Ideas

Strong business networks will boost Kazakh-Singapore partnership

The Demo Day of the Kazakhstan Digital Accelerator on 2020 Nov 3 marked the first time an economic corridor for startups and innovation is created between Southeast Asia and Central Asia.

We are privileged to have the Hon. Anuar Omarkhojayev, Singapore’s Honorary Consul in Kazakhstan and Deputy Chairman of the Board of Baiterek National Management Holding, share the opportunities he sees between the two fast-growing regions.


By Anuar Omarkhojayev

The air was crackling with excitement on Nov 3, even as Demo Day of the Kazakhstan Digital Accelerator (KDA) was held online due to the pandemic. The start-up presenters from Kazakhstan and 150 investors and partners – many of whom were from Southeast Asia – were separated by thousands of miles, but true innovation transcends boundaries.

Some of the ideas put on the table: Cerebra, an automated self-learning artificial intelligence (AI) service for diagnosing strokes; Retail Analytica, an AI retail system that evaluates customer interaction; and Egistic, a smart farm management system that monitors and manages crop areas.

They were among the first batch of 10 cutting-edge start-ups that received seed funding of USD 50,000 each and will have industry veterans mentor them under the KDA. The KDA is an international collaboration between QazTech Ventures – the venture capital arm of Kazakhstan’s sovereign wealth fund Baiterek Holdings – and Quest Ventures, a top-ranked Singapore-based VC firm.

It is the first time an economic corridor for start-ups and innovation has been created between the fast-growing regions of Southeast Asia and Central Asia. It is a good model of how the countries intend to support the Kazakh start-up scene going forward and to allow Southeast Asian investors to discover possibilities and great ideas in Kazakhstan.

It’s just the start

Most accelerators simply offer educational services and mentorship sessions. But together with our strategic partner Quest Ventures, Baiterek was able to let Kazakh companies have international investment and market access, as well as to learn from the best in Southeast Asia. Through KDA, the start-up founders could interact with dozens of industry veterans and founders. They also had more than 40 hours of masterclasses and fireside chats with experts and seasoned entrepreneurs; 13 weeks of individualised mentorship from the Quest Ventures team; as well as access to Quest Ventures’ vast ecosystem of networks and partner benefits.

On Baiterek’s side, we ensured the start-ups – which specialise in areas like edtech, agrotech, healthtech, and retail – had the best instruments for global success. For instance, this meant structuring all the deals within the framework of Common Law under the Astana International Financial Centre (AIFC), in which all the KDA firms are registered.

The results have been promising. In the months since these start-ups have been selected under the KDA, we have seen them blossom. The hope is that they will in turn contribute back to the start-up scene by sharing their experiences.

A tech scene brimming with promise

The KDA and its participants are but a microcosm of Kazakhstan’s burgeoning entrepreneurship scene. The country, driven by the AIFC, is becoming a fintech hub for start-ups. Some of these budding businesses have already won awards in international competitions.

Other more established Kazakh companies are making waves internationally. On Oct 15, fintech firm Kaspi.kz, which runs the country’s largest e-commerce platform, listed on the London Stock Exchange with an overall valuation of USD 6.5 billion, making it Kazakhstan’s most valuable company with listed shares.

There is much to build on. According to Startup Genome, a global innovation policy advisory and research firm, Nur-Sultan ranks high in terms of fast-growing start-up ecosystems in the developing world and is fifth overall for affordable talent.

Baiterek provides necessary support to the start-up industry. The holding’s subsidiary QazTech Ventures plays a leading role in providing institutional investments to the market. Recent examples are a USD 10 million commitment for a total USD 50 million Quest Ventures Fund II co-launched together with Pavilion Capital.

Building a bridge

It is not just about developing and harnessing Kazakh talent, but also providing a key entry point to the broader Eurasian and Central Asian markets for faraway countries like Singapore, which might otherwise not have a foothold here.

There is also much to learn from Singapore, the centre of leading expertise, innovations and investments in new technologies of Southeast Asia. Therefore, I am very much interested to facilitate the process of bringing Singaporean capital and businesses to Kazakhstan and introducing the country’s best practices – not just in the private sphere but also the public domain.

Here I wish to highlight another area in which Baiterek has advanced significantly with Singapore’s assistance. I am talking about introducing an affordable housing system in Kazakhstan, modelled after the Housing Development Board (HDB) flats in Singapore. Over the past eight years, we have seen a growing number of people in Kazakhstan waiting for public housing, but the availability of housing per capita is still less than international standards (22 square metres in Kazakhstan, as compared with 30 sqm by United Nations standards).

When I first met with HDB in April 2018, I was impressed by the statutory board’s integrated approach that created self-sufficient townships. We moved quickly together with Singapore Cooperation Enterprise to develop a road map outlining large-scale transformations, which led to the launch of a national housing operation like HDB under Baiterek. Our initiative has received extensive support from Kazakhstan’s top political leadership.

The creation of the national housing operation, which executes and controls a full cycle of affordable housing development – from design and construction to commissioning facilities – is the starting point of introducing best practices from Singapore in this area. The entity is tasked to introduce fundamentally different approaches in planning and construction methods, which will ensure quality homes delivered through an e-service platform like HDB’s.

