As an early-stage investor, entrepreneur and startup executive, I’m most attracted to the ‘magic’ of every company’s first few years after its founding. It’s when momentum (users or clients) is at its weakest, cash (revenue or capital) at its lowest, and talent (founder experience or team) in its shortest supply. Yet, it’s also an era in the company’s history where founders are most courageous, ambitious at its peak and possibilities seemingly endless. With every passing week and month, the founders and their team continue its free-fall off the side of a cliff as it desperately tries to transform the paper it has on hand into a parachute or an aeroplane to avoid joining the carcasses of their predecessors that line the bottom of the chasm they’re falling into.
Most companies don’t make it, but some do. Founders that were responsible for the successes of Apple, Facebook, Google, Tesla, Baidu or Alibaba are more easily recognised and celebrated by mass media—and understandably so—but just as it is when people tell me that Singapore’s past successes cannot be interpreted and applied verbatim to China’s current (and much larger) realities, a smaller success still has a role to play in informing and inspiring its denizens, and hopefully inspire others to do better.
I founded Silicon Straits Pte Ltd in Nov 2012 and consider it more of a ‘Singapore’ than a ‘China’ story. After raising a small seed round in Apr 2013, I co-founded Silicon Straits Foundry with Kent Nguyen and Andy Bui a month later, as a subsidiary of Silicon Straits. We set up our core design and engineering team in Ho Chi Minh City and come May 21, will celebrate its 3rd anniversary as part of the Silicon Straits tribe. Tuan had requested for me to contribute an article as part of the celebrations, so I decided to look back and share additional context and insights.
The Silicon Straits Origin Story
I first posted about Silicon Straits in Nov 2012 on my blog.
Silicon Straits is a tech venture foundry focused on Southeast Asia. We hope to contribute to the growing tech narrative in the region in a big way. We’d love to hear from entrepreneurs, developers, investors, media and neotenous individuals.
Looking back, the meanderings that led me to found Silicon Straits had begun even earlier in 2011, when my seed fund partner Joichi Ito had called me to discuss his MIT Media Lab plans. At that point, our US$5 million ‘Neoteny 2’ fund had not finished deploying our capital and had yet to see any exits. Without another partner with the right profile and track record, I realised I would not be able to raise a new and larger fund and keep going. It would be more than two years later before our fund returned more than USD6.7 million from 4 exits out of 24 investments — Viki, Catch, SeatMe, and Lanyrd. I did not want to sit on my hands and pretend to the world that I was fully engaged; by mid-2012, most of the investments in our portfolio that we led had already completed subsequent financing rounds and no longer needed active management. I had gotten used to a certain tempo after working with Joi and the founders from our investment portfolio, and was restless.
At Joi’s suggestion, I then spent four months in the middle of 2012 hanging out with Pivotal Labs Singapore. Pivotal Labs USA had just been acquired by EMC. As a result, the Singapore office underwent an interesting gear shift after being sold to Digital Garage — of which Joi is co-founder and Board Member of — to form the Singapore arm of what was then known as New Context, which eventually got renamed to Neo. Few people know that pre-EMC Pivotal Labs and Digital Garage are Limited Partners in the ‘Neoteny 2’ fund back in May 2010, and that I’d been a non-executive director of Pivotal Labs Singapore pre- and post-acquisition by EMC. Pivotal Labs set up its Singapore operations shortly after our fund got going. It felt right for me to add to the management bandwidth during this transition period given the context I had, and be helpful. It was interesting to see New Context sell agile software development in the form of paired engineers at SGD2,000 per man day on time-materials basis, as compared to the mainstream fixed scope fixed budget approach. I ultimately didn’t stick around because I felt I was getting in the way of the rest of the management team; I wasn’t full-time but had higher cheque signing limits than the practice lead. He didn’t report to me, nor I to him. I wasn’t fully convinced with how the Singapore office was being managed by New Context HQ in the US, and couldn’t bring myself to make the commitment to go the full 100%. I made a quick withdrawal to avoid turning a full-time role with New Context Singapore into my Vietnam War.
N.B.: Ironically, in Mar 2015, Neo had shuttered its Powell office after its Edgecase-acquired team had dropped from 33 to 12 people after three years. More recently, Neo was acquired by now-EMC owned Pivotal Labs, with Neo Singapore shuttering and joining the Pivotal Labs Singapore team.
