In December 2013, Dr Alex Lin took over the reins of Infocomm Investments Pte Ltd (IIPL), the Infocomm Development Authority of Singapore’s (IDA) wholly-owned subsidiary which invests strategically in support of building Singapore tech start-ups. A veteran in the start-ups and technology scene, Dr Lin has spent over a decade building companies, mentoring entrepreneurs, investing in start-ups and working closely with Singapore universities to help create rapid-prototyping capabilities and incubators. In this issue of iN.SG, he shares his thoughts on how Singapore can build a stronger pipeline of early-stage start-ups in order to strengthen its tech ecosystem.

Why is the tech industry important to Singapore?
For many years, Singapore put effort to develop the banking and finance sectors and as a result, we have been very successful in these areas. But we have also realised that valuable jobs are being created by tech companies because this is where Singapore also has knowledge workers. Unlike many other sectors, tech companies have a lean top and a bigger middle layer. Typically, you have a few senior managers but many more who are project managers and people who create products – the technologists and the researchers. These are people who have deep domain knowledge about the customers and the products and they work quite independently, without a whole lot of support staff servicing them. They are largely a middle-income group of people, so these are valuable jobs that Singaporeans can excel in.

How can we go about developing our tech sector?
What we really need to do is to look at how we can create a tech ecosystem in Singapore that is able to attract top companies, attract top talent and create successful home-grown companies.

Using Creative Technology as an example, many would have sat at the hawker centre asking how they could be like Sim Wong Hoo. We aspired to be successful like him, and we started working our way towards that. People are naturally attracted to “stars”. We need to have good success stories that will inspire other people to do the same. This will help galvanise the creation of a tech ecosystem which will, in turn, provide support for people to pursue their passion.

What are some of the obstacles that we face in building up our tech ecosystem?
We don’t have a lot of feedstock coming in. It’s not that we don’t have enough young people or people creating companies; they are creating companies but there is no systematic way of showing them the best way of doing it.

Over the past 10 years, I must have seen more than 7,000-8,000 start-ups. Based on my experience, a large majority of them have the same problem – they have not clearly defined who their customer is, and they don’t really understand the customer’s problem. When these two crucial starting points are not addressed, no one wants their products and they are not investable.

There is no institutional memory in this ecosystem. The same mistakes are being made over and over again. Entrepreneurs start building products, but a lot of them will not make it. They will throw in the towel, and they do that because they have not burnt their bridges. They are just doing this part-time and when they realise it is not making money, they stop doing it. The more resilient ones will change their focus to try to survive. Yet another group will have an idea and apply for a grant. If they get the grant, they will do it, if they don’t they won’t.

So we have some companies that are surviving on grants, and that is not helping the ecosystem. Grants are convenient, but when companies become reliant on it, it becomes difficult for them to go very far. It would be better to challenge themselves to see if they have a viable business model. Who is your customer? What is the customer’s problem? Will the customer pay for your product? By answering these, a company stands to become viable.

How can we build up a stronger pipeline of early-stage companies?
One way of doing this is through the accelerator model. We put start-ups through a 100-day programme where teams are coached to validate their assumptions and work out the business model. Eventually, they will create a minimum viable product which they can then test with the customer. Previously, this was also happening but with the accelerator programme, it becomes a structured process.

The programme kicks in right from the beginning. When you come into the accelerator with an idea, the first thing they ask you is: Who is the customer? It forces you to think about it and to define the customer’s problem. When you have the problem defined, the solution becomes easy. If the problem is painful enough, someone will pay for the solution, and the business becomes viable.

Who will run the accelerator programmes?
We will bring in foreign mentors and also groom local capabilities. We already have some people with these capabilities who are teaching in universities and incubating start-ups. The difference is that they have not been really pushing the start-ups in a time-definite manner, so sometimes it becomes a very relaxed relationship. Now with the accelerator programme, there is a structure and a timeline to go through the whole process.

What is IIPL’s role in this tech ecosystem?
We are now an “investment plus” organisation. In the United States, you find that a lot of investment companies are also involved in creating start-ups. The effort and focus has changed. We will still invest in growth-stage companies, but we have also realised that we don’t have enough companies going into the pipeline, so we have to look upstream.

It’s not that we are going to run accelerator programmes. We are looking to invest in accelerators – existing organisations that are helping early-stage start-ups – to see how we can align the programmes and work with them upstream to create more feedstock, so that we can invest in the companies that subsequently emerge.