It is heartening to see Kazakh-Singapore ties growing. I sincerely hope that affordable housing and start-ups are just the start of a bigger, brighter relationship between the two nations, that will serve as a bridge for wider bilateral economic cooperation.

The writer is Singapore’s Honorary Consul in Kazakhstan and Deputy Chairman of the Board of Baiterek National Management Holding.


Beefing up the Kazakh-Australian partnership is a win for all

Kazakhstan’s range of natural resources attract investments globally. While we focus on venture capital investments into Kazakhstan technologies, we observe many traditional industries increasingly infused with smart capital to tap into global demands. The macro trends are clear.

We are privileged to have the Hon. Andrew Fernyhough, Kazakhstan’s Honorary Consul to Australia, share his personal journey and the opportunities he sees in Kazakhstan.


By Andrew Fernyhough

The biting wind swirls through the vast swathes of mountain pasture, but the black specks of life dotted across the fields of snow are hardly perturbed. They keep grazing, with an occasional moo here and chomp on grass there. It’s no wonder they are wandering blithely, as the Angus stud cattle are insulated with fat all over, the kind that produces high-grade marbling for the world’s tastiest steaks. They are truly a cut above.

Mention Angus stud beef, and you think of cattle farms in Australia or North America. But here I am in Central Asia, standing before a massive, modern operation that can rival almost anything in Australia. I’m 3,000m above sea level at Ranch Aktasty in Kazakhstan, 300km east of the country’s largest city, Almaty, and only 65km from the world’s biggest consumer market over the west Chinese border. It is one of three cattle facilities set up by meat company Kazmyaso, and together they total 20,000ha of land, with a 3,000-strong breeding herd.

It all started in 2013 as a pilot. With all genetics originating from Australia, the most recent delivery of 1,500 premium breeding cattle was flown over in 2019, more than 10,000km from Australia to the Land of the Great Steppe, an oft-used moniker for the former Soviet Republic due to its boundless flat grassland.

Today, the US$15 million project is one of the largest of its type in Kazakhstan, and is only possible through the marriage of Australian expertise and Kazakh resources and talent. The business, which has incorporated advanced techniques in growing, fattening and slaughtering cattle, is now almost totally run by local management. With a fully integrated supply chain from breeding through to processing, it is well-equipped to supply top-quality meat to the best restaurants and hotels in the country.

Eyeing greener global pastures

The goal is for Kazakh-bred angus beef to be seared in the finest kitchens worldwide as the country aims to be among the top 5 beef exporters in the world by volume. It currently resides outside the top 10 rankings, while Australia is second behind Brazil in terms of tonnage but is No.1 when it comes to value. With 222 million ha of agricultural land in Kazakhstan, and much of it untapped, such a goal is certainly attainable. There’s a whole frontier to be explored.

Kazakhstan has much to offer the world, but to do so it must first overcome geography as it is landlocked and shipping routes are limited. Yet its ideal location in the heart of the world, adjacent to China, Russia and the Middle East, means the nation simply cannot be missed, especially with the abundance of opportunities it provides.

This is where Australia, an established meat exporter, comes in as a natural partner, especially as the two countries share comparable land sizes, population and a rich agricultural heritage. The Aussie export machinery is a well-oiled one, bringing produce from farm and forest far out to the seas. For example, logistics companies specialising in export supply chains will find plenty of fertile ground in Kazakhstan.

Such collaboration to unlock Kazakhstan as a viable and attractive food provider to the world is especially vital in the midst of the Covid-19 pandemic. Global supply chains are being paralysed. Many countries used to take their imports for granted, but such complacency has been wiped out as the vulnerability of international trade has been exposed. Economies are now on the lookout for alternative food sources to diversify their supply, and with its resources, Kazakhstan should be top of mind for such nations. It can be a farm for the world’s highest-demand markets.

The country is already Australia’s leading trading partner in Central Asia, with many joint activities in the oil, gas and mining sectors. These sectors contribute to more than a third of Kazakhstan’s export earnings. While the relationship between corporate Australia and Kazakhstan is still relatively immature, the opportunity has been realised by some of Australia’s best-known names, with established links in Kazakhstan, among them engineering giants WorleyParsons and SMEC, and mining titans Rio Tinto, Fortescue Metals and Iluka Resources.

Other ripening fields include other food-related industries like large-scale meat processing and irrigation. For example, Melbourne-based Rubicon Water is in Kazakhstan trialling its word-class irrigation systems, the likes of which have been adopted in places like the USA, China and India.

Kazakhstan’s most valuable resource

Yet for all of its natural endowments, international audiences often overlook the most precious commodity in the Kazakh playbook: A young, vibrant and well-educated population.

Many Australians already know this well. Since 2007, the Kazakh government’s Bolashak International Scholarship Programme has seen thousands of scholarship recipients study abroad, including in Australia, with exchanges in course development and teaching placements also taking place between colleges. For instance, the University of Melbourne and Nazarbayev University in Nur-Sultan, Kazakhstan’s capital.

