How a Frog Logo Revolutionised Southeast Asian Startups | Hugh Mason from JFDI

Hugh Mason: [00:00:00] Frogs have this strategy of spawning lots and lots of, of, um, tadpoles. So that's true with startups as well. If you want to create a sort of factory for startups, you know, that most of them are going to not survive. Entrepreneurship is a kind of a faith, really. Uh, you've got to believe that it's possible to start a business, despite all the evidence that most ideas don't work out and you have to frame the failures in terms of feedback and learning and an accelerator is like that.

It's an investment into your business in. Sometimes in cash, but certainly in kind. And if you can see a bunch of people who can get you into a market quicker than you would do on your own, why not?

Rahul: I was talking to somebody recently and then I, um, I mentioned working with you. Uh, and the first reaction that he had was like, Oh, the frog guy.

Hugh Mason: So I feel, thank you for organizing a green studio. I feel very at home.

[00:01:00] Uh, yeah. Umthe one thing about JFDI, uh, is that it had a great brand, uh, associated with the frog.

Love to know your thoughts around, uh, the importance of branding, uh, especially when you are in startup investment, whether it's an accelerator or a VC.

Yeah, I think I realized very early on that we had this sort of abstract thing we were trying to build. No one had done an accelerator in Southeast Asia before, and nobody knew who we were.

Particularly I was from the U. K. Meng had most under most of his work in Canada in the U. S. so we need to have something that people could kind of get hold off. Um, we cottoned onto this phrase JFDI, you know, as the core of of entrepreneurship, just Um, and, uh, we decided we need a logo and we found this, um, clip art online.

I think we got 400 poses of this frog for like 100 or something. and the great thing was because it was open source, well, it was, it was, it was stock art. Then it was already being used on cafes and things in odd places around [00:02:00] Southeast Asia. So the kind of the logo was sort of there in people's minds, like it wasn't associated with anything.

And then as soon as we started using it, people say, Oh, I've seen your logo on this cafe in Vietnam. Oh, I've seen your logo in Cambodia. And you think fantastic. and then we thought, Oh, this is interesting frogs. And actually it fitted because. You know, frogs have this strategy of spawning lots and lots of tadpoles.

They know most of them are going to get eaten. And, of course, that's true with startups as well. If you want to create a sort of factory for startups, you know that most of them are not going to survive. That's just the stats. So, yeah, so frogs seem very appropriate. And then we found this Beanie Baby sort of thing online that was like this clip art and started giving them to people, quite senior people, actually, from big tech companies and saying, Hey, when you go back to San Francisco, will you take a picture of yourself with a frog by the Golden Gate Bridge?

You know, so suddenly we had this frog kind of photo bombing famous landmarks around the world. They just made us look much bigger than we were. Now, I don't know that you could repeat that trick again. I think that, you know, the whole sort of [00:03:00] photo bombing thing has been done. But, yeah, what I would say in respect in retrospect is that as a startup, nobody knows who you are.

So there's two things you can do. You can do something cheeky, and that will get you noticed. And you can also do something not in an irritating way, but you can sort of kick against the world. You know how start lots of startup pitches start with health care is broken. Restaurant booking is broken.

It's always about it. Something is wrong in the world. and, and that way you're saying something that gets you noticed. Now it helps if the thing that you're pointing out is true. Whereas I think for a lot of startups it's, you know, like, laundry is broken. Well, not really, and not in all over the world.

So, so it helps if it's real. But, Yeah. Establishing yourself in a way that's noticeable is good. And then I think the challenges you grow is that you, you need to not create a trap for yourself

Rahul: so from specifically, if you're in the space of investing [00:04:00] in startups, whether Accelerator or we see, why do you think brand is important?

Hugh Mason: I think, um, for the VC firm itself, or for, right, for the VC, so, I mean, a VC firm is a business like any other, it takes money from people who are rich but don't have time to find high growth, high risk, potentially high return businesses, and it, um, and it invests it on their behalf, that's all it is, it's an agency really that, that works on behalf of rich people, and deploys some of their money, and most people will put 90 percent of their money into very boring things, you know, property or whatever, and then they'll put 10 percent into a kind of high risk gamble pot, and they may gamble that themselves, or they may do it with the help of a VC.

So from a VC's point of view, their customer is not you, the startup. It's really important to remember that you are the, you're like the advertising fodder on Facebook, you know, for the VC, the customer for the VC is actually the The investor that's investing in them, that's who they work [00:05:00] for because they have to give them a return in terms of good investments in the short term, a portfolio that looks impressive, even though we may not find out for 10 years whether they did get a good job picking it or not.

And then it also it's got to obviously. Eventually deliver, you know, after 10 years, if you haven't delivered some kind of return, then people may start asking questions unless you can keep the story rolling. So the way most VCs work, in case you're not aware is, you know, they'll take a 2 percent management fee.

So if you have a hundred million dollar fund, you're taking two, 2 million out of that every year. It sounds like a lot of money until you realize you've got to pay two or three general partners. Rent an office, fly around the world speaking at conferences, wear nice suits, you know, go and meet a bunch of startups, turn up to a bunch of board meetings, raise a load of money from, you know, Limited partners, the rich people who you're working for.

So actually the 2 million, that's your only income. And then you get a share 20 percent of what's left after when you sell the investments, [00:06:00] everyone's paid back plus an interest rate, which is called hurdle rate.

Rahul: Yeah.

Hugh Mason: You know, plus everything. So, so. It's a two and 20 model to 2 percent now and 20 percent of the upside if it works out.

