WHAT HAS BEEN HAPPENING?
The Bangkok startup scene has gone through an explosive change in the last five years, culminating in the ‘ Startup Thailand 2016’ event earlier this year with over 30,000 Thai, regional and international visitors. Industry heavyweights from all over the world came to Bangkok to speak about that unique combination of innovation and entrepreneurship that makes a startup. ‘ Startup Thailand’ was one of the biggest, if not the biggest, Asian startup events to date, which hints at the potential for Bangkok as an exciting focal point for startups in the region.
Thousands of people, from students to senior citizens, spent the weekend trying to understand the startup phenomenon: What’s the difference between a startup and an SME? How can I tell if my business idea is any good? Where do I even start? It was inspiring to see the curiosity and creativity bubbling up at the dozens of talks, workshops and demonstrations that made up the event. One of the most encouraging aspects was the realization that there are a large number of people with business dreams who are ready to do something about it.
‘ Startup Thailand’ is one of several new initiatives supported by the Thai Government, in addition to a USD 570 million startup fund created to stimulate the economy and make sure the country stays abreast of the global race for innovation that continues to gain momentum.
Over the years there has been a dramatic change in the types of people that come to these events. No longer are they the early adopters or the techobsessed – startups have turned mainstream and people of all backgrounds are embracing the dynamic processes that Silicon Valley has made a key part of doing business today.
This new breed of business owner is eager to take part in the startup revolution, and if other hubs of innovation are any indication, they could very well have an enormous impact on the future Thai economy as well as help shape the direction of the country and region itself. Silicon Valley is the capital of innovation, continuously rolling out thousands of businesses that are actively looking for problems to solve, and in some cases they are profoundly changing our expectations and our lives. We do transportation differently today than just a couple of years ago. We order food differently, we travel differently, and soon we’ll use banking and a myriad of other common services very, very differently.
Startups are experts at disrupting traditional industries; with the right minds, funding, ecosystem, and frameworks, startups in Thailand could just as easily change the lives of people of San Francisco as Uber, Airbnb and Agoda have changed the lives of people in Bangkok and in hundreds of other cities around the world. To make this happen, however, we need to expand our collective mindset on what we are able to do, and more importantly, how we do it, refining these frameworks and adjusting them to fit the culture and markets we operate in.
WHAT EXACTLY IS A STARTUP?
The biggest difference between a startup and a traditional SME is its rate of growth. A traditional company is usually not able to expand with the same speed as a startup, often due to limits in scalability – sometimes spending decades growing into a global market – whereas we’ve seen startups achieving global domination in a matter of months. That is because traditional business not only lack the venture capital used to fuel such rapid growth, but the innovation culture and ecosystem necessary to sustain it.
The concept of the startup is perhaps a bigger innovation than the technology which enables it.
As important as infrastructure and logistics is mindset – a startup moves fast: it is constantly being reshaped and refined, sometimes on a daily basis. Startups often need to execute very quickly to even survive, with short runways and a competitive and constantly changing market. Moving at this speed, a startup can get market validation and new skill learning on top of a potential hyper market share growth. This requires an outlook that is not only open to ambiguity and change, but actively embraces it. Working like a startup means being open to different opinions and ideas, and being ready to act on them.
As important as infrastructure and logistics is mindset – a startup moves fast: it is constantly being reshaped and refined, sometimes on a daily basis [...] This requires an outlook that is not only open to ambiguity and change, but actively embraces it.
NOW AND NEXT
In addition to a home- grown desire to build business at the speed of startups, international investors are also showing interest and venturing more frequently into Southeast Asia, firmly establishing themselves through investments and re- investments in the startup community and related ventures. We are not waiting for the change to happen anymore – it is already here – and innovation is at its core.
Three or four years ago it would have been impossible to buy a new TV, sneakers or shop for groceries on your mobile while stuck in Bangkok traffic or while riding the BTS – the sort of things that have been accessible in the West for more than a decade.
