Is starting up just for the rich?

Look at lots of entrepreneurs, and you'll notice an interesting, little-exposed common trait.

It's neither that extraordinary passion to change the world nor an admirable penchant for risk.

It's access to financial capital - be it family wealth, an inheritance, or connections to the rich and influential. This thus begets a loaded question: Is starting up just for the rich?

The obvious answer is no.

But it's a no with reservations, because not everyone can be an entrepreneur.

Even with the expertise, one needs money, or a partner with money (and the connections) to start up, regardless of industry.

Successful S'pore start-ups in the international market

  • Local biotech start-up Veredus Laboratories is helping Brazilian civil security forces keep the World Cup safer.
  • The VereChip and coin is part of the system which identifies biological agents of anthrax, all types of plague, tularemia and smallpox.
  • The system is being used at the stadiums as well as ports, border checkpoints, post offices, train stations and airports.
  • Jamie Wang, Joya Zhao and Eddy Zhang are the co-founders and owners of iCarsclub.
  • The popularity of peer-to-peer car rental is expected to grow as the government looks into liberalising the Private Car Rental Scheme.
  • Chiyyarath Chandran Sajeevkumar (in car) rents the car during some weekends from Anthony Toh and his wife Jean Ling, and their daughter Reyko Toh.

Researcher Adam Grant has found that having a sense of security in one realm (for example, financial) gives one the freedom to be entrepreneurial and original in another.

Market observations reinforce this: Ride-hailing app Grab's co-founder is Anthony Tan; his family owns Tan Chong Motors.

Co- working space The Working Capitol was founded by siblings Saranta and Benjamin Gattie; the latter runs boutique real estate firm The Bamboo Group. Social WiFi startup Nimbus & Co, which targets F&B (food- and-beverage) clients, was co-founded by Donovan Goh; his parents own Catalist-listed restaurant group Katrina.

Granted, the question is a tricky one. Just what does "rich" mean, and whose wealth are we talking about - the entrepreneur's or his family's?

It's also a sensitive question; entrepreneurs (notably those with an illustrious family background) dislike being associated with family riches. They tend to want to discuss their startup in its own right, and present themselves as self-reliant businessmen.

When The Business Times posed this question to the startup community, responses suggested that entrepreneurship is not the exclusive domain of the rich, although family wealth and networks do stand an entrepreneur in good stead.

The Working Capitol's Ms Gattie said of her brother's real estate background: "Ben has this amazing ability to see the potential in properties and spaces, and to merge distinct yet related aspects to create destinations - which has been essential in making The Working Capitol a success."

Jonathan Barouch, founder of location-based social media monitoring startup Local Measure, shared that family support from Day One has helped him as an entrepreneur.

He started his first e-commerce startup in high school with US$10,000 (S$13,929), half of which was a loan from his family, and the other half was personal savings.

"My main motivation to be an entrepreneur was my late grandfather, who founded and ran a large manufacturing business. The passion for business and to create a startup is in my DNA. Would I still have been an entrepreneur without the support of my family? Definitely. Was it helpful to have their support? Of course."

Interestingly, Mr Barouch pointed out that an entrepreneur's chances of success are much higher if he or she has previously been successful in starting up, and lower if he or she is just "rich".

He said: "Financial means obviously helps, but so do business networks and personal experience."

Young Singaporean startup founders who are still in school

  • Luke Wu is currently pursuing his degree in NUS Law while running SPARK Asia, an app that allows you to print your photos and get them delivered to you for free.
  • Jeremy Low runs AxtroSports, a distributor for wearable technologies and IOT products in Singapore. He is currently a Year 2 Business student in SMU.
  • Kenneth Lou (left) founded Novelsys, a startup focused on wireless charging solutions. He is a current Year 3 Business Admin major in NUS.
  • Roslyn Teng and Robin Lim both founded Made Real, a healthy snackbox which you can subscribe every month. Roslyn is currently an undergraduate at Yale-NUS while Robin is pursuing her degree at SMU.
  • Syakir Hashim runs Skolafund, a crowdfunding platform that helps to match deserving undergraduates from less privileged backgrounds with various sources of funding. He is currently in his third year taking Global Studies in NUS.
  • Looi Qin En (left) is running his startup Glints, a career discovery and development platform. Glints helps youths discover what they love to do in their careers and help them develop the necessary skills.
  • Tan Jun Ming runs Hyron Tech, a digital consultancy firm with clients such as Gongcha, Fresh Fruit Labs, MOE and many more. Outside of work, he is currently a year 4 Business student at the National University of Singapore.
  • A year 2 Information Systems Management undergraduate at SMU School of Information Systems, Jackson Kwa runs Tech Society, a company that provides education and workshops to students aged 10-18.
  • David Chin, who's currently in SMU first year taking up Business and Accountancy Double Degree Programme, is running CIO Academy Asia, a consultancy for CIOs and senior IT management executives.

