It is a time of unprecedented growth in Southeast Asia (SEA). Over the last few years, commercial innovation and investments have boomed. And investors are taking notice: $24 billion has been invested in Southeast Asian tech since 2015, according to a recent report by Google and Temasek.
There is a lot of opportunity in the region as it continues to grow. The same report predicts that Southeast Asia’s internet economy will reach $240 billion by 2025 — $40 billion more than previously estimated.
But scaling in SEA can be a challenge. It is one of the most diverse regions of the Asian continent, divided by politics, language and culture. Levels of development also vary from market to market: Singapore’s modern and metropolitan infrastructure contrasts starkly with Cambodia’s ongoing struggle to maintain a passenger rail service, for instance.
All of which means that there is no “Southeast Asia answer” to any question. But for startups, there are ways to overcome these challenges and turn this diversity into an opportunity as you expand your business across the region.
In the first meetings he arranged with potential partners for Google’s Next Billion Users (NBU) team, Jon Sugihara is looking for two things: Are we aligned on a project that could positively impact the next billion users of the Internet? And how fast can you move to test our hypothesis?
Working with partners at Google was a new experience. After years of trying to hard sell companies to invest in his own startup, Perx, or working hard to bring in new clients, companies were now hard selling to Jon for the first time. He quickly found that if he sat back and listened, partners would start pitching why they were the best partner for Google.
Jon had founded, developed and eventually advised his own company, but now he found himself on the other side of the table, working with established companies and startups alike to stretch beyond the successes they’d already achieved, and helping reshape a Google that will push emerging economies forward.
Technology has immense value creation potential in emerging markets, and entrepreneurs should choose to invest their energy on problems that are worth solving. While the definition of a worthwhile problem is subjective, Maslow’s pyramid can help inform our thinking. Entrepreneurs should start at the bottom before moving up the hierarchy of needs.
Many in emerging markets don’t have access to fundamental goods and services such as quality education, affordable healthcare and basic financial products. For example, 438 million people remain unbanked in Southeast Asia, or over 70 percent of the population. Governments rife with political tensions and conflicting incentives are struggling to bridge infrastructure and development gaps.
While these problems are more acute in emerging markets, they are by no means unique to them. For example, Singapore and Japan have earned high praise for their access to healthcare in the past but are struggling to keep up with rapidly aging populations today.
In addition to being impactful, it is worth noting that solutions that tackle fundamental human needs have potential for tremendous financial upside. Yet who will assume the mantle? Industries that serve basic needs also tend to be the most highly regulated (rightfully so), which intimidates many entrepreneurs. Existing regulations are difficult to navigate, while the implementation of new ones can sink entire business models. To add to that complexity, regulations tend to vary widely from country to country within a region.
However, to be blunt: that’s simply no excuse. Navigating the regulatory landscape in Southeast Asia’s emerging markets might seem daunting, yet many entrepreneurs have already done so successfully. They’ve changed lives by launching successful startups, and they’ve also blazed a trail for others to follow. The problems at stake are too big and the potential benefits too great for entrepreneurs to risk sitting on their hands. Here is a quick playbook on navigating regulations in Southeast Asia and other emerging markets so that regulations become a runway rather than a roadblock.
A sneak peek into the background profile of our portfolio companies’ founders.
Naga Tan is the Co-Founder of Dana Cita | Bukas.ph, a FinTech startup backed by Y Combinator and Monk's Hill Ventures on a mission to make education affordable in Southeast Asia.
VIETNAM—Vietnam’s thriving startup ecosystem is expected to reach $33 billion by 2025. But so far, the top tech companies have mostly cloned successful companies elsewhere rather than brewing something specific to Vietnamese culture and society. Tiki is Vietnam’s Amazon, Foody is its Meituan, and VNG is its Tencent.
I’m not saying there’s anything wrong with clones. In fact, they’ve brought a lot to Vietnamese society. Today people have more choices: they can conveniently book plane tickets and hotel rooms, order clothes and other goods, and hail rides on their phones (amongst a host of other services).
These tech companies are making Vietnam more productive, more accessible, and more open.
I’ve been lucky enough to be part of this incredible ride and I’ve loved every minute of it. But they’re just the beginning.
