It’s all in the spirit

Two lead­ing voices of­fer Na­ressa Khan valu­able in­sight into the growth of the Asean startup ecosys­tem

New Straits Times - - Bots -

THE startup ecosys­tem in the Asean re­gion is boom­ing, no doubt in re­sponse to the rapid ex­pan­sion of tech­nol­ogy. Tech-driven busi­ness sec­tors such as clean tech, ed­u­ca­tional tech and fintech are be­com­ing in­creas­ingly dis­rup­tive, and ev­i­dently nec­es­sary.

Much of the de­vel­op­ment in the Asean startup ecosys­tem can be cred­ited to the brav­ery of Asian en­trepreneurs to­day. Largely made up of the young, this group is chal­leng­ing the land­scape to adapt to emerg­ing global trends.

One needs only look at the WIEF Idealab, an an­nual con­fer­ence for en­trepreneurs and busi­ness lead­ers par­ented by World Is­lamic Eco­nomic Fo­rum Foun­da­tion and WIEF Young Lead­ers Net­work to get a glimpse of what’s go­ing on in the re­gion.

WYN chair­man Ebrahim Pa­tel says: “It is an ex­cit­ing ecosys­tem here, largely be­cause of its ro­bust­ness and the huge tal­ent pool that ex­ists within the Asean re­gion.”

The an­nual con­fer­ence fore­tells col­lab­o­ra­tions be­tween young en­trepreneurs from across the con­ti­nent who, in Pa­tel’s own words, “share ideas to un­der­stand en­trepreneur­ship, and get back to the com­mu­nity with a bet­ter sense of lead­er­ship”.

While Sil­i­con Val­ley may be the poster ref­er­ence for in­spi­ra­tion, it is not the same pair of shoes in which the startup ecosys­tem here should walk to flour­ish.

For one, the Asian so­cio eco­nomic land­scape is much dif­fer­ent than that of the West, and comes with its own unique set of chal­lenges call­ing for a unified sal­va­tion.

REDEFIN­ING IN­TENTS

Ac­cord­ing to Pa­tel, Asian en­trepreneurs to­day are well aware of the re­gion’s strengths and weak­nesses, and are set to ad­dress it with their busi­ness causes.

Tech­nol­ogy is ev­i­dently rewrit­ing the present op­er­at­ing sys­tems in all ar­eas of the world, so the in­tro­spec­tion is timely.

“The main think­ing in the Asean re­gion is: how do we come up with so­lu­tions to as­sist with spe­cific chal­lenges spe­cific in par­tic­u­lar ar­eas? This ques­tion alone brings about mul­ti­ple con­cepts, ideas and trend lines over­all, and ne­ces­si­tates cross­bor­der col­lab­o­ra­tions,” added Pa­tel.

In­no­va­tions such as blockchain, ar­ti­fi­cial in­tel­li­gence and In­ter­net of Things tech­nolo­gies, for ex­am­ple, are re­cal­i­brat­ing the way peo­ple do things ev­ery­day, so it makes sense for busi­nesses to re­view and re­wire how they run and man­age man­power.

This re­al­i­sa­tion is not exclusive to lead­ers of the ecosys­tem.

The third edi­tion of Idealab, held ear­lier this month in Kuala Lumpur, had proved the emer­gence of break­through ideas from new play­ers, in an at­tempt to democra­tise ac­cess to evo­lu­tion.

From the birth of sen­sory as­sess­ment

The key lies in the ed­u­ca­tion of star­tups wherein they sit, says Digby

tools for per­sonal and pro­fes­sional uses, to the var­i­ous fun­nellings of cloud tech­nol­ogy man­age­ment, star­tups across the Asean ge­og­ra­phy are ac­cu­mu­lat­ing a wealth of in­no­va­tive ideas, all geared for a bet­ter to­mor­row.

“These star­tups are driven by change. Many are either ex­pand­ing ex­ist­ing tech­nolo­gies, or cre­at­ing new ones to melt ideas for great pur­poses.

