KUALA LUMPUR, Oct 14 — A widely-held view globally is that the current period is the best time to launch a startup. If that is indeed true, then startups in South-East Asia in particular and Asia in general are about to have it even better.
Mark Chang, the founder and chief executive officer of JobStreet.com, is preparing to end one period of his life and begin a new exciting chapter where, over 10 years, he hopes to help build the next 10 entrepreneurs who will each create an RM1-billion business.
The chapter of his life that is about to end is the soon-to-be finalised sale of all the remaining Internet assets of JobStreet.com to SEEK Ltd, an Internet recruitment company listed on the Australian Securities Exchange (ASX).
SEEK already own 22 per cent of JobStreet. In the deal announced in February, SEEK will acquire the remaining Internet assets of JobStreet for US$530 million (RM1.73 billion).
Because of delays in closing the deal, the cost of the acquisition is now US$582 million (RM1.9 billion). At the time the deal was announced, Chang owned an estimated 11.5 per cent of JobStreet.
Meanwhile, there is an interesting caveat in Chang’s desire to help build the next 10 hot billion-ringgit companies.
Chang, an intensely private individual, comes from a poor family from a sub-rural town in central Malaysia. He put himself through engineering school at the University of Texas despite a father with a drinking and gambling habit, and despite not being able to string together a decent sentence of English in his first year in college.
Now Chang, a Digital News Asia Digerati50, wants to focus on giving a leg up to entrepreneurs who come from similar disadvantaged backgrounds. He will set aside US$10 million for this purpose — for starters. “It’s my funds. I can put in any amount I want to, but will start with that,” he says.
“I believe entrepreneurs from well-to-do families will always be able to take care of themselves (if the business fails) and have enough connections to give themselves a chance to succeed.
“And that’s why I want to target entrepreneurs from disadvantaged backgrounds,” he adds, speaking to Digital News Asia (DNA) in New York last week as part of the MOL Global entourage when it listed on Nasdaq. He has agreed to be on the MOL Global board.
Helping the underprivileged
Chang’s desire to help those from disadvantaged backgrounds is in line with a major thrust of Digital Malaysia, the national programme that seeks to transform Malaysia into a “digital economy.”
About a year after Digital Malaysia rolled out, Multimedia Development Corporation (MDeC) — which acts as the lead agency for the programme — announced a new Malaysia initiative to harness and coordinate greater private sector contribution in community and social development targeted at the B40 group, the lowest 40 per cent of the Malaysian population in terms of household income.
The national ICT custodian launched Pembangunan Oleh Komuniti Untuk Komuniti (Pokok), or Development by the Community for the Community, an ICT-enabled collaborative platform and its methodology is aimed at matching B40 issues and needs with contributions – in the form of programmes, products or services — from non-governmental organisations (NGOs) and the private sector.
MDeC later identified efforts to aid the underprivileged as one of Digital Malaysia’s “priority areas,” and announced initiatives to increase citizen income and unlock entrepreneurship potential for the B40 group, with two related Digital Malaysia projects: Microsourcing to Generate Income for the B40; and Facilitating Societal Uplift.
Meanwhile, Chang notes that entrepreneurs from such disadvantaged backgrounds will naturally have to struggle a lot harder in building their startups. They won’t have access to funding as readily, may lack the relationships and networks to tap, and generally will not have as much know-how.
He knows because he was there before. And now that he has the means, “I want to give them a chance to succeed.”
Investment criteria
Chang plans to invest at the very early stage with between US$15,000 and US$30,000 each (RM50,000 and RM100,000). Investing early is so that he and his team can play an active role in helping to build the company and influence strategy with their ideas and know-how.
As he notes, “JobStreet is the market leader in the recruitment space in many of the countries we are in. Not many entrepreneurs can say that. That is the know-how we bring to the table to the entrepreneurs we will work with.”
He notes that in the early stage of a startup, money is not the key issue. The idea is to help the entrepreneurs raise their next round of funding at a higher valuation.
But the idea of targeting entrepreneurs from disadvantaged backgrounds did not come to him just because he is about to enjoy a financial windfall. The seeds were laid eight years ago.
“I launched a trust fund called ‘Little Rain Children’ and committed 40 per cent of my net worth to be given back to society. Since then, I have told myself every day that I am working towards this goal,” he shares.
After 19 years of working on JobStreet.com, he declares himself really excited to be now focusing on the next 10 years in helping to build 10 great entrepreneurs.
He cites four criteria he will be looking at when making investments:
Entrepreneurs who want to build a business over the next 20 years and not a short-term flip;
Entrepreneurs who come from disadvantaged backgrounds;
Entrepreneurs who want to build products or create services that benefit society while generating profit; and
Entrepreneurs who exhibit resilience and a strong desire to realise their vision.
He is not worried about competition from venture capitalists (VCs) as he feels his criteria do not fit the profile that the typical VC will go after.
He notes that in the current hot market for startups, most VCs he knows are playing a very short-term game, hoping to flip their companies within two to three years.
To Chang, this is not the recipe for success. Together with a small team of executives who will leave the Internet business of JobStreet after the acquisition is complete, he plans to show how an investor with a very long-term outlook can help build the next group of billion-ringgit companies.
“I am hoping to find and help build the next Ganesh Kumar Bangah,” he says, referring to the founder of MOL Global who just listed his company, built over 14 years, on the Nasdaq market.
While he launched JobStreet from the northern Malaysian state of Penang, Chang has spent the last 10 years based out of Singapore. He plans to continue living there as he starts investing in entrepreneurs, citing the ease of flight connectivity there. “I can make a day trip to Taiwan from Singapore, which I can’t do in Malaysia,” he says.
Having observed the Singapore entrepreneurship ecosystem up close, Chang shares the observation that while Singapore has very strong funding and infrastructure assets, “being an entrepreneur is more about character and mental tenacity than funding or infrastructure.”
In a high-cost environment such as Singapore, he notes that people can give up quite easily after two or three years if their idea is not getting any traction, and if they have choices [options beyond being an entrepreneur]. “Real entrepreneurs will stick at it and not quit,” he argues.
And these are the entrepreneurs Chang plans to invest in and work with. Digital News Asia
This article was first published here.
