- Strategy is to position Malaysia as gateway to Southeast Asia for Silicon Valley
- Immersion, connection, accelerated excellence approach for MDEC GAIN companies
IT has been three years since the Malaysian Digital Economy Corporation (MDEC) set up its beachhead in the Silicon Valley with its MDEC Americas office, in Sept 2015, with its senior vice president, Dan Khoo (pic, below) relocated there.
DNA caught up with Khoo recently who was in Kuala Lumpur to attend the inaugural TechMatch ASEAN at Sunway Innovation Labs (iLabs) that saw 20 Silicon Valley and Europe based VC’s and corporate ventures in attendance, with most of them on their first visit to Malaysia, especially the corporate investors from Airbus, Orange and PayPal.
Jointly organised by MDEC, Sunway iLabs, and the Silicon Valley-based US Market Access Center Inc (USMAC), TechMatch ASEAN 2017 saw 40 high-potential, Southeast Asian (SEA)-based startups vie for funding from the visiting investors. ASEAN (Association of Southeast Asian Nations) is the political grouping of the 10 countries in SEA.
TechMatch ASEAN 2017 was a direct result of efforts MDEC’s Americas office has been seeding over the past three years. The use of ASEAN and not Malaysia is a deliberate branding effort as Khoo explains that to the ecosystem in the Silicon Valley, Malaysia was too small a market, at 32 million, to register on their radar. “Hence, we are positioning Malaysia as the gateway to region with a combined GDP of US$3.2 trillion, a young population within a 620 million strong market with average 5.1% GDP growth in 2017.”
These data points set the stage for MDEC to position Malaysia as the gateway for not just the Silicon Valley, but the world, to look at the startup opportunities in SEA’s ecosystem. Nine of the 20 investors who attended TechMatch were from Europe with the rest from the Silicon Valley.
It is this interest in the region that saw the investors attend the inaugural TechMatch ASEAN which is designed to showcase the promising startup ecosystem of the region.
The regional mix of the 40 startups that made their pitch is important for MDEC to prove that it and Malaysia can be the gateway into the region. At the same time, it also helps MDEC position Malaysia as the gateway to Silicon Valley investors and the US market. That’s the long term plan.
The immediate strategy is to expose and connect scaleup companies within MDEC’s Global Acceleration and Innovation Network (GAIN) programme to potential Silicon Valley investors, partners and the wider US market.
This is achieved through a week long carefully curated immersion programme designed to benefit the GAIN companies and the people they will meet in the Silicon Valley.
The immersion programme though forms the first part of a three prong plan that MDEC dubs ICE or Immersion, Connection and a hybrid of Excellence with speed that Khoo describes as “accelerated excellence”.
One of the companies to benefit has been Forest Interactive, whose CEO, Johary Mustapha tells DNA that he was connected to US telco, Sprint, and was able to sign a contract with them to carry some of his products, three months after his exposure to the market there through the first immersion programme in 2015.
Next step, targeting the 80% in Malaysia’s transition to a digital economy
Khoo, a former tech journalist turn entrepreneur who once ran a promising software startup during the dot com boom of 1999-2002, has been busy immersing himself in the Silicon Valley ecosystem over the past three years and is a mentor for Google’s Launch Pad.
It was through this association that MDEC was able to organize a week long Fintech programme with Google that saw six GAIN companies spend a week in New York to help them launch products via a design sprint method Google’s Launch Pad promotes.
“This programme is an example of the connection and acceleration we are trying to spark as we know the immersion programme is not enough,” says Khoo.
Three cohorts of GAIN companies have been to the Silicon Valley over the past three years, 21 companies in the inaugural cohort in 2015, 24 in 2016 and 21 this year which included some corporates that form the demand side.
With Malaysia’s digital economy already contributing 18.2% to overall GDP, Khoo says that the 20% target by 2020 will surely be achieved. “But what’s the next step here?” he poses?
That would be to target the 80% of the economy that is not part of the digital economy but is transitioning through various digital transformation initiatives.
MDEC sees that helping this 80%, especially the corporates, in their transformation could likely lead to them becoming early adopters of the innovation coming from the supply side represented by its GAIN companies. “This then becomes a crucial part of the ecosystem,” says Khoo.
A strong digital economy in Malaysia with a thriving startup ecosystem also creates a self reinforcing loop with each feeding off the other and giving a boost to MDEC is its efforts to position the country in the Silicon Valley and the rest of the world, as the gateway to SEA and its 620 million strong startup ecosystem and emerging digital economy.
And expect TechMatch ASEAN to become a regular event that helps the process of discovery for Silicon Valley investors to get Malaysia into their radar. Maybe then, we won’t hear of VCs saying they knew very little of what’s happening in the startup ecosystem of the region as one VC professed at TechMatch ASEAN.
“Many of those VCs have expressed their pleasant surprise on discovering the depth of our ecosystem here,” notes Khoo, whose mission is to ensure that the ecosystem in Malaysia becomes less and less of a surprise in the future.
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