Accelerating Hong Kong - article for Peak Magazine

1. ABOVE
Swire Properties'
Blueprint, which
provides co-
working space
and houses start-
ups taking part
in its accelerator
programme,
occupies two
floors in Cornwall
House, Taikoo
Place.
COURTESYSWIREPROPERTIES
4 6 T H E P E A K T H E P E A K 4 7
F E A T U R E
ACCELERATING
HONG KONG
With the proliferation of co-working spaces – many
run by entrepreneurs – and both privately and
publicly funded start-up accelerator programmes,
Hong Kong is seeing a hi-tech reignition of the city’s
entrepreneurial spirit. And now, large corporations
are getting involved.
STORY TONY CHAN
PORTRAITS GARETH GAY
In October 2010, Jonathan Buford
got up on stage at the first Startup
Saturday event organised by
StartUpsHK, a recently-formed
tech start-up community, and
pitched his idea for BootHK, a
co-working space for start-ups. It
was quite simple: Buford needed
HK$100,000 for a two-month
rental deposit on a modest
1,000- square-foot space for
entrepreneurs in Wan Chai.
Among the audience were
Theodore Ma and his father, Max,
founder of the MaBelle Jewellery
Company retail chain. “My dad and
I decided, ‘You know what, this is
a very compelling proposal,’” says
Ma, who became managing director
of MaBelle in 2009. “We walked
right up to him [Buford] and gave
him $50,000. Someone else gave
him HK$50,000. In less than three
minutes, he got his HK$100,000”.
Fast forward five years, and
the number of co-working spaces
in Hong Kong has increased more
than tenfold – from just three in
2010 to 34 in 2015, according to
InvestHK. In addition, there are
six incubators and accelerators,
which also house start-ups. Co-
working spaces have become the
sharing economy’s solution to
the city’s often prohibitively high
office rentals.
Cocoon, which was co-founded
by Ma and opened in June 2012, is
one of these spaces. Before then, Ma
enjoyed attending a lot of the start-
up events that had sprang up in the
city. Part of the reason he became
involved in the scene, Ma says, was
because he wanted to meet people
who were savvy in social media
(in its infancy back then), which
was relevant to MaBelle’s newly-
launched online business.
Initiallyearmarkedfor
MaBelle’sjewelleryheadquarters,
theMasdecidedtoturna
14,000-square-footofficespacein
TinHauintoaco-workingspace.
ItwasnamedCocoon,saysMa,
becausehisfatherwasinspired
bythe1980smovieofthesame
name,whichfeaturedoldpeople
whobecameyoungagain.“Mydad
thinksstart-upideasrejuvenate
peopleandsociety,”hesays.
SinceJanuary2013,Cocoon
hashosted29pitchnightsand
hundredsofotherevents.“We
believeinentrepreneurshelping
outeachother,”saysMa.At
Cocoon’spitchnights,aspiring
entrepreneursgettheundivided
attentionof150peopleinterestedin
start-upsduringtheirfive-minute
presentationfollowedbyafive-
minuteQ&A.Maadvisesteams:
“Don’tjustpitchforinvestors,

2. ABOVE
Theodore Ma,
co-founder of
Cocoon and
managing
director of
MaBelle
Jewellery
Company, at
Cocoon. The
14,000-square-
foot venue in
Tin Hau includes
co-working
space and holds
regular events.
RIGHT
Simon Squibb,
founder and
CEO of Nest
Investments
and founder
and chairman
of Fluid, at
Nest's Hong
Kong office in
Sheung Wan
4 8 T H E P E A K T H E P E A K 4 9
F E A T U R E
pitchforcustomers,teammates,
suppliersandpeopletoworkwith
you.”ThroughCocoon’sevents
andnetworks,start-upshave
collectivelyraisedmorethan
HK$130million,hesays.
