Hong Kong’s startup scene is still in its infancy, but the founders of AcceleratorHK, the city’s first accelerator program, have high hopes that it will become one of Asia’s leading tech hubs.
AcceleratorHK, which is sponsored by Telerik, is now seeking the second batch of startups from within and outside of Hong Kong for its fourteen week incubator AcceleratorHK. The program, which launched in November and focuses on hybrid mobile development with HTML5, was founded by Telerik’s chief strategy officer Stephen Forte with TechCrunch Disrupt NY 2012 Hackathon winner Paul Orlando.
The first class of AcceleratorHK included Taxiwise, PayAllies, SurroundApp, Dynamino, 100Village and GOnnect.
While the process of incorporating a business in Hong Kong is fairly straightforward and transparent, Forte says it’s often a challenge for startups to get the most basic operational necessities.
“Unfortunately the Hong Kong business culture is skewed toward banking, real estate, import/export, and big business, so it is still challenging for a pre-revenue, pre-investment startup to do such things as open a bank account, obtain a lawyer, obtain an accountant, and get office space without cash on hand,” says Forte.
For founders, the lack of an entrepreneurial culture can be an obstacle.
“You also get social pressure to work a standard job,” says Orlando. “I even had one young guy in an earlier program I ran tell me that he never tells potential dates that he works at a startup, because what would be heard is ‘he has no job and no money…”’
Despite these drawbacks, AcceleratorHK’s founders say Hong Kong’s startup scene has made lots of progress within the past few months.
“For example, co-working spaces are on the rise,” Forte notes. “A year ago today we only had 1,000 square feet of co-working space, today we have over 100,000 square feet and more on the way!”
New mentors available to guide AcceleratorHK’s second cohort will include a local lawyer and accountant, and Forte is hopeful that “eventually the banks will come around, they follow the money.”
“When we were putting together the first cohort a year ago, no lawyer or accountant would return my call when I told them the teams had no money,” says Forte. “Now they are coming to me.”
Another perk for AcceleratorHK’s startups is the potential for government support. InvestHK, the Hong Kong Government’s agency responsible for business development in the territory, is supportive of the program and has helped non-Hong Kong teams apply for work visas, grants, and interest-free loans.
AcceleratorHK’s specific focus on hybrid mobile app development with HTML5 gives members of each cohort a chance to share feedback as well as take advantage of user feedback in what Forte describes as “quite possibly the most mature mobile market in the world,” with five major 4G/LTE providers and cheap unlimited data plans that allow a very high smartphone penetration rate.
“Most likely, startups have to change what they do as they learn more about what works for their particular customer segments. Hybrid development helps keep people more open-minded while they’re doing discovery work. If after you’ve proven you have customer demand and a business model and then you want to build native apps, I have no problem with that. But start with hybrid,” says Orlando. “The other difference is that at AcceleratorHK, we work with early-stage startups who are still really going out there to test their ideas. Hybrid is a good match for that.”
Taxiwise founder Jean-Marc Ly, part of AcceleratorHK’s inaugural co-hort, first moved to Hong Kong to take advantage of the city’s high smartphone user rate and test out his previous startup CityWise. Taxiwise is an app that allows customers to book drivers in advance for full day or half-day packages, which is attractive because hailing a cab on Hong Kong’s congested streets is frustrating for both drivers and customers. Ly says Taxiwise has the opportunity to scale up in the region by collaborating with hotels, conference centers, serviced apartments, as well as accommodate tours and driving services for business travelers to Hong Kong.
“Because it has one of the highest mobile penetration rates in the world, the city is the right size and density for us to test and validate our idea. Also, it’s right next to China, which is a huge potential market,” says Ly.
Hong Kong’s proximity to “large markets both mature like Japan, Korea, Australia, as well as developing and growing such as China, India and South East Asia, make Hong Kong startups think global right from the start,” says Forte. “Validate your app in Hong Kong and then take it global right away is what we say.”
Applications for AcceleratorHK’s second cohort will be accepted through April 15 at the program’s Web site.