Populous and expansive, Southeast Asia is a region of diversity despite it sometimes being spoken about as a monolithic market. That’s not to say businesses won’t find similarities when crossing from Thailand to Cambodia, or from Vietnam to Laos. We at KrASIA endeavor to provide the context in every country that falls under our coverage. For this week’s entry of “Venture Voices,” our writers spoke with investors in Singapore, Vietnam, and Indonesia to get their take on how tech startup founders in these countries each have their own edge.
In Singapore, Bernard Shum of IncuVest Asia broke down what he saw as the archetypes of entrepreneurs in the city-state:
Founders here fall under four main categories: scientists who were encouraged to spin off companies from research institutes, individuals who joined and met potential co-founders at accelerator programs, NUS/NTU alumni who worked at startups abroad and returned to start their own companies, and persons who either had corporate experience or have started multiple companies.
Despite these varied backgrounds, Shum posits that there’s one thing that is common in the roots of startups in Singapore:
These founders share the commonality that despite coming from different starting points, they all benefited from some sort of structured programs here prior to starting their own company. Take for instance the former scientists. Strong governmental funding programs for research and development allowed these scientists to create technology with strong IP that can be commercialized. At some point, these scientists, armed with their knowledge and funding from private capital firms, would move on to start their own high tech companies, using Singapore as a test bed.
Over in Indonesia—the region’s largest and most populous country—Melina Subastian, vice president of investment at Alpha JWC Ventures, pointed out that businesses in her country typically set out to relieve existing pains:
I would say startup founders in Indonesia mostly have a “painkiller” instead of “vitamin” product mindset. To give context, “painkiller” here means a product that is necessary and solves unmet customer needs; Go-Jek and Tokopedia are examples of this. “Vitamin” refers to a product that is nice to have and improves existing solutions, like Spotify and Netflix. To me, this shows that Indonesian founders have a problem-solving mindset, which could be drawn from the economic conditions, infrastructure gaps, and other realities that exist in the community. Also, seeing the rise of “problem-solving” unicorns eventually encourages entrepreneurs to create more solutions.
She sees two characteristics in the startups of Indonesia:
Most companies develop their business model first, then the tech follows. They also aim to tap the untapped, like trying to serve the unbanked population, second-tier areas, and under-served segments. They see that the big potential lies in these markets, which are a big portion of the nation’s demography pyramid. This underlies the rise of ride-hailing platforms, various fintech lenders, offline-to-online (O2O) channels, and much more.
Success has a slightly different recipe in Vietnam, where Eddie Thai of 500 Startups Vietnam recognized how the country’s founders need to be particularly inventive to make it:
Compared with startup ecosystems in Singapore and Indonesia, Vietnam’s ecosystem is still a few years behind. This has required Vietnamese founders to learn how to be resourceful and agile. With all else equal, I think this makes them more competitive in the long run than their counterparts in more cash-rich ecosystems.
Additionally, Vietnam has founders with a combination of intimate familiarity with emerging market challenges and strong technical capability. (Vietnam is arguably the leading center of low-cost, high-tech talent in Southeast Asia now). I think Vietnamese teams are well-suited to build technology products and services that can scale across emerging markets.
Drilling deeper, Thai acknowledges the downsides too:
A key weakness of many Vietnamese startups is that they do not have complete teams. Given the difficulty of building a successful startup, we think having two or three founders increases a startup’s chance of success. Yet many Vietnamese startups have solo founders, and many others have multiple founders but without diverse abilities or experience (for example two technical founders and no business founder). We think this is an unnecessary “handicap” to place on a team.
Despite that, we have found world-class teams here in Vietnam—founders who deeply understand a problem and are relentless in solving it, who iterate quickly and thoughtfully, and who are capable of scaling globally.
Bernard Shum is a startup investor at IncuVest Asia, an early-stage (seed to Series A) tech investment platform. IncuVest invests in startups in verticals such as e-commerce, IoT, data analytics, and artificial intelligence. Shum is the head of investment and operations at IncuVest and reports directly to the managing partner and venture partners. He leads a team of investment analysts covering Southeast Asia, China, Korea, and India startup investment opportunities. Shum currently monitors a portfolio of over 20 companies that includes Chope, Cinarra, LingoKids, and Cloudaron.
Melina Subastian is the vice president of investment at Alpha JWC Ventures in Jakarta. Prior to joining Alpha JWC, Subastian worked in McKinsey & Company’s Jakarta office. She spent around three years there, handling digital-related projects, including digital banking development, e-commerce platform development for modern retailers, and the creation of a “digital village” to empower offline-to-online tech transformation in Indonesia’s rural areas.
Eddi Thai is a general partner at 500 Startups Vietnam, which has a USD 14 million fund for investments in promising startups with connections to Vietnam. The firm also offers mentorship and connections to global and regional startups. Its portfolio covers verticals like e-commerce, logistics, edtech, adtech, fintech, and many others.
This article is part of “Venture Voices”, a series where the writers of KrASIA speak with venture capitalists based in Southeast Asia to get their takes on topics of interest.