Thanks to them, we’re poised for the next wave, when entrepreneurs steeped in local culture begin brewing startups that specifically address Vietnamese issues and problems.
Roving between the company’s three offices in the U.S., Europe and Asia, ELSA CEO and co-founder Vu Van has few moments to spare. But if you do reach her for a conversation over the phone or Facetime, you may have a hard time placing her accent. Vu now lives in the San Francisco Bay Area, but when she first moved from Vietnam to earn a masters in education and business from Stanford University, she struggled to be understood.
All of today’s most successful tech companies share one trait: they create value from bits much more so than from atoms.
Let me explain. Atoms are the physical assets of a business, such as inventory, property/infrastructure, and people. Bits are digital or otherwise intangible assets, including software and intellectual property. Bits can be more disruptive because they are more scalable, easier and faster to distribute, and cheaper than atoms (per unit revenues), and thus focusing in them to create value generates a much higher return on invested capital (ROIC). But profitability is just a benevolent side effect of the real rationale for bit-driven strategy: building innovative and efficient products that improve experiences and increase savings.
Fundraising is not supposed to be inhibitive, by preparing and strategizing your pitch you can save up a lot of valuable time - time that you can spend building your startup. The reality is that VCs are constantly looking for great startups to invest. This piece is meant to be a guideline to help you strategize your next pitch and is based on my personal observations and experience.
A pitch to a VC can be broken down to 3 stages: before the pitch, during the pitch, and after the pitch.
This article was first published on InformationWeek.
Empathy makes someone a better employee, and we also need to build empathy into our artificial intelligence applications.
Traditionally undervalued in the tech industry, empathy — which is the ability to read and respond to another person’s feelings, thoughts and experiences — is a trait hiring managers and C-level executives can no longer ignore. After all, in a world where artificial intelligence will take up to 5 million jobs away from humans by 2020, the McKinsey Global Institute predicts that up to 14% of human workers will need to adapt to new occupations to secure our future in the workforce. In other words, as we start sharing the workforce with more machines, human soft skills such as empathy will be at a premium.
By crafting itself as the fintech startup for emerging economies, C88 is striving to break down financial inequality.
Building a credit score system and establishing peer-to-bank communication that accommodates the unbanked and a growing middle class would be a bold move for any Southeast Asian business, let alone a five-year-old startup. But C88’s leadership team was fully aware of these challenges, and their clear-minded approach recently carried them through a bountiful series C fundraising round and into a dominant position in their markets.
C88 currently operates platforms and marketplaces in two Southeast Asian countries— www.CekAja.com is the largest financial platform in Indonesia, and www.eCompareMo.com holds the same distinction in the Philippines. Each site provides innovative services for local users, including comparison shopping for insurance, loans and credit cards. For banks and lenders, C88’s platforms offer crucial customer data and credit scores for millions of consumers. This data allows institutions to price services at fair and competitive rates for low- and middle-income users, while simultaneously educating users—particularly the unbanked—on available services and providers.
Being a mentor is challenging. No question about it. It requires time, energy, and dedication. Not everybody is cut out for the gig. But here’s what no one tells you (or at least no one told me): being a mentee is also challenging.
Not everyone’s cut out for the role either.
Being a good mentee requires you to listen, watch, and learn—without always knowing why. That’s where patience and trust come in, attributes that don’t always come easily to young, ambitious people—the kind that experienced professionals are likely to take under their wings.
Let me give you an example.
A sneak peek into the background profile of our portfolio companies’ founders.
Dorothea Koh is the CEO and Founder of Bot MD, a smartphone AI assistant for doctors. She has a passion for healthcare and emerging markets and her personal mission in life is to impact 100 million patients by the age of 40.
This article was first published on The Next Web.
With a rising middle class and a booming tech startup scene, Southeast Asia (SEA) sits where China did 10 years ago—on the cusp of a major economic boom fueled by the tech industry. The only questions over the last few years have been: When will the tipping point be reached, and when will SEA mature from a promising regional market into the next big world economy? I’ve seen promising signs that in 2019, our region may finally reach that tipping point.
The 10 nations in SEA (Singapore, Indonesia, Malaysia, Cambodia, Vietnam, Thailand, Brunei, Laos, Myanmar and the Philippines) are projected to become the fifth largest economy in the world by 2020. More importantly, though, local companies are driving much of the growth. SEA is now home to eight unicorns—tech startups valued at US$1 billion or more—including Grab, the ride-hailing company that beat out Uber for regional dominance in early 2018.
