Let Us Crowdfund The Singapore Food Scene
By Sheere Ng - Sunday, Jul 29, 2012
Are you selling food at adhoc markets and dream of having your own brick and mortar shoplot? Do you want to set up a food truck to peddle your creations to all corners of this country? How about creating a range of tea blends based on how you feel about certain music?
If you are based in Singapore, where the cost of setting up a business is one of the highest in the world, where you need proven track record before investors will look your way, where pragmatism, KPI and growth chart rules, then you know your chances are razor thin.
But this could change with the rise of crowd-sourced funding.
This is how it works: anyone with an idea that needs funding to materialise can submit a proposal to websites like Kickstarter or AngelList stating their desired funding goals. This gets posted online and users who like the idea can pledge their money in support. Currently, there are over 160 food-related projects on Kickstarter seeking funds, and some have already collected a few hundred thousand dollars.
While crowd-sourced funding is especially popular in the US now (it has successfully funded the above three ideas), it has yet to take off here. But if it does, it could make it easier for independent, aspiring entrepreneurs to break into the F&B (food and beverage) scene.
Not investors, but backers
People who make contributions in crowd-sourced funding are seeking a “warm glow feeling”, in the words of Kickstarter’s co-founder Perry Chen. “It is akin to buying a piece of cheese from the farmer rather than from the store, even if that means the cheese costs more,” he said.
Contributors to crowd-sourced funding do not expect much in return, and even though they are promised a token of appreciation, which range from a packet of cookies to having their names inscribed on the wall of a café they helped fund, what really drives them to contribute is the ability to be part of a movement they believe in, something bigger.
Several Singaporeans have been participating in crowd-sourced funding. Mr Justin Zhuang recently donated $100 to support the making of a documentary about Singapore music group The Observatory. “It costs a lot to produce a film. If we left it to the market, such a niche idea would never be produced,” he says.
When it comes to food, Singaporeans are known to have an insatiable appetite for something new — just look at the long queues whenever a new eatery opens (like the overwhelming response to a recent test-bed event by the US-born In and Out burger chain). This desire could be re-directed to helping more new, artisanal, made-in-Singapore food concepts materialise. After all, donations start from a minimum of US$10 — not a lot more than a foodcourt meal.
A test bed for ideas
We are deprived of many interesting concepts because the current business climate does not support them. Instead, it encourages mindless consumption and hamster-like pro-creation of the same old brands.
With crowd-sourced funding supporting interesting and meaningful culinary ideas, food establishments can go beyond the basic premise of feeding people. How about one with a social cause? Or does the idea of a modern Asian/Singapore food science laboratory excite you?
Diverse Food Options
Increasingly, just a few big players dominate Singapore’s food scene. Walk into any shopping mall today, and your dining options is likely to be limited to the same familiar names and same old players.
The high costs of setup make it easier for those with financial muscle to expand, but shutting out individuals armed with merely creative ideas.
Crowd-sourced funding can help back these individuals. While it may not always raise the full amount needed, it can sponsor a certain aspect like equipments or basic operation consultancy services to see it through the first few semesters of operation.
Mr Danny Pang, who set up the restaurant Spruce a few years ago, says the initial months are make or break. “You need to pay for the rent, equipments and the food supplies. If you don’t have a deep pocket to sustain the business, especially in the first few months, out you go,” he says.
Backers as Gatekeepers
At crowd-sourced funding sites, only when the total pledges meet the amount seeked, can the project materialise. This lets the prospective backers “pre-approve” what they like to see, preventing plain-vanilla and amateurish concepts from flooding the market.
Even if the fund seekers eventually botch it up, we can trust the market forces and response to eliminate them from this highly competitive industry. After all, only big companies will have the financial power to keep mediocre eatries afloat, not small start-ups.
Crowd-source funding, however, does come with its own set of challenges. Mr Joshua Khoo, co-founder of the six-month old Saveur, was concerned about putting ideas on the internet, citing that those with the money will steal their ideas even before enough funds can be raised. (We suggest raising the standard of the concept, such that he is the best man to do it.) Some may also use crowd-funding to carry out already existing concepts.
But these do not outweigh the potential jolt crowd-sourced funding could shock the Singapore food scene out of its complacency.
So what are we waiting for? Here’s a taste of some wacky and lofty ideas our F&B entrepreneurs wish they could realise but cannot as yet.
