“The Perilous World of Southeast Asian Startups”
Running small, medium or even family owned businesses in South East Asia (excluding Singapore), a region that generally lacks well functioning government, economy, infrastructure, access to finance, SMB incubator platforms, customer protection, transparency and good governance is often an underestimated task. The differing trade policies too can be daunting for any startup with cross border agenda.
“SMEs count for 96% of all enterprises and 62% of the labor force in the region, but only contributes to less than half of GDP”
According to statistics published by world-bank, SMEs count for 96% of all enterprises and 62% of the labor force in the region, but only contributes to less than half of GDP and perhaps much less than 30% of total exports of the region. The low output here, does point to overall efficiency issues within SMEs, most probably due to lack of automation and digitalisation of key processes; undifferentiated offerings; limited reach to markets; long ROI time and low returns for investments; insufficient training and development of personnel with the changing needs; and the fact that most entrepreneurs get sucked into the daily grind of meeting customer or project deliverables, leaving little resources behind for forward looking or other high impact business initiatives.
In short, the very nimbleness of startups that we cherish as a ground for new breakthroughs and discoveries, can lead in the wrong direction if impact of business activities are not assessed and realigned regularly according to business goals. Failing to measure outcomes can tie up valuable resources in current events and derail startups from identifying new opportunities; areas of improvements to increase productivity, profitability and revenue growth.
Nevertheless, The lacklustre performance of the domestic entrepreneurial scene has very little to do with larger, well backed competition, accessing the domestic market, talent pool or material resources. Surely legacies of Jimmy Choo, Air Asia,Grab, Samsung, Hyundai, Honda,Toyota, Alibaba and other Asian businesses which made it to the global glory are proof against the perception that we lack skill or talent. The real stickler of the startup take off here is failure to deliver promise to customers, largely due inferior execution of their business plans and cognitive bias on their own capabilities.
What’s surprising though is that our startups usually have a good start, some were even able to secure good funding (through entrepreneurs grants) but later run into difficulties or a form of stagnancy. There are many reasons for this, but the five points discussed here can redirect local startups.
“Envisioning A Global Business – Think Global, Act Locally”
Not imaging a business at a global level kills most startup dreams as we get gulped by globalisation. Just take Airbnb and Uber as an example to reflect on how domestic transportation and hospitality industries are now being challenged to compete with new service providers. One thing is for sure - consumers are now with choices that will work for them. If local taxis are not going to play by the rules and continue to cheat customers, customers can choose to abandon them and hop onto Uber or Grab.
Similarly, very few entrepreneurs know where they will take their business after the initial success. As a result they pour resources in the wrong areas and get lost in their journey working opportunistically instead of following their original strategies. For example, a company building an application fuelled by user generated content will probably have to scale its availability to a larger geographical area after successful pilot to improve daily and monthly active user rates, which is critical in considering the value of the project as oppose to building a second application for the same region where they had success for the first app. This act streamlines resources into one focused area which improves branding, allows the product to mature, meet development ROI and accelerates growth.
“BELIEVE in what you do – Take a leap of faith”
Starbuck, Apple, Alibaba, Dell, Microsoft and Facebook are some examples of businesses that started next to nothing. These businesses had humble beginnings with their founders operating initially from their garage, college domes or homes. Some even decided to leave college and focus solely on their business ideas. In fact, for many of these entrepreneurs, venturing into uncharted territories to build solutions that truly delivered values and improvement to people, environment and their own businesses was a life purpose to be fulfilled. These founders were driven; meticulous; bold; demonstrated high energy; learned continuously; and took risks when stormy weather set in.
Take the self driving or autonomous cars for an example. The first version of such vehicle called, 'BRAiVE’ appeared in July 2013, on a mixed traffic road open to public traffic. What started as a research project in universities in America and Germany with commercial sponsors such as Mercedes Benz in the 1980s, is now a critical R&D area in almost all major automotive giants including Mercedes Benz, General Motors, Toyota, Volvo, Audi and even Google(Waymo). Since the pilot in 2013, countries are now progressing to pass legislations to allow pilots and operation of autonomous vehicles on their roads. Commuters too are getting comfortable with the idea and are expecting more driverless vehicles to emerge on public roads. This technology would have never hit the roads if it’s not for the relentless efforts of young entrepreneurs who took a leap of faith in what they were doing. They believed that by simply keeping their eyes on their objectives a path to success will open up eventually.
