Venture scheme accelerates growth of start-ups

KUALA LUMPUR: The New Entrepreneurs Foundation's (myNEF) unit Rave Ventures Sdn Bhd is looking to raise RM50 million to RM100 million in the next five to 10 years for its business coaching and mentoring programme, called Rave Accelerator.

The 12-week accelerator programme, which consists of a network of experienced entrepreneurs and industry members, hopes to provide promising start-ups with venture building and funding.

Speaking to SunBiz after organising a Rave Mentor Pitch Night a few months ago, Rave Ventures' CEO Rizal Alwani said that the accelerator had previously signed on RM800,000 and RM1 million sized funds for its first and second batch programmes respectively.

Rizal said the accelerator would connect the founders of start-ups with its wide connection of investors and venture capitals, to ensure the start-ups get the right funding for their business.

Apart from that, he said it also makes sure that the founders get proper information and knowledge on how to conduct vesting agreements by providing advice and consultation.

"Working on a 90-day venture building methodology, we engage the selected start-ups to further refine their product, presentation and execution of their business. Our goal is not only to get start-ups to the next phase of funding, but also to ensure sustainability and growth," Rizal noted.

Meanwhile, on the objective of the Mentor Pitch Night, Rizal said it is to introduce the new third batch start-ups to the experienced entrepreneurs and industry members.

"Our goal is to find the right mentors for all the eight participating start-ups, where their mentors will help to guide and accelerate their businesses further."

The start-ups consist of social matchmaking service, known as "Halal Speed Dating", sports clothing e-commerce Summersault.my, home decorations e-commerce Jiham.my, Above and Beyond Concierge Services, JomJamban Bathroom Services, Laundry on the Go Services, MyMakBidan Services and Toy Library Club (TLC) Services.

The eight start-ups were short-listed from 400 young companies, and started their acceleration programme on Sept 28, 2015.

As part of their business coaching and mentoring programme, Rave Ventures also organises what is called as Demo Days for start-ups to be showcased to local and regional investors.

Demo Days are attended by key start-up ecosystem players including big IT companies, early stage funders, influencer and government agencies.

"We are basically backed by myNEF. For the last two batches, myNEF foundation has invested about RM400,000 into the programmes. Starting this July, myNEF allocated another RM500,000 for the operation costs," Rizal said, noting that the accelerator programme is wholly funded by myNEF since it began its first batch programme in July, 2014.

MyNEF, which was formed in 1997, is a non-profit organisation established by ICT and creative industry players in partnership with the government.

By Wan Ilaika Mohd Zakaria sunbiz@thesundaily.com

Startups put through paces 
 

The programme gives startups the right pressure and motivation to succeed, says Rizal.

SPEED and focus are vital in starting a business, particularly at the start-up phase, budding entrepreneurs heard at the “RAVe Mentor Pitch Night” at the New Entrepreneurs Foundation (myNEF) headquarters in Empire Damansara, Damansara Perdana on Oct 9.

“In focused programmes such as our accelerator plan, we make them do things in three months for things which companies use a year to achieve,” said RAVe Ventures Sdn Bhd chief executive officer Rizal Alwani. RAVe is a subsidiary of myNEF.

During the event, the third batch of eight start-ups were given an opportunity to pitch their ideas to mentors and investors.

“Our entrepreneurs are not exposed to the serious level of competitiveness in the tech eco-system and are also less hungry, so in our programme we give them the right pressure and motivation to succeed,” Rizal said.

The eight start-ups, shortlisted from over 400, had to work up to 4am in the morning to achieve their respective deliverables.

“They were all given deliverables, including their three-month revenue target, and they had to find ways to achieve it, including applying guerilla marketing campaigns,” he added.

The accelerator had been running the programme since 2014.

“By the end of the three-month period, we hope they will become investible companies, be it by grants or by venture capitalists,” Rizal said.

