Friday, January 10, 2014

His mission is to help companies grow - Mr Chak Kong Soon / Stream Global

This is the second issue of the DBIT Startup Inspiration series,  a line-up of articles written by our DBIT students and staff about startup founders that they have interviewed in person.

One of the four focal training areas in the Diploma in Business Information Technology (DBIT) is technopreneurship. Our objective is to inspire, develop and enable the next generation of technopreneurs to startup their own companies with great innovative technology products that would impact and benefit the world.

It was a great pleasure meeting and interviewing Mr Chak Kong Soon during our Start-up Visit to Blk 71 on 27 December 2013.

Mr Chak is one of the seven founders of Stream Global Pte Ltd.

First, let me introduce what Mr Chak's company is.  Stream Global is a business incubator.  Business Incubators are organisations that focus on helping startups grow.  Business incubators are usually backed by an high-profile executive team who are able to provide budding entrepreneurs with support such as funding, mentoring and business networks through their vast experiences.

Mr Chak showed us the profiles of his partners which were very impressive.  The members are award-winning high-performance entrepreneurs and corporate leaders in Infocomm Technology (ICT), Management, Marketing, Logistics, Business Development and Finance. Cumulatively, they have over 200 years of expertise!

Mr Chak and his high-profile partners at Stream Global 

Indeed, as one of the Managing Partners in the team, Mr Chak has an impressive bio to boot.

Besides his involvement in Stream Global, Mr Chak is also the President of the Singapore Computer Society (SCS), a professional body for the IT industry with 27,000-strong membership.

He has been in the Information and Communications Technology (ICT) industry for more than 25 years.  After graduating from University of Iowa in USA, he took up his first IT job at Andersen Consulting (now known as Accenture) where he became a Senior Manager in the Financial Services Group providing technology solutions to banks and other financial services businesses. In 1995, he started his own company called Finesse Software to provide financial services institutions with electronic and mobile commerce capabilities.  Since then, he has started several other companies.  So Mr Chak is a very very experienced serial entrepreneur!

His passion in building and nurturing organisations led him to collaborate with several prominent individuals to start Stream Global Pte. Ltd.  With Stream Global, Mr Chak hopes to continue his interest in helping the start-up industry by investing in and partnering with entrepreneurs and assist them in realising their potential.

Every month, Stream Global would receive 20 requests from start-ups who want to seek funding and support from the company.  However, Mr Chak and his team are very selective and would typically choose only two per year.

At the interview, we asked Mr Chak how his team selects start-ups to invest in and what is the process in which Stream Global would help the founders of the selected start-ups.

Below is what Mr Chak shared with us!

Investment Criteria

One of the first things that Stream Global considers, is whether the start-up is in a "sweet spot" for its industry.

Sweet spots

For example, in the media entertainment industry, there are different segments as shown above, that make up the entire eco-system.  Each segment serves its own purpose, but ultimately it will need help from other segments for a business to grow.  Indirectly, all the segments will aid one another and grow together.

Stream Global however chooses to invest in start-ups that fall in 3 sweet spots - content, distribution and service.

Before investing, Stream Global will look at 3 main criteria. Most importantly, the team will assess first if a business idea would be profitable in the long-term.

The three criteria that is considered by Stream Global are as follows:-

1. Chemistry among the team members
2. Technology used
3. Business Model

Once a start-up has been accepted into Stream Global,  two Partners would be assigned to the invested company.  One will be acting as a mentor cum consultant, running facilitating sessions and pointing out what the problems of the start-up that need rectification. In return for the support given to the start-up, Stream Global will take an average of 20% to 30% company equity.

Companies that Stream Global have invested include SyQic, E1 Studio (Global Animation Studio), Mayn, Taggo (card payment), EventClique (Social Network Ticketing Gateway), Stream Media and Sambaash.

Due to time constraint, Mr Chak did not elaborate on all of the companies they invested.  One company that he did single out to mention is Taggo.

Taggo is an innovative loyalty program that allows customers enjoy discounts by checking in as a Fan on the company's Facebook Page.  The best part of the program is that merchants do not pay any fee as the cost is absorbed by the payment providers.  Taggo currently drives fan clubs at 200 restaurants and retail outlets in Singapore and the company is pursuing more.  The company has attracted interest not just from Stream Global but has also secured funding from two other investors recently. Mr Chak shared with us the success ingredients behind Taggo.  Taggo succeeded because its team understands the market-space, knows where the pain points of the merchants lie, as well as the customers’ needs.

Though we did not get to learn more about the other companies, we were told by Mr Chak that as Stream Global considers each investment it makes carefully and strategically, all of the companies that it has invested in, have reaped good returns.
Managing Finance & Growth

Getting funds is essential to execute business strategy in order for a business to grow. Fund raising can be time consuming if not planned well.  Mr Chak explained to us that companies typically pass through 4 stages of growth.
  • Phase 1: Develop new software
  • Phase 2: Build new customer base
  • Phase 3: Expansion outside Singapore
  • Phase 4: Future Plans for growth
Once a company has established itself at a particular phase, it is essential that the company has enough funds to move it to its next phase. As the company moves successfully from one phase to another, its valuation will also increase.

Mr Chak is really a very kind mentor, during our interview with him, he even took the trouble to draw us a graph like the one below to illustrate the concept above!  The blue and red line represents two different companies in the 4 phases of growth.

The very kind Mr Chak who
took the trouble to illustrate the concepts to us

Before we left his office, we requested Mr Chak to share with us some words of wisdom for aspiring entrepreneurs.

This is what he shared with us!
  1. Cut down their reliance on government help or grants
  2. Constantly expose themselves.  That means networking, networking and more networking
  3. Learn to manage risks. Foresee what are the risks that may emerge and devise a plan to mitigate them.

I appreciate your time sharing Stream Global with us, Mr Chak! :)

I also learnt from him that entrepreneurs should adopt different strategies to expand in different stages. Strategies which have been used before may not work again.  As Mr Chak said, always research and understand the market you are in before executing the planned strategies. This minimizes the risk if the strategies fail to work.

I also remember one important message he stressed.

"Don’t be afraid to try something new. If you never try, you’ll never know."

This entry is written by DBIT Year 1 student, Yvonne Chua Yifang.  

Yvonne has a keen interest in Entrepreneurship and she is currently an active member at SP Entrepreneur's Club where she takes part in activities such as organising entrepreneurship competitions and participating in them herself!

During her free time, Yvonne likes baking cookies, muffins. She has a keen passion towards art- fashion illustration, acrylic painting, negative drawing and clay sculptures.

Her ambition is to become a fashion designer and an entrepreneur. She lives by this motto: Take every chance. Drop your fear. 

Connect with Yvonne at her Facebook profile to talk to her! :)

1 comment:

Anonymous said...

Similar to business incubators,startups. However, unlike an incubator, an angel investor would usually consider the impact or how helpful that startup would be for the community, that is why they are called Angels in the first place.