In brief
Personal funds supported 95% of the surveyed mobile app startups, and 59% turned down orders because of staff shortages. More than seven in ten companies were breaking even or profitable, but many faced obstacles to expansion; some called for simpler government startup funding schemes.
Mobile app companies are springing up rapidly. However, a survey found that seven in ten companies were first-time ventures, while 95% said their startup funding came entirely from their own pockets. Some startups hope the government will simplify its startup funding schemes to help more young people start businesses successfully.
One software developer started a business with $2 million in savings, but two years later faced difficulties managing employees born in the 1990s. The developer believes that, with limited time and assets, businesses operating on small budgets can easily make poor decisions that lead to losses and force them to close.
59% turn down orders due to staff shortages
The Hong Kong Wireless Technology Industry Association and the Hong Kong Productivity Council yesterday released the findings of the “Hong Kong Smartphone Apps Survey”, which surveyed 100 local mobile app developers. It found that most company founders were under 30, and nearly seven in ten companies were first-time ventures; 95% said their startup funding came from their own pockets. More than half of the companies surveyed had participated in previous years, and nearly nine in ten were small and medium-sized enterprises, indicating that the industry relies primarily on creativity and technology and is not capital-intensive.
The permanent honorary chairman of the Hong Kong Wireless Technology Industry Association said that Cyberport and other organisations offered facilities on favourable terms. Among the companies surveyed, 56% said rent accounted for less than 10% of total expenditure, while more than seven in ten were breaking even or making a profit.
However, many companies faced obstacles to expansion soon after getting established. Only 24% had successfully attracted overseas funding after their founding, while 59% had turned down orders because of staff shortages, suggesting that the industry still had room to bring in new talent.