Since I woke up yesterday morning, everyone has been talking about the missing Malaysian Airlines flight MH370. It’s an incident we’re all affected with, whether or not we personally know anyone aboard the flight. I asked myself why we as Malaysians are so affected by this flight? We’ve seen other air crashes but it hardly affects us the way MH 370 has.

I thought maybe it’s because there are many Malaysian lives on board but history has shown we don’t differentiate the value of life just because of the type of passport someone holds. When the natural disasters hit Japan or Philippines we were deeply affected too. A life is a life, regardless of the color of a person’s skin or religion.

Maybe our concern for this incident is fueled by our affinity with Malaysian Airlines. As much as we criticize its loss making operations… in a time of crisis it reveals that we all actually still see it as a symbol of national pride.

In light of this incident, Shorty and I asked ourselves this question. How could a plane just go missing and has something like that happened before? We googled around and found an article about an Air France flight AF447 that went missing in 2009.

They found the wreckage only 2 years later and recovered data that explained what happened to the flight. Providing closure for people who have lost close ones on board that flight.

Reading about what happened to the flight was terrifying. You can read it all from the Wikipedia link above but let me pull out some of the excerpts of what happened.

In accordance with common practice, the captain had sent one of the co-pilots for the first rest period with the intention of taking the second break himself.[19] At 01:55 UTC, he woke the second pilot and said: “… he’s going to take my place”. After having attended the briefing between the two co-pilots, the captain left the cockpit to rest at 02:01:46 UTC. At 02:06 UTC, the pilot warned the cabin crew that they were about to enter an area of turbulence. Two minutes later, the pilots turned the aircraft slightly to the left and decreased its speed from Mach 0.82 to Mach 0.8 (the recommended “turbulence penetration speed”).[20]”

At 02:10:05 UTC the autopilot disengaged and the airplane transitioned from normal law to alternate law.[21][Note 1] The engines’ auto-thrust systems disengaged three seconds later. Without the auto-pilot, the aircraft started to roll to the right due to turbulence, and the pilot reacted by deflecting his side-stick to the left. One consequence of the change to alternate law was an increase in the aircraft’s sensitivity to roll, and the pilot’s input over-corrected for the initial upset. During the next thirty seconds, the aircraft rolled alternately left and right as the pilot adjusted to the altered handling characteristics of his aircraft.[22] At the same time he made an abrupt nose-up input on the side-stick, an action that was unnecessary and excessive under the circumstances.[23] The aircraft’s stall warning sounded briefly twice due to the angle of attack tolerance being exceeded, and the aircraft’s recorded airspeed dropped sharply from 274 knots to 52 knots. The aircraft’s angle of attack increased, and the aircraft started to climb. By the time the pilot had control of the aircraft’s roll, it was climbing at nearly 7,000 ft/min.[22]

At 02:10:34, after displaying incorrectly for half a minute, the left-side instruments recorded a sharp rise in airspeed to 215 knots, as did the Integrated Standby Instrument System (ISIS) another half a minute later [24] (the right-side instruments are not recorded by the recorder). The icing event had lasted for just over a minute.[25][26][27] The pilot continued making nose-up inputs. The trimmable horizontal stabilizer (THS) moved from three to thirteen degrees nose-up in about one minute, and remained in that latter position until the end of the flight.

At 02:11:10 UTC, the aircraft had climbed to its maximum altitude of around 38,000 feet. There, its angle of attack was 16 degrees, and the thrust levers were in the Takeoff/Go-around detent (fully forward), and at 02:11:15 UTC the pitch attitude was slightly over 16 degrees and falling, but the angle of attack rapidly increased towards 30 degrees. A second consequence of the reconfiguration into alternate law was that “stall protection” no longer operated. Whereas in normal law, the airplane’s flight management computers would have acted to prevent such a high angle of attack, in alternate law this did not happen. (Indeed, the switch into alternate law occurred precisely because the computers, denied reliable speed data, were no longer able to provide such protection – nor many of the other functions expected of normal law).[28] The wings lost lift and the aircraft stalled.[9]

Notice that all this happened in a minute. 2 minutes ago and everything was going fine in the flight.