And obviously, if you if you hit the ball into the stands and you end up with a huge bunch of 100 times exits, then the carry the 20 percent can be worth a lot. But the dirty secret of VC is that the vast majority of venture capital firms are talking 90, 95 percent will give you your money back. And that's it.

Having taken. This management fee for 10 years. So the, the tension, the moral hazard inside venture capital firms is that in the short term, it helps to, to, to spin a story, to spin a brand around what an amazing, what amazing access you have to incredible, what they call proprietary deal flow. In other words, a great pipeline of investments.

And if you can keep that Feeling going in the marketplace that people investing their money, you will have access to [00:07:00] stuff that they wouldn't see. Otherwise, then you get the whole fear of missing out thing going. And that's basically what it's based on. It's a little bit more complex than that. I mean, for example, another part of VCs brand.

Is, can they follow on? So if you, if you invest now, say you put a million dollars into something at series A, do you actually have deep enough pockets to then follow through at series B? Or is, or is an entrepreneur going to have to go to another fund to raise that money? So there's a whole series of issues around the size as well.

So size matters a lot. And that's why you'll hear VCs always saying, Oh, we've got this many million dollars under management. Um, is it for all fund managers? This, this, you know, size matters.

Rahul: Yeah. So, so why did you start JFDI?

Hugh Mason: Well, when I came to Singapore, which was a lifestyle decision, um, my wife and I just had our son and We really wanted him to grow up in Asia, understanding Asia, learning Chinese, which he has done, he'll do his national service next year.

So it feels time has gone very quickly. but when I was here, I thought, well, I am [00:08:00] an entrepreneur. I want to be an entrepreneur. I can't do it on my own. I need a partner. And I met, uh, Wong Ng Wang, who I love dearly. He's the closest thing I've got to a brother. We are very, very different. but, uh, he and I.

He was also an entrepreneur who'd come back to Singapore for family reasons, and we realized that Singapore at that time, so this is, we're now talking 2009, 2010, there was lots of financial capital here, and there was lots of intellectual capital, smart people, lots of money, but there was no social capital, there was no place where entrepreneurs could come together.

The whole idea of being an entrepreneur was still very unfamiliar. Almost actually slightly so naughty, you know, we had a lot of people come to us who just finished law school. For example, they could see what was happening in Silicon Valley and they say to their dads, Hey, I, you know, I know I finished law school, but I want to start a business.

And dad would say, no, you know, I've just paid all that money for law school, go and be a lawyer. Or if you're going to be an entrepreneur, you see that Mark Zuckerberg, you got [00:09:00] six months, do that. And so people, people needed, you know, in isolation. There was no ecosystem, in other words. Now we weren't the beginning of that ecosystem.

There was some very hard work done by dot com one point or pioneers people who built Jobstreet, people who build the. The first foundation business is here and by business angels network, Southeast Asia, uh, one program in particular was, uh, you know, the kind of the grandfather of the ecosystem here. but it was all very nascent and disconnected.

And I think we just happened to be the right guys in the right place at the right time to start first, the first startup or the first, um, um, hacker, hacker space, co working space on the Island. And then the first accelerator.

Rahul: Yeah. So what were you trying to achieve at that point with this, we

Hugh Mason: realized both of us that, that we built several businesses, both of us, and that they all depended on an ecosystem.

And both of us were kind of New to Singapore. I was literally new to Singapore. I've been doing business [00:10:00] in Singapore for only two or three years. Um, Meng was coming back to Singapore, so he had connections, but, but not with an identity as an entrepreneur. And we realized that you needed all sorts of, you know, you needed, I guess you could say practical support.

You needed structures around like the simple things. Um, what does typical deal terms look like with a business angel? You know, there were no standardized contracts at that time. There were still business angels around who thought taking 90 percent of your business was reasonable as a business angel, you know, a sort of employer mentality.

So on that level, then I think there was a sort of political part of it, which is that we had no, you know, Singapore's government is very important here. And unless you have a group of people, you can't really Talk to government, you can't have a relationship with regulators or government here, because it's a democracy and they need to know that you're not just representing yourself, you're representing a group.

So there's a kind of, with a small p, there's a political dimension to it of needing to have a kind of a movement.and then finally, there's an emotional part of it, which is that, you know, [00:11:00] we, we recognize that entrepreneurship is a kind of a faith, really, one way of looking at it. you've got to believe that it's possible to start a business despite all the evidence that most ideas don't work out and you have to frame the failures in terms of feedback and learning.

You know, I think. If I step back from, you know, what does religion do for people? There's many, many things for people. But one of the things I think it helps a lot of people with is the idea that we're all going to die, right? We know the end of the journey. So where does the meaning come from? If the only meaning of life is death, that's kind of a bit of a downer, right?

So you've got to have something that makes it meaningful in the meantime. And for us, it seemed that the experience of entrepreneurship Having this sort of dual faced thing on the one hand being ruthlessly, uh, realistic about decision making, but at the same time still believing in a dream. How do you hold those two contradictory things in your head at the same [00:12:00] time?

And we came to the conclusion that it's really hard to do it on your own. But if you have a bunch of friends around you. People, you're not necessarily competing with, but sometimes people are competing with two. maybe you can figure it out and maybe you can keep going because there's going to be a lot of knocks.

You know, the only way to learn to ride a bicycle is to fall off and then get back on. And, and that's what entrepreneurship is like. It's like continuously falling off a bicycle. Now, who was it that said Ben, was it Ben Horowitz said it's like eating glass every day.

