Hong Kong’s startup scene is going from coffee mornings to public offerings.

By Adam White

D

on’t believe what your grandparents tell you: being successful in Hong Kong doesn’t mean that you have to be a doctor or a lawyer (or enter the lucrative world of journalism, for that matter). These days,

forward-thinking entrepreneurs are entering the world of startups, where Hong Kong’s can-do spirit has found its next natural home. These people are in it to remake Hong Kong in a startup image—and make a fortune while they’re at it.

The Anatomy of a Startup A

“ think Hong Kong is probably the easiest place in the world to startup,” says

Why Hong Kong? I

James Beacher of venue-booking platform venueHub. “The process is incredibly

t heart, a startup is a few people with a new idea who want to change the world. It’s quite the goal. But the people behind

simple, cost-effective and the government really understands the importance of startups to the local economy.” The ease of doing business in Hong Kong has always made it a draw, and startups benefit from the same advantages. “The government is now stepping in and bringing a spotlight on this industry, and making it easier for startups to get visibility,” says Casey Lau. “That’s a great thing.” But it’s also something about the nature of our city that makes Hong Kong prime startup soil. “The diversity of the population makes Hong Kong a great testing ground for your idea or product before you consider expanding elsewhere,” says Winston Wu, founder of recommendations app Pingspot. Jon Buford agrees. “With a larger market, like Taiwan, you have enough people to do local products, but not really enough to scale to be much more than a comfortable business. With more established and larger markets, like the US, you tend to only see the local market and completely miss the opportunities elsewhere. Hong Kong is a good mix.” The other great advantage is the sense of community. Networking events and venues exist to help startup founders meet and help each other out. “Hong Kong’s blessing and curse both lie in its size,” explains Michael Gasiorek of fashion app ShopHop. “The startup scene is tight-knit, incredibly supportive, and you’ll have more difficulty picking the events worth your time than finding them. Still, while it’s a great test market, it’s an even better launching pad to the rest of Asia.” Pingspot’s Wu points out, “seven million people is a small market. Most startups need to think cross-border from the get-go.” As Simon Squibb of angel investors Nest says, “We’re not running businesses that are successful in Hong Kong—we’re thinking globally. A lot of people have missed this point. They say ‘Oh, Hong Kong, don’t bother.’ But if you only think locally, you won’t go anywhere.”

startups have to want something big: otherwise, they wouldn’t be wasting their time. “When we say startup we usually refer to a tech startup. These are companies that don’t have clear revenue models and are about building a platform that people want to use,” says Casey Lau, one of the founders of networking and community org StartupsHK. “In Hong Kong, I see it more about entrepreneurs that use technology to make things better—whether it be stock trading, booking a taxi or a hotel room, education or social innovation.” “I think the startup scene has grown a lot since we started meeting in a coffee shop back in late 2009 at the first Startup Mondays,” agrees Jon Buford, who’s another of the founders of StartupsHK and also behind 3D printer Makibox. “We started with six members,” says Lau. “Now we have 5,000-plus. We had 1,000 square feet of co-workspace in January 2012—by the end of 2013, we will have 150,000 square feet.” Floor space, in Hong Kong? That’s how to define a business. Take the great success case: silly-image-sharing site 9Gag. Founded in 2008 by HKU student Ray Chan, the site raised $21.7 million in seed funding back in July of last year. These days it gets in the region of 60 million visitors a month. Of course, it’s not all easy. “You have to truly love solving problems to stay in the startup biz,” says Chan. “9Gag makes a lot of money, but there’s not much profit. If you’re interested in making money, there are much better ways to do that in Hong Kong.”

