Serial Entrepreneur: Peng Ong (Part 5)

SM: Have you read any of my writings on the entrepreneurship in India?
PO: Yes I have, and we have talked some on this. What are you referring to specifically?

SM: Well I did a series under the title of Concept Arbitrage. If you look at Indian entrepreneurship right now there is a huge amount of concept arbitrage where you copy stuff that has happened in the US and it is less of really developing original software, hardware and chip ideas. By and large, in India, the latter style of entrepreneurship is still extremely immature.
PO: I don’t think I read that part. I did spend a week in Israel just before the war this year. I had to understand what happened in Israel that took them from oranges to high tech in about 15 years.

SM: What did you gather from that?
PO: It is very different from what you have described in India. There is not much of a local market, so everything has to be focused on software and telecom, usually in the US. Israel has developed a formula for building things and selling it to the rest of the high tech world. It is not just a cultural thing, but it is an intentional mindset of the government in the early 1990’s. The timing was just incredible. Israel produces a big chunk of the new technology coming to the world of enterprise software.

SM: I was actually in Israel last year twice. I was working with an Israeli client and it also struck me, that although the country is constantly in some kind of geopolitical threat, it constantly produces great entrepreneurs. This is a much more sophisticated entrepreneur population than the Indian entrepreneurs for sure.
PO: They are very sophisticated. Let me give you an example. A professor there at one of the top technical universities in the world, if he leaves his job and goes to work in industry, he will probably double his salary. In Singapore he will cut his salary by a third or half. In Singapore the best and the brightest come back to serve the army and they stay on there, and they keep serving as public servants and retire in that role.

In Israel the best and the brightest spend a bit longer than you would think in the army, in their late 20’s and early 30’s they are involved in the military, and afterwards they come out and start building businesses. That is what happens on a regular basis. I spoke to about 70 people in my 10 days or so there, and a lot of them have that background. It is an expected thing for the best and the brightest. Whereas in most of the other places, India, China and Singapore, the best and the brightest are not necessarily expected to start their own businesses.

SM: In India right now there is a big issue that all of the best and the brightest are sitting with very fat salaries inside of multinationals. They are not in academia because academia does not pay very well in India. If you are a high level, high powered IT person you are probably inside a Texas Instruments, Microsoft, Yahoo or a Google rather than an entrepreneur. Because with entrepreneurship you are going to have to slog for a while, work without a salary, whereas the top level managers are making literally $150K – $200K which is a lot of money in the US, and it is a hell of a lot of money in India.
PO: I agree. I guess my perspective is that as long as a significant number, not necessarily percentage, but a significant number of people are entreprenuers, their economies will be fine. The advantage of India and China is numbers. So even if only a tiny fraction of the good people do entrepreneurship, the countries are fine. Singapore, unfortunately, does not have that luxury. This is one of the things that will slow our growth after a while. If we do not create high gross margin businesses, the growth goes away.

This has been a thoughtful interview with Peng Ong. It is very interesting to hear not only how he started, but the goals and objectives he has for the future. After being a successful business entrepreneur he looks all set to become a socio-political entrepreneur.

[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 5 in the series : Serial Entrepreneur: Peng Ong
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