Some of the ideas that the start-ups pitched on that night included being a tech platform for helper services including things like cleaning residential and office spaces, laundry service, post-natal care, purchase of wall furnishings. There was even an idea for a halal speed dating service.

The start-ups were given an opportunity to do a short presentation on their business model, their motivation for doing it and what had been achieved so far.

Subsequently, they were asked by mentors and investors on how they would acquire customers and the acquisition cost. Some mentors also recommended contacts to help the start-ups.

Rizal concluded that the event was to prepare the start-ups of what was to follow.

That would be Demo Day for local investors in December and subsequently in Singapore for investors from the South-East Asian region.

By Lim Wing Hooi The Star/Asia News Network

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Let there be a better year ahead

It's not been a year to shout about with a litany of woes plaguing the country and much of the world. But as 2015 comes to an end, it's time to count of blessings and hope for better times ahead.

IT feels like only days ago that we were wishing everyone a Happy New Year and suddenly it’s time for Merry Christmas. But between Happy and Merry, there has been little joy, has there?

It’s not been a year to look back upon with much fondness.

The ringgit is down, oil prices are down, the economy is down, and many of the people are feeling down, too. And it’s not just in Malaysia. Throughout much of Asia and many countries around the world, it has not been good news.

For us, there was the GST, an all-encompassing tax that has had many people grumbling.

But it brought a hitherto little-known Customs officer to fame. Datuk Subromaniam Tholasy was the face of the tax as the GST director and the man truly believes that this value-added tax is the way to go for the country.

Thus, he worked very hard for it despite the many brickbats. But it was not without its problems. There was the on-off-and-on again prepaid phone card tax problems.

The latest to make the rounds is the supposed GST on tolls. It has been clarified that GST will be charged on the 50sen service charge on Touch ‘N Go top-ups. So, it’s now 53 sen.

Tolls rates may go up soon. And the electricity tariff, too. It’s not going to get lighter on the pocket anytime soon.

Politically, it’s been a problematic year. Almost all parties are in turmoil. The 1MDB controversy and a RM2.6bil donation haunted Umno and saw the Deputy Prime Minister being ousted, only the second time that this has happened in the country. The first deputy prime minister to be ousted was also in the news – he has been sent to jail.

The man who first ousted a deputy, Tun Dr Mahathir Mohamad, is also in the news. He wants to oust the current Prime Minister who ousted his deputy. It’s a merry-go-round that’s not so merry. This intense bickering is something that will go down in history.

Talking of history, Tan Sri Wong Pow Nee has been left out of the history books. This man was a true leader. I remember meeting him as a boy when he was the first Chief Minister of Penang. He came over to where the children were, patted them on their heads and told them all to study hard – and he spoke in Tamil! The man was a linguist and one who truly cared for all.

Great man: Wong was the first chief minister of Penang.

The first chief minister of Penang and a member of the Cobbold Commission that first drew up a working Constitution has been ignored in our history books. The reason? They didn’t want too many figures from the peninsula in the books, and wanted to balance the numbers with those in Sabah and Sarawak.

It makes no sense to me. History is history, it’s not a Maths lesson on the law of probabilities. MCA and MIC leaders were there at the birth of the nation and deserve to be recognised. The MCA is now fighting hard to have Wong, who made the declaration of Independence in Penang, recognised as one of the leaders involved in the early years of the nation.

The MIC is also, well ... fighting. Why they are fighting is hard to figure out as there are two factions, each claiming to be the rightful leadership.

It’s not just the Barisan Nasional. Things are even stranger on the other side. PKR is working with PAS to ensure the Selangor government is not rocked although PAS leaders are getting friendlier and friendlier with PKR’s arch-enemy Umno. DAP is at loggerheaders with PAS but works with PKR, again to ensure the Selangor government is not shaken.

In Penang, DAP has no time for PAS and PKR leaders are not happy with DAP. It’s a bit confusing. The ongoing rapid development is not helping things either.

Penangites love the island as it is, with as little change as possible. After all, the people are the living heritage of the place. I should know – I am a Penangite myself.

