs should always remember to look for clients first before looking for buyers. We need more highly profitable local outfits and/or highly scalable regional/global outfits. Both will then be sought after by different type of global buyers. The exits will be eight, nine or even ten digits. And the founders who exit can then become role models and investors for other startups. 

Contribution to Singapore

I feel strongly that entrepreneurship needs to be nurtured and considered as a career path for all Singaporeans. We want both top students and school dropouts to start up.  By deciding to start a business, my team has generated a hundred new good paying, high productivity jobs for Singapore. We help thousands of employers cut costs by improving their recruitment process and we are now helping spur the digital startup community via our angel investments and mentoring.  Imagine if there are thousands more such stories in all industries doing the same!

The various schemes by ACE, SPRING, MDA and NRF are all on the right track. We need to help locally owned SMEs as much as possible. While most of us may never make the same revenue numbers like an MNC can, some of us will do well and the long term rewards will be substantial. I strongly believe that a Singaporean owned company will stay in Singapore through thick and thin in a way that a MNC will never do. SMEs may expand overseas and sell overseas but the profits will be repatriated and spent via their Singaporean shareholders.  

Mentors & Government Help

I have been fortunate to have met and interacted with many entrepreneurs through the course of the past 12 years. It really is true that not only do we need to meet the right person, ask the right questions but also we must be at the right stage of development and frame of mind to benefit. I have learned the most when speaking to fellow entrepreneurs who run similar sized or larger companies. Talking to professional managers helps when I have a specific functional problem. For instance, during our acquisition process, I consulted accountants and lawyers. They were useful in so far when I was discussing specific points of law or financial terminology. But the best learning points I got were with fellow businessmen who have bought and sold companies and who were able to share from personal experience. 

With respect to the many government grants and funding which are offered to digital startups. I would advice new entrepreneurs to go for them but go with the mindset that even if you fail to obtain a grant, you still have a good plan to succeed. In fact, if we look at recent eight and nine digit exits/investments like PropertyGuru, Reebonz, Beeconomic, JobsCentral, and Hungrygowhere, none of us have taken any form of government funding.  Entrepreneurs should always start with ourselves and blame ourselves if anything goes wrong. I cannot stress this enough. Only when we see ourselves as the root of all our business problems, then can we act to overcome them.