Rahul: Elon Musk. Elon

Hugh Mason: Musk.

Rahul: Eating glass and staring at abyss.

Yeah, it is.

Hugh Mason: That is exactly. And unless and until someone's been there, they don't know what that is. And that's not, if you're doing a side gig and you're just having a little, you know, consulting, but you don't know that's, that's not, that's not the same, not the same at all.

Rahul: So, so this was 2012. Right. Uh, so was there enough.

number of people who are interested in this sort of dreamers that you mentioned.

Hugh Mason: It was actually a bit earlier than that. So about what happened was in 2009, [00:13:00] at the end of 2009, I think there was the very first Echelon conference. So that was organized by Was it E27? Yeah, Mohan. And it was really small. It was like a hundred of us in a room that we'd borrowed at SMU, I think, from memory.

And one of the guest speakers was this guy, David Cohen from Techstars, which we'd heard about. And he was friendly, but he was also very tired. I guess he was jet lagged and everything. And about two weeks after the event, he phoned me up and he said, The government of Singapore wants me to do Techstars in In Asia, but I've got a young family.

I'm really, I don't want to do it. You guys seem to look like you're well connected in the community. Why don't you do it? And Meng and I looked at each other and thought no one's ever done this in Asia before. why don't we explore what this would mean? And it was a huge gamble because nobody knew what a startup accelerator was.

Most people didn't believe in startups. The idea that you would need social capital to glue together an ecosystem that was completely alien, all this, you know, there were [00:14:00] no jobs, there was nobody called a community manager, that concept didn't exist, you know, no, there were very few venture capitalists or if any in Singapore at the time.

So that is my job, by the way, right? Yeah. And, and, and, and there was no, and the concept of mentoring also was not, which was clearly key to the process of textiles was on. So we went out to meet with a bunch of, a lot of people actually asked textiles, could they get some help to do what textiles was doing?

And, and textiles very generously ran, it started a thing which came, became called the global accelerator network. so this was about 2010. We could see that there were some risky parts of this and it seemed to us that the risk is late. Lean startup was only just coming out. Lean startup was not. The book was not released until the year after, but the idea of a minimum viable prototype and identifying the riskiest proposition to test that was all still.

In the air, but it is what we did. So we, we felt that the biggest risk [00:15:00] was, number one, can we get great startups and number two is, can we get great startups? And can we get people to mentor them for free? Because we knew if we were going to be paying world class people, it just wasn't going to work. So what we decided was there was an opportunity for us in Asia, which wouldn't exist anywhere else, which is that at that time, there were a bunch of American and European investors who could see the size of Asia's market.

If they came to explore Asia, right, they'd spend two weeks going from airport to airport, just exhausted, packing their bags and everything. Whereas if we gave them a curated experience in and brought together great startups, we did the deal flow curation for them, presented them with a good experience and just made it easy and also introduced them to key people in the ecosystem they'd come away and be huge advocates for us.

So the So the kind of the minimum viable prototype for JFTI was actually a year and a half long mentoring program. I can't what we called it now. but we, we learned a lot in that. We learned a lot about how do [00:16:00] we identify coachable startups, people who are going to treat the mentors well. How do I, how do we begin identifying mentors who are not just creeps or, um, money grabbers or whatever?

And how do we create a, an environment that where everyone wins?but it still wasn't clear what the business model for that would be. So it took us two years, I think, or a year and a half, certainly, to raise the money to do the first JFDI program.because people would say to us, well, is this a fund?

no. Uh, is it a school where people pay fees to turn up? No. And it was interesting. I mean, just at that time, this is around the time that the platform businesses were starting to emerge, you know, the all the online to offline. So Uber and things like that. I realize now an accelerator is a platform business.

You instead of matching up riders and people with cars, you're matching up startups and people who will have an interest in seeing a startup work so that the core transaction on [00:17:00] accelerator. Is the, is the rapid growth of a, of a nascent business, whereas on YouTube, it's the uploading and viewing of videos.

So, but the same dynamics apply. You've got to find some way of monetizing that transaction. and none of that was clear at the time. I wrote my master's thesis in 2011, trying to understand what this, what this accelerator thing was. I looked at the model around the world and I realized it was slightly different in different places.

now I think it's, it is very clear now an accelerator is a, is a platform business.

Rahul: Yeah, a few things. One is, you mentioned mentorship. So,why is mentorship so important, especially with the program?and then you briefly mentioned about, um, getting sort of the best people around the world and getting them, to do it.

For no cost sort of thing in a paid forward. How did you manage to do that?

Hugh Mason: So that's two questions in. So remind me of the second one. Let me look to the mentorship one first was, why mentorship? Yeah. So I think [00:18:00] the answer there is that one of the defining characteristics of entrepreneurship is, true uncertainty.

Um, there was a guy called Knight in 1921, he wrote a, a book and, and in it he, he says, you know, characteristic of entrepreneurship is unknowable uncertainty. It's not just you don't have enough information, it's just that you, the world is what the academics would call contingent, it is unpredictable, it is chaotic, it is a complex adaptive system, if you want to use that language.

And in that situation, analytical logic doesn't work. You don't have the data to sit and sift through in a way that an MBA or a CFA would do, which is why a lot of people have to unlearn those skills if they've learned those skills and they want to start a business. Another characteristic of doing a startup venture is particularly if it's your first, is that there is an enormous sort of, um, a huge steep learning curve.