The Kazakh projects I have been involved in have all had a healthy ratio of young locals involved, and I’ve been impressed by their world-class talent, adaptability and hunger for opportunity.

Most of all, having trustworthy local partners is the most important ingredient for companies to succeed in the Kazakh market. I first set foot on Kazakh soil in 2003 after meeting my wife Ainura, and fell in love with the country and its people. Since then, we have shuttled back and forth between Kazakhstan and Australia, first finding opportunities in the media sector, before growing roots in agriculture. When my mother-in-law came to Australia to live with us, we became more involved with the expatriate Kazakh community in Australia and I founded the Kazakhstan Society of Australia. This deep involvement in Kazakh culture and development of relationships certainly has been key to doing well. We are happy to share our experience with other companies looking to enter the market, in the interests of developing the country. Regardless of industry, the same principles apply.

It’s an exciting time to be involved in the development of Kazakhstan at this pivotal point of shaping the new Silk Road bridging Europe and Asia. I look forward to seeing the bright future for the country come to realisation, and hopefully a newly defined mutually beneficial Kazakh-Australian partnership is a big part of that horizon.

The author is Kazakhstan’s Honorary Consul to Australia.


A Primer for a Profitable and Sustainable Maritime Business

There are two key measures central to transforming the maritime industry to increase its sustainability and profitability. In this article, we introduce both of them, E’ (E prime) and C’ (C prime), and we discuss their relevance to operational efficiency, predictability, and strategic competitiveness.

Managing E’ and C’ for shipping success

The world consists of two major ecosystems. The natural ecosystem produces the food we eat. Humans have created a capital creation system that produces the goods and services we consume. Success in the natural system depends upon capturing and storing energy, and we measure success in terms of energy efficiency, which we call E’ (E prime). Those that are efficient at capturing and converting energy survive. Every organization and industry need to raise its E’ in order to create a sustainable society. Energy expenditure is a component of nearly every cost of business. E’ is the invisible fuel, and the resulting savings go directly to the bottom line and enhance sustainability.

Every organization is a capital creation system and has a recipe for converting one of six types of capital (economic, human, natural, organizational, social, and symbolic) to another form or enhancing one form of capital. The transport industry, composed of multiple value-producing organizations, creates economic capital by moving goods from producer to consumer. In so doing, it relies on, for example, human capital (a ship’s crew), economic capital (a ship), and social capital (connections to shippers and shipping agents/port operators). Successful capital creation is measured by capital productivity or C’ (C prime), and in the shipping industry this is influenced by E’ because ships requires large amounts of energy.

Managing a ship requires balancing these two primes. To maximize C’ you want to spend the least amount of time traveling between ports and in ports and carry the largest possible cargo on each leg. In other words, you want to maximize port visits so you can carry more cargo with fewer ships. However, as you are aware, this not a trivial management task, as exemplified by the following challenging questions:

In order to get more cargo, should a ship spend another day in port, or should it sail with a partial load?
Should a captain sail between ports at full speed in order to maximize port visits per year?

Answering these questions requires a shipping company to have insights into the needs of its customers, and the capabilities and plans of its service providers. It also means understanding how the relationship between E’ and C’ varies for major decisions. Raising E’ by green steaming between ports might lower C’ as a ship will be able to make fewer port turnarounds. On the other hand, a higher speed over water could raise C’ and lower E’. Furthermore, when a ship cannot immediately enter a port for cargo handling, then there is no loss in C’ if ship green steams to arrive just-in-time.

You can raise E’ by green routing between ports so that a ship takes the path of least resistance in terms of wind, currents, and depth under keel to minimize energy consumption. Combining green routing and steaming will generate a higher E’.

Overall, the critical metric is C’ and its value is determined by initial capital costs for building, buying, or leasing a ship and operational costs, which are mainly determined by E’. We are evangelists for developing Maritime Informatics to give ship owners or ship charters the wherewithal for the dynamic short-term management of C’ and E’, say between three or four ports, to maximize the lifetime C’ of a ship.

Astute captains and shipping owners intuit what you have just read, but they likely use different terms. Our goal is to work with the shipping industry to generate the data needed to compute C’ and E’ and develop the data analytics to maximize C’ for a shipping fleet or each voyage. We first need to start with a common understanding of the fundamentals, which we argue are C’ and E’, and then we can build the digital infrastructure to manage them.

Enabling maximization of C’ by data sharing

Importantly, the values of C’ and E’ are dependent on the actors participating in the co-production of transport between manufacturer and consumer. They must continually inform each other of their progress and plans to minimize delay and raise capital utilization. As the maritime industry is a self-organizing ecosystem, this means the various parties must share standardized digital data as needed to enable tight integration of operations when required. Collaboration greases C’. This is particularly true in the current economic and maritime situation, where many shipowners are extending their operations to, cover the entire multimodal logistic chain. In this respect, digital data sharing is essential for the effectiveness of this entire chain. By improving E’ for the different modes (e.g., optimizing loading / unloading trains or optimizing truck pay load). Such improvements will be reflected in a higher C’ of the different actors in the chain.

