In­ter­est in tech startups rises, but chal­lenges re­main in 4IR

The Myanmar Times - - Business | Local - HTET SHINE htet­shine@mm­

MYAN­MAR will in­vest in de­vel­op­ing its hu­man cap­i­tal to keep up in the Fourth In­dus­trial Rev­o­lu­tion (4IR), State Coun­sel­lor Daw Aung San Suu Kyi said at the World Eco­nomic Fo­rum for Asean in Hanoi last week. But while sup­port for up­com­ing en­trepreneurs and start-ups in Myan­mar is ris­ing, there are still ma­jor hur­dles block­ing the sec­tor from achiev­ing its po­ten­tial.

In her speech, Daw Aung San Suu Kyi stressed that Myan­mar can no longer af­ford to rely on cheap labour and low value-add skills in the 4IR. To stay rel­e­vant in the cur­rent age of tech­no­log­i­cal dis­rup­tion, Myan­mar must nur­ture cre­ativ­ity amongst its youth and lever­age on the tal­ent and po­ten­tial of its peo­ple.

She added that in­vest­ments must be chan­neled to­wards im­prov­ing the ed­u­ca­tion sys­tem and build­ing up prac­ti­cal skills. “In­dus­tries do not cre­ate them­selves. There are teams in­volved in cre­at­ing ideas and engi­neers in­volved in con­vert­ing those ideas into a work­ing sys­tem. Un­less we de­velop the prac­ti­cal skills to make our cre­ative ideas mar­ketable, we will not face the chal­lenges of the new era,” she said. Sup­port, tim­ing For now, the sit­u­a­tion is such that many startups and en­trepreneurs rely on seed or­gan­i­sa­tions like Rock­start and Phan­dee­yar for funds, train­ing and workspace to take their ideas for­ward. Phan­dee­yar also holds yearly com­pe­ti­tions for tech startups, the win­ners of which re­ceive prize money to fur­ther their progress.

While sup­port is para­mount for startups to get off the ground, the key to suc­cess for many is get­ting the tim­ing right. Take BroCode, one of the 3 win­ners of Phan­dee­yar’s Startup Chal­lenge 2018, for ex­am­ple. BroCode is de­vel­op­ing a mo­bile pay­ment so­lu­tions ap­pli­ca­tion for res­tau­rants.

The way founder Ko Zay Ye Htut tells it, “build­ing a mo­bile app is eas­ier to­day be­cause most peo­ple now use mo­bile phones and wifi. SIM cards are eas­ily avail­able and it’s com­mon for some mo­bile phone users to have more than one SIM,” he told The Myan­mar Times.

He added that the mo­bile com­mu­ni­ca­tions net­work is also much wider now and more are aware of the ben­e­fits of cash­less pay­ment so­lu­tions, mak­ing it eas­ier for peo­ple to com­pre­hend and ac­cept the con­cept of dig­i­tal pay­ments.

At the World Eco­nomic Fo­rum last week, Daw Aung San Suu Kyi also in­vited in­vestors to ac­tively in­vest in the coun­try’s en­trepreneurs.

In re­cent years, ven­ture cap­i­tal in­ter­est in tech-re­lated startups has in­deed soared. Just this month, for ex­am­ple, Sin­ga­pore-based Seed Myan­mar Ven­tures, an early-stage tech­nol­ogy in­vest­ment ve­hi­cle with a fo­cus on Myan­mar,took a stake worth six dig­its in Marathon Myan­mar Com­pany Lim­ited, an e-com­merce de­liv­ery ser­vice plat­form.

In Au­gust, Seed Myan­mar Ven­tures also in­vested US$100,000 in Flex­i­ble Pass, a year-old mo­bile app startup in Yan­gon. The app al­lows sub­scribers to pur­chase dis­counted day passes to more than 80 fit­ness cen­ters across the city.

Other tech startups, such as con­tent provider Ba­gan In­ter­na­tional Tech­nol­ogy and ed­u­ca­tion tech­nol­ogy startup eS­chool have also suc­ceeded in rais­ing funds from pri­vate in­vestors. Start up dif­fi­cul­ties Still, unique chal­lenges re­main that in­hibit progress for Myan­mar’s startups in the 4IR. Chief among th­ese is the lack of in­tel­lec­tual prop­erty (IP) rights. Although the au­thor­i­ties have said a draft leg­is­la­tion is in the works for more than a year now, an of­fi­cially en­acted IP law to pro­tect startups against theft of ideas or piracy re­mains ab­sent. “We need leg­is­la­tion such as a copy­right law to help us sur­vive,” said Ko Zay Ye Htut.

Many startups find the lack of af­ford­able workspace as well as ma­te­ri­als a big is­sue. Take Hy­droPlant, an­other Startup Chal­lenge 2018 win­ner. Hy­droPlant is de­vel­op­ing a ground­less agri­cul­tural method to grow crops which can be used both in­doors and out­doors. If suc­cess­ful, the method will re­duce costs for farm­ers while in­creas­ing crop yields at the same time.

“Most of the ma­te­ri­als used in our prod­uct are made over­seas as it is hard for us to source them here in Myan­mar,” said founder Ma Phyu Pwint San. That’s a prob­lem, es­pe­cially with im­ports be­com­ing dearer due to the ris­ing dol­lar ex­change rate.

For Ko Kyaw Zin Htet, founder of Lan Ky­one, the third Startup Chal­lenge 2018 win­ner, ed­u­ca­tion is one of the big­gest bar­ri­ers. “As we are start­ing from scratch, peo­ple don’t know what we do and so cre­at­ing aware­ness and ed­u­cat­ing them about our ser­vice is a big chal­lenge,” he said.

Lan Ky­one is a ride-shar­ing app un­der which driv­ers com­mut­ing to and from Yan­gon Tech­nol­ogy Univer­sity can of­fer those trav­el­ing by bus or other means lifts in their cars for a fee. “Driv­ers can post the time and route they will be us­ing on our plat­form and those with sim­i­lar sched­ules can hitch a ride with them,” said Ko Kyaw Zin Htet.

Although sup­port ex­ists, ac­cess to cap­i­tal re­mains one of the largest bar­ri­ers for most startups and en­trepreneurs. “Be­cause loans are not avail­able to early-stage startups, we all have to in­vest our own money to get started. When more is needed to scale up the busi­ness, we still have to seek in­vestors and this is still hard for us,” said Ko Zay Ye Htut of BroCode.

Daw Aung San Suu Kyi’s gov­ern­ment should con­sider the cur­rent startup en­vi­ron­ment as it de­vices new mea­sures to un­leash the in­no­va­tive po­ten­tial of the Myan­mar peo­ple and make sure the coun­try re­mains rel­e­vant in the 4IR.

Photo: Thiri Lu

A cus­tomer makes en­quiries at a Sam­sung dis­trib­u­tor in Yan­gon.

Photo: Thiri Lu

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