You've got to, if, You've got to learn to manage people. You've got to learn to understand a [00:19:00] very wide range of stakeholders and their interests all at once. And most people don't know what they don't know. It's the Dunning Kruger effect, right? So what you need is someone to say to you.actually, there's a thing that you don't even know that you don't know right now, but there is a solution to the problem that's going to hit you in three weeks time, and you might want to start thinking about this now, and then the immediate response to that is, Oh, my God, where do I find out about that?

And now I can start looking on YouTube reading books or whatever, but but I can't. Sit down and do a course and train myself in how to make my startup work, because there is no formula for it. So, you know, I'm, I'm, I'm sort of, halfway through two thirds of the way through a PhD at the moment, so I have a supervisor for my PhD.

I'm working at the very boundary of knowledge. And I need to have someone who's been there before, because otherwise I can go down rabbit holes. I could waste months chasing stuff, you know, and of course there are entrepreneurs [00:20:00] who just don't want to be mentored. They want to do it their way. some of them succeed.

Many of them then don't know why they succeeded or else they don't know that actually there was an even bigger opportunity adjacent to where they were, but they never had the perspective to see that. but for them it was a life journey. So I think one of the things is that there is no one model of what makes the right mentor for a right person at the right moment in time.

And almost certainly someone who is a useful mentor now. I always say to people, you know, if they ask me to mentor them, I might be useful to you for, you know, six minutes, six weeks, six months. But it's unlikely to be six years. I mean, we'll still be friends in six years, I hope, but, you know. So that's why mentorship.

And then I think the second question question

Rahul: was around, like, how did you manage to attract people? Great people.

Hugh Mason: So Ming is an unusual person, and he had made a great deal of a great number of contacts in Silicon Valley. And by reaching out and tapping on that network with its very open minded attitude that [00:21:00] that, you know, has made it so successful, we were able to invite people over.

And, so that's, it was the connections that Meng had already made that made that possible.

Rahul: Yeah. So, you spoke about mentorship and also you mentioned about attracting the best startups, right? and Techstars already existed, Y Combinator already existed. so,were you able to attract the best startups?

So given the chance that they get. Into Y Combinator or Techstars. Would they have still joined

Hugh Mason: or did they join at that point? Well, it's interesting. I mean, so Y Combinator and Techstars are both in the U. S. And they both have a massive national, you know, monolithic market of how many hundred million Americans?

300 plus. 300 plus million American people. So if you are a really successful U. S. startup, why would you even bother thinking about the rest of the world for the first 10 years of your operation? The same with Chinese startups or Indian startups. Why would you bother looking, right? So, part of our thesis was [00:22:00] that there were a whole lot of opportunities here in Southeast Asia, which American companies wouldn't look at.

And if they did look at Asia, they would look at the big markets first. whereas we knew that Southeast Asia is a very fragmented market. That gave it a weakness because in order to scale, you'd have to think about how am I going to work across these different jurisdictions, these different territories, different cultures, different languages.

But it was also a strength because Singapore is a hub, you know, it loves that word hub. Um, and it is, um, it's an island of kind of commercial stability in that connects together the very disparate places around this part of the world. So we felt that that was worth trying. To see if that was, going to work, but we also recognize there were some, some barriers.

As I say, there were no expectations for what venture deals should look like. There weren't very many venture capitalists around. there weren't, there were still aren't very many local mentors that there is, you know, there are long traditions of mentoring in, in Asian culture. But they're different to [00:23:00] the West.

So, you know, you have stories, the classic stories of from Indian history and from Chinese history where there are sort of wise teachers and so on, but they have a different relationship with the people they're teaching. There's typically a much more, the bigger power distance that we have, the academics would say.

Um, the idea that you could walk into a cafe in Palo Alto and say, Hey, I've got a, I've got a term sheet. Will someone give me advice? You know, that you can do that in Palo Alto and people won't think you're weird and they'll be delighted to give you some advice for free. They expect nothing in return.

They're quote, paying it forward. You know, that whole pay it forward concept was not here. And I still don't think it is. To be honest, we have the opposite of it in Singapore. We have Kiasu, you know, fear of losing out. It's literally the opposite of pay it forward. So there were a whole series of things that we knew we were going to have to reinvent.

Yeah. but we were inspired by the fact that TechStars had a different model to Y Combinator and that it had worked in a small town, you know, Boulder, Colorado is a lovely place, but it's [00:24:00] basically got a liberal arts college, some nice mountains and some retired rich people. It's not very big. It's like 150, it's like size of Toa Payoh here in Singapore.

So if they could build a successful accelerator there, that kind of inspired us that, you know, maybe this was a model that would work. And as I say, I think we realized after a while that, You know, 60 percent of it would work straight out of the box, and the rest of the 40 percent we'd have to reinvent, um, completely.

And it wasn't clear at the beginning which We'd have to reinvent.

Rahul: There are very few people in Asia who has the paid forward sort of culture. The one reason I respect our mutual friend Elise is because she has that character. Yes, that's right.

Hugh Mason: And it is coming in. I mean, I think, and I don't want to criticize Asia has many, many positive, um, aspects to its cultures, but there's one thing that, that sort of made, you know, the U S.

Business in particular work very well because I don't think a lot of European countries don't quite have the same pay for what [00:25:00] either some do, but most don't, The U. S. is, um has a very positive view towards giving things a go, accepting that things aren't going to work out every time, not killing someone off if they've, if they've failed, because they haven't failed, the venture's failed.