“NURTURE A Driven Team in Meeting Milestones”
Realising an entrepreneurial dream requires one to remove immediate barriers, create inroads and ensure that the entire team stays in the game, throughout the process. Waking up every morning excited to get one step closer is key, as small wins eventually mounts to an utopia. Failure is part and parcel of any startup or business for that matter, but is no reason for taking lack lustre attitude to future development. Each dip is an opportunity to improve engagement internal and external while learning to redirect resources to higher impact business areas.
Lead your team by example and treat them as your closest partners to energise visions, strategies and quest for success. Implement together an appropriate mechanism to forecast revenue and product releases; track and report performance of key indicators and initiatives; build distribution channels; conduct weekly team roundups and share/ enforce together good practices where everyone has a critical role to play. This cycle of planning, attaining and reassessing performance, current issues and key business initiative can intensify focus while revealing which of the company’s strategies are really working and where resources should be conserved.
“INNOVATE Solutions to Problems”
If there is one question that every entrepreneur should ask when they plan and execute a business is that - what problem their business is addressing for their target customers. For instance, businesses like godaddy, Alibaba and shopify enabled thousands of moms and pops entrepreneurs to access a larger market overnight through their e-commerce platform at price point never before. Solutions that promotes a lower carbon footprint, better life quality, eradicates poverty, equal distribution of resources, improved literacy, improved transparency or even world peace are some of the areas, businesses can contribute to it’s domestic and global communities. Pick a problem that you are passionate about and solve it in ways possible. The journey itself will lead you to people, ideas and resources needed to make your venture a success or at the least a great unforgettable adventure.
“DELIVER Promise to Customers - Your Product and Services Must Work”
I recently came across a fast growing food delivery startup which spent half a million dollars on advertising to register new customers, only to realise four or five weeks later that the registration feature in the application was faulty and the mobile app was far from friendly to redirects customers to the support link. As a result, they lost many opportunities to their rival who had a much simpler app but worked flawlessly despite a rather limited menu list.Nothing is worst than going to the market with a faulty product. For example a slowly loading web store, mobile app download failure, unfriendly interface, critical feature failure e.g payment, new registration or SMS verification can deter customers from coming back to the site. This may also impact the brand to be unreliable and might incur higher advertising and new customer acquisition investment in order to get the traffic back to the business.
As such plan your product or service releases in manageable phases, matching your delivery capabilities. It’s better to do a few things really well rather than having a million non functioning features which frustrates users.
"Conclusion – Envision-Believe-Nurture-Innovate-Deliver”
Nelson Mandela fought an anti-apartheid revolution from within his prison walls for 27 years prior to his release in 1990 and his appointment as the first black head of state for South Africa in an ever first democratic election in South Africa in 1994. Abolishing apartheid became his life purpose and lack of material resources did not stop him from pursuing his ideals together with his many supporters whom revered him for his strength, energy and unfettered dedication to social causes. Mandela’s success is a great example of how one’s, ‘state of mind’ can result in revolutionary outcomes despite poor conditions.
South East Asia is a vibrant region, a melting pot of culture, art and people of all kinds. Embrace this diversity and celebrate it’s intricacies when running your business instead of blaming it for complexities. There is no shortage for ideas and intellect here. Build teams and your support structures by sharing your visions to solve social, environmental or even economic problems that is near and dear to your heart. Lead and create opportunities in your market while staying true to your promises to your key stakeholders especially customers, employees, partners and suppliers.
Stop feeling inferior to other global players and pointing the finger elsewhere for failures. Focus on your market, services and the economic needs of the business eco system you are in. Generate and protect Intellectual properties that can help to differentiate and expand the business. Start admitting that we are behind because we think so and that we need to change our thinking to be successful. That alone is the beginning of a brand new start with roaring energy.
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