Most Singaporeans know that former Nominated Member of Parliament (NMP) Calvin Cheng is an outspoken political commentator. He often expresses controversial views on socio-political issues here, many of which are often lampooned by the anti-establishment camp. In 2015, he was investigated by the police for calling for the killing of “terrorists’ children”. Cheng has since apologised to his fellow MLC members, MDA and supporters.
Despite this online prominence, it is easy to forget that Cheng is also a businessman who burst onto the scene as Asia-Pacific head of Elite Model Management from 2001 to 2004 before forming integrated media company Lumina-Looque International in 2005. He is now co-chairman of ASX-listed corporate training firm Retech Technology, though he is semi-retired.
In an interview at the opulent private members club 1880 on Nanson Road, Cheng tells The Edge Singapore that his foray into entrepreneurship was very much a stroke of luck. The Oxford graduate said he had spurned the traditional path of investment banking and caught the entrepreneurship bug while working at internet incubator Extramedia Ventures. He subsequently established his own spin-off company ModelAlliance to serve as an applications service provider for the talent industry, basically using the internet to streamline model bookings and invoicing.
“All of this seems very plain, vanilla to you now, but back then it was pretty cutting edge,” says the 45-year-old of those early beginnings, which in some ways parallels the wave of digital transformation that the business world is seeing today.
His big break, he says, came in 2000. With his firm on the verge of bankruptcy, Cheng tried to pitch his software to international modelling firm Elite Model Management. After a whirlwind trip from Stuttgart in Germany to Paris via Switzerland — a journey that involved last-minute clothes shopping and an altercation in the City of Lights — the then desperate Cheng convinced Elite to allow him to sell their franchise in Asia after initially rejecting his software pitch. He sold his first franchise in Vietnam and persuaded Elite to name him Asia President of the global firm at just 26.
Cheng has since expanded his business interests across a myriad of industries, ranging from magazine publishing to cryptocurrencies. As an entrepreneur, he has weathered the Dot Com Bubble of the early 2000s, the Global Financial Crisis of 2008 and the present Covid-19 recession and lived to tell the tale. Having had an initial IPO attempt scuppered by the 2008 crisis, he listed Retech on the Australian Stock Exchange in 2017.
However, Cheng warns entrepreneurs against treating IPOs as an end, rather than as a means of growth. He knows what he is talking about, having undergone the process twice and is all too aware of the trials and tribulations business leaders must undertake to go public. The end goal of an entrepreneur, he argues, is to sell off their business in a trade sale after which they can wash their hands off it — something that IPO founders often cannot easily do. An IPO, ultimately, is a vehicle rather than a measurement of business success, he says.
Naturally, the learning curve was often steep for Cheng as he dived into these various different industries. He recalls a time that he was asked to serve on the panel of a modelling contest. Out of inexperience, he erroneously picked the most physically beautiful model as the winner, not knowing that successful models are not necessarily the prettiest face in the room. The secret of his success, he claims, is to develop agility and a willingness to change with the times.
“The book I want everyone to read is Who Moved My Cheese? by Spencer Johnson,” Cheng says, highlighting the business fable as what best encapsulates his approach to business. It is an allegorical tale of two mice who live in a maze, who would run the maze to eat a piece of cheese placed in the same location every day. When the cheese was moved one day, one mouse kept returning to the same location to see if the cheese would come back, while the other quickly decided to look for the cheese elsewhere.
The first mouse died of starvation; the second survived. “When the cheese has moved, you need to move, otherwise you will starve. Digitalisation is also like this, where a lot of people are stuck in the old ways — they cannot move,” says Cheng. He believes the world belongs to those who move fast to adapt to an environment where change is the only constant.
Braving stranger tides
It takes a certain degree of resilience to exercise such agility. Cheng is worried that local entrepreneurs are too soft, as Singaporeans are spoiled by this well-run country where everything works efficiently.
“A lot of entrepreneurs here like to say that I want to pilot my project in Singapore. Singapore is the worst place to pilot anything because things work here. Things do not work anywhere else in the world except Singapore,” says Cheng, with his usual bluntness.