I think, you know, it is right to, Cut someone off if they have failed. I mean, there is, there is no reason to fail in a startup, kill people. You know, the, the case study I'm working on for my PhD is around Theranos, not because of the Theranos story. There's a whole bunch of reasons why I chose it.

But, you know, I, I do think Elizabeth Holmes deserves to be in jail because she put at risk the lives of cancer patients, a bunch of other people, and she lied. I mean, with documents, that kind of stuff. Yeah, by all means cut people out. But for someone to try an idea and, and then it fails. Why should that be perceived as you failing?

That seems to me to be a brave thing to celebrate. Umyou can do it, you know, if you're, as long as you're [00:26:00] clear with everyone that you're taking a risk and people know what they're getting into, then that's fair enough, you

Rahul: know,

Hugh Mason: in my book.

Rahul: Yeah. I briefly want to discuss like what is still relevant for an accelerator.

Now, uh, I mean, the FDI sort of ran from 2012 to 2015, if I'm not wrong.

So, how does, uh, accelerator sort of measure, uh, the, the progress during the, the, So it's,

Hugh Mason: it's very interesting.

I think what people have realized over the last 20 years in particular is that, there is no one sort of personality type. there is no one business model that that is the success flavor. there are some which are more predictable than others now, like, as I say, software as a service.

But I don't think the world is going to fall into those kind of neat categorizations.on the other hand, of course, there are some very established models where, for example, if you're doing a food franchise here in Singapore, people absolutely know what the economics will be. And you'll often see [00:27:00] restaurants start up, they'll run for three months, and then either they just abandon the whole thing.

Or they'll completely strip out the interior and what was a Mexican restaurant becomes, you know, something else because they know that it's not, it should be delivering more numbers by now. So if you go for an established business model in an established market, there are metrics and you know what you're doing.

But to go back to your question with an accelerator, I think the metrics we realized we had to look for were, Actually about connection. So we realized that after a while when we were recruiting startups that there needed to be sort of three things that were connected together. There's like the business idea.

What is this business model? This technology, this opportunity that they've identified. Then there's a team that says they're going to execute it. And are those things actually linked together? Like, are these the best people in the world to do this idea? And then there's the second, then the third pole of it is, is this the right place to do this idea?

So, in which case, [00:28:00] are these people tied to this place, or are they just going to run away somewhere else with our money? And, you know, is this idea relevant here? So, for example, A lot of people came by JFDI pitching kind of, substitute for their mother type businesses, the kind of bro business you see picked, pitched in Silicon Valley, where it's like laundry as a service or something.

Well, we have laundry as a service here. It's called a domestic helper. We don't need a kind of digital app enabled version of that, you know, it works. So that doesn't work because of the location. Sometimes it would be people who weren't fitted to an idea. So I remember once, it's hilarious interview, there were these two.

Guys who actually showed up in suits pitching to Meng and me. Women's shoes.

Rahul: Women's shoes,

Hugh Mason: I think, yeah. They were pitching an idea about women's shoes and Meng sat there listening to them. And then after about two minutes he said to them, so when was the last time you guys actually bought women's shoes?

And there was this kind of silence fell on the room and they, they, they intellectually thought themselves into women's shoes being a good market, but they had no insight [00:29:00] into women's shoes. They didn't have a feeling for it. You know?

Rahul: Yeah.

Hugh Mason: Whereas I met her, I was sitting once at a conference in Indonesia next to a former Miss Indonesia, and she'd identified that there was a problem for kind of mid range women's shoes in Indonesia.

If you lived in the provinces in Indonesia, you couldn't get very expensive, nice shoes. You could get cheap, cheap ones in the market. But there was no kind of sort of aspirational. I'm now an office manager. Sort of professional woman type shoes and she set up an MLM business basically servicing that need in Indonesia So she had a genuine market insight and she personally had a great affinity for women's shoes And I understand that she made a great success of the business.

So

Rahul: yeah, I also heard you talk about That that selection is very very important and it has to be you know, as tight as the elite sort of schools Otherwise, I think so.

Hugh Mason: Oh, gosh. tight. I wonder how to describe this. So my own view is that, if you think of [00:30:00] sports policy for a country, you can have sport for all.

So that's providing swimming pools so that fat uncles like me can go and try and avoid having a heart attack by doing some exercise, right? That's a good thing. I genuinely believe that sort of entrepreneurship for all, helping people to think there might be other opportunities in life, helping people to become resilient, helping people to cope with ambiguity, those things are really important, particularly in a country like Singapore where life can seem very predictable.

And it can seem like you're kind of on an escalator set by the government, you know, when an unexpected event hits you, you, you need entrepreneurial skills. So that's all fine, but doing kind of entrepreneurship in every school in a country is not going to create elite superstars. In the same way that if you want to have a, an Olympic gold winning team in a country, you have to have an elite selection process, which is brutally meritocratic and which is utterly realistic with people has a whole coaching and mentoring structure in place.

And [00:31:00] that was what we wanted to try and create with JFDI, not just for Singapore, because we felt Singapore was too small, but to, to do it for Southeast Asia. so selection has to be, I think, realistic and,And elitist like that and that probably means that you need to look at a lot of things and probe them because they're all flawed.

So our own view was that we needed at least 20 startups that we were rejecting for everyone we take. I was just talking with, um Amara term accelerating age the other day and she says they're now running at about a 2 percent acceptance rate, which is about what Yale NUS was running at here as a college when it was running.

I think Yale runs about 3 or 4 percent Harvard at about 3 5%. So if you want to be an elite. Organization. You probably need to look at that many people. And again, coming back to your question about branding, that means you have to have enough of a kind of a magnet that people believe in that you're going to attract those people.

