HONG KONG – In this city that never stops, a startup community is starting to flourish, and I think it has the potential to be the most dynamic in Asia Pacific.
I am here for a brief visit, and have had the fortune of sitting down last night with two of captains of this new startup era in this city-state of China: Daniel Fung and Jon Buford. Together, they have started a startup workspace called BootHK, as well as a startup collective called StartupHK. Mark Hookey, newly settled in Hong Kong and an FI entrepreneur, is also working to advance the startup scene in Hong Kong. The result has been a rash of startups, some newly tapped local venture capital, and interest from the Silicon Alley bigwigs.
While there are but a few banking startups, the playing field appears to be ripe for a financial services venture or two. This is Hong Kong, after all, and it remains a key banking center for Asia Pacific. Further, Hong Kong remains after all these years since British rule a portal to China. That access to arguably the world’s most potent manufacturing infrastructure means a financial service venture can marry a software idea with a manufacturing component in a way that, say, a startup in New York or San Francisco cannot.
I would submit that Hong Kong is the capital of capitalism in the world, even as it is under China’s jurisdiction. The business of Hong Kong is business. Container ships continue to crisscross the harbor, sailing low in the water under the weight of overloaded freight. It is nearly impossible to travel anywhere in Hong Kong without passing an industrial center or three. I counted three shipping ports along the train route from the airport to the city center – at that ride is but 25 minutes.
Of course, HSBC dominates the banking landscape here, and HSBC is arguably the least innovative of the world’s top 10 banks. HSBC prints the money, has the greatest retail presence, and is the most prominent banking force in Hong Kong. Its headquarters reside on Bank Street for a reason. But the China banks are making inroads here. To be fair, retail banking is something of an afterthought as compared to commercial banking. Hong Kong has, and always will be, about money – not “service.” And the real money is in commercial banking.
Just today there was movement on the FI innovation scene here that could be a crucial development. A deal inked between Monetise and PCCW, the big mobile telco here, will have Monetise is providing mobile money technology through PCCW.
Can Hong Kong become a startup haven? Yes. It is a gateway city to Asia Pacific, has a tremendous amount of indigenous capital, understands banking, and remains a global city. At our meetup last night, we ended up discussing how too much data can boomerang and lead to less efficient prices for consumers, because with so much dynamism in the prices – say a health insurance price that fluctuates based on the number of orders of chicken wings you make – it will make it impossible for consumers to shop around for the best price. That’s the kind of discussion that shows a hunger for the next big thing. I’ll bet such big things will come from Hong Kong, and soon. That’s what a startup culture can do.