Optimizing E’ and C’ through digital enablers

The optimization E’ and C’ is enabled by data sharing and data analytics. Without standards for digital data sharing about all aspects of transport, such as the status of every container, optimization is infeasible. Once a foundation of data sharing standards is established, then data analysts can combine real-time digital data streams and historical databases to apply techniques such as artificial intelligence, machine learning, and digital twins to raise the quality of decision making in the pursuit of higher values for E’ and C’. Maritime and logistics companies are already working on problems such as the optimizations of vessel operation and predictive and prescriptive solutions to various critical aspects of the logistic chain.

EEOI as a measure of E’

The Energy Efficiency Operational Index (EEOI) is a current measure of E’ appropriate for the shipping industry. It refers to GHG emissions per unit of transport work, such as grams of CO2 per ton-mile (gCO2e/tnm). In practical terms, this KPI recommends that ship operators maximize the number of fully laden holds for the fewest number of legs on each voyage. As well, one could measure Megajoules per ton-mile, which would measure energy usage directly.

From an operational standpoint, managing to reduce EEOI begins with collecting relevant and accurate data. These data include vessel type, size, its route, reports from the ship, engine/equipment performance, weather conditions along that route, port congestion, availability of berths at each port and of course, speed and bunker consumption. Each of these data sets helps to paint a picture of a vessel’s performance while steaming and while conducting activities in a port, which also requires using fuel of some type.

For each of the needed data sets —and there are more—there is some inherent level of inaccuracy, and they are generated or updated at different times and frequency, from real-time, to quarterly. Some data feeds are subject to the availability of the Internet and can, in fact, go missing for days. AI and machine learning can enrich, validate, correct and present data in an actionable way to maritime decision makers. When there are missing entries, machine learning can interpolate based on historical data.

The Maritime Informatics Agenda

As an energy and capital-intensive industry, shipping needs to build a digital foundation spanning from data standards to new analytics tools to digital twins that makes feasible effective measurement and management of E’ and C’ to improve decision quality. To have some influence over the future, you need to participate in making it. You want to prejudice your future by shaping today’s key decisions. Maritime Informatics is an emerging discourse joining practitioners and researchers to explore the opportunities enabled by enhanced digital data sharing, digital collaboration, and data analytics to optimize E’ and C’. Thus, we argue that a body of industry innovators and scholars need to coalesce around the theme of Maritime Informatics to create an overarching set of forums for addressing the full range of issues relevant to E’ and C’. The captain steers the ships between ports, and Maritime Informatics can chart the industry’s voyage between the present and its digital future.

This article was originally published by Windward’s Captain’s Insights.

About the authors

Mikael Lind is Associate Professor and Senior Strategic Research Advisor at RISE and has a part-time employment at Chalmers University of Technology, Sweden. He serves as an expert for World Economic Forum, Europe’s Digital Transport Logistic Forum (DTLF), and UN/CEFACT.

Richard T. Watson is a Regents Professor and the J. Rex Fuqua Distinguished Chair for Internet Strategy at the University of Georgia. He has written books on Data Management; Electronic Commerce, Internet Strategy, Energy Informatics, and Capital, Systems, and Objects and has published nearly 200 journal articles.

Chye Poh Chua is founder of the ShipsFocus group and a venture partner at Quest Ventures. His interest is in maritime digitalization and inclusivity, helping MSMEs narrow the digital divide.

David Levy is Chief Marketing Officer of OrbitMI, a maritime software company headquartered in New York City with offices in Sweden, Norway, and Serbia, whose purpose is to unlock the value in data to help maritime become more efficient, profitable, and sustainable. Its product Orbit, offered as a Software-aa-a-Service, is a suite of integrated business solutions that transforms raw data into actionable insights and predictive intelligence.

Socrates Theodossiou is the owner and co-CEO of Tototheo Maritime, a maritime technology company specialized in optimizing vessel and fleet performance. His experience includes designing and rolling out integrated software solutions for data analytics as well as communications’ and secure network solutions.

Omer Primor is a specialist in maritime predictive intelligence and has collaborated with and advised organizations worldwide on optimizing operations and mitigating risk. He is a former Intelligence Officer and currently Head of Marketing at Windward. Windward’s Predictive Intelligence SaaS solution fuses AI, big data, and maritime expertise to enable clients and partners to understand the maritime ecosystem and its broader impact on security, finance, and business.

Alexio Picco is Managing Director at Circle Group, providing IT solutions for ports and logistic actors. He was involved in digital transport projects since 1996. Currently he is the coordinator of the project on the port of the future (DocksTheFuture) and the leading consultant to support the EU Coordinator for Motorways of the Sea. He works also as IT transport specialist for the European Commission (e.g., EMSWe, TAF TSI).


Why is Vietnam going to emerge the strongest post-COVID-19?

There are three reasons why Vietnam is outshining its neighbouring countries when it comes to handling the aftermath of COVID-19

Vietnam is one of the first countries to ease social distancing measures and reopen its society as early as April 2020, where most countries are only starting to grapple with the severity and spread of COVID-19.

Also known as the land of the ‘Ascending Dragon’ (due to the geographical shape on the world map), it the first in Southeast Asia to emerge from the global pandemic, allowing for businesses and domestic travels to reopen. Vietnam is also identified as one of the first countries in Southeast Asia when Singapore reopened its borders for travellers.