“There’s also this de­cen­tral­i­sa­tion that has taken place, mov­ing growth ar­eas back into the ru­ral economies, and thus, mak­ing a pos­i­tive change in the global econ­omy. That is by far the dis­rup­tion that has taken place in and by the ecosys­tem,” he added.

It also helps that youth is a fac­tor for ex­pe­di­tion, the in­gre­di­ent nec­es­sary for in­no­va­tion. A flat man­age­ment is much more preva­lent in com­pa­nies to­day than the tra­di­tional top-down hi­er­ar­chy.

“And so, you see more star­tups and more in­no­va­tions and de­gree of in­de­pen­dent think­ing. They are tremen­dously driven, so it is up to them to chan­nel that en­ergy ac­cord­ingly.”

RIS­ING TO THE CHAL­LENGE

An­other no­table dis­rup­tion is the trans­par­ent com­mu­ni­ca­tion be­tween all ecosys­tem mem­bers, no doubt in­spired by the cross­bor­der col­lab­o­ra­tions nec­es­sary to power on in­no­va­tive ef­forts.

As much as all the good is be­ing shared, so too is the bad.

As Pa­tel ex­plained, the most no­to­ri­ous chal­lenge openly ex­pe­ri­enced by star­tups in the re­gion is get­ting funded ac­cord­ingly and ap­pro­pri­ately.

“It all re­ally re­lies on the reg­u­la­tory en­vi­ron­ment we are presently in. Be­cause the Asean re­gion is of a di­verse na­ture, you have lev­els of reg­u­la­tion which are im­pact­ing on cur­rent ef­forts of col­lab­o­ra­tion. If we could move them into a unified par­a­digm in gen­eral, we’d make it a lot eas­ier for most, if not all, com­pa­nies,” he said.

Clearly, in­vestors also play a great role in shap­ing the Asean startup land­scape.

Copen­hagen-based ven­ture cap­i­tal­ist and key Idealab vis­i­tor James Digby, for one, be­lieves that the dif­fi­culty lies with the tim­ing and the stages by which in­vest­ment money is aimed for.

Digby said: “While many ideas posed by the young and driven to­day are re­ally great, some are re­ally just not prof­itable at the mo­ment. As in­vestors, we al­ways have to find the bal­ance be­tween what is the next best thing, and us mak­ing money and re­turns.

“There is just not enough be­ing done to get good busi­ness into the core of star­tups to­day. The key lies in the ed­u­ca­tion of star­tups wherein they sit.”

A good way for young en­trepreneurs to nail it in the bud is to cou­ple their eye and in­tu­ition for in­no­va­tion with a sharp­ened in­sight into vi­able busi­ness trends (code for in­vestor’s per­spec­tive).

Ac­cord­ing to Digby, it is also worth the while for star­tups to take note of the ef­fect that tech­nol­ogy im­parts on the process and stages of ven­ture cap­i­tal­i­sa­tion.

“There was no such thing as seeds 10 years ago. So this move­ment and the emer­gence of lean star­tups which have great ideas also led to things like con­vert­ible notes to do, rather than ex­pen­sive raises that are in­sti­tu­tional,” he said.

Se­ries A fund­ing now raises an av­er­age of US$5 mil­lion (RM21.5 mil­lion) early on, in­stead of the typ­i­cal US$1 mil­lion, as per back in the day. In a nut­shell: it’s a lot of money to in­vest.

“Tech­nol­ogy can also be hin­der­ing when not chan­nelled prop­erly. We can do so many things, so quickly, that busi­ness fun­da­men­tals can be missed. And that’s where many star­tups can strug­gle with get­ting the funds they need,” added Digby.

Those well-versed and amped with busi­ness knowl­edge from the very be­gin­ning — cue a quick glance at Grab­car, which had just closed US$2 bil­lion worth of funds from Didi Chux­ing and Softbank — are the ones right­fully fu­elled.

Dig­by­said, “With the right fo­cus and spirit which many star­tups in the Asean ecosys­tem clearly have, any­thing is pos­si­ble.”

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