Darius Cheung, famed serial entrepreneur and angel investor, told BT that he in fact knew of more entrepreneurs who were "less privileged", and identified himself as one.

The founder of mobile security firm tenCube (which in 2010 got acquired by American security software company McAfee) noted, however, that the "safety net effect" is real. For entrepreneurs with a wealthy background, failure is hardly ever "a disaster", and they are also more likely to "go all in and create a massive success".

"But broke entrepreneurs are also more likely to succeed - because they have no choice but to.

They could be more risk-averse compared to those who already have a safety net."

Mr Cheung, who most recently co-founded property search portal 99.co, added that there is a level playing field for entrepreneurs.

"Capital, tech and talent are all equally accessible to the rich and poor. In fact, the poor tend to be much more resourceful and resilient, and their opportunity cost is much lower. So, if anything, the playing field is in favour of the less privileged."

Poh Weijie, first-time entrepreneur and co-founder of US-based HPV vaccine maker PathoVax, said that having well-off networks helps in securing angel funding. Asked if he considered himself as having a privileged background, he said: "I wish, but no."

PathoVax is a regular at startup- pitching competitions. Mr Poh said that the biomedical startup is there for the prize money or grants. "To a startup, every single cent helps."

Benjamin Tang, founder of facial recognition startup jio.sg, said it ultimately boils down to skill sets. And in today's world, as digital is all the rage, programming know-how is key.

"If you are poor and want to start up, you have to be the coder. If the coder is poor, he can still hire cheap or free labour to help him develop the business. But if the business development guy is poor, he will never be able to afford the coder."

8 Singapore startups to keep your eyes peeled for In 2016

  • Bolt

    Brain Pickings founder Maria Popova says it best, "The Internet is a messy and distracting place." But it's not about clearing the internet up. The million dollar question is, how do you make a brand or product stand out from stiff competition? Two words: powerful storytelling.

  • Zap Delivery

    Waiting for your package to arrive can cause extreme pacing and nail biting, especially when you have spent hundreds of dollars on it. One startup is pledging to change that, and it's none other than Zap Delivery. Adding Zap Delivery in this list was a no-brainer - this multi million dollar business grew from 0 to 1000 couriers in a matter of five months!

  • Good Food Heals

    Our favourite probiotic girl, Valerie, is back with a new business venture. Called The Probiotic Bar, it's a bento fast food joint recently opened at The Arcade. Valerie's "new adventure in this delicious revolution" is one of the favourite hot spots of health food enthusiasts.

  • Tribecar

    Question: what's the most expensive country to buy a car? If you answered Singapore, well done. You've been reading up on the newspapers. Tribecar, a startup Vulcan Post featured last month, is the path-breaker in our daily commute. For as low as $2 per hour, their cars can be used for leisure or as a flexible side gig to earn extra income.

  • CreoPop

    CreoPop is enjoying massive success in Singapore. Dubbed as "the world's first 3D pen with cool ink", it's a venture-backed startup based in our sunny shores. It's evident from the beginning that CreoPop is - as cliche as it sounds - destined for success. Two years ago, it raised over 400 per cent of its goal on crowdfunding site Indiegogo, and it was shortlisted as one of the 48 finalists in the SXSW accelerator competition.

  • airfrov

    Picture it. You order a batch of hair products at an America online store and just when you click the 'Checkout' button, you balk at the exorbitant shipping fee. Does this happen to you? Isn't it ridiculous that these delivery charges cost more than the item itself? One startup by the name of airfrov is changing this exact shopping predicament.

  • Tutate

    There are dozens of assessment books in the market and more often than not, picking a suitable one for your child is frustrating, not to mention time-consuming. Tutate, a startup we covered a year ago, is set to disrupt the education space.

  • Venn

    The job hunt process is icky, lonely, and miserable. But the thing is, it doesn't have to be this way. Take Venn, for instance. The job portal startup eliminates the annoyance one gets when mindlessly exploring a plethora of jobs he or she may not even be suited for in the first place.


This article was first published on October 24, 2016.
Get The Business Times for more stories.