The total number of COVID-19 cases in Vietnam stands at 349 (as of 22 June), with zero deaths. This stands in stark comparison with more than 42,000 cases in Singapore, 30,682 in the Philippines, and 8,587 in Malaysia.

The international community is stunned by Vietnam’s breakthrough during this COVID-19 pandemic. An Asahi Shimbun reporter assigned to cover Vietnam was intrigued by the following statement by a Japanese national who works in the country: “Even though I talked about the very few patients infected with the new coronavirus and the Vietnamese government’s tough measures to combat COVID-19, no one in Tokyo believed me.”

Following the outbreak of the coronavirus, the IMF’s 2020 GDP growth forecast for ASEAN-5 countries – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – is cut to -1.3 per cent (and Singapore -4-7 per cent), but Vietnam is expected to still experience positive 2.7 per cent GDP growth, with a strong rebound of seven per cent projected in 2021. Prime Minister Nguyen Xuan Phuc sent a positive 2020 economic growth target of over five per cent, in spite of IMF’s projection.

From this, we can see Vietnam is poised to emerge one of the strongest economies in Southeast Asia and these are the three reasons why:

Swift action and digital services

Vietnam’s ability to achieve such outstanding results due to the swift and decisive actions from the national government, followed by coordinated and dedicated efforts of the general population. Vietnam took action very early when there was minimal information about the virus.

Nationwide school shutdowns were implemented in January, travel restrictions and border closure followed quickly. Vietnam also implemented aggressive contact tracing and quarantine people who are exposed to suspected cases for two weeks.

The Ministry of Health developed an app, NCOVI, health authorities disseminated warnings and orders through Zalo, a homegrown messaging app with more than 50 million users, and the internet spread a coronavirus public awareness pop song that went viral.

The swift action and digital services enabled transparency and collective and informed decisions in Vietnam’s battle against COVID-19, enabling them to emerge fast from the pandemic.

Resilient economy and startup ecosystem

The Business Times reports “Mobility metrics show the fastest recovery of activity in Vietnam, with movements to retail and recreation venues having rebounded to just 15 per cent below the baseline, compared to more than 60 per cent below baseline before measures began to lift.”

People may remember Vietnam for their amicable people, natural wonders, and sometimes their fight for independence for over 30 years. Through this COVID-19 episode, the world now views them in a new light, as a resilient and stable country, and one of the hubs for innovation and entrepreneurship in Asia.

The innovation ecosystem in Vietnam is attractive to e-commerce, software outsourcing, AI, fintech, healthtech startups. With more than 3,000 startups in the ecosystem, total investment in Vietnam startups increased six-fold in the period of two years between 2017 and 2019.

Some of the tech startups have also contributed to the fight against COVID-19 in providing online medical consultations, medical deliveries, and on-demand access to healthcare services.

Strong cross-border collaboration

“Being ahead of the curve, the ASEAN chair is in good stead to lead and shape regional responses on the pandemic”, says Dr Huong Le Thu, senior analyst at the Australian Strategic Policy Institute told The Straits Times.

Vietnam works closely with the regional neighbours in COVID-19 response and also in terms of driving regional growth and innovation.

To drive regional startup ecosystem development and integration, Vietnam’s public and sector stakeholders have been actively partnering with international entities for two-way market access for startups expanding in the region.

Quest Ventures, in partnership with statutory boards under the Ministry of Trade and Industry of Singapore and Saigon Innovation Hub (SIHUB), supports Singapore startups entering Vietnam through Vietnam Global Innovation (VGI) acceleration.

Leading venture capital in Southeast Asia, Quest Ventures supports startups through Quest Ventures’ wide network of mentors and domain experts. Startups will also have access to high quality and comprehensive online training module topics, and (if global health situation allows) an in-market immersion in Vietnam to maximize exposure and establish long-term partnerships between startups and ecosystem players.

It is no surprise that Vietnam emerged fastest during this health crisis and this winning strategy of swift action, resilience and cross-border collaboration is also the same one that will allow the economy and startup ecosystem to rise strongly in the region.

This post first appeared on e27.

Image source: Thijs Degenkamp on Unsplash.


Central Asia good expansion option for Singapore startups

When Singapore startups are looking to expand overseas, the go-to destination has always been its backyard in South-east Asia. But in an increasingly competitive and mature market, where the fight for top tech talent is intense, this reflex strategy requires a rethink.

Fast maturing Hanoi and Jakarta have seen startups grow at a rapid pace, and have attracted significant venture capital funding. There is not a lot of room left to play for latecomers.

At the other spectrum are Cambodia and Laos, which looked ready for Singapore startups to explore and expand. But VCs’ experiences reflect markets which are still at an early stage of building their startup ecosystems, and not quite ready for significant venture capital investments.

The need for startups here to look for fresh pastures farther afield is urgent, especially in a post-pandemic world where the search for opportunities requires greater creativity, commitment and courage.

Instead of being content to be near home, take the leap into less familiar territories. A good new landing point would be Central Asia. The region provides strong conditions to develop a startup ecosystem.