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Startup Stoppers I
infrastructure and—of course—money.

t’s not all good, of course. Hong Kong’s startup scene is still nascent, and there are obstacles to overcome if it’s ever going to be a truly successful

What Next? T

he startup founders identify a few solutions. “The ‘newness’ of it all is the biggest drawback. Hong Kong is definitely on the right track,

scene. We’re missing three great things at the moment: talent, government The lack of talent comes down to something elegantly predictable: Asian parents. “The culture for university students to form or work for a startup is still not strong enough,” says Andrew Chan of package-tracking site Aftership. “Top students still aim to work in an investment bank or big corporate firm.” “People are always asking ‘when are you going to make money?’” explains Simon Squibb. “The government wants to know the business plan, how you’re going to get revenue, when will you be profitable, will you employ local people. All fair questions. But the problem is, I don’t know when it’s going to make money.” The reality of startups doesn’t really fit into Hong Kong’s traditional business mindset, just yet. The lack of cash is a knottier problem. Hong Kong’s not a cheap place to live or work, although more and more shared office space has helped to shoulder the burden. But the real problem is capital. “There seems to be a large gap between risk appetite amongst angel investors in Hong Kong and, say, Singapore,” says Asif Ghafoor, one of the founders of property search engine Spacious. “Most of the angel investors in Hong Kong seem to be looking for a company that is already making money, or very close to.” That’s a tricky position for startups to be in—after all, it took Twitter years to work out how to turn a profit. “Most of our seed money came from abroad,” says Jeffrey Broer of social media translation app Surround. “When you’re talking to investors in mainland China, they’re all expecting the new Angry Birds.” He says it’ll take a while—and a little bit of experience—before they begin to invest more diversely.

but it will still take some time,” says Pingspot’s Wu. He points out that we are a city that got rich on traditional business and land. “Wealthy investors have only recently started to turn their attention to angel and venture investing as an alternative investment option.” But the thing we need above all else is an enormous success story: an exit. An “exit” is a successfully executed exit strategy, wherein a startup is sold to a corporation for a huge amount of cash. “I think the main thing people are waiting for is that first big exit from a company here,” says Jon Buford. “It will be those companies that form the next round of growth and will act as both investors and mentors to the next generation of companies.” Wu agrees, pointing out that a high-profile exit would validate and energize the startup community, provide a model for new startups, encourage entrepreneurship as a career amongst young people (and their parents), and demonstrate to investors the value of Hong Kong companies. “It’s a powerful cycle, and I think Hong Kong is on the cusp of setting off that cycle.” “We’ve seen the startup community grow like crazy and I think 2014 will be a landmark year. In Asia we have so much potential with so many people, and so many problems that affect people, from Kowloon Bay to Makati City. There are some great startups I’ve seen in HK and around Asia that are ready to be international successes,” says Casey Lau. “These will change the game.” “This city was built on entrepreneurs,” Nest’s Simon Squibb points out. “Li Ka-shing was an entrepreneur—he started out selling plastic flowers. A lot of people have forgotten that.” Hong Kong is a city that’s grown rich on people wanting to make great things happen. Meet the next generation.

HK MAGAZINE FRIDAY, octobeR 4, 2013

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Hong Kong is rammed full of exciting, interesting startups at the moment. We’ve picked just 10 here—but there are many, many more.

HotelQuickly
RApHAel CoHeN (pICTuRed), TomAS lAbouTKA, CHRISTIAN mISCHleR, mICHAl JuHAS, mARIo peNg Launch March 2013. The Elevator Pitch “HotelQuickly is the largest last-minute hotel booking

Spacious
dAvId beATTy (l) ANd ASIf gHAfooR (R)

smartphone app in Asia.” The Deal Stuck in a foreign city and in need of a last-minute hotel room? Load up HotelQuickly and it gives you a list of deals on hotel rooms in your city. You can make a reservation right up until 4am that same night, in 11 countries across Asia and Australasia. Hotels fill their empty rooms, and you get a bed. Everyone’s a winner. The app has just raised $9 million in “Series A” (first round) funding. The Dream “We aim to become the reference app for spontaneous hotel bookings in the Asia Pacific. We are building up a lifestyle brand for spontaneous travelers in the region. Business travelers, flashpackers, staycationers—anyone who makes lastminute changes in travel plans—should all think about our app right away.” www.hotelquickly.com, free from the App Store, Google Play, and blackberry World.