Togetherwithseveralpartners,
Mahasrecentlyinvestedin
start-upshimself.Oneofthemis
Shopline,whichwonaCocoonpitch
nightfinalin2013.Thecompany,
whichallowsane-commerce
merchanttoopenanonlinestore
usingamobilephonewithin
minutes,nowhasmorethan
35,000merchantsonitsplatform,
andraisedUS$1.2millioninseed
fundingearlierthisyear.
INCUBATING SUCCESS
In2010–thesameyearthat
BootHKwasestablished–Simon
Squibbputtogetherateamfor
NestInvestments,anewincubator
companyhefounded.
SquibbhadbuiltupFluid,
acreativeagency,foradecade.
Originallyestablishedbecausehe
felttherewasalackofcompaniesin
HongKongthatcouldprovidegood
branding,marketinganddigital
strategiesataffordableprices,
Fluidbecameabigsuccess.Then
Squibbdecidedhewantedtostart
somethingnew.
Afteranalysingwhatheliked
doingthemost,hereachedabitof
anepiphany.“Ithought,‘Whydon’t
Ijustdedicatemyselftohelping
start-upfounders,andwhydon’tI
buildabrandfromscratchagain?
Becausethat’swhatIreallyenjoy,’”
Squibbsays.Whilehestillchairs
Fluid,hefoundsomeoneelseto
runit.
Nestisengagedintwomain
activities:thefirstisincubation;the
secondacceleration.Incubation
occurswhileacompanydevelopsits
technologyorproductandcantake
years,whileduringacceleration,the
focusisonacquiringcustomersand
marketdevelopment,explainsPeter
Dingle,thedirectorofinnovation
acceleratorsatNest.Nest,which
investsseedcapitalandtimein
promisingstart-upsthrough
incubation,nowhasaportfolioof
dozensofcompanies.
NeststartedwhatSquibb
calls“brandpartnership
accelerators”lastyear.Each
three-monthprogramme,which
includesintensiveeducationand
networking-relatedevents,involves
amajorcorporationbroughtinby
Nest.Attheendoftheprogramme,
companiesshowcasetheirproducts
topotentialinvestorsatademoday.
IntheinauguralAIAaccelerator
programme,whereparticipating
companiesweregivenspaceand
mentoringbyNest,sevenoutofthe
eighthealthtechcompaniesthat
participatedgotfundedafterdemo
dayearlierthisyear.Tenstart-ups
havebeenparticipatingintheDBS
acceleratorprogramme,which
focusedonfinancialtechnology
(FinTech)start-ups,whileeightare
takingpartinaprogrammewith
Nissan’sInfiniti,whichisfocusedon
smartcitiesandInternetofThings
(IoT)innovation.
Nestprovidesmentoring,know-
howandrelationships,whilethe
largecorporatesandbanksinvolved
bring,amongotherthings,accessto
largepoolsofpotentialcustomers.
UnlikemostUS-basedprogrammes,
theNestacceleratorprogrammes
donotinvolvepre-agreedequity
investmentsinparticipating
start-ups.“It’sanevolutionof
theUSmodel,”saysSquibb,who
explainsthatinstead,thereisthe
opportunitytotalkaboutpotential
investmentsandpartnershipsatthe
endoftheprogrammes.
SquibbhasseenHongKong’s
techstart-upscenechange
enormouslysincehefirststarted
Nest.“Fiveyearsago,everyonesaid
tome,‘Thiswon’twork,mate.The
market’stoosmall.Don’tbother
investinginstart-ups;gowork
forabank,buyproperty’,”says
Squibb.“Now,Ithinkthatpeople
seeit.Theysee[forexample]Jack
MabuyingahouseonthePeak
“FIVE YEARS AGO, EVERYONE
SAID TO ME, ‘THIS WON’T
WORK, MATE. THE MARKET’S
TOO SMALL. DON’T BOTHER
INVESTING IN START-UPS; GO
WORK FOR A BANK,
BUY PROPERTY'”
— Simon Squibb, Nest Investments
“I THINK THAT A LOT OF PEOPLE IN THE [HONG
KONG] BUSINESS WORLD AGREE THAT THE
ENTREPRENEURIAL SPIRIT DIED IN THE PAST
20 YEARS. AND WE ALL NEED TO REIGNITE IT”
— Theodore Ma, Cocoon

3. OPPOSITE
FROMTOP
PaperclipHK, a
7,000-square-
foot co-working
space in Sheung
Wan, runs
regular events
and an academy
called Startup
Campus;
Deepak Madnani,
founder and CEO
of PaperclipHK
LEFT
Cyberport’s
Smart-Space
has grown from
14 rooms in 2009
to around 76,000
square feet of co-
working spaces
in multiple
venues.