We are taking action. My company Quest Ventures will roll out a startup acceleration programme called Kazakhstan Digital Accelerator by the end of the year. It aims to nurture tech startups in Kazakhstan and Central Asia over the next three years.

This came after funding into Quest by QazTech Ventures, the venture arm of Kazakhstan’s sovereign wealth fund, in April this year. Our target is to groom 30 startups, or 10 a year.

Such optimism is not based on a punt. Central Asia, with Kazakhstan at its heart, is the new frontier for startups and is well equipped to take off.

As the most economically developed market in Central Asia, Kazakhstan has sought to create a finance and investment hub in its capital city of Nur-Sultan. The Astana International Financial Centre, established in the capital in 2018, uses English as the working language and offers visa and tax waivers to woo investors and global financial players.

On the tech front, the country has shown significant commitment in developing a future-ready infrastructure. For instance, several of their government services have gone digital – residents can register the birth of a child, or report a lost vehicle conveniently online via a centralised website.

This initiative was developed under the Digital Kazakhstan programme, a government-led effort to transform the country to a digital economy. Last year, the programme created some 8,000 jobs in the country.

Also, more than 75 per cent of its population have access to the Internet. Its telco sector is highly developed, with an extensive 4G network and high mobile penetration rate.

A large segment of the population own smartphones, and have access to mobile data. On Chocolife, a homegrown ecommerce startup in Kazakhstan that offers food delivery services, youngsters regularly spend the equivalent of S$4 or S$5 to order beverages for themselves – similar to Singaporean youths who are frequent consumers of gourmet coffee and bubble tea drinks.

This is good news for startups. Consumers in the young Central Asian country, where 45% of its population are aged under 30, are hungry for new experiences, curious about the world, and have the spending power to boot.

Some might point out that the Kazakh market, ready as it may be, is small and hence offers limited opportunities. Indeed, the sprawling country has just about 18.7 million people. But just like how Singapore is often seen by industry players as a gateway to South-east Asia markets, Kazakhstan is a bridge that connects investors to Central Asia.

The region, which includes Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, is home to 72 million people. In fact, if we expand the range to include regions within a 2,000km radius from Kazakhstan, we are looking at a potential market of 3.3 billion people, including a large swathe of Russia and Eastern Europe.

I can think of two immediate opportunities in Kazakhstan for Singapore-based startups.

First, to hunt for tech talent in the Central Asian region. While startups here have typically recruited talent from Vietnam and Indonesia, the brain drain in South-east Asia is a growing constraint. Kazakhstan’s emerging tech scene offers a rich talent pool of young, tech-savvy people seeking white-collar careers. They are educated, creative and modern.

The Kazakh government has invested significantly in developing and promoting STEM education. Students at the secondary education level are exposed to coding, robotics and even virtual reality to cultivate an interest in tech.

The country also wants to grow its startup landscape. Astana Hub, a government-run technology park similar to Singapore’s Block 71, offers support to startups in the form of training programmes, mentorships from entrepreneurs, office spaces and networking opportunities.

Second, Kazakhstan’s ambitious task of building a digital Silk Road provides opportunities for tech players. The government is pouring significant resources to develop the country’s information and communications technology infrastructure. It will require support in fields such as digital literacy education, cybersecurity and data analysis, to name a few – areas that Singapore startups are well-placed to be a part of.

Companies here may be reluctant to venture to the Central Asian region, due to differences in culture and language. But the longer we stay stagnant and stick to old formulas for growth, the easier it is for someone else to steal our lunches.

The writer is the managing partner of Quest Ventures, a Singapore-based venture capital firm.

This post first appeared on The Business Times.


The key to real transformation is not learning, but unlearning

And this is how it can help us sail through COVID-19

I am sure you have found out in (not-so-) recent news that COVID-19 beat most of the CEOs and CTOs hands down in driving digital transformation in organisations across all sectors globally.

It is dubbed as a the “before and after moment in the digital transformation” by one Forbes contributor Andrew Filev in his column, greatly accelerating previously slow-moving trends such as telecommuting, on-demand food and services, virtual events and the cloud.

“Despite the uncertainties in the macroeconomic and geopolitical environment, there is one thing we are certain – the world is moving toward digital-first and digital-everything.”

The benefits are not new, but why does it take a global pandemic to realise these transformations?

It is precisely because COVID-19 threw us off what we know as normal and the reality that we are so familiar with. We are now forced to unlearn the established and traditional ways of how society and businesses work. Only when we are pushed to unlearn, did we truly embrace the possibility and power of change and finally move into the new normal.

Why is it only through unlearning that you transform?

A word of gold from Margie Warrell, Forbes Columnist & Advisory Board Forbes School of Business & Technology: “Unlearning is about moving away from something -—letting go— rather than acquiring. It’s like stripping old paint. It lays the foundation for the new layer of fresh learning to be acquired and to stick. But like the painter who needs to prepare a surface, stripping the paint is 70 per cent of the work while repainting is only 30 per cent.”

Unlearning challenges assumptions in the conventional wisdom that may have become invalid and obsolete. The world changes whether you accept it or not.

