Derek Chim, Head of Incubation and Acceleration Programmes at HKSTP
Since its inception in 2001, the Hong Kong Science and Technology Parks Corporation (HKSTP) has played a pivotal role in promoting the growth and development of startups. Known as Science Park, HKSTP provides incubation and acceleration programmes not just for local but global startups as well. Unlike traditional accelerators, the organisation provides a continuum of programmes from ideation to market scaling, catering to a diverse community of 800 startups.
In this interview, Derek Chim, Head of Incubation and Acceleration Programmes at HKSTP, delves into the HKSTP’s distinctive approach and the unique benefits, challenges, and opportunities it brings to the global startup landscape.
Edited excerpts:
How is HKSTP’s programme different from other similar acceleration programmes?
At HKSTP, we need to deal with the whole spectrum of startup growth rather than focusing on a particular stage. While traditional accelerators focus on seed or pre-seed round startups, Science Park in Hong Kong covers programmes starting from ideation-incubation, i.e., ideating companies and helping them create minimum viable products (MVPs) and push their products into the market for testing, etc.
On the other hand, we have a programme for startups with an MVP that has secured their first few customers. We at HKSTP help them scale. This is an extension of the ideation-incubation programme.
Also Read: How HKSTP can help international startups in the next stage of their expansion journey
At HKSTP, we have a community of 800 startups and provide them with various services, such as go-to-market, scaling, matching with corporate customers and investors, and partnership opportunities among themselves.
How many applications do you receive on average from across the globe, and how many do you admit per batch?
Last year, we received nearly 2,000 applicants for ideation-incubation and acceleration from Hong Kong and globally, of which we admitted around 1,000 startups for the Ideation Programme (50 per cent).
The incubation is a three-year programme focusing on monetisation, go-to-market, gaining the first customer, etc. That means we incubate about 300 startups annually, covering different sectors, including hardware, ESG, and biomedical.
For acceleration, we are more selective; for every ten applicants, we select one or two.
When it comes to scaling and expanding globally, most Hong Kong-based companies look eastward, not west. Why so?
No, it is not correct. While Mainland China is an excellent place that evokes great interest, only a small number of startups have moved there in the past three to four years.
Today, our startups operate in 20-30 countries, although many of them still prefer Hong Kong. In the past two years, we have not only helped them start rolling out their products in Hong Kong and China but also brought their products to other countries like the Middle East and the US.
At Science Park, we have a lot of management people with international connections. We help startups partner with those in the West.
What benefits does HKSTP offer to global startups from outside of Hong Kong?
First of all, no matter what product you’re building, the world is divided. If you want to build a product in Asia, I think Hong Kong is one of the best choices, in addition to Singapore and South Korea. The government is very supportive in Hong Kong; it has implemented many business-friendly policies and tax benefits.
Secondly, we have a lot of good researchers in Hong Kong. When you get incubated or accelerated at the science park, we’ll take you along to other countries and big corporations.
For example, if you’re creating a fintech product and want to meet the HSBC CEO or top management, we can arrange that meeting. That is the power of being part of the startup community at Science Park. If you want to meet him on your own, you won’t be able to meet any of the bank’s top execs.
How do you compare the venture capital industry in Hong Kong with that of, say, Singapore?
As we know, there are different types of startup investors, and when it comes to institutional investments, Singapore is very strong.
However, we have many angel and corporate investment networks in Hong Kong that can write cheques worth US$100,000 to US$200,000 per startup. HKSTP engages them as mentors for our startups. We hold tech events almost daily, and these angels attend and interact with these ventures.
Also Read: Here are the five innovative startups we met at Hong Kong Science and Technology Park
When these startups graduate and get admitted to our acceleration programme, we help the founders improve their pitching skills. While most founders in our programme have great technology and products, they lack the skills to pitch the problems they solve and the opportunities they see. Our team of investors helps them upskill how they structure their business model.
We have a network of over 1,000 investors in Science Park, and we can connect these investors with our startups. Some are corporate ventures, such as HSBC and Gobi Partners. We help them with the match with these corporates.
HKSTP also has a corporate venture fund worth HK$1 billion, from which we co-invest in our startups with corporate VCs. In the past four years, we have received HK$19 each from corporate investors for every dollar we invested in startups.
We are still in the initial stage in Hong Kong, so we can leverage these three things to grow the engine.
What are the significant challenges faced by startups based in Hong Kong?
The challenges encompass four areas: pitching skills, go-to-market strategies, funding, and talent acquisition.
Lack of pitching skills: Our startups are great at technology and products but lack the skills to pitch the way it should be. While they can pitch about their technology and products, they fail when it comes to pitching the problems and opportunities.
Lack of proper go-to-market strategy: Suppose you are a producer of chopsticks. You can think of chopsticks as eating utensils, which is a great market. The same chopsticks can be recycled to make carbon-negative furniture, which is another great opportunity. However, many founders fail to see this opportunity. This is because they are so young and limited by their scope of imagination. How startups position their inventions and products in a particular market could change how they go to market.
Lack of funding: Startups need our support to raise capital. They often easily fall into unavoidable traps in their rush to raise capital and raise money from those who have no idea about the business you run or the product you develop. Raising money from the wrong people could backfire. You should always try to raise smart money.
Lack of talent: Hong Kong has good researchers, scientists, and businesspeople, but it doesn’t have good product managers or marketing people.
These four areas are exactly what most startups in Hong Kong need help with.
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