Payment systems and logistic companies are currently trying to solve some of Thailand’s biggest issues when it comes to enabling this kind of innovation by making distribution and cash flow a seamless part of the customer experience. Soon you’ll be able to say a few words to your phone and within the hour someone will be standing outside your door with the products you ordered.
Startups are constantly solving these types of problems, and Bangkok and Thailand have more than a few to solve. Will Grab or Uber actually end up fixing our traffic jams? Can your neighborhood mom & pop shop start taking orders on Line? Who will be Thailand’s Jack Ma or Elon Musk?
One thing we are working on at our own local startups is how to make it possible for someone without resources or the network to solve problems, innovate and grow their business without taking on too much risk. Only by embracing failure and building an ecosystem that gives risk takers another chance will Thailand be able to follow the global trend.
HOW TO START THINKING LIKE A STARTUP
You may be asking yourself how this relates to your current business. One sim- ple way to look at this is to ask yourself if you want your company to be a Kodak or an Uber. Kodak, once a rock- solid global brand, failed to follow the digital economy, and eventually lost its way completely by focusing too much on quarterly reports rather than recognizing the speed of the new competition and adopting it. Uber, Facebook, YouTube and a host of other well- known global success stories have managed to change global transportation, social interactions and media consumption in a heartbeat.
While innovation lies at the heart of startups, it is not exclusive to them, and there are more and more stories of traditional companies incorporating innovation into their strategic plans.
One way to describe innovation is “an organization’s process for introducing new ideas, workflows, methodologies, services or products.” Innovation also doesn’t necessarily mean technology, but it does mean connecting meaningfully to the customer experience in order to optimize and improve existing products and services in a very focused way. Innovation is as much about attitude as it is about process, and requires an openness that can sometimes be challenging, but which has the potential to reap real rewards.
One of the keys to truly embracing innovation and possibly one of the most difficult to adopt in the Asian context is embracing failure. Obviously, businesses need to succeed in the long run, but in the context of startups, failure is an opportunity to learn, adapt and iterate in a very short period of time, quickly incorporating lessons into a more refined product that has been validated by real users.
The “failure” of a prototype product or service that has been developed over the course of a week or two can yield tremendous insights and result in a meaningfully tested experience with good prospects.
This type of rapid prototyping is so successful that more and more companies are adopting what is commonly known as a ‘ design sprint’ as part of their strategic planning. Many of the tools and methodologies used in this process come from a range of disciplines, such as Human Computer Interaction, User Experience Design, Human Centered Design, or Design Thinking. What they all have in common is a focus on real people – your users. Your design sprint will ideally include a few of these as part of the process, because it is easy to forget that not everyone thinks the same way we do. Having a firsthand experience of how your customers engage with your product or service is invaluable and can often provide a wealth of information and insight.
The key to running a design sprint is making it focused and fast – a sprint can run for just one week. That may not seem like a lot of time, but with the right people in the room – your users, key decision makers and subject matter experts – it is more than enough time to bring innovation to your business and understand that “failure,” if managed in a structured way, is worth embracing.
Just a few years ago it would have been impossible to build a business with millions of users within a few months on a Search Engine Marketing budget. It would have been impossible to do what Tesla did as well, selling 400,000 cars before even launching its very first model. Never have innovation and businesses changed faster. And never will it ever be this slow. In roughly 10 years, 40% of the Fortune 500 companies will be gone, unless they change their ways of execution and research and development. It is no longer a question of whether you need to change or not. It’s innovate or die.
For Thailand to truly innovate on a global level, we need to incorporate the structures, strategies and methodologies of startups, and embrace the idea of failure as a recipe for success rather than disaster. You just need to fail fast enough.
Geir Windsvoll is Co- founder & Managing Partner at Santora Nakama Startup Studio & Gordon Candelin is Founder & Experience Director at The Strategic Design Lab. They can be contacted at geir@ santoranakama. com and gordon@ thesdl. com.