Elsewhere, too, there has been much misery. The two great Penangite sporting Datuks – Nicol David and Lee Chong Wei – have had a forgettable year.

Nicol is no longer the invincible girl she once was and has dropped out of the world No 1 ranking while Chong Wei was embroiled in a doping scandal, and spent the early half of the year serving out a suspension.

His return wasn’t remarkable and after some spectacular flops, he is finally picking himself up and could bring us all good news next year.

And never rule Nicol out. That lass has it in her to come back fighting every time she falls.

So, while much of the major news has been bad, it is the little people who have delivered the good news – those who continued feeding the poor even when the authorities wanted to ban them and throw the homeless into “reservations”, those who continue to teach the needy in the streets and in their homes and those who reach out to help regardless of age, race and religion.

And the year also saw the advent of G25, a moderate movement to stem the tide of extremism. Racial ties have not been at their best with some loud-mouthed leaders but the common folk are the ones rallying together.

The education system has again been called into question with several flip-flop decisions on English and the deaths of five orang asli children in Pos Tohoi. But even out of that came heroes who cared for the rural folk, the poor and the indigenous.

These are the people who we can depend on to keep the country intact - the way it was intended to be by our founding fathers.

Let’s hope the new year brings up better tidings, even if it is the common man who has to deliver them.

Why not?  By Dorairaj Nadason  - The writer, who can be reached at raj@thestar.com.my, wishes all readers Salam Maulidur Rasul, Merry Christmas and, yes, a Happy New Year once again.

Malaysian public research universities using short-cut measures to achieve world-class recognition

Other ways to achieve world-class recognition

I WAS bewildered by the news that some public research universities intend to increase their intake of foreign students so that they can achieve the so-called world-class university status.

This is a misguided strategy that, if followed through, will be done at the expense of local, especially non-bumiputra, students whose places would be taken up by the foreigners.

Take a look at the National University of Singapore, a top-10 university in Asia and top-50 in the world. It has only 8% to 10% foreign students whereas Universiti Teknologi Malaysia has 20%.

My point is increasing the intake of foreign students in our public universities to 10% and above is not a compulsory requirement to attain world-class university status.

I do not deny that a developing nation like Malaysia still needs to import foreign talents but they must be brilliant people and not just the average Joe.

Reduce the intake and tighten the screening process to accept smart foreign students only.

Efforts to attain world-class status should be focused on research and development, rate of journal citation, efficiency of teaching staff and facilities, academic freedom, etc.

Let’s stop using short-cut measures to score full marks in the foreign student category.

I strongly urge public universities and the Education Ministry to fix the foreign student quota to no more than 10% and re-allocate precious tertiary education resour­ces to local people who are paying tax to the Government.

By doing this, we can also reduce the chronic problem of brain drain.

NKKHOO Cheras

Stop using short-cut measures

WE share NK Khoo’s sentiments regarding some public research universities intentionally increasing the intake of foreign students to achieve “world-class university” status in, “Other ways to achieve world-class recognition”.

It is good that over the past few years the Government has been serious and determined in improving the global university ranking and upgrading tertiary education of our public universities.

It is however unfortunate that in their eagerness to satisfy the ranking companies, we have seen some of the public universities sacrificing the quality of education as a whole and using their limited resources to earn “easy” points on certain measures, such as the QS World University Ranking’s “International faculty ratio” and “Student-to-faculty ratio”.

For instance, University of Malaya (UM) and Universiti Teknologi Malaysia (UTM) have shown a significant improvement in ranking in the “Student-to-faculty ratio” and “International faculty ratio” measurements. In the former criteria, UM and UTM had respectively climbed to 58th and 143rd in 2015, from 86th and 203rd in 2013 respectively.

There are also good signs of improvement in the latter criteria with UM and UTM ranked at 167th and 193rd in 2015, respectively.

The irony is that with these improvements in “ratio”, it still falls short in claiming graduates who are “good quality graduates” in our public universities in the last three years.