But you also have to accept that you're going to get it [00:32:00] wrong.you know, there's some villains that have come out of Harvard, some villains that work at Harvard. You've just been exposed for academic fraud. So if you're working with elites, you're going to get it. There's going to be some uncertainty there.

It's not going to be a sausage machine.

Rahul: Yeah. And okay. So we talked about selection and the sort of progress that you make during the program. What is the goal in the end? Like what happens? What is the sort of outcome that's great for an accelerator program?

Hugh Mason: It's an interesting question. I mean, when we started, I think we didn't really think that through enough.

Like what was the end game for us? It felt like we had so much that we had to get together. We had to get a mentoring structure together. We had to get finance together. We had to get the operations together, all that stuff. We knew that, for example, once we had a portfolio, we'd have to sort of do some management of that.

But we assumed that would be easier than it actually turned out to be. In fact, every accelerator finds out once you have 50, 100, 100. [00:33:00] Companies in your portfolio. It's extremely difficult to manage them. You have a minority share in them, so you have very little influence over them. they've probably gone into different jurisdictions.

They've got new dominant shareholders who have their own view and have probably forced new shareholder agreements on them. So suddenly you've got to deal with contracts in different jurisdictions. You can't turn up to board meetings, even if you have rights to time. We never had Observer rights or, you know, attendance rights for our, but we didn't want it because we knew we'd never be able to go to 74 meetings in a month.

So to answer your question, I think for us, it was about seeing the ecosystem grow. and it was about,seeing if we could create a structure that would, that would scale. And I think once we realized that We'd gone as far as we could at that time that we got copied so many times by people who are making empty promises.

I think there were 50 accelerators by the time we finished. It was insane. It was insane. Every, every kind of polytechnic, every school was running its own. So every boring old bank was running [00:34:00] its, you know, so called accelerator program. So. It was just the mentors that we'd, the mentoring pool that we'd built was suddenly being pulled in every direction.

Startups were trying to play off one accelerator against each other, saying, how much money will you give me for how little shares? It's just, it became a race to the bottom. And we thought to ourselves, let's get out while we're on top here now. Um, and it also wasn't clear, um, What the sustainable cash flow model would be for us, because the accelerator has bills to pay now, like every investment company, you've got bills to pay now.

even though you might make a lot of money down the line, so accelerating Asia, I think, was were much more clever than us. They put together a structure that means they had a kind of consulting business, corporate consulting business that pays for this, and they got that going from the very beginning.

and, They're very kind enough to say that I think that some of that came from, the woes I shared with them, the experience we'd had, um, we tried a number of things and lots of people were trying at the time in 2015, all around the world, different [00:35:00] accelerators that had had this sort of rush of.

Experience, but everyone was wondering, how do we do this? Do we do what 500 startups does, which is you, you invest 100, 000 into a company and then you take 50, 000 back in fees. We always felt really uncomfortable about that. so we didn't do it, but. But we maybe we should have done, for example, some, some, accelerators, charged fees to different people, some people.

And again, it's all context dependent. a lot of accelerators went down the kind of corporate route and for a while we're running these things that were kind of basically like paid open innovation projects. And I think those didn't really work. I think the whole open innovation thing kind of happened about 2017, 2018, and it didn't really work.

We tried corporate innovation at the time. and I understand again, it's different.

Rahul: So what would you say is the number one lesson learned running GFDN?

Hugh Mason: Gosh, that in retrospect, that it is a multi sided market. And, [00:36:00] you can, and as a result, it's, it's a platform play. And as a result, it suffers all those challenges of a platform play.

So you need to get to critical mass. It's got the cold start problem for anyone who hasn't read Andrew Chen's book, I really recommend that. So that's, that was the really big insight, you know, and that's, I was just getting close to it when I, when I wrote my master's thesis in 2011. I think I didn't really, really internalize that until we, we'd actually finished, you know, 2015.

What does that actually mean? Because the whole concept of platform businesses was not clear until about 2014, 2015. I remember Sangeet Paul Chowdhury, I spending hours and hours and hours talking about what is this concept of a platform business as opposed to a pipeline business. And now it's common knowledge, but it wasn't, it wasn't part of our mental, Landscape at the time,

Rahul: I used to read a lot of his work to understand how very smart

Hugh Mason: guy, lovely guy and he, I really admire the way he has kind of created along with several others, but he's created a kind of paradigm shift and a lot of people now [00:37:00] think they understand platform businesses and conceptually, they're not that difficult to understand.

The challenge is how do you do it because they've got so many moving parts and you've kind of, it's a bit like trying to cook a meal for 20 people in one kitchen with three burners, you know, so you've got to have the first course going and the soup and you've got to be preparing the dessert, but you've also got to be in there kind of talking to the guests and making sure everyone's happy with each other and everything.

So it's easy enough to say, but it's quite a complex thing to get right and it's context dependent to what works. In one environment, in one country is not and at one time is not going to work again.so

Rahul: yeah, and the sort of fulfilling thing about, GFDI.

Hugh Mason: So people, um, I, I think we, you know, we ran these Friday open house events and I met something like 10, 000 people in that time.

I have on LinkedIn still about 10, 000 contacts. most of whom I haven't seen since I met them, but, but they occasionally write to me and, you know, and I feel [00:38:00] like part of that. You know, I was one of the first COVID patients in Singapore, and I got hundreds and hundreds of messages when I was in isolation, and that was a wonderful thing.

