One of the favorite things we do at the end of the year is work on our annual performance infographic. We had a super response from last year's infographic so we quickly knew that this will become a tradition at our young company. Reflecting on the year and counting the important and not-so-important statistics really puts our efforts in perspective and reminds us that while the work is hard, we must also remember to laugh and celebrate. This year’s gives us great cause to celebrate. It shows that we are staying true to our mission, to enable entrepreneurs. We are showing the 2016 infographic teaser here while we put on the finishing touches which you will see next week.
And what a year it has been. Let me re-cap by addressing what Paperclip Campus has been doing with Coworking, Startups and training founders.
In August 2014, I wrote about the co-work bubble “Cowork Madness" and predictably it is in full swing. Touching up to 50 spaces and from what we’re hearing, hundreds of thousands of square footage is coming into the market. The cowork business is becoming less ‘exciting' and more ‘boring', which basically means they need to know how they will sustain their businesses while managing costs, with a target to eventually turn profitable. When businesses are in the ‘exciting’ stages, investors have more patience for losses or ideas with weak value propositions.
So, who benefits with cowork craziness? Young and small companies, freelancers and Startups are spoilt for choices. Startup founders and early entrepreneurs can also learn from this very real case study. They can learn to expect intense competition whenever there is a whiff of perceived success or a validated idea. Competitors with deep pockets will enter the market. Only the fastest learners and the best executors will survive.
I personally like to tell all the founders I mentor ‘I don’t care how unique you think your idea is. Assume there are already 20 people who are well funded, executing on the same idea and they started 6 months ago - what will you do now?'
Startups in particular may have further reasons to celebrate. The new wave of Accelerator mania is hitting Hong Kong. I am cautious here. Paperclip has also launched its own accelerator, in partnership with Amplifi from India, focusing on B2B space.
The cautiousness stems from the questionable effectiveness of the program and expected outcomes, and with the design of 'incentives' with the program owners. Even the word ‘accelerator’ now means different things. Launching an accelerator is very hard work and accelerators cannot be blamed for poor execution from founders. At the same time, accelerators must be clear about their value proposition; what is the expected benefit for the founders from the program?
With the onset of several Accelerator programs, my biggest challenge with accelerators is with the incentive design. I believe the original model, the ‘copy and paste’ Silicon Valley model of Program and Funding+Equity exchange is not designed for Asia. Not yet anyway. A few smart investors in Hong Kong whom I hold in high regard are following the original model. Let it play out but I predict poor results and it is poor use of investment capital. Investors’ goals are designed for a 'return on investment' which I believe has inherent flaws in early stage investing. The Paperclip model went a different way. Staying true to Paperclips mission, my question was, ‘What is the best Accelerator design to get a ‘return on the founder’; I want to see the founder benefit forever, even if his venture fails. We aligned our incentives and performance closer with the founders - a simple success fee upon successful fund raise post program. So, if there is no fund raise, there is no fee.
I will address this and more points in my January 2017 blog titled 'The Accelerator is dead. Long live the Accelerator.’
What more can you expect from us in 2017? Well, we have learnt that Founders don’t really care about ‘education’ and are really focused on fund raising. We have also learned that Accelerator or Incubator programs, designed right, can greatly benefit Startups. We tested a new program format called the Validator. As we close in on our third year of operations, look out for more programs from us. Is there an Angel fund on the horizon? Watch this space.
Finally, one last update, have you heard about the new Flexipass that replaces the outdated part-time hot desk? Click here for more information.
Merry X'mas and Happy New Year!