Why Emerging Markets Don’t Need Elon Musk

 

by Bryan Mezue  |  HBR.org 

Elon Musk, the South Africa-born entrepreneur, recently unveiled his proposals for the Hyperloop, a groundbreaking high-speed transportation system. The technology community has become accustomed to Musk pushing the boundaries. His name is also attached to Paypal, SpaceX, Tesla and Solar City, and he is very rightly celebrated.

At the same time, South Africa is currently considering its own transport future and many African countries are much farther behind in transport infrastructure. The gap between Hyperloop and the state of infrastructure in the vast majority of developing countries is a demonstration of what economist William Janeway calls the Two Innovation Economies.On one side is the frontier economy, populated by highly skilled engineers pushing the boundaries of technology, and investors making highly risky bets on which new fields will take off. On the other side, where most of the world’s billions reside, is the follower economy which is characterized by solving problems that have already been solved elsewhere, but have not been adopted due to institutional or structural reasons. Here, investors often do not make bets on technology risk; they are more worried about political and implementation risk.

The frontier economy has unimaginable appeal to the skilled engineers and savvy entrepreneurs. It is sexy to work on the world’s most technically difficult problems at the bleeding edge. Top talent in the follower economy has to deal with messier problems, like poverty, lack of healthcare, lack of education, and unemployment. Instead of cutting-edge science, they have to spend time worrying about things like politics and economics (the dismal science).

As a result, many top-tier students in developing markets graduating from  READ MORE

Douglas Abrams: The man who left the US enchanted by Asia’s potential – An investor’s story

Team YS

A sneak peek into the mind of investor Douglas Abrams, Expara IDM Ventures

Originally from the US, Douglas Abrams, shifted to Singapore in the year 2000 when he sensed the great opportunity to tap into in the growing Asian markets. His profile and accomplishments are nothing short of extraordinary.

An MBA from Wharton, Douglas was an investment banker with J P Morgan for 14 years in New York where he looked after the technology and global markets. Today, he is the founder and CEO of Expara IDM Ventures, and early stage fund focussed on investing in interactive and digital media startups from Singapore, Malaysia and Thailand. He has invested in over 20+ startups in these areas since 2007 via the fund. He is also an Adjunct Associate Professor at the National University of Singapore’s (NUS) Business School, where he has taught since 2001 and is a Visiting Professor in Entrepreneurship for the Sasin Graduate Institute of Business Administration at Chulalongkorn University in Bangkok. He is also the Director of Southeast Asia Business Angels Network since 2001.

Douglas lives in Singapore and calls it his home now. His enthusiasm for entrepreneurship in Asia is palpable when you talk to him. What keeps this man going, why does he bet big on Asia, what were his key learnings while investing in the region? He opens up to us.

Journey from New York to Singapore

I came to Singapore from the US because I believed at that time and continue to believe now that Asian markets are the most exciting markets, and for the next 15 years Asian markets will continue to be the most exciting markets, especially for startups and early stage investing.  I truly believe opportunity for growth is in Asia. In 1999 I visited Singapore (and Asia for the first time) on a business trip while at J P Morgan, that very trip I decided to move here full-time. For purely selfish reasons, opportunity brought me to Asia.

Genesis of his investment company Expara IDM Ventures

In 2007, I launched Expara IDM Ventures, a public private partnership between Singapore Government and IDM Program office of the National Research Foundation where we have made 55,000 dollar investments in 16 interactive and digital media startups up until 2011. In 2012, we launched Expara IDM Ventures II where we will continue to invest 255,000 dollars into early stage interactive and digital media startups.

In 2008, I also launched a venture fund called Extreme Ventures which is a 20 million dollar venture capital fund, we did 1-3 million dollar investments up until June 2013

In 2011, we have launched Expara Ventures Thailand, and in 2013 we have launched Expara Ventures Malaysia.

We also have a 2000 sq feet incubation facility in Singapore. We are located at Block 71, which is special purpose complex in Singapore dedicated to incubators, venture capital funds, startups, Government agencies in the enterprise and innovation space – so it is a cluster of participants in the enterprise ecosystem. We are on the second floor of that building. We have 25-30 people working on startups in the space right now.

I make high risk investments

We invest into a company at a very very early stage, we are always the first investors in the companies we partner with. We invest in companies that are pre-revenue, companies that are pre-customer, we invest in first-time entrepreneurs, we invest in students/young entrepreneurs, we invest in companies that only have a business plan and have not developed product yet! What I am trying to say is, we get in really early. Then we help companies develop in the initial stages, and they are able to launch successful products and go out and raise more money.

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