At 02:11:40 UTC, the captain re-entered the cockpit. The angle of attack had then reached 40 degrees, and the aircraft had descended to 35,000 feet with the engines running at almost 100% N1 (the rotational speed of the front intake fan, which delivers most of a turbofan engine’s thrust). The stall warnings stopped, as all airspeed indications were now considered invalid by the aircraft’s computer due to the high angle of attack.[29] In other words, the aircraft was oriented nose-up but descending steeply. Roughly 20 seconds later, at 02:12 UTC, the pilot decreased the aircraft’s pitch slightly, air speed indications became valid and the stall warning sounded again and sounded intermittently for the remaining duration of the flight, but stopped when the pilot increased the aircraft’s nose-up pitch. From there until the end of the flight, the angle of attack never dropped below 35 degrees. From the time the aircraft stalled until it impacted with the ocean, the engines were primarily developing either N1 100% or TOGA thrust, though they were briefly spooled down to about N1 50% on two occasions. The engines always responded to commands and were developing in excess of N1 100% when the flight ended.

The flight data recordings stopped at 02:14:28 UTC, or 3 hours 45 minutes after takeoff. At that point, the aircraft’s ground speed was 107 knots, and it was descending at 10,912 feet per minute. Its pitch was 16.2 degrees (nose up), with a roll angle of 5.3 degrees left. During its descent, the aircraft had turned more than 180 degrees to the right to a compass heading of 270 degrees. The aircraft remained stalled during its entire 3 minute 30 second descent from 38,000 feet[30] before it hit the ocean surface at a speed of 151 knots (280 km/h), comprising vertical and horizontal components of both 107 knots. The aircraft broke up on impact; everyone on board died.[31]

That was the end of it. It all happened within 5 minutes.

Sounds terrifying considering that I travel so much and I never thought much about turbulence or how things could go wrong. Yes I know statistically commercial air travel is still a really safe mode of travel but it’s still kinda scary.

As I watched the BBC News this morning, experts were saying the Boeing 777 on the MH370 flight is one of the most advanced and safest aircraft in the world. They also said that whatever happened to the flight probably happened so quickly that the pilots didn’t have a chance to make a distress call.

In a way we’re all expecting the worse but praying and hoping for the best. My hope is… perhaps they did an emergency landing on some beach island somewhere, where all passengers are safe and sipping on a cocktail drink while they wait for the rescuers to find them.

My heart goes out to the passengers of MH370.

My Dad always told me. Success isn’t measured by the number of digits in your bank account, or the cars you drive… the watches you wear. It’s about how you manage to find a balance in life and be happy. How we all achieve that all boils down to one thing: Time.

We’re all given the same amount of time in our lifetimes. 24 hours a day, 7 days a week, 52 weeks a year. What determines where we end up in life, what impact we make and the relationships we build is how we spend this time. I’ve always struggled with allocating my time properly though. I tend to often find it sometimes too shifted to work and I think it’s something many of us find.

Then one day I joined this organization called Entrepreneur’s Organization. There we are taught that there are 3 areas that entrepreneurs need to focus on when reflecting on their lives. These 3 areas are business (or career), family and personal. As I was reflecting to myself yesterday, this is how I spend my time in these 3 areas.

Business (or career)

It’s easy to spend too much time at work and sometimes that’s not a bad thing. When I spend too little time at work sometimes I feel like I’m not working to my full potential of what I could really be. The one thing I have going for me though is that I am by nature a very efficient worker.

When I have things to do I spend very little time procrastinating and most of my time focusing on getting the task done. By the end of the day a morning I would have finished a list of things that you’d think I would have taken a day to do. When I host and conduct meetings, I like them to be quick and to the point. Not long and draggy. I also set my meeting schedules almost back to back so it forces me to be self disciplined with my meetings. So that I’m forced to wrap my meetings up quickly and go on to the next one.

Technology helps too. Well… technology can be a distraction (time spent on FB, Twitter, Dayre etc)… but it’s also meant to be a tool for productivity. Heck 10 years ago the only way we could answer emails is in front of a computer. Now we all do it from our phones. I use technology to cut out almost every idle time I have. When I’m waiting for an elevator, waiting for someone to arrive for a meeting, or even just walking around sometimes.

With all this, I make sure that I leave the office by 5.30-7PM. If I have any work leftover I finish it at home after dinner.