Daniel Zhang, Alibaba Chairman and CEO, commented recently during their earnings call that “despite the uncertainties in the macroeconomic and geopolitical environment, there is one thing we are certain – the world is moving toward digital-first and digital-everything”. Before or after COVID-19, it is an undeniable phenomenon.

Through the global pandemic, unlearning acts as a catalyst to overcome the inertia of conventional wisdom and shake up the assumptions of what works and what doesn’t. For instance, it pushes organisations to realise:

  • You do not need your employees to work in the same physical space, in the same time zone, and within specified business hours to get things done.
  • You do not need to physically attend events or even fly for international forums and conferences to access content and networks.
  • You do not need that many meetings to complete and agree on a plan and execute it.

By unlearning, you remove all the prior multi-layered assumptions and pare your problems down to their first principles, a basic assumption that cannot be deduced any further.

That is when you can address the problem directly, effectively, and efficiently and identify the solutions:

  • You need your employees to be contactable, responsive, and accountable to get things done.
  • You need to leverage the rich media enabled by technology to access content and build your local and global networks.
  • You need to identify the key personnel in charge of the different tasks and projects and empower them to make decisions.

Only when you unlearn, can you relearn

With change being the only constant in the world, there is a need to keep adapting to stay competitive. Darwinists know best that “it is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change”.

But after being put through highly structured (and time-honoured) systems of education and learning, most people would have a structured box of basic toolkits to help them understand and navigate the world.

Without unlearning, humans tend to fit everything into the box and use the (sometimes irrelevant) tools to fix novel problems and answer new questions. Sometimes, that will leave the problems badly fixed and questions badly answered, but all will agree and adopt it because it will not shake up the systems and disrupt the comfortable status quo.

That will no longer cut it, as waves of innovation and tech startups come in to disrupt the status quo. And more recently with COVID-19 catalysing this process. Businesses, government, and the people came to unlearn the old ‘rules’ and relearn the new ones.

Unlearning breaks imaginary limits

Unlearning is not about forgetting. It’s about removing limits and choosing an alternative mental model or paradigm.

Michael Porter’s five forces is a foundational framework that most business and strategy experts learn and use to build their competitive advantage. It is about setting limits to achieve based on what you know.

However, in a VUCA (Volatile, Uncertain, Complex and Ambiguous) world, it may become irrelevant by the time you set the limits and definitions to achieve, causing the organisation to always be falling behind.

“The Porter model of strategy isn’t obsolete. But it is decidedly incomplete. It takes unlearning to see the model as only one possibility rather than canonical truth”. From design thinking to lean and agile to Ross and Lemkin’s From Impossible to Inevitable, recent popular frameworks that guide businesses and strategy starts with breaking imaginary limits, rapid prototyping, and iterations, and finding a combination that works for you.

This had allowed breakthroughs of immensely successful companies such as Google, Facebook, Uber/Grab, and Airbnb, as they focus on removing limits rather than setting them.

In all, real transformation is not just about learning but unlearning. By unlearning, you challenge obsolete assumptions and conventional wisdom, enable yourself to relearn, and achieve breakthroughs in mindset limits. Let me end with a short story I came across:

“Once a very bright student from Japan comes to see a Zen master with excitement and pride and says ‘Master. I’ve gone all around the world and studied all religions; I master now all philosophies, the only thing I don’t know is Zen. Teach me everything I don’t know about Zen so that I can become a master myself.’

The master doesn’t respond, instead, he puts an empty teacup in front of the student and starts pouring tea. He doesn’t stop, he keeps on pouring and soon the tea starts spilling on the table. The student got very upset and almost yells at the master. ‘Master stop!! You can’t pour any more tea in it. It’s full.’

The master stops, smiles, and says, ‘Like this cup, your mind is also full. How can I teach you Zen unless you empty your cup?’

This post first appeared on e27.

Image source: Tim Mossholder on Unsplash.


Carousell and Series B

The biggest news in Singapore recently was the announcement by Carousell that they have raised USD 35 million for their Series B: TechCrunch, TechinAsia. Rakuten Ventures led the round while previous investors also contributed.

The round drew the attention of Lim Der Shing, who writes one of the more frank and penetrating entrepreneurship blogs in Singapore. He noted that this appeared to be the first time that a pre-revenue startup raised Series B in Asia. There could be other examples, but Carousell was the most recent one, and a brand that most people know.

A week before the announcement, I was at Startup Weekend 2016. Invited to give a pep talk, I mentioned Carousell (and Vulcan Post but that’s another story). Someone taped part of the speech and put it on Instagram.

By now, Carousell’s story is well-known: that they started from Startup Weekend 2012; that they renamed their original creation, Snapsell, to the catchier Carousell; that they raised their first round of funding, ie, angel, from NUS (ACE “YES” grant) and us; that they went on to raise funding from other funds subsequently.

Startup Weekend 2012 was the first startup event that we sponsored in Singapore. Being based in Beijing, I could not attend the event but asked the organisers to introduce the winners to me on my next trip to Singapore.

At that meeting, the Carousell team was not ready for fund-raising. Meeting at the Yellow Room at Blk 71, they said the product was not ready and that they wanted to focus on that.