Launch July 2013. The Elevator Pitch “Spacious makes it much easier to find a property to buy or rent in Hong Kong.” The Deal We’ve all had to do the flathunting thing, and it sucks. It’s tricky to find flats online, doing it in person is time-consuming, and either way it’s hard to compare prices and market information. Spacious overlays Hong Kong property listings onto a map, and cross-references them with previous data to indicate if the place you’re looking at is a good deal, or just owned by a greedy landlord. Add detailed neighborhood guides and you’ve got yourself an effective way of looking for your next place. Interested? Spacious is currently looking for more investors who can bring something special to the team. The Dream “We want Spacious to significantly improve the experience of buying or renting a property. The general consensus across property searchers seems to be that the current players are not providing the great customer experience people expect. We passionately believe Spacious will change this.” Spacious.hk.

geT NeTWoRKed g
These people will get you off the ground.
HoNg KoNg SCIeNCe pARKS INCubATIoN pRogRAmmeS
Catchy name for a series of government-funded startup incubators. Offers a variety of programs for app, tech and biotech startups. www.hkstp.org.

INNovATIoN lAb
A fully serviced 8,000-square-foot office space in Sai Wan with private offices and communal areas. Casual use starts at $2,000 per month, while offices start at around $20,000 per month. Cheung Hing Industrial building, 12P Smithfield, Kennedy Town, 2542-1035, www.innovationlab.hk.

CarryAd
HANley lI (l) ANd leTTIe SIN (R) Launch July 2013. First batch planned for this month. The Elevator Pitch “Solving Hong Kong’s plastic bag problem by replacing normal plastic bags in the wet market with 100 percent biodegradable ones. How do we do it? We fund it by turning plastic bags into a new advertising channel for companies.” The Deal Hong Kong’s choking on plastic bags, and Chinese University students Lettie Sin and Hanley Li have an idea: to sell advertising space on biodegradable plastic bags, and then to sell those bags at cut-rate prices to wet market stall and shop owners across the city. It’s an elegant solution that uses business to clear the way for the environment: how very Hong Kong. The Dream “Making plastic bags as an advertising channel more common and accepted. It’s an effective and economical advertising method.” www.carryad.com.

ACCeleRAToRHK
Three-month-long startup “accelerator” program for mobile startups. Provides $116,000 in seed capital, mentors, guidance and space to work. acceleratorhk.com.

HKdC INCubATIoN pRogRAmme
Two-year program run by the Hong Kong Design Centre, for design-, fashion- and branding-related startups. www.hkdesigncentre.org.

NeST
Incubator for scalable lifestyle startups. Known for its “Dragon’s Den”-style pitch days, where participants have 15 minutes to present their idea. If they like you, they might mentor you and invest up to $500,000. nestideas.com.

CybeRpoRT INCubATIoN pRogRAmme
$530,000 of funding for tech startups for two years. www.cyberport.hk.

dRAgoN lAW geNeRAl ASSembly
Launched in New York in 2010 as a startup, General Assembly now holds courses in tech, business and design across the world. It’s just kicked off its first full-time training program for web developers. generalassemb.ly. Online legal consultancy designed for startups. Create legal documents, contracts and agreements with easy templates. Find answers to legal conundra, or get in touch with a lawyer. Launches Nov 1; pre-register at www.dragonlaw.com.hk

for more resources and information, visit www.startmeup.hk.

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ShopHop
(CloCKWISe fRom Top lefT) mICHAel gASIoReK, KRIS duffy, HeSpeRuS mAK ANd olgA lyudovyK Launch “You’re catching us at a great time! We haven’t launched yet, but we’re right now looking for local fashion-lovers to be part of our VIP beta.” Sign up online. The Elevator Pitch “ShopHop helps anyone shop like a local in Asia. We’re like the app version of a longtime Honkie who just has to take you to her favorite little boutique (or five) as soon as you arrive.” The Deal Not everyone can be as on top of fashion as HK Magazine’s style maven Katie Kenny. ShopHop aims to help you out. The app will fill users in on trends and hot new openings, chart out little-known boutiques as recommended by fashionistas or friends, and match your style with other shoppers across Hong Kong. The Dream “ShopHop wants to be the one-stop mobile and web portal for all Asian shopping that doesn’t carry a barcode. We’ll start with the best of local written and photo editorial from bloggers and fashion publications. We make it actionable with search-and-go personalized store tours of Asia’s favorite boutiques, vintage stores, pop-up shops and anything fashion small-business. And eventually, build a platform for taking the best stores to the world with mobile commerce. You’ll be able to learn, explore and buy: with one app, in English and Chinese, across 12 Asian shopping cities from Bangkok to Singapore.” www.shophop.me.
© E. KADNIKOVA

