Out of the nest

Bankers and traders sharing war stories over drinks is a common sight all over the world, and Lawrence Morgan came to know a few popular hangouts during his career in the financial world with JPMorgan (no relation) in London and Hong Kong. But not many bankers end up deciding that owning a bar beats working on the trading floor.

Fewer still make the move from owning one bar to owning more bars, then buying and selling real estate, before trying their hand at building, scaling and exiting a range of businesses in media, finance, marketing and manufacturing. Mr Morgan has done it all.

One of the watering holes the London-born entrepreneur once owned, I learned during a recent conversation, happens to be one I have visited frequently at the bottom of a street in Lan Kwai Fong, one of Hong Kong's most popular nightlife hot spots.

"I started learning more about JPMorgan by taking my counterparts at other banks out for drinks than I did on the trading floor, before I quickly came to the realisation that I might as well own one," he tells Asia Focus.

Some of the insights he picked up over drinks, such as tips about bidding options, were put to good use in helping to build up the European credit business for JPMorgan Chase in Asia. Prior to his posting to Hong Kong, he had worked with the American lender as a trader of corporate bonds, credit and equity derivatives along with structured credit.

A decade after leaving the banking world behind, and after having created and sold several businesses along the way, Mr Morgan is still a passionate entrepreneur, an avid investor and a formidable motivational speaker. The latter is a skill that was clearly evident in our conversation, and one he puts to good use as the CEO of Nest Global, a company that operates corporate innovation accelerators, invests in seed to growth-stage startups, and runs an entrepreneurial community in Asia, the Middle East and Africa.

The love of doing business is rooted in a love of reading about businesspeople, he says.

"I always loved reading biographies from the age of 12, and often they were about businesspeople," he reveals. "I really feel that I don't need to experience something myself to learn from it, and biographies are an amazing way to take in the experiences of others."

The first biography Mr Morgan read was about Arnold Schwarzenegger, who he describes as a "fascinating guy" who went from being beaten by his father before he decided to pump iron until his dad could not beat him anymore. "He was the first guy to actually make weightlifting into a career before his foray into films."

What impresses him the most about biographies of successful people, he says, is "how driven a lot of these people were, along with the focus and the single-mindedness about what they wanted to achieve".

Given his fascination with the business world from an early age, Mr Morgan decided to go to Warwick Business School in Coventry, England. Then it was on to internships at banks, where the trading floor was "an extremely challenging environment", he admits.

"It is an environment where you are very much with yourself as in, 'You've got your own book and you trade in your own book' where it is not about relying on others; it's an internal challenge," he recalls.

Mr Morgan spent a total of 10 years with JPMorgan in London, New York and Hong Kong before he and his wife, who was a property trader at Lehman Brothers, decided to take a year off to travel before going into the real-estate development business.

The British investor was already buying and selling bars and restaurants when he was with JPMorgan in Hong Kong, and ended up establishing Astoria Star International and Chablis Chablis, two holding companies owning bars and restaurants across the territory in which he personally invested and sold between 2004 and 2010.

"It was fun and it was an exciting time but we then ended up selling it as a group to a retiree," he says.

When you buy a bar in Hong Kong, he says, usually you are buying just the shell, so how much you spend designing and fitting it out is up to you. Mr Morgan met a contractor who specialised in fitting out all kinds of properties, and that was when he decided to enter the real-estate side of things.

"I told him that I wanted to do residential property with him in Hong Kong to improve the quality of luxury fit-out, and that was when I started to go into property," he explains.

After he sold two residential property development companies that he founded on the island, M Estates and Stanford Morgan, Mr Morgan in 2015 began investing in startups and tech businesses including Fluid, a creative agency that he co-owned and helped direct.

With Fluid, it was a case of "repositioning" the value proposition of the agency toward global branding agencies, as the mid-market clientele the agency was targeting was not that profitable in Asia when compared with those in the US and Europe, he says.

"As an investor, we brought in a new management team and a CEO who could capitalise on the global opportunity before we sold that business to PwC," he explains of the company, which was named one of the top five creative agencies in Hong Kong by Marketing magazine and the only independently owned agency in the top 10. Its clients include the Hong Kong Jockey Club, The Wall Street Journal, The Economist, the South China Morning Post, PCCW and Estée Lauder, to name a few.

After a hectic period of building, selling and investing in businesses in the food, real-estate and IT sectors, Mr Morgan and his wife decided it was time to channel their entrepreneurial experience and spirit into a new venture called Nest.

"We started Nest very much with the mindset of how can we help make that entrepreneurial journey more supportive," he says. "We want to be a platform to enable startups to have access to the resources they need to commercialise and scale."

One thing that set Nest apart was the founders' belief that funding is only one of the challenges startups face, and not always the biggest one.

"We saw the VC (venture capital) players in the market and it was very much about capital and funding," he says. "We think that from the start, a lot of the bigger challenges for startups to grow are not about funding. It is actually access to the right mentorship, support and help that actually is useful and relevant."