The QS surveys’ have seen declining “Employer reputation” (employers were asked to identify universities that they consider best for recruiting graduates) and “Academic reputation” (academics were asked to identify the institutions where they believe the best workplace is) of these universities in the last three years.

For UM, these “reputation” measurements have been declining from 200th (2013) to 246th (2015) for “Employer reputation”, and 184th (2013) to 175th (2015) for “Academic reputation”.

Given that the above “reputation” indicators are measured using QS global surveys, that drew responses from thousands of experienced stakeholders worldwide, it indicates the dire need for the leading public universities in Malaysia to catch up to earn their reputation professionally and internationally.

Further, one possible explanation for such a negative correlation between “reputation” and “faculty ratio” measurements is that these rankings by “ratio” do not reflect the actual quality of some of the academic staff hired by the universities.

The counter argument would be that investing taxpayers money into upgrading rankings is good in improving higher education, but should not be done at the expense of the teaching quality.

For comparison, the leading Singaporean university, the National University of Singapore (NUS) has shown positive correlation between “reputation” and “ratio” measurements. With “Employer reputation” ranked at world No. 9, its “Student-to-faculty ratio” is ranked even lower than UM, at 67th.

As compared to UM, with a relatively higher number of students per academic staff, NUS still managed to produce much better quality graduates who earned a high reputation from employers globally.

To emulate NUS’ experience, more autonomy to the administration and management of our public universities could possibly address the underlying problems.

For instance, a better and fairer reward scheme for high performance faculties, strict replacement system for under-performing staff, as well as ensuring that only truly qualified candidates enter public universities, would potentially help to improve accountability, effective work culture and reputation of tertiary education in Malaysian public universities.

As these universities are highly subsidised by the Government, it must be worthy of the money paid by the taxpayers. To this effect, the Government plays an important role in providing necessary support such as academic freedom and autonomy to public universities, and eradicating hurdles and constraints that restrain public universities’ improvements, particularly in teaching and research.

On the other hand, despite the shortcomings and flaws of all existing university ranking systems, results of comparisons between universities can still serve, to a certain extent, as indicators to gauge the international reputation of a university.

Some of these ranking measurements are useful for policy makers and academics to collectively improve the standard of tertiary education in Malaysia.

BK SONG and TINA NEIK Subang Jaya

Building the startup ecosystem

To build a successful ecosystem, you need to first identify the end goal. Then, piece together all the components and players that will play a fundamental role in making that goal happen.

AS my tenure at MaGIC draws to a close, I wanted to reflect on my thought process for building the startup ecosystem in Malaysia and the region.

When I was asked to be the founding CEO of MaGIC, I came up with a comprehensive gameplan to build the startup ecosystem within the country and Southeast Asia and presented it to an interview panel in February 2014. One interviewer asked: “Sounds like you want to do a lot. It’s a very ambitious plan. But if there’s only one thing you want to accomplish at MaGIC, what would that be?”

I answered without hesitation: “I will put Malaysia on the global map. Because Malaysia has so much untapped potential and my job is to show what’s possible.”

When I was appointed and shortly after President Obama and our Prime Minister launched MaGIC on April 27, 2014, I sketched the ecosystem map above.

You can’t build an ecosystem without first understanding what the end goal is – to help startups succeed at a regional and global level. Only then can you piece together all the components and players that will play a fundamental role in making that happen. As a healthy ecosystem requires various parties to play different roles towards a common objective, this charted a clear path for me to fill in the gaps in the current ecosystem.

One of the reasons why MaGIC has been able to make such an impact so quickly is because I’m a returning Malaysian with an international perspective; no historical baggage, no hidden agenda and nothing to lose.

MaGIC’s initial focus on education, exposure and acceleration charted an agnostic platform and foundation for all parties to genuinely come together and create a critical mass much needed to take this ecosystem to the next level.