“A true force of nature.”
The Strad

So, you WANT To lAuNCH A STARTup?
Nest’s Simon Squibb offers 10 tips… and some advice.
1. Be passionate. Love the idea and don’t just do the startup for money. 2. Make sure your startup is something people want or need. Don’t adopt the “build it and they will come” school of thought. Read “The Lean Startup” by Eric Ries, and don’t start until you have! 3. Invest time in a scalable idea [one that can be expanded regionally or globally]. This is definitely more attractive to investors. 4. Think about who your client might be in as much detail as possible, and don’t forget to ask them if they need your business idea. Talk to customers; don’t sit behind a computer and guess what they want. 5. Hire people smarter than you and/or who complement your skill set. 6. You’ve got to think, so think big. 7. Be original and don’t steal ideas. Some people might disagree with me, but in the long run, anyone who copies someone else always pays for it. 8. Be confident and develop a thick skin. Many will say you are nuts and tell you to get a real job. 9. Give yourself no choice but to succeed! Many fail because in the back of their minds, they know they can go back to a job. Failure is not an option— but then again, don’t be scared to fail. 10. Ask everyone in your circle to support you. The founder of LinkedIn said that building a startup is like jumping off a cliff and building a plane on the way down. You need to go home to a soft landing to make it!

Programme

Dvorˇák Smetana Wieniawski Enescu Gardel/Williams arr John Williams Waxman

Carnival Overture, Op 92 My Fatherland: The Moldau Fantaisie Brillante sur Faust, Op 20 Romanian Rhapsody in A, Op 11 No 1 Tango, Por Una Cabeza Schindler’s List Theme Carmen Fantasy

13.10.2013 7:30pm
(Sun)

HK City Hall Concert Hall $360 $250 $150

Hire Wise. Don’t hire the wrong people just because you’re desperate for help. Sell Yourself. A lot of people overlook things like marketing. They just assume their app is going to get on the App Store and everyone is going to love it. Have a marketing plan. brand It. Don’t underestimate the need to have a brand—especially IT-driven startups. People need to trust brands

and what you stand for, if they are going to give you their data. Don’t Think It’s Gonna be Easy. Doing a startup is the hardest thing you can do. A lot of people leave big companies to do a startup and suddenly there’s no one to pick up the phone for them anymore; there’s no one to take care of their accounts. People just don’t realize how much is involved, and how much multitasking they need to do.

Tickets at URBTIX
Hong Kong Sinfonietta reserves the right to change the programme and artists

Music Director/Conductor

2111 5999 | www.URBTIX.hk Programme Enquiries:2836 3336
Hong Kong Sinfonietta is financially supported by the Government of the Hong Kong Special Administrative Region Hong Kong Sinfonietta is the Venue Partner of the Hong Kong City Hall

Yip Wing-sie

HK MAGAZINE FRIDAY, octobeR 4, 2013

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makibox
JoN bufoRd Launch Production begins in October. The Elevator Pitch “The MakiBox A6 is the world’s cheapest complete 3D printer kit. It is both inexpensive and easier to use than others on the market. It takes three to four hours to assemble and start printing, and comes with an instruction manual similar to IKEA furniture.” The Deal Eventually, 3D printing—where digital models are transformed into physical products—is going to redefine how we get our goods. In the meantime, the MakiBox goes a long way towards making that a reality. At $1,550, this home 3D printer is incredibly cheap. There’s plenty of interest from schools and tech groups, and the first batch of 1,500 ships this month. The Dream “We are working on how to make manufacturing more accessible to companies and how to change the supply chain for products: the next step in bringing traditional retail sales and crowdfunded products together. There will likely be much more manufacturing in Hong Kong in the near future.” store.makibox.com.

AfterShip
ANdReW CHAN (l) ANd Teddy CHAN (R) Launched October 2012. The Elevator Pitch “AfterShip is a tracking and notification service for online retailers, supporting 108 couriers worldwide.” The Deal If you run an online business, keeping track of everything you send to your customers can be an almighty pain in the ass. AfterShip allows you to combine all your orders into a single interface, so it’s easy to stay on top of irritating customers. AfterShip is one of Hong Kong’s success stories, winning the 2011 Startup Weekend Hong Kong and then going on to win the 2011 Global Startup Battle. These days it’s used by 4,000 merchants, mostly in the US. The Dream “Google for package tracking—when you want to track a shipment, you come to AfterShip.” www.aftership.com.