Family

Family time for me is in the morning before I leave for work, night after I come back from work and weekends. The one thing I learned about family time is that it’s not really about how much time you spent. Like if I had a family dinner and all the time I spent looking at my phone, it’ll be as if I wasn’t even there in the first place. Family time is about quality. So on weekend nights after work I make it a point to talk to Shorty for half an hour or so without distractions. We have deep conversations about what we did with our days or what’s going on.

Then I spend the same amount of time or more playing with Fighter. Again… with attention undivided and with no distractions. I call my parents at least once every two days and have weekly meetings with my brother and sister in KL.

Personal

When I first joined EO and was introduced to the concept of personal time, I was first asked what I did for my personal self in the past month and it was a question I struggled to answer. I learned later that it’s an answer a lot of people struggle to answer too. We are all too bogged down with work and family that sometimes we forget about doing things for ourselves that make us happy.

Personal time isn’t just doing things that make you happy. It’s also doing things for your personal development (like reading up on stuff) and most importantly… health. For me the two things I do is golf and cycling. Cycling for example is one of the things that hit two birds with one stone for me. I thoroughly enjoy it… and it’s good for health. I make it a point now to go cycling every weekend.

 

As for personal development… I read a lot. Every day in fact I look around for things to read. I buy magazines … mostly Businessweek, Fortune, Forbes… not because I think that’s the only magazines I think we should read for personal development but because I so happen to have an interest in these things.  If you have an interest in photography or even cars then read up about cars. 

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So that’s how I manage my time. I want to write this down here because in a few years I want to see if I manage it differently from how I manage it now. Do I spend more time with family in future or in work. Whatever it is… this will be my reference point… of how I used to spend my time in the year 2014.

I give a lot of talks at colleges and universities these days and every so often I have students coming up to me telling me how they want to start a business. When I ask them what they have in mind and it’s often tech related. It’s not difficult to see why. I mean just this week we had news about WhatsApp being bought out for $16 billion, before that Snapchat was offered $3 billion and who could forget Tumblr for $1.1 billion.

My current thoughts are that we’re yet to see many real Malaysian or Singaporean companies that came out of our local ecosystem that has had a huge exit (exit means you IPO or you sell the company so you can cash out though in this article I refer more to acquisitions). Yes there’s Jobstreet, but Jobstreet is a 16 year old company and is as much a brick and mortar job-matching business as it is a tech business. It also happens to do RM50 or RM60 million in annual net profit. It’s a big company.

So based on the 7 years I’ve been in the tech industry in SouthEast Asia, I’ve learned some things and I thought I share my thoughts. Now note that these are my thoughts… every internet entrepreneur you meet probably has a different point of view or different thoughts too. Anyway here goes:

1) There is a lot of seed funding in Malaysia and Singapore. But beyond that your funding options are limited. 

Take a good look at the venture capitalists we have in Malaysia and Singapore. With the NRF, Singapore has quite a few more but they’re all largely seed funds. When I say seed I mean $5 million or $10 million funds. So a $10 million fund can probably make 20 $500,000 investments into 20 different startups. They can’t or won’t… make an investment of $5 million into your own startup even if they really love your startup. Because they’ll be putting all their eggs in one basket.

So if you’re a startup that is hoping to raise $500,000 to gain some traction then you’ll have plenty of options. But once your company passes the seed stage and hits the growth stage, you will probably need more money. That’s when you’ll find it more difficult to raise more money from Malaysia or Singapore. You need to start looking abroad. Whether in VCs abroad or IPOs abroad. Some entrepreneurs here have done super well with this… like Patrick Grove. 

Why though? Why are VC funds in Malaysia and Singapore so small? A part of this is because of my next point.

2) Tech Startup Exits In Malaysia and Singapore are Small.

We haven’t had a really big exit. Sure there was Viki but as much as it was branded a Singaporean based company, it wasn’t a company that was bred out of the Singaporean ecosystem. Most their backers are Silicon Valley based  VCs (who have the ability to put in tens of millions) and none of them (to my knowledge) are actually Malaysian or Singaporean VCs. It’s all part of the ecosystem right. If one VC had a big exit that would mean they had more money to reinvest into other startups. 

So what exits do we have left?

