When I launched the PacificLink Group in 1998, it started with a love for web design and an ambition to change how businesses can realise their online potential. We dared to be different and made a name for ourselves by passionately illustrating the endless transformation possibilities contained within the digital realm. Yet while grit and forward thinking defined our strategy, 20 years later our vision has changed, as it must if we want to maintain success.
While there are clear advantages for startups in Hong Kong, including its world-class business infrastructure, position as a global leader in banking and business, and proximity to the wider Asian markets, it’s also not without its challenges. Holding back venture capitalist confidence is Hong Kong’s limited market size. With a population of just under 8 million, market consumption is still much smaller than many countries in the world — even if a company penetrates 70 percent of the market. That’s why when VCs think of Hong Kong-based startups, they likely look at possibilities for market extension into neighbouring, if not global markets. Both China and Southeast Asia are strong choices, as their proximity give Hong Kong startups a competitive advantage over many overseas countries.
Another issue for Hong Kong-based startups is the scarcity of local talent. Technical professionals are harder to come by due to the population and culture. As Hong Kong’s economy undergoes a digital transformation, startups need to keep acquiring technical talent in order to offer VCs sufficient confidence. Fortunately with the government’s recent policy amendments that now welcome overseas talent, it seems likely to boost the overall strength of the local startup scene, thereby helping startups gain more of a competitive advantage.
Getting backed by VCs is eminently possible in Hong Kong, especially when keeping the following in mind:
1. Scale up sustainably
Startups looking to scale up quickly must pay close attention to a major strategy of growth hacking: omnichannel marketing. Omnichannel marketing helps startups, small-to-medium enterprises, and large corporations scale through driving customer conversions. Two decades of experience has taught me that, in most cases, a consumer needs to be engaged with at least seven touch points of a brand before converting into a customer. Omnichannel marketing is the art of communicating with your target audiences through off- and online channels while maintaining a degree of messaging consistency in each channel. Sustainable growth is essential for customer retention, and loyalty and sound tactics for acquiring loyal customers is the secret sauce to maintaining development and a prerequisite for building a strong brand.
2. Put your most concrete plans forward
Risk-averse investors tend to prefer practical, predictable and relatable business models. Presenting ideas as less of a concept and more of a plan with distinct approaches and milestones that are executable will go a long way towards easing feasibility concerns. And don’t be shy about promoting promising traction — the more organic the better so as to show off your bootstrapping capabilities. If you have the time and confidence to build traction, your possibilities becomes that much more attractive. However, avoiding overly optimistic financial projections is wise because being open-minded to alternative outcomes demonstrates you recognize there are factors outside of your control that can work against you.
3. Consider including the Chinese market in your business plan
Due to Hong Kong’s limited market size, showing how your business model can also be predicated on China could end up being the key to successfully fundraising. China’s enormous market size can greatly increase a startup’s potential, however that also brings a much more highly competitive and complex market environment and differences in business landscape into the fold. Should you choose to include the Chinese market, you still need to convey to investors solid plans or tractions. Depending on the business models and team compositions, other regional markets, especially emerging markets like Indonesia and Vietnam, may also attract additional interest during fundraising.
4. Keep looking forward
A smart way to illustrate your startup’s potential is by looking at how it has the capacity to evolve in the months, years and decades ahead. Show your commitment to hiring like-minded professionals, keeping a finger on the pulse of future developments and uncovering innovative solutions so VCs know you’re dedicated to staying ahead of any digital transformations down the line.
You’ll be well on a path to success if you do what you’re passionate about and strive to be the best all while planning for the future. Part of how you’ll make a name for yourself is staying the course while maintaining the drive to fulfill your potential.