So a group of us were lucky enough to be part of MaGIC’s e@Stanford program, which is a program that brings young Malaysian startups to Sillicon Valley, we had the opportunity to network with other startups there, and also attended a course at Stanford University that’s tailor-made for entrepreneurs.
During this trip, many of us learned how amazing it was to be building a startup in the Valley. And it didn’t take long for us to start noticing how different it was for us in Malaysia. I even heard comments being whispered such as “It’s a much bigger market here” and “It’s so easy to grow in a homogeneous market, SEA is so fragmented, it’s difficult for us Malaysians”.
And just to make me feel worse, when I met the founder of a startup that had similarities to Wobb.my, I was incredibly surprised when he told me he managed to raise almost $2 million USD for his seed round, gradually and at different stages, of course, but this was before he had a clear strategy how he would charge. Me? No one was interested to give me a single cent in those early days.
So, do startups in Silicon Valley really have such a huge advantage over us? Or does the phrase “the grass is always greener on the other side” apply here?
Well, the answer is yes, yes and yes, they do have those advantages. However, there’s a big “BUT” here. Because what people choose not to see are the advantages I believe we have here in Malaysia. And we need to know this so that we can capitalise on it while it’s still there. Here are some of my own thoughts as to what these advantages are.
1) Yes it’s so difficult to grow in ASEAN. Almost every country speaks a different language, has a different culture, and certainly different regulations. It’s simply not the same as growing a business across America. But that’s also the reason why it’s difficult for an American or European business to penetrate into our market. Without local knowledge, and someone on the ground who can understand and maneuver around these cultural differences, it’s simply too difficult for them.
And that’s why it is so easy for an ASEAN business to defend it’s position here, especially if the business resides in the physical world, and not the virtual world. Because if you can’t figure it out, they probably won’t. Had it been easy, these American businesses would long have been all over ASEAN, and this opportunity wouldn’t be here for you. Which leads me to our second advantage.
2) There are still so many opportunities and gaps in the market here. While the guys in the Valley have better access to funding and support, it’s also incredibly saturated there. I could easily walk into a group of startup founders and find that half of them are working on ideas that have never been tried before in Asia. Because it’s so competitive, entrepreneurs have no choice but to keep pushing boundaries, and try new ideas, which is much higher risk than starting something that’s proven to work before.
In Asia, many of these ideas have never even been attempted. I’m not suggesting you should just follow what’s been done before, but you have access to actual lessons learnt from other startups which will give you an edge when you start your business.
3) Sure, investors in the Valley are more willing to invest in ideas that may not be financially sound yet. But it’s very easy to forget one of the sole purposes of running a business, which is to make money! Most investors in Asia want to know what are their returns before investing in your startup, and therefore this notion that you can keep getting funded until you figure out the best way to monetise, just doesn’t work in Asia, and that may be a good thing.
Entrepreneurs who build businesses with the hopes of getting acquired run a huge risk of not focusing on a solid long term strategy, and if you don’t get acquired, you’re probably left with a business that cannot sustain itself over time.