I went back to the drawing board. I hadn’t figured out the complete plan but realised I needed to start somewhere. I decided to take the easiest next step, which was to decide on a new name. The Neoteny brand belongs to Joi; I needed to build my own.
The Silicon Straits Brand
The evolution of the Silicon Straits logo happened over three iterations in a year. I had created a crappy word mark in Photoshop in Nov 2012 when I first bought our domain name. I chose the name ‘Silicon Straits’ to represent the spirit of Silicon Valley amidst the Strait of Malacca, an important waterway that touches much of Southeast Asia. It was the first name that came to mind, and only name that stuck.
The second iteration came about after I commissioned a 99designs contest. It lasted for five months.
The 3rd and current iteration were produced by outofstock as part of their scope to design our Singapore office that doubled up as a co-working space and fab lab. The double ‘S’ analogy stuck and was further refined, resulting in a simplified double-displaced semi-circle and logo.
By the time I raised our S$512,500 seed round in end-Apr 2013, the description of what Silicon Straits had become:
Silicon Straits is a venture foundry in Southeast Asia that operates at the intersection of ideas, talent & capital and invests in the convergence of design, hardware & software.
Investing in the Convergence of Design, Hardware, and Software
I had envisioned two key activities for Silicon Straits; early-stage incubation and investment and product development. I knew what was needed for the former, but needed partners for the latter. I also needed working capital to get started. I had next-to-nothing when we got started.
My first investor was Lim Kia Hong. KH was introduced to me by Grace Chng and coincidentally stayed just across the road from me. He felt like the business father I never had; the two of us spent hours often into the wee hours of the night swapping notes and discussing ideas for new business. Despite his age (50+) and accomplishments (successful entrepreneur, tech distribution, listed companies, etc.2), he was young at heart and always gave me sound advice. He knew I needed working capital through our discussions and offered to be my first investor.
My second investor was Dileep Nath. Dileep is the father of Sanjay Nath, one of the two partners at Blume Ventures, an India-focused seed fund that was co-investors with me in my ‘Neoteny 2’ fund. Dileep felt like the business grandfather I never had. His smile and gentle demeanour belied the post-40 risky/crazy move of quitting law and co-founding Kanbay, which eventually listed on NASDAQ and was acquired by Capgemini for US$1.25 billion. I believed Dileep to be the antidote to my impatience and was delighted when he agreed to invest.
My third investor was Ivan Lee. Ivan was introduced to me by a common friend and had sold his stakes in Thai Express for US$80 million. He was nearest to me in age and felt like the business brother I never had. He wasn’t as hardcore a geek as I was, but always had an affinity for tech despite starting his career in the F&B industry. He offered to invest without having met KH or Dileep.
My fourth investor was Teruhide Sato. Teru was an investor in my ‘Neoteny 2’ fund with Joi, individually and through the company he founded and listed, Beenos. We’ve known each other since 2010, and he had then just relocated his family to Singapore.
My fifth and final investor was none other than Joichi Ito. It made sense to invite Joi to the party since he was the progenitor of my post-government journey.
With a mere S$512,500 and since Apr 2013 , I oversaw the growth of Silicon Straits into an innovation tribe in Southeast Asia that builds products, companies, foster communities and makes seed investments. Today, the Silicon Straits tribe has a team of over 70+ across offices in Singapore and Ho Chi Minh City, and oversees US$15 million in early- stage investments. Apart from the remaining portfolio in my ‘Neoteny 2’ fund with Joi, Silicon Straits is a shareholder in companies such as SmoothOps, Burpple, Livi, Caarly, Hipvan, Ztore, GreyOrange, Neoteny 3 and Carro. Unlike a proper venture fund, we make between 2 to 4 investments a year ranging from $20K to 50K a pop. We’re not really investing a lot, but that’s because we’re doing it entirely from our parent company’s balance sheet, and need to juggle the allocation between working capital to fund growth and our investment allocation.