BELOW
Herman Lam,
CEO of Cyberport
Management
Company
5 0 T H E P E A K T H E P E A K 5 1
F E A T U R E
recently.”WhenNestfirststarted
itsincubationprogrammes,they
hadaboutfourapplicantseachtime.
Now,Squibbsays,theygetover
250applicationsforeachpitchday,
whichtheynarrowdowntoabout
20.Nestusuallyendsupinvestingin
oneortwo.
START-UP EDUCATION,
HONG KONG STYLE
Co-workspacesinHongKong
nowprovideahostofvalue-added
services,suchasevents,classes,
mentoringandpotentialinvestment
(inadditiontospace,coffee,
printingandotherservices).Some
catertospecificnicheareas,suchas
hardware,softwareorIoT.
ForDeepakMadnani,founder
andCEOofPaperclipHK,aco-
workingspaceinSheungWanwhich
openedinMarch2014,thelearning
processforstart-upsiscrucial.
Madnaniparticipatedinaworkshop
runbySteveBlank,awell-known
SiliconValleyentrepreneur
GOVERNMENT ITC
AMBITIONS
Meanwhile,thegovernmenthas
pushedinitiativestohelpkick
startITandotherentrepreneurial
activityinthecity.Cyberport,a
sprawlingcomplexwhichincludes
officebuildings,retailspaces
andahotel,wascreatedwiththe
intentionofformingaleading
informationandcommunications
(ITC)techhubintheregion.“We
wanttoencouragethedevelopment
ofthetechecosysteminHong
Kong,”saysHermanLam,CEOof
CyberportManagementCompany
(Cyberport),whichisfullyownedby
thegovernment.
Smart-Spacewaslaunchedat
Cyberportin2009.Afterinitially
startingwithjust14rooms,itnow
encompassessome76,000square
feetofco-workingspacesover
multiplevenues,andcurrently
housesover230companies,says
Lam.PricesstartatHK$800per
monthforafloatingdeskorfrom
HK$4,000foraroom.Usersare
notvettedbutneedtobeIT-related
companies.
InDecember2013,Cyberport
announceditwouldinvestat
leastHK$200milliontodrivethe
developmentofITwithinathree-
yearperiod.LamsaysCyberport
doesnotreceivegovernment
funding,butusesmoneyfromits
operations,whichhavebeencash
positivesince2008.
Thefundssupportstart-ups
throughthreemainprogrammes:
theCyberportIncubation
Programme,whichbeganin2006,
theCyberportCreativeMicroFund
(CCMF),whichwasestablishedin
2011,andtheCyberportAccelerator
SupportProgramme,whichwas
launchedin2013.
CCMFisaseedfundwhich
providesHK$100,000cash
grantstohelpstart-upsdevelop
recognisedfordevelopingtheLean
Startupmovement,acoupleofyears
ago.MadnanisaysBlankhelpedhim
seehisexperiencesasa“journeyof
validation”.
Madnani,whohasover15years
ofexperiencerunningdifferent
businesses,encompassingtrading,
manufacturing,supplychain
management,designandfurniture,
ishimselfaserialentrepreneurand
stillrunsseveralbusinesses.Buthe
isalsopassionateaboutsharinghis
experiencesandcoachingaspiring
entrepreneurs.“Iwanttomakea
dentintheentrepreneuruniverse,”
hesays,addingheiskeenonhelping
Asiacomeupwithitsownapproach
tostart-upsandstressingthat,
“we’renotSiliconValley”.
