Government Bets on Youth and Hong Kong Startups
There has been some good news for Hong Kong startups in recent weeks with the Home Affairs Bureau and the Youth Commission launching a HK$300 million Youth Development Fund to assist young people in launching their own business or rolling out creative projects.
Why Hong Kong Startups?
With the youth unemployment rate in Hong Kong having increased to 6.60 percent in July from 5.90 percent in June of 2016 the timing of the fund could be perfect in terms of inspiring a young generation frustrated with the lack of career opportunities available to them in the corporate world.
However, whilst this initiative deserves a degree of praise, the ultimate verdict of success or failure is a complex affair. By taking a look at the top 20 reasons why startups fail, it becomes clear that financial backing is my no means the only ingredient for success.
A Delicate Balance
What this CB Insights survey tells us, is that whilst funding might solve the problem of running out of cash – at least in the short term – there are many reasons why a startup business might not succeed. In order to maximise the chance of a positive outcome, there will need to be a balance between putting cash in the hands of worthy startups as soon as possible, whilst doing the right level of due diligence to ensure that funding is not diverted to ideas with little chance of addressing market needs, or those with a sub standard product or business model.
Dr Ken Chu, the group chairman and CEO of the Mission Hills Group recently stated in an article in the SCMP that, “even if a new business collapses, the lessons learned are invaluable”. That might be true to some extent, but it would also be a shame if in a rush to give everyone the opportunity to realise their startup dreams, there wasn’t at least some care taken to ensure a few of these dreams are likely to be realised.