For these burgeoning tech giants, expanding outside of SEA is an obvious next step. Tech startups will also continue to take the lead in bolstering the regional economy. Here are three of my predictions for where SEA startups will go in 2019.
Today not all celebrities are made at the box office or in a recording studio. Though a hit movie or single can help, many launch their careers or find new, devoted fans on platforms like YouTube, Instagram, and Twitter. They’ve become influencers, and their social media presence brings them closer to their fans than ever before.
Even as celebrities have become increasingly reliant on social media, however, many have become frustrated with its limitations. Popular platforms nurture creators but too often deny them control over what they create—and how it is monetized. That’s where influencer platform escapex comes in. Founded four years ago, the Singapore-based startup aims to create a new social currency that will improve the experience for influencers, brands and followers alike.
What’s the secret to fintech’s appeal? It’s not just the vast numbers of unbanked people in the world, who represent a ready-made user base for innovative financial products. Nor is it only the vulnerability of the business models of existing payments networks like Visa and Mastercard, whose cumbersome transaction fees increase prices and, possibly, slow down innovation.
The main appeal of fintech is the opportunity to collect and analyze customer data.
Indonesia’s startups are gaining serious traction from international investors, positioning the country’s ecosystem to lift off as a dominant destination in Southeast Asia. But that success is not guaranteed. Indonesia’s government, investors and founders have to make strategic moves in order to bring the country to the level of Singapore or Silicon Valley.
The capital funneling into Indonesian startups is unprecedented. The country pulled in more than $3 billion of venture capital in the first half of last year, netting about 20 percent of all VC funding in Southeast Asia, according to a survey by Google and consultancy A.T. Kearney. Even more impressive than the weight of money flowing into startups is the growth in investments; as recently as 2012, Indonesia garnered just $44 million in capital. Indonesian unicorns also stand out amid the region’s giants, with Tokopedia, Go-Jek and Traveloka cinching three spots among the top 5 most funded startups in Southeast Asia, according to Tech in Asia.
The original motivation behind social media platforms was to address a basic human need: we’re social creatures and we long for connection, community, belonging. Social media’s simple goal was to create a new way for people to communicate, share, and form relationships. That simplicity faded as the world’s populations joined those networks, with all their complicated nuances and differences in tow.
For all the development and progress achieved by Facebook, the social media platform is now contending with major negative repercussions around the world. As social networks like Facebook and Instagram plowed new paths for networking and connecting, they simultaneously – likely unwittingly – seeded new ways to amplify disinformation, hatred, and exclusion on their applications.
Headlines today focus on the negative, but overall, social applications have delivered incredible benefits to users, opening up a whole world of communication we never dreamed possible. Society is now developing a better understanding of how our social media accounts impact our lives in the physical world, and startups have a new chance to disrupt the market and move beyond some of the mistakes that major social media platforms are dealing with today.
A sneak peek into the background profile of our portfolio companies’ founders.
Paul Hadjy is the CEO and Co-founder of Horangi, a full-stack cybersecurity platform. Paul manages the efforts behind creating cutting edge, cyber security solutions while ensuring that users in the C-suite down to technical operators are all armed with the right, actionable data to make critical cyber decisions.
Horangi CEO and co-founder Paul Hadjy is always connected. Whether sitting in a meeting or returning the emails that crop up overnight, the 33-year-old entrepreneur aims to keep his two-year-old cyber security company focused on clients. And as such, he finds himself forging new relationships and sustaining established ones with his team, client entrepreneurs and investors.
Ninja Van was born from co-founder and CEO Lai Chang Wen’s frustration: he couldn’t find a bespoke but affordable shirt, so he created automated custom retail brand Marcella. Later when he couldn’t guarantee timely, seamless delivery for his products, he began to explore last-mile logistics. After Lai resigned from a derivatives trader post at Barclays to pursue his new project, his friends Shaun Chong and Boxian Tan joined as co-founders. Tan doesn’t believe founding a startup with friends is usually a smart strategy, but the close core team yielded extraordinary results for Ninja Van.