“You may look at pictures of Hong Kong and think it’s a big high-tech city. But there’s a lot of people still clinging onto the traditional ways of doing business,” Casey Lau described his home. Known famously as the co-host of RISE and partner at Dimsum Ventures, Casey is also a co-founder of StartupsGBA. Over the years and multiple cups of coffee, StartupsGBA helped create a diverse thriving tech startup ecosystem in Hong Kong.
Casey believes startups are the key to finding new ways of doing old things. In doing so, we will find solutions to some of the biggest challenges the human race faces today; such as banking for the poor, sustainable food production, saving the oceans, and more.
By solving these challenges, startups can help heal the world. For this, they need a buzzing ecosystem that supports their efforts. So, we caught up Casey at Disrupt Asia 2019, Sri Lanka’s premier startup conference and innovation festival. Here’s what we learned about what it takes to build an environment that helps startups succeed from Casey Lau.
The first ingredient of a thriving startup ecosystem: Community
Since their inception, over centuries, coffee shops have held a reputation of being places where ideas were exchanged. Even in modern times, this reputation holds. In 2009, a group of individuals made it a habit to meet every week at coffee shops in Hong Kong.
Together, they brainstormed and exchanged ideas to develop the startup ecosystem of the city. Casey was one of these individuals and alongside him were Gene Soo, John Buford and Daniel Cheng. “We’d share what we were working on and what we needed help with. No matter what, we would meet every week to talk about startups,” said Casey describing these meetings.
After countless cups of coffee, they launched StartupsHK. Working together, they aimed to ignite the tech startup ecosystem in Hong Kong. To that end, they hosted a series of conferences and networking events. On the surface, their approach seemed simple. Yet, through these initiatives, the ecosystem grew exponentially.
From its 4 founders that met at coffee shops, it’s now a series of focused communities, each with hundreds of members. With this growth, StartupsHK underwent a complete rebranding and transformed into StartupsGBA. This was to signify the expansion of its efforts beyond Hong Kong to the Greater Bay Area in Southern China.
Reflecting on this explosive growth at Disrupt Asia 2019, Casey said, “In Hong Kong alone, there are various communities in areas like Fintech, e-commerce, and so many more. It’s all very specific and it’s focused. So if you were to visit Hong Kong, you will find people in your industry. Today, if you take RISE alone, we have 18,000 people coming to Hong Kong to share ideas.”
The second ingredient of a thriving startup ecosystem: Mentoring
To build a startup ecosystem you need a community. You also need mentors willing to help young entrepreneurs. Casey shared that the reason he had strong mentors that guided him to build successful companies. Returning to his roots, Casey is an entrepreneur from the dotcom era.
Known as one of Hong Kong’s tech startup pioneers, Casey Lau launched Rogue Media, which was among the 1st web design studios based in Hong Kong. He later launched ActionAce.com, which was one of the 1st e-commerce websites in Asia. He also co-founded Velocity9; a new media development agency and Popcorn Media Network; a digital publishing company.
Throughout this journey, each of these companies faced unique challenges. For example, we can take the case of ActionAce.com. Originally known as ComicPlanet.com, Casey started the business with John Wong on January 1997. It was an online retailer that sold popular and hard-to-get Japanese and American toys. However, while Asia is now considered to be the next big frontier in e-commerce, this wasn’t the case in 1997.
Describing the environment at the time, Casey once said, “E-commerce in Hong Kong was a fantasy a few years ago. Nobody believed in it.” This was true across Asia as few people had credit cards and many preferred to buy items in person at shops. For ActionAce.com, they found success by advertising on AOL, GeoCities, Yahoo, and other websites. Despite this, banks were distrustful of e-commerce businesses. Hence, the company while based in Hong Kong had to process its orders in the US.
These were just a few of the many challenges Casey faced during the dot-com era. He credits his mentors for helping him find the solutions to these challenges. So whenever he was offered the chance to be a mentor, Casey didn’t hesitate and grabbed it to give back and help someone else succeed.