Heexplains:“InHong
Kong,everyone’sdoingmultiple
businesses.InAsia,wedon’tjustdo
onething.Wediversify.There’sso
manyopportunitiesandtheeaseof
doingbusinessissuchthatwecan’t
helpgettinginvolved.”
Squibbhasanotherinteresting
takeonthispoint.“Ouradvantage
here,inmyview,iswe’refive
minutesbehindSiliconValley,”
hesays.Hecitestheexampleof
JackMa,who,afterseeingPaypal,
AmazonandeBayin“silos”inthe
US,endedupbuildingonemassive
company–Alibaba,whoseeventual
IPOwastheworld’sbiggest–with
thebenefitofhindsight.
PaperclipHKrunsanacademy
calledStartupCampus,whichhosts
regularworkshops.Signatureevents
include“RealEntrepreneurs”,
whereentrepreneurssharetheir
stories,and“ShowMetheMoney”,
whereinvestorstalkaboutwhat
theyarelookingfor.
Ma’sCocoonhasbeenworking
withtheHongKongUniversityof
ScienceandTechnologyandthe
ChineseUniversityofHongKongon
internships,bootcampsandcareer
days.Sincelastyear,hesaysthey’ve
placedmorethan75studentsinto
internshipsatstart-ups.
“INSTEAD OF JUST
‘TECH’, WE NOW
TALK ABOUT FINTECH,
EDUCATION TECH, LEGAL
TECH, FASHION TECH AND
E-COMMERCE. AND THESE
PLAY TO HONG KONG’S
STRENGTHS”
— Herman Lam, Cyberport Management Company
COURTESYPAPERCLIPHK/CYBERPORT(OPPOSITEABOVE)

4. BELOW
Swire
Properties'
Blueprint
occupies 10,000
square feet of co-
working space
and another
10,000 square
feet which
houses start-ups
taking part in
its accelerator
programme in
Cornwall House,
Taikoo Place.
RIGHT
Hilary Szymujko,
head of Blueprint
at Swire
Properties
5 2 T H E P E A K T H E P E A K 5 3
F E A T U R E
prototypesduringasix-month
period.Participantsinthetwo-year
CyberportIncubationprogramme
receiveanuptoHK$330,000
cashgrant,rent-freeofficespace
andothersupportandservices,
whiletheCyberportAccelerator
SupportProgrammeprovidesup
toHK$300,000forrecipientsto
meetthecostsofparticipatingin
acceleratorprogrammes(whichcan
includefees,officerentals,travel
andaccommodation).
“Bygroomingandbuilding
companiesforbetterproducts,
solutionsandbetterteams,Ifeel
confidentthattheywillbeableto
findmoney,”saysLam.
Lamsayshehasseenadramatic
increaseintechentrepreneurship
inthecitysince2011.“Ithinkithas
hadalottodowiththepopularity
ofmobile,cloudcomputing,”he
says.“Becauseofthesetechnology
developments,itissuddenlypossible
forasmallcompanytoreachlarge
The16thfloorofCornwall
Houseisnowaco-workingspace
thatisopentoanyoneworkingin
technology.Withspacecostingjust
HK$2,000permonth,itisfullto
capacity,withover140members,
andthere’sawaitinglist.The
floorabovehousesstart-upsin
Blueprint’ssix-monthaccelerator
programme,whichsupportsB2B
(business-to-business)start-ups.
Thereare10companiesinthe
currentgroup.Applicantsare
vigorouslyvettedandfacean
interviewpanelwhichincludes
high-levelSwireexecutives.
Blueprintreceivedabout150
applicationsforthecurrentcohort.
Withcompetitionfor
acceleratorprogrammesheating
up,US-basedacceleratorTechstars
teamedupwithNestandother
partnerstorunStartUpNext
HongKong–apre-acceleration
programmedesignedtohelpstart-
upsgetintotopaccelerators–at
BlueprintinNovember.
