Are entrepreneurs born or made? Q&A with Cheryl Yeoh
Fundamental breakthroughs often happen in labs, but it takes entrepreneurs to bring those and other innovations to market so they can change the world. Thomas Edison, the scientist, pioneered the light bulb, but Edison, the entrepreneur, helped make them ubiquitous.
Cheryl Yeoh, a serial entrepreneur, is both a student of entrepreneurship and a leading teacher of the art and craft of building companies. Raised in Malaysia, she earned an engineering scholarship at Cornell University and went on to found Reclip.it, a digital wallet for daily deals acquired by Walmart Labs in 2013. She then became the founding CEO of the Malaysian Global Innovation & Creativity Centre (MaGIC), that country’s leading business accelerator. Now based in San Francisco, Yeoh will take the stage at Brain Bar Budapest 2016 with a focus on the keys to entrepreneurial success. She took time out to field a few questions.
Q: Are entrepreneurs made or born, in your experience?
There’s no right answer to this question because anyone can be an entrepreneur if they’re smart, hardworking and persistent. However, I believe that there are certain traits that differentiate a good entrepreneur from a great entrepreneur. Some of these traits include a healthy appetite for risk and experimentation; being unafraid of failure or adversity; resourcefulness (street smartness); logic and problem solving skills; and empathy and leadership.
However, as innate as they sound, our personality traits are largely influenced by our childhood upbringing and environment. How our parents raised us in the first ten years of our childhood influences our proclivity and aspirations in the future. Therefore, if we want our children to be entrepreneurs, I do think there are certain traits that you can inculcate in them. For example, when I was a child, my mom encouraged me to compete in storytelling competitions, sell in flea markets, do door-to-door sales, and other things. That fostered my ability to sell to future investors and increased my confidence in public speaking.
Q: How has the startup environment, and in turn the funding environment, changed since you started your first company?
When I first started my company in NYC at the end of 2009, the tech ecosystem there was relatively nascent. Investors in tech were mostly new and they came from finance, hedge fund or consulting backgrounds, hence they put more emphasis on pro-forma financial statements and revenue models, whereas venture capitalists from Silicon Valley prefer to invest in riskier “zero to one” tech ideas that didn’t necessarily have a business model yet. There was a notion of “old money” (backed by experience and success) vs “new money” (backed by financial instruments and inheritance). Valuations on the East Coast was still finding its way, while valuations on the West Coast was higher by 2–3x, in general.
Sometimes, the startup game works in your favor just because you got in at the right time and right environment. Other times, you’re a little too late entering an already crowded space. But startups with strong fundamentals withstand external conditions and come out ahead in good or bad times.
Nonetheless, markets always adjusts their value. Six years later, NYC’s tech ecosystem has matured a great deal and produced many interesting and successful companies such as Etsy, Blue Apron, ClassPass, SeatGeek and many more. Investors are a lot more seasoned.
Q: How are the dynamics and challenges of starting a company different in Southeast Asia, the United States and Europe?
In Southeast Asia and Europe, the ecosystem is still relatively new. Some of the common complaints among entrepreneurs are that there are not enough experienced and successful entrepreneurs to mentor them; there isn’t the right talent; the market is very fragmented; cultures, languages, and laws are different in countries in the region, which makes it tough to capture a large enough market to be VC-fundable. There are fewer mergers and acquisitions and initial public offerings, and hence, fewer investors are willing to invest without a viable exit strategy. There’s slower market adoption because the population is not as tech savvy and needs education. The list goes on. A lot of the health of the ecosystem depends on the country’s economy and GDP, too, since a healthy dose of public and private resources need to go in to support a sustainable ecosystem.
All that said, you can start a company anywhere. But your target market matters, and it’s very important that you understand your customers and their pain points. Instead of trying to blindly copy U.S. business models, try to localize the model or capitalize on a unique competitive advantage within your local market. For example, if your region has a strong manufacturing history, see if you can work on a hardware product that can leverage the talent, resources and skills in your region. Entrepreneurs in new ecosystems may need to bootstrap for a long time and build solid businesses.
Q: Are there certain sorts of companies in certain types of industries that do best in tech accelerators?
Accelerators are now becoming more specialized (e.g. hardware, retail, education, and so on), so the mentorship, partnerships and benefits provided in each are unique to help entrepreneurs within the program succeed.
In Silicon Valley specifically, the 500 Startups accelerator is good for companies with existing revenue traction, e-commerce models, etc. Y Combinator takes more risks with tech-based startups, but are also covering more industries as they scale. There are a multitude of other specialized accelerators.
The function of an accelerator is to help founders with network, focus, distribution, introduction to investors and others. The cohort network is also really important as most founders within the same cohort form a strong bond and tend to help each other out throughout their entire entrepreneurship journey.
I personally like cross-industry cohorts because it prevents group think and you can learn from other industries. The best disruption always comes in sideways or is inspired by other sectors.
Q: What’s the role of government in creating a successful startup ecosystem? Will they come if you build it?
Anyone who’s interested in creating a startup ecosystem should read Brad Feld’s book, “Startup Communities.” He says governments should be feeders (providing infrastructure, policy, incentives, and support), but that the entrepreneurs should be the leaders as far as programs, training, mentorship and funding of any ecosystem. That’s because they’re the ones who truly understand what entrepreneurs need to succeed.
Q: What are the top three things a budding entrepreneur should be paying attention to?
First, focus. Remove distractions and focus on one thing at a time. Keep experimenting and getting to Product-Market-Fit (PMF). Nothing else matters. Second, be resourceful. Don’t take no for an answer. Don’t be afraid to ask for help and admit it when you don’t know the answer (but make sure you figure it out later). Third, hire people smarter than you and build a great team. Everyone in your team should have a superpower — something they’re very good at — that complements your entire team. Build your team around superpowers, but also around the ability to collaborate and see the larger vision.
Interview By Todd Neff