Asian entrepreneurs on how to avoid failing when you quit banking for a startup
Leaving Asian banking to start your own company sounds like a good idea in principle – no more stifling company bureaucracy to deal with, no more 11pm calls with head office. But is it in reality?
If you’re contemplating quitting banking for business in Hong Kong or Singapore, we’ve asked ex-bankers who've made a successful move to highlight some of the potentials pitfalls.
Not planning enough
The seeds of your business failure could be sown in the first few months. “Do a lot of research right from the start, plan your business model, and have sufficient resources to see it through,” says Lyn Sia Rosmarin, a former director at Merrill Lynch who now runs Singapore swimwear company K.BLU. “A lot of the time entrepreneurs can't see a great idea through because they haven’t planned how to keep up with operating expenses.”
Having the wrong focus
“The main objective is not fund raising – even though the media is obsessed with it – and the objective is not to attend seminars and be written about," says Tanmai Sharma, CEO and founder of investment analytics fintech firm Canopy, and a former Deutsche Bank MD. "Instead focus on your product, customers and on generating cash flow – everything else will follow.”
Relying too much on external help
“Don’t be fooled into thinking that using external firms like recruitment or media agencies is always necessary,” says ex-HSBC banker Cynthia Siantar, who co-founded Singapore fintech Call Levels and now works in banking again. “It might not be the best decision for cash-strapped startups because the resources could be better allocated elsewhere. From my experience, to generate PR you can always build your own contacts by actively reaching out to reporters and bloggers. No external people will ever pitch your startup better than you will.”
Focusing on skills, not cultural fit
Don’t focus only on skills and experience when you recruit people into your startup, warns Siantar. “In a small, young company, setting the team culture is very important, so hiring the right people with the right mentality and attitude is more important than anything else. Someone who's inflexible and can't work well with others can spell the downfall of a startup.”
Trying to replicate your banking job in your business
“Your area of specialisation in your bank is not the only thing you can found your business on,” says Sharma. “If you did KYC in the bank, that doesn’t mean you start a KYC software company, for example, because that area is already crowded. You should instead use your general banking knowledge to see what customers want and build something on that basis.”
Not coping well with the salary loss
“A monthly salary, especially a banking salary, is quite an addiction – you have to be mentally prepared for the ‘deaddiction’ and the issues that it brings,” says Sharma.
Starting up for the sake of it
Above all, don’t leave banking because you feel bored and want to follow the herd into the startup world. “I get at least one or two LinkedIn messages a day from bankers who want to go into fintech,” says Henri Arslanian, a former UBS director, now a board member of the Fintech Association of Hong Kong. “My advice is always that they shouldn’t do it just for the sake of joining a startup. While there are some really amazing start-ups out there, there are many more bad ones.”