Yee Hoong is an Investment Analyst at Monk’s Hill Ventures, and was most recently founder of Custom Tribe, an online algorithmic custom shirt startup. Prior to that he was an associate with a life sciences VC/PE, and a management consultant working with clients in FMCG and Financial Institutions.
Every now and then in conversations with founders and friends, the question “would you do a startup again” will most certainly creep up. Reflecting on the decision leaving vc to build Custom Tribe a few years back, I now often advise many to-be founders to think long and hard about it. Here are three things I think are unique to Southeast Asia, from collection of conversations with fellow SEA-born (ex) founders.
Your opportunity costs are high
To quote an old friend and mentor, you’re giving up a 3x opportunity cost to found a startup. 1x stable paycheck, 1x career progression, and 1x investing personal money into the business.
Let’s break this down
- Salary is underrated.
Southeast Asia is unique in that depending on which country you’re in, what you give up in monthly paycheck can differ from a few hundred USD to a few thousand USD. Until you realized that you haven’t had a paycheck for 6 months, it may be a bit too late to regret having taken the leap.
- Your career takes a different turn
The conventional career progression typically means specializing in one set of skills and move up the career ladder for being known for those same skills. Doing a startup changes this. You need to be versatile and learn to be well-rounded. This often means putting on halt that specialized skill progression you’ve built and start building other adjacent skills. While your profile starts shifting from being “part of an operation” to “leading an operation”, you’re also losing the proportionate growth in that specialized skills (and industry) compared to your peers who stayed on.
- Raising funds may be new to you
Fundraising for the first time is disorienting. Kinda like a deer in the headlights at times, especially for Pre-Seed. While many of us in MY and SG turned to government grants / convertibles as a start, rubber really only meets the road when you start talking to angels / early-stage VCs. Compared to selling multi-thousand dollar projects in your day job, the dynamic changes when you’re selling you and your team for the same amount. Hence many first-time founders end up putting in significant amount of our hard-earned savings – speaking of putting all eggs in one basket!
I recommend listening to Kathryn Minshew’s fundraising experience for reference. May need to be adjusted to local culture but the gist is there.
2. You have a family
“Having a family” often means something different in SEA than in many Western cultures. In addition to staying with our parents well into adulthood, many of us still observe traditional Asian familial values like filial piety, social expectations, and familial obligations. This is even more so if you’re the first in the family to X [fill in with anything that makes an Asian family proud].
This is not to be taken lightly, and I recommend a transparent and practical conversation with your families at large, as part of the decision-making process. Leverage on their life experiences. We often forget that many of our (great) grandparents are (im)migrants, either from another country or from the countryside. They may not know tech but know life much better than we do.
3. You’ve been taught never to fail since birth
We’re simply not taught to fail. From grades to graduation, from projects to career progression. The real test of resilience comes when your first failure strikes.
It’s already cliché but there can be no clearer truth that you need to fail small fast and frequent to find the correct formula for your startup, especially in its early days. Personally, you need to push your comfort zone everyday to succeed in the longer run.
So where does this lead us?
Thinking long and hard about things that can work against you before diving in culminates in what I call thoughtful commitment. Building a successful startup often takes a decade. Having considered all these upfront helps prepare you for the marathon.
What if I’m not ready?
Then don’t start a startup.
You don’t need to be a founder to be part of a startup, or to learn to run a business. To Lucy’s point, if you think joining a startup is right for you, it’s not a bad idea at all to just join a startup instead of founding one. Consider this: you don’t need to be a founder to build successful companies.
And if you’re ready?
Building a startup is an exhilarating journey, for the prospects of truly changing an industry and lives around it; it is also incredibly humbling and practical.
A final note to fellow idealists out there: see through the practicalities, eyes on the prize. Take the red pill, it’s worth the ride.