To create this, we strived to equip entrepreneurs with the right startup skills via our education portal, MaGIC Academy, expose entrepreneurs to other ecosystems like Silicon Valley and big markets within Asean, and accelerate startups via a global platform such as our MaGIC Accelerator Program (MAP) and 500 Startups’ Distro Dojo.

This critical mass, complemented with our media strategy of exposing and highlighting successful entrepreneurs, generated visibility that did two things: inspired the masses, private corporations and GLCs towards understanding and adopting startups, and generated massive regional and global mentor/investor interest in Malaysian startups.

For example, before MaGIC existed, there was only one accelerator called 1337. Now, there are seven more on top of MAP: Tune Labs, Game Founders, Maybank Fintech, Infinity Ventures, WatchTowerFriends, DistroDojo, 1337. Before MaGIC existed, investors would usually skip Malaysia and fly to other countries such as Singapore, Thailand, Vietnam and Indonesia to seek investment deals. At the MAP Investor Demo Day in November 2015, over 150 investors from all over the region and world came to hear 50 MAP startups pitch. Before MaGIC existed, there was a dearth of interest in startups. Now corporations like Axiata, Khazanah, Maxis, Accenture, Sime Darby, Sunway Group, YTL Group, all the way down to family businesses are trying to set up programmes and funds for entrepreneurs.

On the social enterpreneurship (SE) side, we’ve published a National Social Enterprise Blueprint, a Social Enterprise 101 guide, and the team has been traveling all around Malaysia, doing workshops via SEHATI in Kedah, Kelantan, Terengganu, Johor, Sabah and Sarawak to create more awareness on SE. There’s a big opportunity for MaGIC to be a thought leader in SE because it’s a relatively new concept to the country.

These forces come together to make up the so-called magic recipe (pun intended) for a successful ecosystem. This ecosystem will only be self-sustainable if all parties can work together in a neutral, agenda-free environment.

Looking into the future beyond our initial core focus, MaGIC’s leadership should continue to focus on the exits and acquisitions of startups, which most other fledgling ecosystems in the world don’t pay enough attention to. There is also a need remove roadblocks via government and regulatory policies to make it easier for startups in Malaysia to flourish, regardless of race, gender, age or nationality.

In my opinion, MaGIC’s mandate and goals should be flexible to change every two to three years to adapt to rapidly evolving market and ecosystem needs, to ensure the agency remains relevant in continuing to fill in the gaps. At the same time, because MaGIC utilises public funds, we should continue to spend very wisely to ensure that it commensurates with the impact and effectiveness of our programmes. This should be the mantra of any government-funded ecosystem builder in any country.

I believe in the past two years, my team and I have laid the groundwork for MaGIC and the larger community while showing real impact for what’s achievable within a short amount of time. As with startups, if you put the right team of people together with a vision for common good, anything is possible.

Ultimately, it’s the software (people) that matter more than hardware (infrastructure, capital or assets). A good ecosystem’s foundation is built on good people coming together, and even the most expensive buildings or funding can’t replace that.

Our playbook and strategy has been shared across other countries. We’ve had multiple interest and hosted delegations from Czech Republic, Hungary, South Korea, Thailand, Kazakhstan, India, Japan, Philippines, Australia, New Zealand and many more. Most of these countries are keen to have their startups join MAP next year or collaborate with MaGIC in some ways.

As I approach the end of my contract and time at MaGIC, I can say with confidence and pride that the MaGIC team will continue to deliver as MaGIC moves on to its next phase under new leadership. Despite the initial challenges we faced as a new agency, we have gained the trust and respect of the community and entrepreneurs, and achieved regional and global recognition through our initiatives.

I hope you will visit impact.mymagic.my to view all the programmes we’ve set up and the accomplishments we’ve achieved in the past two years. This is a testament to my team’s absolute focus and commitment to deliver on our mandate.

I am truly proud of the MaGIC team and the empowering and transparent culture we’ve established. While I’m sad to leave my MaGIC family behind, I am privileged to have worked with each individual who will continue to give their all so passionately because they believe in elevating their beloved country and pushing boundaries for positive change in Malaysia.

