There is a danger for any startup to find product and market fit at the early stages of inception. Most startup founders often reached for the market that is easily accessible to them given the lack of networks and industry experience. One segment which I often see startups stumble is in what we call and small and medium enterprises, which represents almost 95-99% of the economy which they are operating in. For Southeast Asia, it is not simple to touch this segment because the market means different things to different countries. I have worked on this segment for a few years and deliberated on the best approach to build reach and distribution whether I am in a startup or corporate setting. The problems are similar as much as the misconceptions. In this essay, I address how one should approach these issues, and hopefully guide entrepreneurs through my own learnings as well as failings. My key advice to everyone targeting this segment particularly in Southeast Asia: A lot of startups claim to focus on small & medium enterprises in their respective markets. My advice is to focus on “M” & not “S” In that market segment. Continue reading Advice to Startups Targeting Small & Medium Enterprises in Southeast Asia
Finally, some people cannot take it anymore about the taxi problem in Singapore (Check out this article by Tabitha Wang in Today). Of course, we have heard countless complaints about taxi drivers ranging from their bad service to profit mongering during peak hours. I am giving the government a break by acknowledging the civil servants must have worked out all possible scenarios in their meeting room to come to the present set of transport policies. However, the picture from the ground is clearly opposite to what they have in mind.
Here is the problem cut down into one paragraph. There are many customers during the peak hours and there are finite number of taxis. In order to create incentive for the taxi drivers to fetch customers, the taxi companies increase the surcharge and the number of taxis after clearing permission from the Ministry of Transport. Strange enough, till today, people are still complaining. Why is it so?
The reason is because the taxi drivers have beaten the system. First of all, the taxi drivers gave excuses for not fetching some people because the distance is too far. For example, a taxi driver finds no incentive to drive someone up from the city to Jurong because he would have difficulty finding an customer such that he can enter back into the city. So, as a result, most drivers, after sending their first customer out of the city, are wasting time hovering around the town areas like Jurong, Ang Mo Kio, Pasir Ris and Yishun. Second, the surcharge system is abused blatantly. During peak hours, you are likely to get a SilverCab or a SMRT cab than getting a Comfort-Delgero cab (both the blue and the yellow ones). The reason is the phone booking system and the surcharges. Since the blue and yellow Comfort cabs make up the bulk of the taxi population, the tendency is for a rogue taxi driver to sit out and wait for the phone call so that he or she can earn a few dollars more. As Tabitha Wang puts it clearly, having surcharges actually encourage bad behaviour by penalising good cabbies. In fact, the cab drivers made it blatant to have their supper between 10.30 to 11.30 pm such that they will pick up all those poor people waiting outside Clarke Quay after that time with the surcharge.
So, is there a possible solution to the problem to solve both problems? Yes, the solution is simple – take away the surcharges during peak hours and force the taxi drivers to compete fairly. By doing that, you reduce the chances of bad behaviour and reward good behaviour. In fact, we need to do one more thing to make it work, that is hold the taxi companies responsible for their bad behaviour. Our government should find a way to impose fines on the taxi companies (since they are clearly the largest benefactors and not the taxi drivers) for bad services.
Author’s Note: I totally support Tabitha’s suggestion that in setting up a website to publish the licence plate numbers of those who cruise along empty but refuse to pick up passengers. In fact, the citizen journalists can clearly help with their phone cameras and video cameras.
Yesterday, the Malaysia-Singapore Joint Ministerial committee started their first meeting on the Iskander Development Region (IDR) in Johor Bahru. The conclusion of the first meeting leads to the committee forming four common task force groups to explore the areas (on environmental matters, boosting tourism, facilitating immigration clearance and enhancing transport links) identified by a previous meeting between Prime Minister Abdullah Ahmad Badawi (Malaysia) and Prime Minister Lee Hsien Loong (Singapore) during their recent Langkawi retreat. The principle of the working groups is to achieve a win-win outcome for both countries and the committee will meet every quarter to discuss further cooperation and taking stock.