'MOVING THE NEEDLE'

In Mr Morgan's view, the entrepreneurial journey in Asia is different from that in other parts of the world. For a start, the region does not have a history of idolising and making icons out of entrepreneurs. Another problem is a concentration on money instead of customers.

"So many companies come to us thinking they want capital but what they actually need is more clients because that is the best way of scaling, so the biggest part of Nest's business is what we loosely call a corporate accelerator," he says.

Nest works only with B2B (business-to-business) startups, taking a special interest in connecting fast-growing late-stage startups with decision-makers in large corporations to create commercial engagement.

"The reason why we focus on that, based on our experience, is quite simply because you have those technologies at that stage of development where they can actually be deployed and integrated and are valuable to large multinational corporates," Mr Morgan explains.

The company has four pillars including Nest Innovation, which runs corporate innovation accelerators to connect startups with larger corporate entities. Nest Ventures looks to invest in startups at the late stage of seed or Series A fundraising that have gone through their innovation programmes. Metta is a club for the entrepreneurial community to connect and share knowledge to bring ideas to life. And Metta Connect serves as a matchmaking platform for businesses, providing curated introductions based on members' interests and expertise.

Since 2015, Nest has helped to get 174 startups growing with help from corporate partners including AIA, Amex, Bangkok Bank, DBS, Infiniti, FedEx, and various governments on three continents. It currently has more than 1,500 startup applicants for its various programmes, while US$184 million has been raised by its alumni.

It has also staged 24 corporate innovation accelerator programmes that include many repeat clients such as DBS, which last year was recognised as the World's Best Digital Bank by Euromoney magazine for the second time in three years.

"The first company in the corporate accelerator that we worked with was AIA," says Mr Morgan. "It has 48 million customers in 18 markets and it was fascinating to figure out how to move a needle with startups and technology in that."

That helps explain why any startup that Nest brings to the attention of a large corporation needs to have something concrete to offer right away.

"Frankly, if it is two people with an idea that needs validating and it is five years from commercialisation, it is just not valuable and it is not worth the precious time of senior management, and we only deal with CEOs."

Mr Morgan says that Nest wants its programmes to have the buy-in of senior executives who fundamentally want to engage in innovation to transform how their organisations do things.

"For me, if we can hook up these valuable startups and technology, who can actually move the needle for large companies with new businesses, if we can help them grow in scale via commercial contracts with a multinational, you can take that and honestly you can have all the funding you want," he says.

"That's not the challenge. The challenge is really how can we help you have commercial business success and grow your business in that way through new commercial partners and scale your business geographically as well."

Besides the Hong Kong headquarters, where around two-thirds of its staff are located, Nest now operates in six other markets: Singapore, Toronto, Nairobi, Bahrain, Bangkok and Seoul.

"We feel that Asia, the Middle East and Africa share a lot of common traits … where you can go from garage to Google, but your opportunity to grow through word of mouth and launch an internet site in hopes that it would go viral is simply a much less likely pathway to success in the markets in which we operate."

Mr Morgan describes Asia, the Middle East and Africa as "classically" monopolistic or oligopolistic environments where only a handful of players have a very dominant market share in any one industry. Thus, the opportunity for startups to gain market share in that environment is "potentially challenging", whereas in Europe and the US, it is more fragmented in terms of industry makeup.

"Hence, our fundamental ethos as a business right from the start here is, rather than looking at the corporates and the large incumbents as the enemy to disrupt and dismantle and replace, we look at them as your best access to an opportunity to scale," he says with clear passion and commitment in his tone.

"They know the industry better than anybody else, they have the brand, they have access to the customers, and they have that internalised knowledge which can then be your leverage as well."

The British entrepreneur admits that initially, Nest's approach was "contentious" because many in the startup community did not see it as a path that they wanted to follow. They saw themselves as an "alternative" rather than a "complement" to the incumbents, he says.

However, he believes that Nest's success in helping many startups gain commercial traction -- which also benefited the large corporates that invested in them -- has led the startup community to warm to the idea of seeing large companies as friends instead of enemies.

Positioning itself as one of the first touchpoints for startups that want to expand regionally and globally with a multinational means that Nest has to look for firms that have a business model that can still be refined, but they should already have a validated service or product.

"They have built their product and service and our job is to see whether it fits with the solution they have and the needs of that corporate organisation, and that is really the inflection point to rapid growth," says Mr Morgan.

"If they can go from having a few local customers to able to have a global multinational as a client, the ability to service that customer might require them to really scale up rapidly. So we look for digital business models where you can really have an impact very quickly because that is where you can move the needle."

With his passion for building businesses, Mr Morgan is a firm believer that "entrepreneurship is the great equaliser in life", and his main goal is to empower as many entrepreneurs as possible.

"Our tagline is, 'empowering entrepreneurs to achieve the extraordinary', and I am really, really passionate about that, whether it's in that founder's role, or whether at Nest supporting other entrepreneurs on their journey, I think building business is something that is core to me," he says.

"Reading other people's biographies and thinking about people in their older age reinforces the precious nature of time in life, so I am really conscious of having an impact and making a difference as a main driver for my life."