For example, online grocery delivery service RedMart was unable to replicate its success in Malaysia. Unlike Singapore, most Asean cities struggle with traffic and thus face difficulties meeting orders on time. As a consequence, Asean entrepreneurs operating out of Singapore have an easier time and are not as easily cowed by difficulties, he argues.
The size of the market here is also a problem. “We just have to realise that we just don’t have a market,” he says. For example, Singapore-trained programmers are no inferior to their counterparts from India and China upon graduation. However, they do not enjoy as many opportunities to undertake large scale projects and within two years, the differences in real-life working experience will be apparent.
Cheng then cites the example of an Indian-run educational startup providing online tuition. While the firm’s maximum load in Singapore was one tutor to 127 students, their first day of business in China saw around 1000 students coming online, causing the server to crash. Even DBS Bank’s successful mobile banking app, he says, only reached the quality it eventually achieved after it was first launched in India, where it helped the bank serve millions of clients in the populous subcontinent.
“That is why we have so many F&B entrepreneurs, because we do not have the scale to do anything else,” says Cheng, fearing that Singaporean entrepreneurs would consequently lack resilience and initiative to operate in a global marketplace.
His best advice for them: “Pack their bags and go somewhere else”. Move to different markets — like Vietnam or Indonesia, for example — and tap on the young population and growing markets and test their mettle in unfamiliar waters.
Going abroad also helps business leaders develop the ability to operate in multiple cultural contexts. “The best advice that someone gave to me [about investing in China] is to do the opposite of what you do in Singapore,” he shares, noting that contracts in China are often the beginning of a negotiation rather than the conclusion of one. He cites Foreign Affairs Minister Vivian Balakrishnan’s observation that relationships are often more important than legal stipulations when doing business in China, which often proves an obstacle to firms used to Western norms.
‘Monopoly money’
Part of being agile, however, is knowing when an idea has run its course. In 2018, Cheng founded AlphaBit CryptoCurrency Exchange (ABCC) alongside a team of “experienced entrepreneurs and investors” to tap the growing cryptocurrency market by being the first cryptocurrency exchange to provide commission-free trading. By the end of that year, it had become the top five exchanges in the world in terms of trading volume with a daily volume of US$35 million ($47.47 million).
“I think that crypto finance is here for the long-term, so it doesn’t really matter what changes. In building this company, it is not that we simply followed the trend, but something that we believe in for the long term,” he told CoinGape in September 2018. That same year, he told CNBC that at least some cryptocurrencies were able to drive the evolution of blockchain technology in “genuine ways”. “It is a financial innovation that gives companies access to finance that they did not have before,” he argued, pointing out that the speculative element of cryptocurrency was insufficient reason in itself for investors to swear off investing in them.
Right from the start, Cheng expressed misgivings about the relatively unregulated nature of the currency. Speaking to BlockShow in an interview last year, he says many cryptocurrencies lacked fundamentals to be a sustainable investment. The resulting volatility in cryptocurrency markets, he warned, would make them unsuitable as a store of value. Yet, Cheng was hopeful that the wheat would be separated from the chaff with time, allowing cryptocurrencies to evolve into a reliable form of corporate financing that would not require firms to dilute their ownership.
Two years on, however, it appears that Cheng has changed tack. In June 2020, he sold a controlling majority stake of ABCC to entrepreneur and angel investor Calvin Ng for an undisclosed sum. Given the lack of an underlying asset base and weak regulation, a pessimistic Cheng now calls cryptocurrencies “monopoly money” — useful only for speculation.
However, he has not given up entirely on the growing fintech industry. There are certain aspects, such as blockchains, on which security tokenisation offerings are built upon, that could yet prove a viable investment.
Now with more time for himself after the sale of ABCC, Cheng claims that he is tired of entrepreneurial labours. If he were to get involved in another company, he will only do so as an active investor. But don’t expect him to be using the free time to publish his political commentaries. Asked if he ever intends to write a book, he demurs, noting that this would merely introduce restrictions on what he can or cannot say. Controversial as they may be, the political commentary of Cheng will — for the foreseeable future — remain the pursuit of a private citizen.