Snaptee
WAI-luN HoNg Launched August 2013. The Elevator Pitch “Snaptee’s mission is to realize your creativity, by empowering people with the ability to create and collaborate. We want to let everyone design unique T-shirts.” The Deal A T-shirt designing app that plugs into your camera feed or Instagram account. Add filters, text, and color, alter shapes and use templates. Once you’re happy, your personalized T-shirt will be delivered straight to your door for $155 plus shipping. Share your designs online for others to buy, and you’ll get a cut of the profits. The Dream “We envision a world where people are happy designing and wearing their unique creations. Snaptee empowers this T-shirt revolution.” Snaptee.co, free from the App Store.

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HK MAGAZINE FRIDAY, octobeR 4, 2013

pingspot
WINSToN Wu Launched March 2013. The Elevator Pitch “Pingspot is an easy way to organize and share recommendations of great businesses. ‘Ping’ your favorite local spots and travel recommendations, discover your friends’ recommendations, and have all of these great businesses at your fingertips.” The Deal The idea’s simple: if you like it, you “Ping” it to let people know about it. It shows up in their feed if they’re following you. There’s no negativity or bad reviews: you just build up a social network of your friends, and people whose opinions you trust. The Dream “Our dream is for Pingspot to be your go-to source whenever you need to answer the question ‘Where should I go for _____.’ If we can achieve that, then lots of other good things will happen.” www.pingspot.com, free from the App Store.

Surround
JeffRey bRoeR (l) ANd ANgelINA yAN (R) Launched June 2013. Web platform currently in beta. The Elevator Pitch “We enable Chinese social media for non-Chinese readers.” The Deal Chinese social media is huge. Sina Weibo has more than 500 million registered users, and if you don’t read Chinese that’s a significant part of the internet that’s closed off to you. Surround provides real-time machine translation of a variety of Chinese social media platforms, including Sina Weibo and QQ. Projected features include human translation and accurate slang translation so you don’t miss out on the nuance. The Dream “To take down the barriers of social media language. To help people communicate with each other, to have an open conversation and break down language barriers.” www.surroundapp.asia, free from the App Store and Google Play.

perpetu
RyANNe lAI (pICTuRed) ANd ANdReA lIvoTTo Launched April 2013. The Elevator Pitch “Online photo albums, emails, social profiles: what happens to them when you die? Perpetu lets you choose!” The Deal If I should die, think only this of me: DELETE MY SEARCH HISTORY. Perpetu allows you to manage your digital afterlife. You leave final actions for your Facebook, Gmail, Twitter accounts and more: sending a final tweet, a last missive, or deleting an embarrassing FB album. When you die, designated friends get in touch, and Perpetu will implement your digital will. The Dream “To allow anyone to decide how to be remembered.” www.perpetu.co.
Additional reporting by Yannie Chan and Sarah fung.

HK MAGAZINE FRIDAY, octobeR 4, 2013

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Space to Think
Find yourself the ideal workspace. By Lisa Huang.

Talking ideas with BootHK

HK Commons
Best for: Techies. Having merged with BootHK, another collaborative workspace, HK Commons targets tech start-ups and developers. There are two venues: the corporate-vibe Sheung Wan branch, or the Lai Chi Kok locale, which is basically Silicon Valley in HK and specializes in video games and tech. The space: Aside from being the best of both working worlds—a hybrid between an open working space and private executive offices— HK Commons is the corporate mom you’ve never had. They take care of everything from incorporating your company, to a one-year

domain registered website, to business cards and government paperwork. What’s on? Free knowledge! Who says education ends after college? HK Commons offers lectures featuring top-notch speakers and classes on tax-efficient strategies for expats. Sign up: The full HK Commons care package will set you back $8,888, if you pass the interview. With BootHK’s merger, however, you can also sign up for more flexible memberships.
25 & 27/F, Workington Tower, 78 Bonham Strand, Sheung Wan, 3563-9201, www.hkcommons.com.