And for true change to happen, we should have the courage to be comfortable with the uncomfortable, and be familiar with the unfamiliar.

I would like to take this opportunity to thank my chairman Tan Sri Dr Mohd Irwan for convincing me to return to Malaysia to be the founding CEO of MaGIC, to all our ecosystem partners who’ve collaborated with us, to the mentors, instructors and investors who’ve generously stepped forth to give back to the community, to the entrepreneurs who believed in MaGIC, and last but not least, the MaGIC family who’ve worked so hard to make sure we create a sustainable and impactful ecosystem for entrepreneurs to thrive in, especially my first 10 hires who believed in me and my vision back when I had nothing.

I am ever so grateful to the Ministry of Finance for entrusting me to set up MaGIC and steer it in the right direction where it will benefit entrepreneurs not only within Malaysia but the larger Southeast Asia, and to truly put Malaysia on the map.

By Cheryl Yeoh

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How property prices are determined?

Factors affecting prices - It is not easy to predict trend as the property market involves all kinds of players

THE year 2015 will always be considered one of the more challenging years for the property sector, with several factors coming into play and leaving potential buyers and investors cautious.

Looking back, Jordan Lee & Jaafar executive director Yap Kian Ann says there were many factors – be it microeconomic or macroeconomic, political, social, among others, that affected the property market performance and its pricing either directly, indirectly and/or jointly.


Click for actual size:  http://clips.thestar.com.my.s3.amazonaws.com/clips/business/property-prices-chart-1912.pdf

“These factors are inter-related and influence each other. Individually, they give direct and indirect impact to the property market, property transaction volume and property prices at a different direction and degree.

“As the property market involves players (buyers and sellers) with all kinds of behaviour and is subject to a combination of factors that affect its performance at a given point in time, it is not an easy task to predict its trend and degree accurately.”

Looking ahead, property consultancy VPC Alliance (KL) Sdn Bhd managing director James Wong expects 2016 to be more subdued than this year.

Wong says most developers have launched their products aggressively in 2014.

“They knew the market this year would be soft and this softening would be carried forward to 2016. The full impact of the expiry of the developers’ interest bearing schemes (DIBS) will be felt next year.

Under DIBS, property buyers need not service the loan until the property is completed. Introduced in 2009 as an incentive, speculators purchased multiple units under DIBS because of the initial low outlay.

He expects to see softening demand in the high-rise high-end residential sector in the central region of the Klang Valley in 2016. Landed residential property demand is still resilient, especially with the gated and guarded community concept. House prices are expected to “self-correct”, he says.

Wong says foreign investors are actively monitoring residential properties in Kuala Lumpur due to weak ringgit but they remain cautious.

The increase in interest rates by the Federal Reserve after nearly a decade is also keenly watched. Already, reports are filtering out that Federal Reserve’s sway on global interest rates is causing a sharp jump in Singapore’s benchmark borrowing cost, squeezing growth in the small Asian city-state.

On a state by state basis, MIDF Research said earlier this month that Johor’s house price index showed the slowest growth year-on-year at 3%, Penang (3.5%) while Selangor fared better at 6.2%, followed by Kuala Lumpur’s 5.3%.

“We believe that the outlook for property price is better in Greater KL (Selangor and KL) due to support from the urbanisation factor.”

Citing Bank Negara statistics, the research house also noted that demand for property loans declined 13% year-on-year in October 2015 to RM25.19bil.

“This was weaker than September 2015, which declined 9% year-on-year. On a monthly sequential basis, the data was 1% lower. We are negative on the data as the number was showing nine consecutive year-on-year declines since February 2015.

“Year-to-date October 2015, loans were lower by 7% year-on-year to RM253.88bil. In our view, consumer appetite for big ticket items such as property remains low due to the rising cost of living and the weakening ringgit.”

By Eugene Mahalingam The Star/Asia News Network

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