The IDR plan was conceived to follow the Hong Kong-Shenzhen model, which has enjoyed economic success. However, there are notable differences. First of all, in the Hong Kong-Shenzhen model, the model is “one country, two systems”. In the IDR case, we have possibly “two countries and hopefully one system”. From the perspective of Singapore, there are good economic reasons why we need to move to the IDR. First of all, we need to expand our markets and industries to the surrounding and we are reaching the limits of our population on the island. A combined economic region will help to diversify and increase growth for the region as a whole. The Malaysian side will also benefit from the technology transfer and the increased trade between both countries. All these sound too good to be true. So, the question is, “What’s the ceveat?”
There are some infrastructure barriers which we need to overcome. The first is the immigration issue. Listening to the stories from my parents’ generation, between 1965 and 1968, even though Singapore has gained independence, people from both countries were allowed to move between borders without much immigration checks as compared to today. I wonder how many of us remember that there used to be the blue Malaysian passport. The next issue is the connectivity issue and those who crossed the causeway often complained of the car jams in the weekend or public holidays. There is only one public bus (bus 170) and very few private transport services to bring you across the causeway. The working groups has taken a start to crack this solvable questions.
The key is the mental bridge. Singapore and Malaysia are not just separated by infrastructural issues brought about by two causeways, but the mindset and attitudes of the younger generations are vastly different from the previous generation. Our governments and civil services have also evolved after two generations. There is a mental bridge which citizens of both countries need to cross. Most Singaporeans view the project with a lot of skepticism, citing concerns of security and the change of leadership in the future (which might lift away the current privileges). I am sure that a different set of complaints about Singaporeans will also emerge from the other side of the bridge. The solution, of course, is to resolve that mental bridge by encouraging more interaction between the younger generation of both countries.
My colleague, Kway Teow Man wrote an article to explain the rationale behind the Civil Service Appraisal System. The article prodded me to think about why a lot of people out there are always making this assertion that “the private sector is better than the civil service”.
On a skeptical note, a few questions emerge, “What do you mean by the private sector? Are you referring to just the multi-national companies (MNCs) or do you include small medium enterprises (SMEs)? What do you mean by better?” I doubt that most people are referring to the SMEs when they mention the private sector. In fact, the local SMEs are facing the same kind of problem as the civil service in attracting and retaining talent even though their presence are equally important to the growth of our economy. It is likely that they are talking about the MNCs where their destinations are the investment banks (Goldman Sachs), the management consultancies (McKinsey), the law firms (Clifford Chance), the high technology companies (Microsoft) and the traditional industries (Toyota).
Now we establish that the private sector which people are talking about are the MNCs. The next question is to ask what people do mean by better. In my humble opinion, it is virtually impossible for our Civil Service in Singapore to completely emulate the private sector. One obvious difference is the company culture. For example, Google has an interesting policy that their staff can spend 20% of their working time to work on a problem which they are interested. To compare apples to apples, we can ask whether such a policy can be implemented in our public research institutes (for example, Defence Science Organization). From a friend’s anecdote, HSBC has done so well in the previous year that the lowest level of their staff (including janitors) are also invited to the company dinner and dance in one of our five star hotels.
The next obvious difference is growth opportunity. It is possible for someone to climb from the low ranks to the highest rank of the company. Some CEOs started off from ground zero in sales or marketing and they moved up the corporate ladder quickly by the sheer volumes they produce. Can we demand the same with the civil servants? Let’s try asking EDB to implement a policy where their officers are graded by the number of foreign investments they bring in. While we acknowledge the point that the CEP system originated from the private sector, the implementation is extremely difficult in the Civil Service.
That comes to the final difference is what I call the risk factor. A study done by Booz Allen Hamilton few years back that the average tenure of a top CEO is about 1.5 years. If we look around at our top civil servants, their average tenure in a top position is about 3 years and they get rotated to other ministries, statutory boards or government linked companies. The volatility for a job in the private sector is extremely high as compared to the civil service.
That comes to my final point. Other than pay, other factors come in play to support the image that the private sector is better. It comes to this final point. Despite the risk where your job survival is dependent on purely performance and network, it nevertheless promote a more meritocratic image than the civil service where the scholars are destined for high places if they don’t screw up. That I believe, is really why most people think that it is better to work in the private sector than in civil service.
In an earlier article, we discussed the Gini index in detail and suggested an alternative to measure inequality with data pertaining to consumption rather than income. We queried earlier whether the Gini coefficient computed by the Department of Statistics (SingStat), Ministry of Trade and Industry has taken taxation and transfer money payments (for example, the Progress package in 2006) into account.