A few months later in Beijing, I received an email from Elisha Ong, then CEO of Burpple and by then one of the top foodie apps in Singapore. Elisha re-connected Carousell and me. We arranged for a call that same night and I remember negotiating the terms with Siu Rui in the living room of my Beijing home and wiring the funds over shortly.

I got to meet the team again some months later on my next trip to Singapore. They were working two rows away from me, at the same NUS Plugin space that I also hot-desked out of. They were bootstrapping like every other startup at Plugin, eating cheap chicken rice from the old hawker centre and taking the last bus home every day to maximise their working hours and reduce the time they spend on the road. They were working long hours every day including weekends.

When Carousell raised the next round from 500 Startups, Golden Gate Ventures, etc, they offered us pro-rata. They did not have to but the gentlemen in them did.

Very honoured to have been part of the journey.

Image source: Huffington Post


QQ and why we have not moved to Slack

Late last year, we started experimenting with Slack. This was when Slack was still relatively new, and most people were using HipChat or some other group chat.

We have been using QQ for years. The Chinese (China version) of QQ is loaded with features such as screen-sharing, voice chatting, video calling and of course, plain text messaging.

QQ is free to use and, until WeChat came along, was the dominant tool for PC-based communications. Fetion, a Web SMS service from China Mobile, could not compete despite the huge base of China Mobile users. Fetion required senders and recipients to be on the China Mobile network. Each of the three telcos had their own offerings but none could compete against the network-agnostic QQ.

We use QQ for group chats. We have a general company-level group where our entire “global” team that is scattered across cities in China, in the US, in Southeast Asia, are placed in one group. Each of them download and create their own QQ UserID but when they join, group admins give everyone nicknames based on their functions. For eg, someone in the investment team would be “Analyst-NAME”.

In addition to the company-level group, we also have smaller project- and function-based group chats.

We also use QQ for voice and video calls internally. Call quality between users inside and outside of China used to be bad but it has improved significantly in recent months such that we seldom use Skype as a backup anymore. The QQ mobile app is a delight to use.

Slack is as good in all the areas above, if not more so given its rapid new releases. There is only one problem with Slack and it is significant enough that we hesitate to adopt it. That problem is we do not know when Slack will be blocked in China.

Right now, to access our mails, we either use a VPN to get into our Google Apps for Work, or, like many of us, we forward our mails to QQ Mail or 163 or one of the local email services. This also means that we forgo many of the collaborative features of Google Apps. Since VPN can be unstable at times too, we decided to have a blend of East and West — for instant communications, we use QQ; and for all other purposes, we use Google Apps. This ensures that there is always at least one way to reach us.

This has worked for us for the last three years and we don’t see it changing soon.


Startup Leadership Program in China

The Startup Leadership Program took place in Beijing today at the office of Cadwalader. SLP has been running for one or two batches before this, and being volunteer-driven and relatively new in China, had been progressing in fits and starts so I am glad that there is a new group willing to get it going this year.

Incubation/ acceleration/ entrepreneur training programs has ballooned in the last year. There are now many locally run, “foreign-inspired” programs modelled after Y-Combinator, 500 Startups, and others. Foreign-based, equity-driven programs such as Founders’ Institute has not had success coming in due to regulations around foreigners investing into or owning internet companies.

Beyond branding, there really is not much the non-Chinese programs offer when compared to the local programs. Content is very much local, and especially so in China where what we do in marketing in, say, the Bay Area, is not the same in China because of different channels. Sure, quantifiable data are measured the same way (MAU is MAU anywhere it is measured), but to listen to an “international expert” speak in a foreign language (English) and describing what they do on foreign channels (eg, Facebook) is difficult to relate. Hence, most if not all programs have local mentors, and rarely include international mentors.

We work closely with local programs but participate in the foreign ones when we can too.

This batch of SLP at Cadwalader was run by volunteers from Peking University and Startup Noodle. I participated as a mentor and heard and gave feedback on the teams that presented. The afternoon went by quickly.


Plaques and official recognitions

Official recognitions are big in China. Enter any office and you can probably find a few metallic, embossed plaques or paper certificates adorning the walls. These are usually not licenses, for eg, the license to operate an F&B restaurant. Rather, these are awards issued because the establishment met certain criteria in a campaign or best-in-class.

I was at the official award of the Beijing Youth Innovation and Entrepreneurship Centre plaque award ceremony for the Venture Cinema today. The Venture Cinema is literally a cinema in the central business district that has been converted to an events venue that hosts demo days. 500 Startups’ Dave McClure and angel investor Lei Jun have gave talks here before, as did many other investors (more than 500 individuals have done so according to Venture Cinema). Such is the scale of the ecosystem, and how old, disused venues can be re-purposed.

I sat beside Mo Weigang who was the guest of honour and gave out the award to Venture Cinema. Mo is the head of the enterprise department of the Communist Youth League in Beijing. He has been driving entrepreneurship initiatives and the community has been reacting positively to it. The atmosphere in the Venture Cinema this afternoon was palpable. The auditorium was completely filled including the stairs. I think there were more than 200 people present. Most are young graduates. Can’t imagine that happening in an old cinema in the Bay Area.


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