Idea is the company, customer is the validation, revenue is the reward. Looking at the likes of Google, Facebook and Twitter, its apparent that the most prolific consumer tech companies did not start with a definitive revenue model in mind. I cannot help but feel that the best environment for consumer disruptive innovation to gestate is one that is devoid of a monetization strategy; the initial focus should be on idea validation and not the reward. Ive always firmly believed that its the users of the technology and not its creators who ultimately determine its technological purpose and value. Intended as a communication network to exchange data between particle accelerators, the internet serves as a perfect reminder. If a technology is truly globally disruptive, then it must support use cases which are entirely unprecedented, even to the creators themselves. When a tech company starts with an overly-specific business model in mind, its really saying our technology will only support use cases that we could think of. This strategy is largely inhibitive to customer development because the pool of early adopters are limited right from the start. Pretending to know what we dont know, thats a slippery slope. The best tech companies constantly evolve their business models to adapt to the use cases and demands of their customers. They dont tell their customers how their platforms should be used. Instead, they started out as free platforms with a focus on customer development and only begin to figure out monetization when the customer base had acquired critical mass. For example, YouTube only introduced interstitial advertising in 2010, 5 years after its founding. So whats your business model? How big is your addressable market? Of course, investors love asking these questions — thats their only metric for risk analysis. Giving a good answer tells them that we are clearheaded and know what we are doing. But the fact of the matter is, we dont. That is precisely why we are trying, failing, iterating and relentlessly finding the sweet spot. Twitter would not have existed if George Zachary wanted the answers more than he wanted Evan Williams to realize them. Yet I look at the local investment scene and ask myself if Twitter didnt exist today, would any investor in Singapore be willing to invest in Williams. For that thought experiment, I think we would all share an unanimous prediction to its outcome. I am adamant that we should move away from this conservative investment attitude and start paying attention to the ideas and the people instead of the crystal ball. Our most talented engineers are flocking to US, UK and Australia because they know their talents and passions would be better appreciated and recognized elsewhere. I strongly feel that if Singapore were to truly strive to be the Silicon Valley of South East Asia, then the stakes have to be raised: higher pay for software engineers, deeper capital pool, an education system that focus on exploration and building the tangible and most importantly, investors who are more irrational. Because that... is exactly how a startup ecosystem should be.
Posted on: Wed, 15 Oct 2014 08:16:08 +0000
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