I mean, it might sound very odd to say it, but I, my father had died a few months earlier, and I realized, you know, the, the only thing we take with us is love, and the only thing we leave behind is love. And I really thought to myself, if I ever worried, you know, will people miss me? Do I matter? Then yes, I feel loved, which was wonderful.

And I think that came because what we tried to do at JFTI was not just a business thing. It was about helping people to try and realize their hopes and dreams. And that was complex. I have some haters out there as well. They've kind of gone away at the moment cause they don't see, and I'm not so public anymore and I really don't miss that.

So this is the first podcast I've done in a very long while.

Rahul: yeah. So, so what do you think about the current state of ecosystem in Singapore

Hugh Mason: So I think we talked earlier on about that [00:39:00] concept of there being some specialist roles and there being a kind of maturity that's coming in.

And I think we maybe need to acknowledge that. So. When we did JFDI, you know, startups, rah, rah, rah, t shirts, pizza, beer, all that crap. That's fine. That was great then, but it needs more for the future. And it needs, we need to be more serious about it. We need to be more structured. And I think critically, something I do hope that Singapore figures out is that, adopts is this, this idea that we need to decide that we've maybe got two levels of structure here.

We absolutely should do entrepreneurship for all. I'm really glad that it's taught in many colleges and I enjoy mentoring the students I teach. I teach courses at NTU and NUS and other places, but those on their own is not, that's not going to create world leading businesses. If we say, for example, here in Singapore, that we want to have an intellectual property based economy with deep technology.

We're only going to get that from an, a laser focus on a small number of [00:40:00] markets. We cannot be supreme in quantum computing, you know, all kinds of medical devices. And we can't do all of these things. We're a small line with a limited amount of talent and a very small home market. So the playbook that works in America or Germany or China won't work here.

And, um And just as, you know, if you look at, um, I'm very proud of what we achieve as a nation at the Olympics, you know, we've, we celebrate the fact that we get some bronzes sometimes and we get, you know, and when one or two sports, and maybe that's realistic, you know, I still think we can make a lot of money out of entrepreneurship by being.

The sane island in a sea of madness, you know, a lot of this part of the world, if you want to get paid, you need to marry the guy's daughter. You know, it's very medieval, very game of thrones, which is what makes it fun doing business here. But it's not like Germany where if you have the contract, if you have the deliverables, it's not going to, it's not like that here.

So, so I think that we need to have a clear two separate strategies, [00:41:00] one for entrepreneurship for all and one for entrepreneurship for elitism.

Rahul: Um, focus on sectors and focus on sectors where there is a natural advantage for example. Yeah.

Hugh Mason: And for example, in terms of the entrepreneurship for all thing, you know, I really support the folk who are trying to do impact businesses, but I think if you try and measure an impact business by any of the same metrics as a, as a, as an economically oriented, financially oriented business, it's going to, it's going to look terrible.

It's not going to work. And then I think we do have to do that stuff. We have to be realistic about the fact that the metrics that we use. You asked me earlier on about progress. so you can measure inputs to things very easily during a startup process. So have I given them a grant?

Yes. So I just spent some taxpayers money. Is that innovation? And my criticism of things like the Global Entrepreneurship Monitor and everything is it's all those kinds of things. It's all about inputs. It's like number of courses run, number of colleges, number of graduates, number of [00:42:00] patents. All of those things are inputs.

The problem is that the outputs come delayed by a long period. So if you, so what the academic inside me would say is that actually you need to measure process in that situation. you can't, if you look for inputs. You just won't get an indication of where things are at. If you look for outputs, um, they're not going to happen yet.

And the other thing I think is you, and again, this is at the core of my PhD is that you have to be realistic about the fact that. The measures you choose to set on an or on an ecosystem or on a startup are political. So the fundamental reason why Elizabeth Holmes at Theranos is in jail is because she lied to her investors.

Now, she did some stupid stuff. She changed that. She falsified documents, right? But when you are a startup, particularly in a business that's not, a business model that's not understood well, or a technology that's not understood, how do you report back to your investors? I [00:43:00] look, for example, there was one artificial meats company that I very indirectly knew here in Singapore.

I had a young engineer who was working there who felt very uncomfortable because he felt the founders were being pressured to report success when actually, The laboratory work wasn't, it wasn't proceeding fast enough, you know, which is remarkably similar to the Thurama story. You know, um, I have some sympathy up until about 2013, Elizabeth Holmes was not lying.

She, I think, I think she was trying to boil the ocean and that was a key part to her problem. And she also had an industry that there was no way the incumbent blood testing industry was ever going to let her succeed, not in a million years, right? They were just waiting for her to misstep and then they were going to crap all over her and it happened all of a sudden in 2015.

And through her own stupidity, but we need we need. So we need to focus on, we need to focus on the process of what we're doing. And we need to accept the fact that it's not going to be an efficient process. It must be an effective one. You're not going to think thinking specifically [00:44:00] Singapore. We're extremely good efficiency.

We're very good at taking things that don't work terribly well somewhere else, like public housing and making it work really well. You know, we're extremely good at getting kids in very high grades. And you could say there's some costs in doing that, but you know, we are very good at it. And that's why we come out high on all those scores.

So the metrics that you choose, are not neutral. They're, they're political with a small P and over the course of a startup, you go from a conversation that's mostly about fantasy at the beginning, hopes and dreams towards a legitimized business when it exits, which has got to have it. Hard metrics so the question we we haven't really got mapped out yet is what what do we measure and when and the technical phrases you know what information proxies do we use to represent progressand and those are going to be contested between the different people so if you're if you're an investor who's got to report back to.

