Startup Roundtable of IBM’s Cloud Event 2014: What Are The Pros and Cons of Starting a Company in Hong Kong?

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We’ve spoken to investors and veteran entrepreneurs alike and advice for first-time founders is unanimous: when building your business, you need to think globally. Thanks to innovations such as the internet, social networking and the Cloud – it has never been easier to grow and stay connected with your customers and collaborators.

On Monday’s IBM Cloud Event 2014, leaders within the investment, hardware, gaming, web, mobile, social and co-work space community came together in a Roundtable discussion on the pros and cons of Hong Kong’s ecosystem. In an exciting nexus point for major startup scene players, the Roundtable was an opportunity for key IBM/SoftLayer execs to understand how they can help Hong Kong’s ecosystem.

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Our own Gene Soo kicked off the panel, citing wildly successful 9GAG and 6waves as two Hong Kong startups that have gained global traction, with 9GAG securing US $2.8 million in seed funding from Silicon Valley in 2012 and 6waves securing $17.5 million in seed funding from a NY venture fund. Going forward he expects Asian investors to take up a bigger role in funding startups in the region. According to Gene, Hong Kong is now home to 21 co-working spaces which is another sign of rapid ecosystem growth. See our post for some of the newest co-working spaces in Hong Kong.

Angel investor Tytus Michalski also illustrated Hong Kong’s development as a global hub. He says that outside money and expertise is a huge contributing factor to our ecosystem’s growth. “VC firms are moving into the space realizing that some companies are ready for series A funding,” said Tytus. “Many are coming overseas, US and French entrepreneurs are contributing to the scene.” Read our story for more ideas and advice from Tytus.

Peter Choi of Startup College also threw ideas into the ring. He says that he’s noticed a shift in student’s mindsets as many are starting to explore options outside of the corporate world, such as roles with startup companies. According to Peter, mentorship is what university students need in order to move into the startup realm.

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InnoFoco founder Rachel Chan was also on hand to discuss the government’s role within the ecosystem. She agrees with Peter that changes and increased coaching at the university level is important to foster the next generation of startups. “Young students don’t have a grasp in what the real business world needs,” she said. “The government needs to fix the education system to spur entrepreneurship – there needs to be an increased focus on creativity and innovation.”

Chris Lee of 6waves added to the Roundtable as a pioneer in Hong Kong’s startup scene. He says that while money might be an obstacle for a young company’s growth – the real hurdle is learning to become less risk adverse and quitting your job to start a business.

In the hardware spot, Jon Buford of Makible says that although growing a hardware startup is cash intensive, he attributes his success mostly to crowdfunding and also cites Hong Kong’s unique locality as a plus point. “The location of Hong Kong allows companies to start a new type of manufacturing supply chain that needs to be backed up by systems and processes, [this] cannot be done in China due to the overhead expenses that are always incurred.” Read a guest post from Jon on the hardware community in Hong Kong.

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Michael Michelini of Social Agent added his thoughts onto the advantages of Hong Kong’s close proximity to Shenzhen. “The hardware space is between Hong Kong and Shenzhen. While the cost is cheaper in Shenzhen, the ability to be near Hong Kong is a key contributor to setting up here,” he said. “One advantage of being here instead of China is the internet capabilities, [it’s] faster and more open.”

Rounding up the discussion, angel investor and founder of Bigcolors James Giancotti praised SoftLayer’s Calayst program for its role within the ecosystem. “The Calayst program has contributed to the success of growing companies and the big conglomerates that are looking to acquire,” he said. “There needs to be a movement of innovation and disruption.” Read our story on James and Bigcolors.

In the flipside, James says that there is a lag in the business side of entrepreneurship and stresses the importance of understanding customer needs. “The tech side seems to be proficient but there needs to be mentorship that aids founders in identifying their customers and narrowing it down.”

All in all, the Roundtable was a brilliant summit for those actively pushing for Hong Kong’s ecosystem growth. We can’t wait to watch these great ideas unfurl into more concrete plans and will post updates when they do.

Here are more crowdsourced photos from the packed event via Twitter #IBM40in14:

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