In Singapore, Building Businesses for the Next Billion

OCTOBER 30, 2013, 8:30 AM

In Singapore, Building Businesses for the Next Billion

By QUENTIN HARDY

SINGAPORE — Years back, my first serious job began in a warehouse in a jungly part of this island nation. I returned there last week. The same building, somewhat refurbished, is now five stories of start-ups, accelerators and venture capital offices, surrounded by modern high rises. That is not shocking. Living in modern Asia is about embracing contradiction and change. A deeper look at what’s now happening inside this old factory building, though, showed how much today’s cheap, portable technology is affecting virtually all societies around the world.The building, called Block 71, is like much of Singapore: a product of state-sponsored planning. It was founded in 2011 as a way of consolidating early-stage local and expatriate technologists and investors in a country with a population of just 5.3 million. There is a state-financed business accelerator there, and several independent venture firms.

Singapore’s tiny size always forced it to look outward, whether servicing foreign ships or assembling electronics for export to Europe and the United States. Now that software is delivered over the Internet and almost everyone has a phone, Singapore still needs to export its business, but the regional market, with an extraordinary mixture of rich and poor, has a lot more potential.

Among the start-ups in Block 71 is a company that uses software to teach people in the rural Philippines to become telemarketers. There is a method of loaning money to people in need of infrastructure like clean water. Earlier, I had dinner with an engineer at mig33 a social network with 65 million users, aimed largely at people whose Internet connection comes over cheap mobile devices.

The local office of an American company, called Boku, is developing mobile payments systems for phone companies in places where people don’t have banks, tuning numbers and minutes into identity and money.

At the other end of the income scale, people are developing fashion sites for teenage girls who write about their shopping sprees and resell the goods, a way to recruit and manage research projects, and kits for quad copter drones built with three-dimensional printers. For the vast middle, there is a social network for watching sports, and a way to evenly split the bills after a night of drinking.

“There are over 1 billion people within a four-hour flight of Singapore,” said Hian Goh, a partner at Pivotal Asia Ventures. While that is true of a couple other Asian capitals, he noted, “nowhere else has the range wealth: Singapore’s $60,000 per capita GDP, and $3,000 in Laos. Technology is a force enabler for all of them.”

The expatriate ties are equally diverse, with companies from Russia and the European Union looking for cross-border investment, and individuals from South Africa and Slovakia who were drawn by the warm weather, easy business regulations and high-speed connectivity.

One incubator, called The Joyful Frog Digital Incubator (the name has something to do with “just do it”), wouldn’t seem out of place in the Silicon Valley, except the house barista is more cosmopolitan.

This isn’t to say “there is better than here,” or “Asia wins.” Those responses are increasingly incoherent. It may not be that kind of contest, and for many of these people, even in a state as closely managed as Singapore, the nation matters less than connectivity and what local populations need.

They are building a world where tech travels everywhere, demolishing existing systems and changing societies.