To explain the impact of mentorship, he shared the story of Stanley Tang. When the two first met, Stanley was a 17-year old high school student about to graduate. They met at the coffee shop meetings StartupsHK held. Over a cup of coffee, they discuss all things startups from getting your first customers to finding investors and everything in between. Later, Stanley would leave Hong Kong to pursue his higher studies at Stanford.
It was inside a Stanford dorm room, that the seeds of entrepreneurship Casey planted bore fruit. In 2013, Stanley and his roommates were frustrated by the troubles they faced ordering food. So they decided to build a company to solve the problem. Today, their company DoorDash is active in 600+ cities in North America and employs over 6,000 people. When they met next, Stanley told Casey, “I’ll be coming to RISE. I want you to help me to find the next generation of startups that I can invest in.”
Hearing those words, Casey reaffirmed the importance of mentorship. It pays to help others move forward. “Whether you’re in finance, e-commerce, logistics, or anything else, seek out those mentors and bring them into your ecosystem. From my experience, they are very willing to do it. Older people who want to see younger people succeed. Mentorship is a central component of building an ecosystem.”
Build first before finding investors. Build anywhere in the world.
A universal problem that trouble startup founders to wit’s end are the challenges of getting funded. This is because it’s not simply about getting the money anymore. Startup founders today seek to get funded by the right investors who will actively support their growth. Casey shared that he sees countless founders facing this dilemma attending RISE every year, seeking to get funded by at least 1 of the 500 investors in attendance.
However, he also noticed that many of them were seeking funding to get off the ground. They wanted the money to quit their day jobs and build their products. Casey disagreed with this approach. Rather, he advocated that startup founders should bootstrap to build the product. Elaborating on this at Disrupt Asia 2019, Casey said, “The idea is to build a product and get people to use it first. Afterwards, it’s easy to attract money. But I find a lot of young startups are always trying to raise a million dollars rather than building a product.”
Find customers first, and with that traction then seek investors to scale up. This doesn’t necessarily need to happen in your home city either. Casey also shared that he’s a big believer of startups working remotely. Casey explained, “It’s fine you’re not finding traction, looking for investors, quality talent, or anything else in your home city. The world is so connected that you can go to any city, which you feel is your city and find a network that will help you succeed.”
To illustrate his point, Casey took the example of the Techstars Starburst Space Accelerator programme. He explained that a company looking to build products for space and get NASA as a client would face an uphill battle in Colombo or Hong Kong. Yet, across the world, there are such programmes like the one by Techstars. Here they can easily find a network of investors, clients, and partners to succeed.
Casey went on to share that he mostly works out of WeWork coworking spaces across the world. Thereby, tapping into the networks of startup ecosystems across the world. Yet, even without being in such spaces physically, it’s still possible to connect to these networks. All you need to do is drop an email or a message on Linkedin to the right people.
As the internet reshapes our world, Casey stated, “Today, if you have a broadband connection, you can build a software product anywhere. So if anyone’s thinking Sri Lanka isn’t big enough, I would say it is big enough. There’s somebody somewhere interested in buying what you’re building! All you need to do is find the right network.”
Startups and their place in digital transformations
As the sun sets on the 2010s, one could say that this decade was shaped by a series of digital transformations. Each one having ripple effects across the larger world due to cheaper internet connectivity. It has threatened companies to perish or fall into obscurity, as was the fate of Nokia unless they undergo a radical transformation.
An example Casey Lau shared of a company that underwent such a transformation is Shiseido. Founded in 1872, the Japanese company is one of the oldest cosmetic companies in the world. However, at RISE 2018, Masahiko Uotani – President & CEO of Shiseido announced that they were no longer a cosmetics company. Rather, the 150-year-old giant was now a wellness company. To that end, they were seeking to work with startups developing wellness technologies.
However, for many large enterprise companies, digital transformation remains a daunting challenge. As recently as 2018, a McKinsey report stated, “the success rate for these efforts is consistently low: less than 30 percent succeed. This year’s results suggest that digital transformations are even more difficult.”
