What the 5th generation of startup acceleration in Singapore will look like

In part one of this series, I talked about the evolution of startup accelerators in Singapore from Generation 1 through to 4. The Singapore startup ecosystem is now at the tipping point of evolving to Generation 5. Here’s what it entails: accelerators would pivot to become innovation enablers, and our entire ecosystem would accelerate in tandem.

Let’s first talk about what’s on the minds of most – are accelerators still important in the ecosystem?

Yes, definitely. Acceleration benefits startups by helping them raise money. But what is less talked about is the accelerator’s ability to weed out startups that don’t make the cut. Accelerators inculcate the “try fast, fail fast” mindset in their participants. Startups who don’t see funding or traction within six months of graduation typically wind down. This is a healthy recycling of entrepreneurial talent and spirit within an ecosystem.

What is even lesser appreciated is the effect of acceleration on the entire ecosystem – that one can learn lessons on building great startups by attending demo days. The presentations always follow the same format and sequence:

• Who are the identified customers?
• What’s the customers’ problem?
• What’s the impact of the problem?
• How’s the team going to solve it, and do it better than others?

Would-be founders and younger startups can be influenced by these pitches to find product-market-fit in their own products.

Moving on, the evolution of startup acceleration in Singapore is cyclical, somewhat similar to how computing went from concentrated to distributed and back again. We started off with mainframe computers (concentrated), then to PC clients and servers (distributed), and now to cloud servers (concentrated).

Looking through a similar lens, Gen 1 (business plan competitions) was the start of widespread knowledge and activity build-up (distributed). Gens 2 and 3 saw the collective base of knowledge and experience in building startups deployed at incubators and commercial accelerators (concentrated). We’re now in Gen 4, where knowledge about startup acceleration is becoming distributed again, even to corporations.

Pivoting into Generation 5

So as our ecosystem matures, acceleration know-how spreads and can become institutionalized. There is less need for pure-play accelerators like JFDI. The accelerator has disrupted itself and now needs to be re-invented to becoming an innovation enabler. While JFDI pioneered the accelerator model in Singapore, it’s evolving to fit a new, Generation 5 environment. Here are the characteristics:

• More and more (and eventually the majority) of the ecosystem stakeholders possess knowledge on building startups (a decentralization of knowledge).
• There is the desire to build innovation-driven enterprises (IDEs), which leads to better jobs in the economy (a typical government objective), good markets and revenues (startups and corporates both want these), and return on investments (clearly relevant for VCs and universities).
• Stakeholders cooperate, seeking complementary alliances and resources, while still mindful of staying competitive and achieving their own strategic objectives.
• The innovation enabler is involved at the various life stages of a startup from the beginning through to its growth stages. It’s an end-to-end innovation enabler that’s involved in entrepreneur and talent identification and development from pre-acceleration to series A and beyond.
• An interconnected web of ecosystems around the world.

All ecosystems eventually get to a stage where innovation becomes critical to the country. Because innovation gets us ahead of current times, it boosts the economy and create jobs. Even though ecosystems around the world are unique, they are all connected; and this larger ecosystem of innovation and startups has the potential to benefit everyone. Here are some examples:

• Israel is a proven source of good tech-based early stage startups, and many of these startups have and will expand to the US. They seek markets, funding, and exits.
• India has many good startups that are not just targeting local needs and situations but have products and services that are also applicable elsewhere. These startups would end up going overseas, often via Singapore.
• Beijing in China has its own vibrant startup ecosystem which is dominated by a few big players. It’s an intensely competitive, winner-takes-all environment. While the China market is still big, many startups often seek ideas, technology, and business partners from other ecosystems to create additional paths for growth and survival.

Small exits

I’m often asked how are Singapore startups performing ever since the ecosystem was energized two years ago. What they’re really asking is whether any big exits have come or are forthcoming. The common perception is that Singapore startups don’t seem to show many exits. But CB Insights reported that Singapore is in fact ranked 13th globally when it comes to startup exits. Within Southeast Asia, 40 percent of exits in Southeast Asia hail from our tiny red dot.

Closing thoughts