Innovating in tandem with today’s changing market conditions is necessary for small and medium enterprises to stand out. The Business Times looks at what three Singapore SMEs are doing to shake things up in their various industries – through innovation.
A SCIENTIFIC equipment trade show may be an odd place to learn that the diamond necklace you are wearing and are so proud of, is fake. Yet, it’s where one visitor found out – and the person who detected it was businessman Tok Wee Lee.
Mr Tok, 47, is no jeweller. But he is the executive director of Technospex, which designs machines that use light wavelengths to identify molecular fingerprints. The technique, called Raman micro-spectroscopy, can sieve out the real McCoy from counterfeits for anything from gems to palm oil to drugs.
The technique itself is nothing new in the world of science. But Mr Tok wants to give local researchers and businesses a case-specific apparatus – at a fraction of the usual cost.
And it’s with this device that Mr Tok was able at the scientific equipment trade show to pick out the fake diamond necklace.
The market growth potential for it “is actually quite huge”, he said, having just returned from a business trip to Shanghai.
“We have partners over there who are telling us that consumption in China for this type and level of systems is easily 500 to 1,000 units a year,” he said. “The potential of China alone is a bit scary.”
Still, moving hundreds of units may sound like a tall order, especially when Technospex has sold just 25 of them – to customers based both here and abroad – since it set up shop in 2014. That made for a revenue of only about US$1 million over four years.
But Mr Tok figured that “things are on an expansion path now”, with the company working to build brand recognition overseas, as well as make a play for original equipment manufacturing (OEM) on a contract basis.
Technospex develops modular systems, dubbed uSight and uRaman, which can be slotted into off-the-shelf microscopes from major brands such as Nikon. Made by third parties in Singapore and Indonesia, the modules are tuned in to specific portions of the light spectrum, calibrated precisely to the sorts of materials that each client wants to test.
This means that devices can be sold for US$40,000, or as little as one-tenth the price of commercial offerings that come with the full monty – making Technospex a boon to smaller firms. Mr Tok is weighing a leasing model for those who cannot cough up the money for it. He has also loaned devices to laboratories for feedback.
But his game plan centres on design-and-build industry contracts.
For example, on the Malaysia side, there are multinational corporations that just want to solve problems in production. What we develop for them, we can eventually carry as a product and sell to the rest of their competitors, so it becomes part of our products as well.
Mr Tok, Executive Director of Technospex
His confidence in this strategy comes from his background in the local optics and electronics industry, where he has worked in since 1995.
Technospex was in fact spun off from Mr Tok’s other business: equipment distributor Einst Technology, which also custom-builds scientific products for academia and industry.
Einst had been asked by a biotech startup to build a micro-Raman spectroscopy system that’s compatible with its cancer-detection chips.
“But then we didn’t hear from them for more than six months,” Mr Tok recalled. “Then the guy came back and said, ‘Oh, we’ve closed down the company’. They had run out of money. So we ended up with this module that we built for them and didn’t know what to do with it.”
The system merges microscopy and spectroscopy, which Mr Tok said made it hard to appeal to clients who specialised in just one of those technologies. “So, after almost six months of no positive feedback, we decided to do it ourselves. That’s why we decided to incorporate Technospex.”
He tips his hat to the Agency for Science, Technology and Research (A*STAR). Without its support, “we would not have been able to get to where we are with the investments that we have”. The agency “lent” him scientist Phang In Yee, whom he knew from previous Einst projects.
Dr Phang has been with Technospex since 2015. Tasked with coming up with industry applications for the uRaman system, he is now on his third stint with Technospex – and jokes that his boss has asked him not to go for a fourth secondment.
Mr Tok said that he has already ploughed about S$1.2 million of his own money into Technospex, on top of the S$100,000 in startup capital from his employees’ stakes.
Both of his companies still share a headcount of roughly 20 workers, and he noted that Einst has helped to defray some of Technospex’s research and development costs.
The two businesses also share a modest office in a Lower Delta Road industrial estate, with a laboratory tucked away in a back room.
“At first, we were pretty optimistic,” he said. “It was unique stuff, so we thought the world would just buy it as if it were doughnuts. But eventually, it didn’t prove that way.”
Even with a shift towards OEM, Mr Tok acknowledged that “it’s a long play”. “From scoping out the competition until you get the orders, it’ll take a while – one to three years.”
Still, he wants to break even this year. “The good thing is that we’re starting to get a bit more brand recognition internationally, so that will provide us with some leverage.”
Mr Tok added: “We know the systems inside-out, we know the technology. We have a solid foundation.”