Organisation:
McKinsey, Singapore Economic Development Board
Resource Link:
My Key Takeaways
Let’s talk a bit about venture building, pitfalls and best practices in Singapore (SG) and Asia – topics covered by the latest report by McKinsey and the Singapore Economic Development Board.
Asia’s Appetite for Ventures
56% of business leaders in Asia Pacific see new-business building as a top-three priority, while 20% name it as their top priority.
Business leaders in Asia expect 60% of revenue in the next 5 years to come from products, services and businesses that do not exist today.
Best Practices to Improve your Venture’s Success Rate
1) 40% of ventures fold within the first 4 years. Fewer than 20% achieve annual revenues of more than US$50M within the above timeframe [refer to exhibit 2 of report].
2) When CEOs take at least 3 out of 4 of the actions in page 10, their new businesses are nearly twice as likely to be successful.
3) Use acquisitions strategy SPARINGLY – builders who made 2 acquisitions at the start of early scaling were 25% more likely to meet or exceed growth expectations, than those who made none, or 3 or more.
4) Appointing diverse leaders set the tone for the new organisation and bring important advantages in attracting additional talent. Women-led new businesses outperform their peers by 10%, yet only 15% of respondents in SG say their new business is led by a woman.
Snapshot of SG’s Business Building Ecosystem today
1) 7,000 multinational corporations, with more than half running their APAC businesses from SG
2) 43% (i.e. 15) of SEA’s unicorns are based in SG
3) Since 2018, 40 corporates have successfully launched in SG. 55% of SG-based corporate leaders named sustainability as a top venture priority. Details on global, APAC & SG venture building priorities in exhibit 1.
4) The Singapore Economic Development Board (EDB)’s S$10M Corporate Venture Launchpad pilot programme just got expanded in March 2022. It helps a wider range of SG-based companies to build ventures quickly and effectively.
5) Builders can also use EDB’s SG Tech Pass to bring global entrepreneurs and technical experts to SG.
Case Studies of New Ventures recently launched from SG (Pg 4)?
➡️ German engineering firm Bosch’s venture into aquaculture sensors, software, services and data analytics through AquaEasy. It already has business with shrimp farms in Indonesia, Vietnam and SG.
➡️ Dutch fintech multinational ING’s SG incubator launched its first venture – supply chain finance SaaS Stemly which could save clients 10 – 40% of inventory cost & working capital (equivalent to tens of millions of dollars in some cases).
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“You have to come to terms with the fact that you will have two different tribes… The governance you have established for the core cannot be copied and pasted into the new venture.”
Well, I often hear larger corporates lament stagnant growth and challenges competing with tech startups to attract younger generations of talent.
Guess it’s time to consider building a new venture too? 💡🚀
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About Zhilin SIM
Having worked and lived in Singapore, the Nordics, China, Spain, and the UK, I’m now based in Paris.
I’m fluent in English, French and Mandarin, and I’m learning Arabic because it’s a beautiful and fascinating language.
My team creates and supports one-many initiatives connecting corporate and startup ecosystems in Europe to business and innovation opportunities in Singapore and Southeast Asia.
I’m passionate about horticulture, watercolour, startups/tech as well as French cuisine, Peranakan kueh techniques and other global cuisines.
Feel free to connect with me if you think my network in Europe and Asia could be of benefit to your business and innovation activities.
