Net Value: A long and bumpy road
The Edge - December 25, 2006

There is an excerpt from Carlos Castaneda's controversial series of books — Don Juan's Teachings — that says: "The basic difference between an ordinary man and a warrior is that a warrior takes everything as a challenge, while an ordinary man takes everything as a blessing or as a curse."

This philosophy applied to the native warriors of America and today, to entrepreneurs who have spent years attempting to realise their dreams. Any individual who had the courage to go against conventions would be able to tell you about his long and bumpy ride.

Acknowledging the need to compete on a global scale to remain economically competitive, the government has been putting in much effort to cultivate more entrepreneurs. Various initiatives over the past few years, both public and private-driven, have come up to encourage entrepreneurship in the technology space. One of the more interesting ones was the Venture business plan competition.

Jointly organised by the Malaysian Institute of Management (MIM), the Mesdaq Market and management consulting firm McKinsey and Co Malaysia, the Venture competition was conducted annually from 2001 to 2003. Malaysia Venture Capital Bhd (Mavcap) and several other venture capitalists (VCs) played a prominent role in the competition. Individuals who were interested in participating had to submit their entries in teams. Then, 10 to 15 teams were short-listed to go through a six-month process of mentoring, coaching and skill building. The quality and commitment shown by the various mentors was the key to the success of this programme. Yet it ran out of steam in 2003.

Venture 2002 attracted 255 entries between January and September, while Venture 2001 and 2003 received 447 and 69 respectively. The drop in the number of entries was not surprising because winners of the 2001 competition did not receive any form of venture funding. Neither did the 2002 winners. Three to four winners of Venture Accelerate 2003 got their ideas funded. VCs did not consider the 2001 and 2002 winners good enough to provide them funding.

In essence, it seems like the competition was more of a tool to help hopeful individuals learn about the realities of setting up their own businesses and the viability of their ideas. ( For more information on Venture 2002, go to www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_18862 for "Stoking the fire", netv@lue2.0, Jan 20, 2003. )

It has been four years since Venture 2002 but we felt it would be interesting to catch up with some of the finalists and learn about their journey so far. These men and women may not be of Ernst & Young Entrepreneur Of The Year calibre yet, but they exhibit all the traits that make for successful entrepreneurs. We felt their experience would have given them a good overview of the entrepreneur ecosystem in Malaysia and asked them to share their lessons with us.

We managed to catch up with overall champion Maestro Solutions Sdn Bhd, first runner-up Oceantec, second runners-up Sherman3D Sdn Bhd and Integrated Methods, which tied for the position, three third-phase finalists — Phenomenal UAM Sdn Bhd, I-Access Solution Computer Specialist Sdn Bhd (IAS) and Paximej Sdn Bhd — and 1.com.my, a first-phase finalist.

Of the eight finalists, seven are operating, with six of them pursuing the idea that had won them recognition in Venture 2002. The exception was 1.com.my. It came as a surprise that first runner-up Oceantec had folded.

"Oceantec ceased to exist after efforts to secure venture funding were unsuccessful and members of the team moved on to other projects," said team leader Wong Yat Chee. However, he declined to talk about the challenges and obstacles that had led to the company's demise. Another finalist — MobileWorks Sdn Bhd — declined to be interviewed. Its team leader Lui Tuck Meng was apprehensive when contacted and did not offer any explanation. All attempts to get in touch with the remaining two — GenPro and PsycWeb — were unsuccessful.

Entrepreneurship 101
To succeed as an entrepreneur, you need a combination of funding, the right idea, a well-thought-out business plan and, last but not least, buckets of luck. Often, the entrepreneurs' most common complaint is the lack of funds. As they say, money makes the world go round. However, what became glaringly obvious was that most of the entrepreneurs are not considering government grants and loans as a source of funding. For instance, five of the eight entrepreneurs who are in need of funds did not know about the SME Growth Acceleration Fund!

First-prize winner Maestro Solutions was one of the lucky few that did not need to rely on others for funding. Members of the team — Aris Samad Yahaya, Azreen Latiff and Maisie Chui — did not imagine they would be where they are today when they participated in Venture 2002.

"Maestro Solutions is self-funded. We decided we didn't want to go into debt and venture capital for the sake of our sanity!" laughs Aris. "Also, we got our first project in October 2003, worth over RM300,000, and found we could fund ourselves through growth."

With a target to list by mid-2008, he wants to first ensure that the company is very strong.

Sadly, the rest of the finalists are still struggling to keep afloat, surviving from project to project. If this is happening to the winners of a nationwide business plan competition, it is hard to imagine what other entrepreneurs without similar exposure are going through. To date, none of the 2003 class we spoke to has received any financial support from VCs. Sherman3D, Phenomenal and 1.com.my , however, received RM50,000 from the Cradle Investment Programme (CIP) in 2003.

"A lot of people don't understand that game development is really expensive. RM50,000 can't take us far. We were lucky because we managed to get our first project within six to eight months of setting up. Since then, projects from our overseas clients have been paying the bills while we work on the development of our own MMORPG [massively multiplayer online role playing game] Alpha Kimori," explains Sherman Chin, chief executive officer of Sherman3D.

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