The story of Hong Kong-based Internet of things (IoT) startup Ambi Labs, based in the entrepreneurial Sheung Wan area, starts with a hot dog. An ageing husky named Levy, to be precise.

Julian Lee, a Singaporean and CEO of Ambi Labs who has spent the bulk of his life in Hong Kong, was looking for a way to keep his Siberian pet cool during Hong Kong’s sweaty, humid summer months. The solution he struck upon was a smart, data-driven approach to climate control.

Control air conditioners from afar via an app

“We founded Ambi with a very simple purpose. In the summer it’s always a struggle – do I leave the AC air conditioner on 24/7? It feels very energy wasteful; like you’re not a responsible global citizen,” he says. “At the same time you can’t leave your husky at home in the heat of summer in Hong Kong and not worry about him.”

Ambi Labs’ core product, Ambi Climate, tackles one of subtropical Asia’s most enduring problems – keeping cool – by optimising the air conditioners that are ubiquitous in the region’s homes. According to the Euromonitor data that Lee and his team have crunched, 300 million of the roughly 415 million air conditioner-equipped households in the world are in this region.

Ambi Climate started off as a relatively simple solution that allowed users to control their air conditioners from afar. But Lee is looking beyond that towards ways to capture and use the torrent of data that every aspect of our smartphone-equipped lives generates.

Ambi Climate is a small, sleek device that acts as a monitoring station as well as a proxy remote. When installed in a room it feeds data about climate conditions and climate control usage to users via an app downloaded to their smartphones. The app also acts as an interface that allows users to adjust temperature and humidity settings remotely, ensuring any kids, furniture -- and huskies -- in the house are well cared for no matter where the user happens to be.

Automation with data intelligence

Importantly, by seeking feedback and cataloguing and analyzing data patterns in temperature shifts, the device learns a user’s habits and preferences and responds accordingly. “Thermal comfort” is thus entirely automated, in the most energy efficient -- and cost effective -- way possible.

For Lee it’s important that any connected device makes the data gathering and usage process intuitive and non-invasive. With Ambi Climate, for example, “you don’t have to program things or set timers. (Data) intelligence should be seamless; it should be part of everyday life and transparent to the user.”

Ideal climate for digital startups in Hong Kong

Lee sees Hong Kong as an ideal base for digital startups like Ambi Labs. While the city has its downsides -- high rents being among the biggest -- young professionals continue to be attracted by its low taxes and quality lifestyle, ensuring a healthy supply of talent. In addition, as an affluent, tech-savvy -- and hot -- place, Hong Kong is the perfect test bed for Ambi Labs’ flagship product. The city is also full of early adopters, since people in Hong Kong “are risk takers; they’re learning to follow their passions and dreams,” Lee notes.

Lee also credits the government for being generally supportive of the start-up culture. Local and foreign companies can take advantage of multiple resources to assist in the setup process, from government-funded incubation programs and small enterprise support schemes to InvestHK, an agency dedicated to helping foreign businesses gain a foothold in the city.

While Lee leveraged his private equity background and tapped friends and family for the initial funds to get Ambi Labs off the ground, he says that the city is also a hotbed for venture capital and angel investment. “Hong Kong has a lot of smart people with deep pockets who are willing to back projects.”

Also important is the vibrancy of the start-up scene, largely centered in Hong Kong’s historic Sheung Wan neighborhood, where app builders and programmers work in offices that rub shoulders with shops selling Sheung Wan’s other famous export -- dried seafood.

Before launching Ambi Labs in 2012, Lee and his co-founders met in a Sheung Wan ‘hacker space’ -- a community-operated workspace where like-minded programmers and technicians gather -- called Dim Sum Labs. “We wanted to stay in the area, partly because we got to meet a lot of other startups. So we kind of entered the ecosystem in a non-official way.”

The proximity of so many would-be founders and inventors encourages plenty of collaboration and meetups, Lee says. “I feel that we’re very fortunate in Hong Kong. We’ve visited startup communities in Taiwan, in South Korea, in Japan, and one thing that we’ve seen is that the startup scene, particularly the hardware startup scene, in Hong Kong is very collegiate. Everyone tries to help each other, share ideas, brainstorm.”

Ambi Climate’s focus on hardware may put it in the minority of tech startups, but Lee feels Hong Kong is a particularly compelling destination for companies with a hardware component as they can take advantage of the city’s proximity to neighboring Shenzhen, arguably the world’s greatest manufacturing hub.

“Hong Kong and the Pearl River Delta have a long history of manufacturing: electronics; toys, whatever you want to name. There are a lot of services here that you can tap into to accelerate your development and a trip across the border to Shenzhen is very easy.

In addition, online marketplaces like Taobao make it easy to source parts for protoyping “very quickly and cheaply. It’s orders of magnitude cheaper than if you were to do this anywhere else in the world. For me it’s a critical success factor for this type of startup in Hong Kong.”

Ambi Labs has grown into a team of 20, has users in 39 countries, and is looking to ship its 10,000th device within the next year. The company was also a presence at the 2016 Las Vegas Consumer Electronics Show and has been feted with multiple awards, including grand prize for top pitch at the 2015 RISE startup summit, and an IoT gold award in the Hong Kong ICT Awards 2015.

But Lee sees all this as just the beginning. “To all intents and purposes we consider our product mature enough now to really fully launch out and scale up. That’s our key goal for the next couple of years. For now, we’re focused on being the best possible solution for this air-conditioning problem.”

© 2016 The Economist Intelligence Unit Ltd.  All rights reserved.                                                                         

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