In general, Singapore is a great place to start out because of its strong legal framework and supporting business ecosystem.
Parisian-born Serge Zloto is CTO of Scortex, but has spent several decades travelling the world, building technology solutions in an extraordinary range of B2B contexts. Unlike some of our other contributors, his experience in Asia has come from a range of different commercial engagements, ticking boxes for software, hardware and mobile. Today, he is embarking on Asian expansion for Scortex and plans to take the popular route of establishing a hub in Singapore.
Scortex uses artificial intelligence to offer “Quality Control as a Service” for manufacturing industries (automotive, steel etc.). While traditional visual inspections – things like checking barcodes, making sure screws aren’t missing, fluid levels, etc. – are left to manual or already highly automated operations, Scortex speeds up complex, expert-level inspections where previously automation was not possible. For example, the company runs inspections on assembled car interiors, to spot issues with dashboards and metal forged parts. Current clients include major manufacturers across Europe, and the team has grown from five to 14 in one year.
Tell us about your career…
“I’ve spent 22 years of my life outside Europe. I started off in the telecommunications industry, designing graphical interfaces for the US Army on a Department of Defence contract in Boston. I really enjoyed my time there, and it shaped my liking for embarking on international ventures. From there I left for a consultancy and services company, again designing graphical interfaces. They had a lot of Pan-European involvement which led to plenty of travel for me and some tricky coordination issues. Eventually, I wanted more sun; so I moved to Sydney where I met my future wife and worked for Telecom Australia.“
“After we got married, we moved to the US west coast for five years (Cisco and Oracle), then back to Sydney (Oracle again) and finally Singapore came calling. I worked on a job designing targeted data packages for advertisers to reach mobile users, which was a huge success; but it was hard to convince the network operators (Singtel etc.) at that time, because they were milking the SMS cash cow and didn’t see the mobile internet as a source of revenue. We even launched in Thailand and achieved 40,000 subscribers within a week – but ultimately the project ran out of funding.”
“I got further experience in Asia by making a business out of my hobby of building and flying model helicopters and planes. I designed a gyroscope for better flight performance and commercialized it with manufacturing in China and Malaysia (while carefully keeping the software and IP local!). I made a pretty good living out of it, selling around 400 per week, but I wound it down to pursue a CTO role with a financial data company. Things were going well and we secured $1.8M in private investment, but the CEO took the money and fled overnight to India leaving us high and dry! It even became an Interpol case and he’s still in hiding to this day. After one more Ukranian/Singaporean joint venture, we moved back to France where I joined the co-founders of Scortex and that – after three continents – is where I am today.”
How is Scortex planning to tackle Asia?
“Since we’re dealing with quality, Japan is an obvious target market for Scortex. That said, we’re not ready yet to take on that expansion, since we want establish ourselves on demonstrable success in Germany first. Currently we’re focusing on manufacturing industries, but our tech is versatile enough to be applied to other sectors too; like the agri-food business, pharmaceuticals, etc. We know it will take some time to crack manufacturing, so we’re wholly focused on that for now.”
“That’s why we haven’t pushed into Japan yet, but our CEO has traveled to both South Korea and Japan to establish initial contacts in each country. We focused on those specific territories because of their large and established profiles in manufacturing.”
What steps should companies make in preparation to expand to Asia?
“In general, Singapore is a great place to start out because of its strong legal framework and supporting business ecosystem. The government is incredibly pro-business with lots of grants, tax breaks, funding, etc. – they are even prepared to match seed investments 1:1! Extraordinarily, even if only your parent company is in Singapore and you own subsidiaries in other Asian countries, you can still get government support.”
“There are other advantages too: everyone speaks English, and it’s convenient to travel from there to other Asian countries, which is crucial as face-time is of paramount importance in Asian culture.”
“One drawback is that we found it surprisingly hard to hire the local technical people we needed. This need is mitigated by the fact that it is very easy to get work visas for Singapore, in order to recruit talent from other countries.”
Any words of caution for those seeking to go to Asia?
“Each Asian country is different from the next. My wife is Japanese, and when we moved to Singapore, she remarked that it was her first time living in Asia! Each country is highly distinct and you must adapt your strategy and tactics appropriately for each culture.”
“Employee turnover is very high in both Singapore and India. People won’t hesitate to switch jobs for a $50 a month difference in salary, without even telling you or trying to negotiate with you beforehand. That can make it hard to conduct business because you may find yourself having to replace your workforce constantly. Sometimes locals will change jobs just to get an upgrade in job title. It’s all part of the culture of prestige there.”
“If you manufacture in China, be sure to show your face often, because serious quality issues will manifest if you leave processes alone, there. One of my companies, for example, was sent batches of product that were simply unusable. The mentality is just to send you another batch – no big deal – but of course you would prefer it to be right first time. For more peace of mind, you may explore manufacturing in Taiwan. Also, be very protective over your IP – this can get very tricky in China.”
Any Last Words Of Advice?
“For now, capital is more readily available in the US than in Asia. In Asia, banks and investors still ask for comparatively more guarantees and they’re more risk averse. You have to show them real revenue generation and prove yourself. This attitude is slowly shifting but culturally it is still prevalent. That said, it is still easier to access capital in Asia than in Europe.