Thematic interviews
Written by: Yue Yueting
2019-12-05 08:00
Last updated: 2019-12-05 08:00"Business is hard to find" has been hung by Hong Kong people from time to time. How severe is the economic situation in Hong Kong? From October ’s record-breaking retail sales of 24.3%, from the rich man ’s warning that the Hong Kong government will record a fiscal deficit this fiscal year, and from the Nikkei Hong Kong ’s November Purchasing Managers Index ’s low of 38.5, the answers have been found.
The economic outlook is not good, and the fiery venture capital industry in the past has cooled down. "The father of ATV" Qiu Degen Taipa, Qiu Dagen who has been in the venture capital industry for more than 20 years, disapproves. In an exclusive interview with "Hong Kong 01", he frankly stated that every time the economic downturn cycle, science and technology enterprises become adversities in the market, and he personally taught Huike Capital, which he co-founded, to contact more than a thousand startups a year. "Treasure hunt" to find the secret to invest no more than 10!
Qiu Dagen has been in the venture capital industry for more than 20 years. Many technology companies involved in the investment have been listed on the Hong Kong Stock Exchange and other stock exchanges. (Photo by Ou Jiale)
The global economy is breeze, but Qiu Dagen believes that a recession is not tantamount to despair. This kind of optimism is not on the lips. It is because Qiu Dagen has gone through several economic waves in the past 20 years and has been focusing on investing in technology companies in Greater China, North America and Israel.
He said that every time the economic downturn cycle, science and technology enterprises have become adversities in the market. The reason is that when the economy is poor, many companies want to save expenses, improve production efficiency through the application of technology, reduce manpower and costs, such as the use of large Data analysis of consumers' shopping habits and preferences reduces spending on market analysis, so poor market conditions can also be the moment of start-ups.
Qiu Dagen believes that the economic downturn is a danger to start-ups. Large companies will hope to reduce their expenses during this period. "Computer programs have reduced many processes. Using big data to analyze customer preferences can even save labor in the marketing department." (Profile picture)
Startups need to change operating models
However, it is impossible for start-ups to live in parallel time and space with the economic breeze. Qiu Dagen believes that they need to change their own operating models, especially for some companies that rely on burning money to buy customers. Investors do n’t like this direction of development anymore. This type of venture capital and angel funds are also much less because “burning money "Shangkei" needs a huge market to do it, and the Hong Kong market may not be suitable.
He suggested that start-ups should first do more businesses that can bring cash flow, even if the economy is sluggish, they can have cash to "support themselves". For example, in the past, companies provided free services for customers to use. Now, they can launch additional services that require charges, sign more paying customers, reduce operating costs, and extend the company's survival time. "There is currently a vacuum period. The number of financings and the amount of financing in the start-up market may decline.
Looking at the information, Cyberport's start-ups have reached a record high of 5.5 billion yuan in the financial year 2018-2019, but the financing amount from April to September this year (the first half of the fiscal year) has slowed to 2.3 billion yuan. "Start-ups will go through a slower investment period and the amount of investment will be adjusted," Qiu Dagen reminded.
Qiu Dagen believes that the Sino-U.S. Trade war has made the entire global capital market uncertain and has greater impact than local social events, but each market also has its ups and downs. Now it is also good to adjust it in the long run. (Profile picture)
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Investors need to redeploy sooner or later under the trade war
As for when this adjustment period will last, it also depends on when the Sino-US trade war has a clearer direction. He explained that the Sino-US trade war adds uncertainty to the global capital market. Investors are mainly unclear about the attitude of China and the United States. "It is no longer a matter of optimism, but it is not clear how to go, the world ’s first and second largest The economy is at war, and we do not know whether the future will be anti-globalization or the same approach as in the past. The trade war has re-deployed science and technology investors, early or late investors. "Recently, the retail and consumer markets Local social events that have had a greater impact have little impact on the venture capital community, as demonstrations have only impacted the local market for the time being.
In fact, startup investors are very "choice". For the initial startup, angel investors will evaluate whether the company's technology is more advanced or difficult to replace, and also see if this technology can improve people's lives today. For example, Huike Capital, owned by Qiu Dagen, contacts more than a thousand startups each year, but only ten of them are "favored" in the end. But how can startups get Qiu Dagen's favor? He said that each fund operates with its own criteria. Huike Capital prefers startups in upstream industries because these companies have research and development capabilities. The fund will use technical depth, team members, and whether to start businesses in suitable places as the selection criteria. . "I don't think that if we don't invest, we are not good companies. In fact, we have missed a lot of good things." Qiu Dagen added.
Qiu Dagen said that if Hong Kong can make a name for itself with two or three industries, such as financial technology and production technology, it will create an entrepreneurial atmosphere and attract more people to start businesses in Hong Kong. (Photo by Ou Jiale)
Medical technology is expected to become a hot spot for future investment
The family started as a brick, but Qiu Dagen turned against the "tradition" and made it difficult. He has joined the venture capital industry for 20 years. He recently stepped down as the chairman of the Cyberport Investor Network Planning Group of the Cyberport investment matching platform. He bluntly said: When discussing whether Hong Kong can do it or not, it should not be an innovation and technology department, but if it always depends on finance and real estate, it will have a great impact on the next round of economic momentum! "Whether Hong Kong's economy is high or low, technology can drive Economic development, "To find out in the technology field, there are those we can do, the most important thing is to find the" own "(positioning), as for hardware and factory settings in Guangdong Province." He laments that Hong Kong now has digital Hong Kong and the Science Park are somewhat successful, but the number of employees is low and the industry output is low. The technology industry has a long way to go before it becomes an important industry in Hong Kong.
In recent years, artificial intelligence has become the focus of the investment community, but Huike Capital has not followed suit to invest in this type of startup. Qiu Dagen revealed that the investment market also has a new outlet almost every year. The former was the share economy, followed by AR (augmented reality) and VR (virtual reality), but many upstream technologies did not last for a few months. To achieve it, it is often done as a unit over the years, and only after accumulating certain experience. Even though the market is discussing what to do, the foundation will look at its own capital or foundation to decide what to do.
He expects the next investment hotspot is medical technology, because people are gradually paying attention to issues such as the aging population or how to use it to make people live healthier. Medical technology can use genetic testing to prevent diseases, and it will even be used to treat diseases in the future. He believes that There will always be breakthroughs in technology. "Suddenly everyone will invest. I don't know, but at least I have seen a trend."
Startups Qiu Dagen