We have the group buying sites that the foreign players like Groupon, Living Social and all came to buy everyone out. The group buying site in Singapore was bought out for a fairly decent amount. In Malaysia I hear the deal sizes weren’t particularly big at RM1.5 million or so plus an earn-out.

We have sites like Hungrygowhere in Singapore that were bought out for S$12 million and iBilik for RM15 million. Decent amounts but it’s not enough to arm the VCs with loads of money for their future investments. It’s also not enough to make the entrepreneurs behind these startups super rich so they can start angel investing heavily.

Think about it, say I have a company and I sell it for RM15 million. I don’t get all that RM15 million because most of the time I have partners and other investors. So maybe I end up getting RM6 million of that. It’s $2 million, decent amount of money but not super rich. On top of that what happens is you’re bonded to work with the company that acquires you for the next number of years.

We build good startups, but they don’t get acquired for a lot and we don’t end up owning a lot of them by the time they exit. But why don’t we? This brings me to my next point.

3) VCs in Malaysia and Singapore are less generous with valuations

I spent some time in Silicon Valley two years ago. We were pursuing a pet project called Imotiv. It was a mobile app which started a few months ago, with 50,000 users and no revenue and no plans to have any revenue. After talking to some VCs in Silicon Valley we ended up with a term sheet on our table valuing Imotiv at $4 million. We didn’t do the deal in the end and Imotiv was put in a back-burner because we had another project that was gaining much better traction. Still…. a few month old mobile app with a small team and no revenue had a valuation of $4 million.

That unfortunately is rarely the case in Malaysia and Singapore.

Malaysian and Singaporean VCs tend to look at tech companies in the old school way. They look at profit and revenue mulitples. And when they look at profit multiples they don’t look at 20 times earnings (even if tech companies listed on the Malaysian stock exchange are trading above that). Even if you’re at a pre-IPO level, they look at trying to buy into your company at 10 times earnings in the hope that they can flip it or so at 20 times earnings. It’s business, they want to make money… but if you’re not desperate for money, why would you do a deal like that?

It’s almost as if VCs here don’t invest in you purely because they believe in you or your startup or what your startup will be worth in future. They try to invest in you at a discount of what you are worth. Though the good news is that not ALL VCs in Malaysia and Singapore are like that. I’ve met good ones that are willing to invest in the entrepreneur and the future value of the company. Not the current.

Another point to note also though is that at the seed funding stage though when profit and revenues aren’t significant yet though… you might be able to get away with being valued on revenues or profit multiples.

4) Exits often come with strings attached.

Some time back it was in the news that SPH had acquired SGCarMart for $48 million. I was like WOW… finally… a big exit from a startup bred out of our local ecosystem. Then I happened to be in Singapore one weekend talking to some VCs and industry insiders. I was talking about how I’m really impressed at the deal. The insiders said “Nah… it’s not $48 million. It’s UP TO $48 million… but in order to get that they have to achieve certain miletones… like profit guarantees or revenue guarantees. The deal size is much smaller. I was disappointed… but hey even if the base price is half (and that I would consider extreme)… it’s still a lot of money and a really good exit.

5) Internet companies in Malaysia and Singapore don’t really make a lot of money.

There are some that do make good money like MOL, Jobstreet, MyEG (if you’d count that) and a few more. The rest of the tech startups here even the well funded ones in the ecommerce space don’t make a lot of money (yet at least). On the flip side I have friends like Bryan Loo who came out and started a purely brick and mortar business Chatime in Malaysia and he makes tons of money.

I guess my point of this article is to share my thoughts. I haven’t taken the effort to link sources for numbers quoted here because well I don’t intend for this to be a news article. It’s just my thoughts on my personal blog. You can however Google and do a fact check and if you find something that I got wrong then correct me. Some of the other stuff I’ve shared are from what industry insiders have shared but take it with a pinch of salt too.

My partings thoughts is that the startup scene in Malaysia and Singapore is a place where a generation of young people have made their initial wealth. It has certainly been an industry where I have personally made everything I have today. So I’m not saying that it’s something you should avoid like a plague and go work in a bank instead. I’m just trying to say that in my experience, this is what it’s really like right now but I’m hoping that things will change. That our exits will get larger and our ecosystem be able to support great new tech startups out of Malaysia and Singapore.