AsinthecaseofNest,the
Blueprintacceleratorprogramme
doesnotinvolveacquiringequity
inparticipatingstart-ups.Butithas
providedotherbenefitssofar.For
example,oneprogrammegraduate,
SnagR,whichSzymujkosayshas“a
clearsynergy”withSwireProperties,
hascompletedseveralpilotswith
thecompany.SnagRhasdeveloped
technologywhichassistsinproperty
siteinspections,sothatwhen
picturesaretaken,theycanbetagged
tofloorplans,makingatraditionally
paper-heavyprocessdigital.
WhatcanallthismeanforHong
Konginthelongrun?
FortheMafamily,it'satopic
closetotheirhearts.“Myfather
instilledtheentrepreneurialspirit
inme,”saysMa.“It’simportantto
us,becauselikewithmanyother
HongKongfamilies,ourancestors
cameherewithnothing.Ithinka
lotofpeopleinthebusinessworld
agreethattheentrepreneurialspirit
diedinthepast20years.Andweall
needtoreigniteit.”
“Moreandmorecorporationsare
interestedininnovationandalso
thenewbusinessmodelstheycan
pickup,”saysMa.
LaunchedbySwireProperties
inJanuarythisyear,Blueprint,
locatedinTaikooPlace,isdescribed
bythemajorpropertydeveloper
asbeingpartco-workingspace,
partaccelerator.“Theideaof
Blueprintcameaboutfroman
internaldiscussionwithinSwire
aboutinnovationandhowSwire
Propertiesinnovates,”saysHilary
Szymujko,headofBlueprint.
Managementwasinterestedin
questionssuchas“Howdoes
innovationcomeabout?” Adigiital
taskforcewasformed.
Andwhentwofloorsofabout
20,000squarefeetinCornwall
Housebecamevacant,insteadof
findinganewtenant,theydecided,
“Let’scarveoutabudgetandactually
bringinnovationtoTaikooPlace,”
Szymujkosays.
audiencesandtobeabletoprovide
technologiesandsolutionswitha
very‘leanandmean’structure.”
Healsoseesmorecrossovers
betweentechnologyandother
domains.“Insteadofjust‘tech’,we
nowtalkaboutFinTech,education
tech,legaltech,fashiontechand
e-commerce,”saysLam.“Andthese
playtoHongKong’sstrengths,
becausewehavealotofexpertsin
allthesedifferentdomains”.
In2006,only25companies
appliedtoCyberport’sincubation
programme,outofwhich12were
accepted.Thisyear,Cyberport
receiveabout1,000applications
foritsCCMFandincubation
programmes,accordingtoKaren
Wu,Cyberport’sseniormanagerof
corporatecommunications.Lam
estimatesthatclosetoHK$500
millionhasbeeninvestedinthe
hundredsofcompaniesthat
havegonethroughCyberport’s
programmes.
Onewell-knownCyberport
successstoryisthatofmobile
logisticscompanyGoGoVan,which
joineditsCCMFprogrammejust
overtwoyearsagoandsubsequently
tookpartinitsincubation
programme.In2014,itreceived
US$6.5millioninSeriesAfunding
in2014andafurtherUS$10million
whenRenRenacquireda10percent
stake.Thisyear,itreceivedatleast
US$10millioninaSeriesBfunding.
ENTER THE CORPORATE
HEAVYWEIGHTS
Perhapsthebiggestrecentchange
inthelocalstart-upscenehasbeen
thegrowinginvolvementoflarge
corporates.Apartfrompartnering
withAIA,DBSandInfiniti,Nest
hasbroughtinotherpartners(such
AmazonandMicrosoftfortheDBS-
brandedacceleratorprogramme).
Cocoon’sMacountsLi&Fung,
KPMGandHongKongBroadband
Networkamongitspartners.
“THE IDEA OF BLUEPRINT CAME ABOUT
FROM AN INTERNAL DISCUSSION WITHIN
SWIRE ABOUT INNOVATION AND HOW SWIRE
PROPERTIES INNOVATES”
— Hilary Szymujko, Swire Properties
COURTESYSWIREPROPERTIES