4 tips on business-building from top SE Asia-based Founders and CEOs
Founders from Luxola, Wego, Tokopedia, and Facebook’s Managing Director of Southeast Asia discuss best strategies for penetrating into Asia
Asia is a densely populated region made up of disparate cultures and economies. For entrepreneurs, the success of their business often depends on how well they can localise and tweak their products to each market.
At the Kauffman Fellows Southeast Asia Venture Capital Summit last week, four Southeast Asia-based Founders and CEOs sat down in a panel moderated by Akshay Garg, Founder of Singapore-based fintech startup FinAccel, to shoot the breeze about their experiences navigating in the region’s waters and the best strategies to adopt.
They are:
1. Ross Veitch, Founder, Wego
2. William Tanuwijaya, Founder, Tokopedia
3. Ken Bishop, Managing Director of Southeast Asia, Facebook
4. Alexis Horowitz-Burdick, Founder, Luxola
Here are four key takeaways from the discussion:
1. Imperative to optimise your product for the mobile platform
Asia has an increasingly high mobile penetration. Currently there are over a billion smartphone users in the region, with no sign of levelling off anytime soon. It is important for entrepreneurs here to make their products mobile-friendly.
Tanuwijaya saw the proliferation of cheap smartphones as a major driving force behind smartphone adoption. In the past, most of Indonesia-based e-commerce platform Tokopedia’s transactions were carried out on desktops. Now, Tanuwijaya claimed that at least 75 percent of its transactions came from smartphones.
Ross added to that point and said smartphones with larger screens as well as faster networks were key drivers behind the conversions from desktop to mobile. Companies need to be spending more money on mobile app in-store campaigns and push notifications as opposed to paid searches, he said.
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He said his team at Singapore-based travel startup Wego foresaw this trend coming six years ago. Still, they faced difficulties adapting to this new model.
“It hit us harder than we expected, as a company, we have tried going with outsourcing our development or going hybrid [mix of outsourcing and in-house development] and what worked best was building a full in-house native client app development team,” said Russ.
The tactics for marketing and acquiring users also required a different approach, he added.
For consumer facing industries, the mobile experience is important, said Horowitz-Burdick, whose Singapore-based cosmetics e-tailer Luxola was acquired by luxury brand LVMH’s cosmetics subsidiary Sephora mid last year. She cautioned, however, against putting all your eggs into one basket, and stressed the importance of optimising both the mobile and desktop experiences.
Bishop observed many Facebook users discovering new products on mobile, before proceeding to purchase it on the desktop. Facebook helps companies understand the path users take to make an online transaction.
2. Understand the complexities of each market
Beyond adapting the product to fit users’ behaviour, there are also other factors to consider.
For Horowitz-Burdick, she did not face any difficulties launching Luxola in Malaysia because English is widely used over there. In Thailand and Indonesia, however, it was a different story. Because of the complex regulatory and distribution models, her team had to learn to adapt to those frameworks quickly. She also established teams there to localise the content.
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Another problem she pointed out was while in Singapore and Malaysia, language barrier was not an issue, the user behaviour model didn’t translate well to Australia because the continent has different seasons and trends.
Among all the countries in Southeast Asia, Singapore was the easiest place to start a company, she said. Big companies such as Spotify and Facebook have built regional teams there.
Ross echoed that point, he said most Southeast Asian-companies preferred to run regional bases from Singapore. Building a business in Japan and South Korea may require a different approach as they are radically different from the rest of Asia, he added.
3. Funding and exit trends in Southeast Asia
A steady flow of capital and acquisitions or IPOs are signs of a growing and healthy tech ecosystem.
Also Read: Pivot your marketing instead of your product
According to Horowitz-Burdick, Southeast Asia’s ecosystem is still somewhat nascent. She said Singapore’s tech scene does not look like Silicon Valley; expectations of investors need to be focussed on the maturity of the ecosystem instead.
“More than just exits, We need to focus on how an ecosystem gets built, we need people to invest back into ecosystem. I don’t think there is a secret recipe to it.”
Ross had a different observation. He said the investment scene in Singapore has changed radically. It used to be difficult to get VC funding, now more of them are receptive. The government is also playing a pivotal role in growing startups.
While “valuations are coming off the boil a little bit”, Singapore is still a good place for investments, he said. And there is more local capital flowing into local startups than ever before.
4. Building a talent pool
How strong and fast your startup grows is dependent on the quality of the talent you bring on. You need a team who can innovate to build a long-lasting product [or iterate when things go south].
Tanuwijaya said in the beginning, it was difficult to find talent in Indonesia. You had to patiently nurture people, build up the culture and build up their trust to prepare them to be the next generation of tech leaders. Besides growing local talent, it is also important to extend an invitation to global talent, he said.
Also Read: 5 reasons why VCs and startups need to put India under the spotlight
Finding the right employees wasn’t really a problem for Horowitz-Burdick, although, she faced difficulties hiring local qualified CFOs and managers in countries such as Singapore, Indonesia and Thailand, and had to resort to expats.
The issue, she said, was not because there was a lack, but rather, the turnover rate for top management professionals was low.
“Hire passionate people that will stay. Offshore some positions and find out the core strengths of each region,” she added.
Ross agreed with her and said:
“If employees don’t see the value and long term vision, you can filter them out.”
Image Credit: Shutterstock
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