Their existing investors, [00:45:00] you know, that everything's going great and your money's safe with me. And by the way, you should give me more money for my next fund. You're incentivized to report success, and then your investees are incentivized to, you know, to report success as well. And so there's some, There's some potential for misunderstandings at the very least there.

Rahul: Yeah.

Hugh Mason: And I don't think we've figured that out yet.it would be naive to think that we can just apply balanced sports scorecard measurements like you do in a big corporate environment or, or traditional accounting metrics. Those don't work in a startup.

Rahul: Would you start an accelerator in Singapore in 2024, not a Venture Studio accelerator?

Hugh Mason: An actual accelerator, personally, not this time in my life, because I'm now 58, and I know how long it would take to, you know, it's 15 years now since we set up JFTI pretty much, and the foundations of it got going, and we're only, you know, [00:46:00] we've still got a portfolio that we're getting rid of as fast as we can, but I would be what 70 something by the time it, it works.

So I personally wouldn't do it. would I recommend that someone set up a model? I would be drawn at the moment to, um, a venture builder. And the reason for that is I think that particularly in the areas I'm interested in, like I'm really interested in affordable healthcare. it seems to me a lot of innovation is done in the world for The top 1 percent of the world's population by earnings with the idea that then somehow medical technology filters down.

Actually, if we focused on the fact that around the equator, there is billions of people who all look up to Singapore, who've all learning, you know, 50 to 800 a day maximum. If we innovated for them, I think we could do an enormous amount of good for the world. I think Singapore would be respected for it, but that's complicated.

It needs trusted distribution channels in place. It probably is doing a healthcare venture [00:47:00] builder. That would be far too broad. I actually think if you did a venture builder focus, for example, on maternity and neonatal care, everything to do with maternity, everything to do with neonatal care, you could reduce childhood mortality that way.

That would be the perhaps that would be the impact metric. And because there's a lot of work to Pregnancy and the immediate period immediately after both a fairly consistent medically, there is a fairly predictable set of patterns and timings and structures that you could leverage on to build a venture builder.

so that's the kind of thing I would probably do if I was doing that kind of thing again, but that was then in my life. And I, so personally, I wouldn't, I wouldn't add it, but I do think there are those opportunities. And I really admire the fact, for example, Here in Singapore, it's interesting that Entrepreneur First came and went, my own view on that is that Entrepreneur First is an excellent program in London.

I think it works because there is a whole load of tacit knowledge in the air in London, there is a centuries of risk taking, merchant venturing is, that's the very history of the City of London. [00:48:00] there is not that same history here and I was always dubious that Entrepreneur First would work for that reason.

I never really engaged with the community here. It was very much its own thing and it was seen by the raw material suppliers, the people who were the universities who were supplying PhDs to it. It was seen as competition. so in that sense, I don't think entrepreneur first sort of stood a chance. It's, it was, it was never going to work, but I do think the Singapore deep technology association, you know, Clara and Luke are doing a fantastic job running that.

the kinds of businesses that I'm, when I, when I mentor their startups.they're actually market entry type started. They're not, I've got an idea for something that's going to pay off in 10 years. They're actually, they're quite far down the line. So that's very good. and then I think accelerating Asia is absolutely fantastic.

And what they've done is to manage to build a very community engaged, very credible, commercially sustainable organization with integrity. that seems to be [00:49:00] working and it's basically what, uh, I am incredibly admiring of, of them for doing it because it's what I would like JFTI to turn into, you know, so I'm all power to them.

So, and we've probably got enough of, you know, if you just had two or three max of those things in, in Singapore, that's probably enough, then it's fine to have lots of, you know, student programs and.

Rahul: Okay.

Hugh Mason: So,

Rahul: but do the very best entrepreneurs and maybe repeat entrepreneurs, do the, do you think they are still attracted to an accelerator program and also a venture builder?

Hugh Mason: So mature ones, they are. It's interesting enough. So, yeah, I mean, First of all, I think we've also got a better picture now what an entrepreneur is. Over the time that we ran JFDI, you know, the average age went up with every cohort and it ended up being people in their mid thirties. That was a typical kind of age range.

if you look at the data from the Kauffman foundation, then I think you're six times more likely at my age to set up a successful business than [00:50:00] someone who's a college student six times. I mean, massively, right. Because of life experience and everything else. So,Experience, uh, one of the things I think that's the, you know, you get glasses and a bunch of other things as you get to middle age, but also some of us get over our ego issues and we realize we don't have forever in this world and as Meng and I always said, it's better to have, you know, a hundred, 10 percent of a watermelon than 100 percent of a grape.

and if you stick on your own, it's going to take you a very long time to grow that grape to be the size of 10 percent of a watermelon. So an Excel, if an accelerator makes the pie bigger. It's a bit like saying, am I going to give away equity to an investor? Well, the only reason you should ever give away equity is if, if that makes the pie bigger, you know, you're not taking a slice out of the pizza for nothing.

The whole pizza is grown by having that investor on board. So even though 10 percent of the business has just gone, the business is now significantly bigger than it was before.and an [00:51:00] accelerator is like that. It's an investment into your business. in sometimes in cash, but certainly in kind. and if you can see a bunch of people who can get you into a market quicker than you would do on your own, why not?

Rahul: yeah, this was great. You, thank you so much for taking the time to do this. Thanks for having me.