For such efforts to succeed, there are numerous factors these companies must look at, which the report delves into. Yet, while many of these factors, while appearing simple on paper, they are challenging to be put into practice. Among these is working with young nimble startups building the technologies that will shape the future. This was a point that Casey emphasized with the story of Shiseido.
Elaborating further, Casey shared two additional examples. The first being the banking industry, which is struggling to retain customers as millennials demand simpler means of banking through digital platforms. The second being the automotive industry, where the likes of Porsche, BMW, Mercedes, and other manufacturers are following in the footsteps of Tesla. Not only in terms of providing electric vehicles but also never before seen digital services, such as video games inside cars.
With these examples, Casey boldly said, “They’re afraid of startups disrupting their livelihoods. It’s happening right now. These larger companies want to be in the conversation with you. So never be intimidated when talking to larger companies. If they’re not looking to the future, then they’re either going to be playing catch up or watch as their entire industry is eaten up by your company.”
Innovating to stay ahead of the pack
Despite their differences, at the end of the day, both startups and large corporations need to constantly be innovating. “Keep innovating. You have to always think about the next iteration. If you don’t then someone is going to innovate instead of you,” was the stark warning that Casey gave the audience at Disrupt Asia 2019.
To demonstrate what happens when companies stop innovating, Casey turned to eBay. A company, which he describes as, “Your dad’s auction site.” Despite surviving the dotcom crash, it’s now facing fresh challenges from vertical platforms, such as StockX. In sharp contrast, you have Airbnb, which has gone beyond rooms to also offering experiences. Thereby, it’s thriving even in challenging markets like China.
So how can companies both large and small constantly keep innovating? By making little incremental changes. Elaborating on this, Casey pointed at the iPhone. “Behind the scenes, small pieces are being upgraded. It could be as simple as new software that helps the camera take better pictures. These small incremental changes are important. When we think about iterations and new products, it doesn’t have to be big. It just has to be something that moves your idea a little bit further ahead.”
Adding to this, he encouraged the audience at Disrupt Asia 2019 to also explore niche markets. Casey argues that we’ve yet to tap into the full potential of the technologies available to us. Therefore, niche markets with specialized products are ripe for innovation.
Granted, at first glance, it’s easy to dismiss that notion with the likes of Amazon selling practically everything imaginable under one roof. Yet, companies like Away, which sell suitcases online and directly to consumers are dispelling this myth. All the while operating in Amazon’s backyard.
The future is investable
Describing his outlook towards the future, Casey quoted Wayne Gretzky who said, “I skate to where the puck is going to be, not where it has been.” Explaining his interpretation of this classic quote, he shared that founders need to know what will happen before it happens. Quite often, many startups witness successful ideas in the US and then attempt to recreate that.
In certain cases, like with PickMe in Sri Lanka, it works if there’s a local market for these ideas. But the general rule of thumb is that successful startups are those looking 5 or 10 years into the future. Casey goes onto say, “The future is very investable. When I was in Silicon Valley, I saw people investing in things that I thought were crazy right now. But they weren’t looking at the present. They were looking at the next 5 years.”
Similarly, by applying that same rule, Casey optimistically looks at Sri Lanka as an exciting market to watch. Concluding his talk at Disrupt Asia 2019, he invited any hungry entrepreneurs to explore China’s Greater Bay Area. With cities like Shanghai and Beijing becoming saturated, the region offers plenty of opportunities for eager startups.
Ultimately, for a startup ecosystem to have successful companies, there must be a strong community. Within this community, there has to be a pool of mentors, willing to help others succeed. Thankfully, with the world becoming ever more connected, it’s possible for founders to travel anywhere until they find the community that’ll help them collaborate, innovate, and look into the future to succeed.
Of course, even then it’s no easy task to create a successful startup. But as Casey Lau, walked off the stage, he shared a simple piece of advice for anyone crazy enough, “You just need to get a few things right and the opportunity is yours to build the future.”