Ghost moving to Singapore is no cause for celebration

Photo credit: aotaro

UK-based blog publishing startup Ghost made an impression this week with a blog post titled, “Moving to Singapore.” In it, John O’Nolan, founder and lead designer at the not-for-profit open-source software company, outlines the reasons the startup chose the Lion City to move its headquarters to. He then waxes lyrical about Singapore’s strengths as a place to set up your business.

We’ve heard it all before. Best place to do business in the world, best place to seek investment, stable government, transparency and limited bureaucracy, and so on. Combined with a few other factors Ghost mentions, like support for e-payments facilitator Stripe and non-residents being able to set up companies, it sounds like a no-brainer. This must mean the startup ecosystem here is awesome!

Well, not quite. Sure, Singapore’s startup ecosystem is doing great. But a startup like Ghost moving its business here doesn’t really say much about the ecosystem itself. It mostly says the startup has some very market-savvy people running it.

Simply put, Ghost is using Singapore as a convenient place to incorporate, nothing more. It’s a literal ghost – not contributing to the building up of the startup scene in a significant way.

As many have pointed out, Singapore is the Delaware of Asia. Businesses might register in the country because of its friendly tax policies, but it’s different from putting intellectual capital – the real gold mine – into the country.

Special needs

Ghost is a bit of an aberration as a company. For one, it doesn’t have to look for space in Singapore. In the post John stresses the company won’t even have an office in the country (much like it didn’t have one in London, using instead a “virtual address” – a common way for startups to do business in another country).

Its team is distributed around the world. According to its website, “Ghost is created almost entirely by volunteers. The project is organized and run by a small, non-profit organization called the Ghost Foundation – but it is developed in public, by a large group of contributors all over the world who donate their time and skills to creating a blogging platform for everyone.”

Like its team, Ghost’s customer base is also decentralized, with users all over the world and a product that lives pretty much on the cloud. Simply put, Ghost can serve its customers from anywhere, with little concern over where it’s based.

Photo credit: Erwin Soo

Hurdle race

Two reasons prevent startups from sinking operational roots in Singapore. First, the high costs of living and day-to-day operations can eat into a company’s finances pretty fast.

And second, the sparseness of engineering and technical talent is a constant cloud hanging over founders’ heads, heavier than the perpetual rain clouds over Southeast Asia. It’s actually led to some companies in Singapore taking matters into their own hands.

As a result, highly sought after engineers and other technical talent aren’t as incentivized to come to Singapore, when they could be raking it in in Silicon Valley where the best and brightest are, or enjoying a much more affordable lifestyle in other Southeast Asian countries. Add to that limits that the Singapore government itself places on businesses importing talent from abroad, and you get a heaping helping of challenges to overcome.