S

o you’ve got the perfect idea for the perfect business: now all you need is an office. These collaborative work spaces will get the creative juices flowing. Or maybe that’s just all the coffee you’ll be drinking.

CoCoon
Best for: Tree-hugging masterminds. CoCoon is an incubator-type space that prioritizes eco-friendliness and social responsibility. “CoCoonians”—early stage entrepreneurs—can find mentorship and
It’s like startup Google

The Hive
Best for: Classy visionaries. Chic consultants, entrepreneurs, and independent professionals who work in fashion, wine, trade, real estate, advertisement, architecture, high-end metal and jewelry design… The space: The Hive comes from British interior design firm Alexander Waterworth, whose past projects include luxury hotels in Miami and private clubs in London. The open, breezy workspace is three floors high, equipped with kitchens, lounges, sun terraces, meeting rooms, and a business concierge. Actually, we might just relocate HK Magazine here. We could do with a little more sun terrace time. What’s on? Workshops, courses and shows. It also offers social media workshops, legal clinics, customer relationship management courses and fashion shows hosted by local online fashion brand Shop des Créateurs. Sign up: There are daily rates ($300), part-time rates ($2,800 per month) and everything up to monthly dedicated office or workstation memberships (from $6,000 per month) for those after longer-term spaces. Startups and social enterprises get reduced rates.
21/F, The Phoenix Building, 23 Luard Rd., Wan Chai, 3568-6343, www.thehive.com.hk. The Hive’s sun terrace This is a superfluous caption

resources from Entrepreneurs in Residence: hired, experienced industry experts. The space: Keeping in mind the eco- and socially-conscious theme, the 14,000 square feet of open space looks more like a mini-golf range, just without the holes. In addition to a library, lockers, conference rooms, huge worktables, and a photography studio, it has—wait for it—foosball and Ping Pong tables. Beer pong, anyone? What’s on? Pitch Nights. Held once a month, members pitch ideas and network with

Stylish eco-entrepreneurs

investors… and maybe play some foosball afterwards. Nothing like some networking through the medium of tiny skewered people kicking tiny plastic balls. Sign up: Visit an open house night. Bring your laptop, enjoy the café, play some ball and join the CoCoon: you can get a six-day-a week membership for $2,000 a month, and participation in weekly events is mandatory.
3/F, Citicorp Centre, 18 Whitfield Rd., Causeway Bay, 3158-2999, www.hkcocoon.org.

Fill in the blank
Best for: Sensitive artists. In the DIY-like workspace, members at FTB will coax your inner artist out of its cave. If you’re creative— a writer, graphic designer, or musician—this is the place for you. The space: An arcade. There’s nothing like

All in a trendy day’s work

Dim Sum Labs
Best for: Inventors and life hackers. As diverse in offerings as a dim sum cart, Dim Sum Labs bills itself as a “think tank.” If eccentric innovations are your thing, be sure to get to know the other members: for example, there’s one who’s currently developing a brain-reading machine. The space: Doraemon’s magical pouch. This place is home to a host of really cool equipment such as electronic parts, Arduino microprocessors, a RepRap 3D printer, and a
Making it work

a rooftop and 600 square feet of ample testing space; we call first dibs on space rocket flights. What’s on? HackJams—a platform for those interested to check out the place and talk hacks and ideas over free flow beer. Kind of like a frat party, but with fewer sweaty 19-year-olds and more laptops. Sign up: Visit an open night to check out the vibe, and sign up if you like the feel. Year-long memberships cost either a $5,000 lump sum, or $500 per month for a year.
14/F, 100 Jervois St., Sheung Wan, www.dimsumlabs.com.

a TV, Xbox, and a fully ranged movie and board game collection to spike that creative flow. The 1,000-square-foot space is equipped with a comprehensive library, long worktables, and dry erase walls. What’s on? Board game and movie nights… the tweens in us are already shaking with excitement. Sign up: It’s a flat rate of $100 per day, for up to six hours of full-on creating. If you’re a student, it’s just $50.
13/F, Hang Wai Commercial Building, 231-233 Queen’s Rd. East, Wan Chai, 2897-7792, www.fillintheblank.hk.

CNC machine. We have no idea what half those things are. Members also get full access to

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FRIDAY, october 4, 2013