Operating at the Intersection of Ideas, Talent & Capital
I first met Kent Nguyen in 2011 when he was an engineer at Anideo. I had actually met his twin brother Torin Nguyen slightly earlier, when Torin was hired by bunnie as one of Chumby Industries’ first engineers in Singapore. Kent had been introduced to me by AJ Solimine as the ‘hotshot developer from Vietnam’ on the newly formed Anideo team, backed by Eduardo Saverin.
I reconnected with Kent in December 2012 when I was doing my rounds to identify a suitable CTO. By then, Kent had left Anideo and was spending his time between Singapore and Ho Chi Minh City. He was the most compatible CTO I had dated over that 2-month period. I learnt that he had a small team of 3+ in Ho Chi Minh City under TGM Tech supporting the tech needs of its parent company TGM Holdings, which had been formed by ex-NUS graduates from Vietnam. I’ve always found the Vietnamese to possess amazing work ethics and a thirst for exposure and knowledge. I visited Kent and his partner Andy (Bui Hai An) at the Ho Chi Minh City downtown office they had shared with 2359media. It wasn’t much, but between Kent and Andy, I spotted the beginnings of something and managed to convince them to leave TGM and join forces with me to co-found Silicon Straits Foundry. Everything moved at light-speed after that.
I invested the startup capital required out of Silicon Straits, contributed my entire business network of contacts and prospective clients and worked with Kent and Andy to move our Vietnam operations into our District 7 office, at the same time that I was renovating our Singapore office. Those were crazy times; I was responsible for sales and business development, while Kent was responsible for engineering and project management and Andy was overseeing business and people operations. The relationships I’ve garnered since my IDA and Neoteny Labs days ensured that we’d never need sales people, and saw us growing our Vietnam team from 3 to 30 in 6 months, and then to 40 and beyond by the end of our 12th calendar month of operations. We’ve had to tear up our plans and change our processes several times in order to cope with growth. We’ve made mistakes and learnt from them in our hiring and people operations. We’ve had amazing customers who came and stayed with us as we raised our man day rates from S$150 per man day to S$350 per man day (and up).
Despite keeping the team entirely in Ho Chi Minh City, or Saigon as I’d affectionately call the city, Silicon Straits Foundry became our playground to foster design, hardware and software tinkering while retaining sufficient organisation to deliver MVPs to individuals, bootstrapped or funded startups, or scalable mission-critical enterprise software to large organisations across Southeast Asia. We took on straight consulting jobs that were at our usual man day rates. We experimented with cost-plus and equity hybrid models to partake in the risk and upside of our partner-clients. We even developed and launched two SaaS products for the Vietnam market, and invested design and engineering resources in launching an Uber-for-household services play in Hanoi and Ho Chi Minh City, only for our operating partner to try to screw us of our shares and IP (to his detriment). It didn’t always work, but we learnt from our mistakes and failures and scored some pretty big wins along the way, with clientele like SingPost eCommerce (vPost), Starhub, Bluebird, 7-Eleven Indonesia and 7-Eleven Vietnam.
The Next Lap
I stayed at the operating helm as CEO for over two years before appointing Jonas Eichhorst as my replacement in Aug 2015. I assumed the role of Executive Chairman and focused on the meta- and macro- aspects of Silicon Straits’ proverbial next lap.
Apart from spending 80% of my time as Vice President (International) at GreyOrange since 1 Jun 2015, helping Samay Kohli and Akash Gupta with building out GreyOrange’s Asia Pacific team and entry and expansion into the markets of Southeast Asia, Japan, China, Taiwan and Korea, I’ve been pondering upon our tribe’s future. Indonesia has always been an interesting market for us. We’re set for our highest-ever multi-million revenue year come 31 December 2016 and are on track for our third profitable year of operations as a group. Consulting is but a means to an end, and we’re starting to see some long-awaited validation in the form of the tech architecture, design and product development work we’re doing for 7-Eleven Vietnam and Bluebird Indonesia. How this shift from software engineering towards product development can take on further purpose and scale, is something I challenge every one of our tribe members to take on and contribute towards.
N.B.: One of our Vietnam tribe members had a sudden stroke on 21 Mar 2016 and passed away unexpectedly. He has been with us since almost the beginning of our journey, and it was a big emotional blow to the Saigon team. He was 24.
On our 3rd birthday this coming weekend, I wish us all happy celebrations. To Khoa, may you rest in peace and be in a better place. You will be dearly missed by one and all.