The Dilemma of Building a Startup for the Singapore Market

Yes, that’s quite a dilemma.

Entrepreneurs based in Singapore fall into either one of two categories: either they believe that Singapore is the best market to get started in or the worst possible one to succeed in. I think the latter is true and the longer you stay in Singapore, the more you’ll come to realize the serious problems with the market here.

But first, let’s start with reasons for why the Singapore market is so awesome:

1. Seed money flows freely

This is a nation where money paves the streets. Not since the days when the roads of Nanyang (Singapore’s traditional name) were literally paved with gold has there been such a hive of activity in the Singaporean economy. And this trickles down to the startup scene as well. I wrote about this previously – if you’re just starting up and not a recipient of a government grant, something is wrong with you. Why deprive yourself the chance of an added level of support just because you need to fill in a form?

2. Highly savvy and connected demographics

Singapore ranks among the top most technologically savvy populations in the world. While statistics are hard to come by, it is safe to say we are a nation of well-connected mobile users. Best of all, Singaporeans move in broad trends; three years ago, iPhones dominated the scene, but now there is a gradual shift towards Samsung Galaxy phones. This makes planning and penetration simple. Furthermore, the population continually seeks and chases the next upgrade, pushing us to the forefront of the technology adoption curve.

3. Great launch platform into the Southeast Asia region

Lastly, no one will challenge the logic that the Singapore market is small. I won’t even argue against it. However, we are an excellent launch pad for the larger, and much more tempting region of Southeast Asia. There are six capital cities and a total addressable market of 350 million people within an hour or two of Singapore. If that isn’t exciting, I don’t know what is!

The flip side

But what about the flip side of SIngapore for startups?

1. Yes, I have seed funding. Now what?

As much as the initial setup is quick, the race to survive is not. You might hear of huge initial rounds in the half a million range, but this dries up quickly, leaving many facing the “I’m still testing problem-solution fit but ran out of seed money” problem. This makes the Singapore startup scene one where only the lucky survive; it is difficult to distinguish between those that are stronger and those who did not get the chance to fully test their hypothesis. To survive here in Singapore, revenue generation is critical. Jump straight into producing your first drop of income, or risk being obsolete faster than you can say “series A”.

So what’s the takeaway from this?