Reflections

Hi I’ve taken a long break from blogging -? too long - but I’m eager to get back into it. Starting today I’ll share a few reflections on the start-up ecosystem in Southeast Asia. I moved to Singapore 13 years ago, just around the time the first start-ups emerged - I’m thinking of companies like #PropertyGuru , #TradeGecko , #MoneySmart , #Carousell , #Traveloka , #Trax and #Ninjavan - all of whom I’ve had the pleasure of working with over the years. It’s certainly impressive that 5 of these 7 companies are now unicorns!

But of course there are many other companies that have come to define the ecosystem since then, notably unicorns like #Grab , #GoTo , #SeaGroup , #PatSnap , and more recently founded companies such as #Carro and #Carsome .?

In 2013 I wrote down my hopes and fears for the emerging ecosystem. Here are my observations based on how those hopes and fears turned out.?

Let’s start with four things that turned out better than expected:

Scale.?

I massively underestimated how big the tech start-up sector could become in SEA!? In terms of revenues, capital raised, valuations, employment, and impact on ho wwe live, it’s pretty remarkable. Compared to 2013 it’s unrecognizable, and I never would have guessed it could grow so quickly.

Careers and Talent.

In the early days the start-ups only had enough money to hire folks straight out of university or with a couple of years of experience.? But the truth was that no one with a ‘solid’ corporate or banking type job over the age of? 30 would even consider shifting to a start-up. Most professionals were extremely risk averse, leading them to stay in organizations that were often bureaucratic, slow-moving and limited their growth potential. Clearly that has changed: start-ups are now regularly hiring some of the best mid-career talent, and for individuals with energy and talent the career options are far broader than they were 10 years ago.?

Capital.

ASEAN start-ups raised $21 billion in private capital in 2021 alone! I don’t have good data on the total of the past ten years but I would estimate that it’s between $75 and 100 billion. Any way you cut it, that’s a lot of capital. Who knew that was coming our way?? (I’m sure some folks did.? I just wasn’t smart enough to see it.)

Internationalisation.

It was clear from the start that most ASEAN markets weren’t big enough to sustain a really large business apart from Indonesia. Since much of the early entrepreneurial activity was in Singapore and Hong Kong, they faced the challenge of internationalizing their businesses much earlier than they would have if they had started in China, the UK or the US. This added a huge amount of complexity to their operations long before they had stabilized their business models and processes - making effective execution about ten times harder.??

And yet here we are today with many proof points that it can be done: Grab, ShopBack, NinjaVan, Klook, LalaMove, Traveloka, Trax, and many others.??

Tomorrow I’ll share some thoughts on things that IMHO didn’t turn out so well.? Highlights:

• Creating shareholder value for investors
• Building truly innovative companies as opposed to copy-cat models
• Thinking beyond their next round and the excessive valuations that their VCs preached and supported
• Building cost-effective organizations
• Building great cultures and great places to work

What do you think? And what will the next generation of entrepreneurs bring?