Patrick Grove’s ‘beautiful thing’ fires up MDEC’s GAIN
By Karamjit Singh January 14, 2018
- Invites founders to join his mission to build global companies from Malaysia
- MDEC hopes to see up to US$100mil investment into Malaysian-based startups in 2018
JUDGING by the participation and noise volume during networking, players from the tech ecosystem have returned after the year end break charged and driven to make 2018 a memorable one for themselves and by extension, Malaysia’s Digital Economy. And so it was that a full house of founders and senior executives attended Wednesday’s networking+dinner event by Malaysian Digital Economy Corporation for its GAIN (Global Acceleration and Innovation Network) companies.
Prior to the dinner and networking, an engaging panel session on the topic of “Grow Fast, Go Global” was held where Catch Group founder and CEO, Patrick Grove shared that his key mission in 2018 is to prove that great global companies can be built from Malaysia, using Malaysian talent “where people from all over the world can come together here and build something really great.”
“I think that would be a beautiful thing,” he says urging all the entrepreneurs in attendance to join him. “This is not just us. I would love for a lot of the people in this room to be part of that mission.”
Joining Grove on the panel were CC Puan, founder, Green Packet Bhd; Andrew Tiang, cofounder and MD of N2N Bhd, Joel Neoh, cofounder and CEO, Fave Sdn Bhd, Vishen Lakhiani, founder and CEO of MindValley Sdn Bhd and Yasmin Mahmood, CEO, MDEC. Freda Liu, a radio producer and host was the moderator.
The panelists agreed that M&A was an important strategy to accelerate growth, though N2N’s Tiang cautioned that digesting the companies was the key to ensuring a successful acquisition. Tiang himself pulled the trigger last year on a US$31 million (RM123 million) acquisition of a Hong Kong based company that gave him access to over 50 brokerage customers and about 1,000 high net worth individuals across Hong Kong and China.
Tiang’s next target is to be the first to create a pan-Asia trading hub. While it is already up and running, he estimates it will take 3 years to complete.
Having grown iProperty from zero to US$30.2 million (RM120 million) revenue in seven years, principally with the help of 10 acquisitions made in the region, Grove too is a big believer in M&A playing a key strategy for “anyone aiming to build a great and sustainable company”.
Meanwhile Fave enjoyed a 300% growth in its business in 2017, powered by its acquisition of Groupon’s businesses in Malaysia, Indonesia and Singapore, says Neoh, who completed a full circle by acquiring the assets of Groupon that he helped grow back when he was heading Groupon’s operations in the region.
“It’s very hard to run a small consumer app in SEA as it will get drowned in the noise. But it is a powerful combination if you have both organic and inorganic growth,” says Neoh who shares that Fave has seen accelerated growth since the acquisitions. And while he predicts further consolidation through M&A in the consumer eCommerce space in SEA, he also sees “huge opportunity to grow organically”.
Indonesia will be a key driver of this growth with Neoh spending a lot of time there. “I am finding that there are many lessons learnt in Indonesia that are relevant in the region as well.”
No doubt Neoh will be hoping these lessons will help Fave achieve his target of becoming the top mobile commerce player in SEA.
The Malaysian advantage – local talent, global talent
Malaysia’s attractiveness as a base to build top notch tech based companies was also highlighted by the panel. This has long been touted by Grove who has listed five internet companies over the past 11 years, all regional plays based out of Malaysia. That track record leads Grove to declare that Malaysian tech talent works as hard and is as smart as any in the world and with strong government support to boot.
He now aims to take this further with his mission to build a global company through his video on demand startup iflix that is now in 25 countries and ended 2017 with 10 billion minutes streamed across its platform. [Corrected: An earlier version stated iflix was in 22 countries.]
Another motivator for Grove is to turn the sceptics into believers. To the point that it got annoying, Grove was repeatedly asked in the early days of iflix about when he was going to sell it to a US content company.
The almost ingrained belief that SEA startups were inevitable acquisition target for US companies galled him. “I want to prove to everyone in Malaysia and SEA that great companies can be built from here and we don’t need to sell and maybe one day we will even buy them! That’s part of the vision,” he shared to which Yasmin declared, “that is music to my ears.”
And while the MDEC chief expresses the hope that entrepreneurs will build their companies from Malaysia, creating exciting jobs for Malaysians and registering intellectual property here, the government is aware that global companies need global talent and has policy that welcomes them with Malaysia Tech Entrepreneur Programme being the latest.
The support is appreciated by entrepreneurs such as Vishen whose 2018 goal of becoming a household brand in the US market will be powered by the potent talent mix he has assembled from 36 nations.
“The government’s openness to global talent is a big advantage Malaysia has, especially at a time like this when countries like the US are closing their doors,” he says.
The China opportunity
Interestingly, in the discussion about Malaysia’s strengths as a regional base for tech companies and startups, CC, who has a strong Chinese network through his non tech business dealings, spoke about the unique position Malaysia was in viz a viz China’s increasing interest in SEA.
“I have been telling my team for the past few years that Chinese tech companies will have more impact in this part of the world and will want to tap the multiracial strength, know how and market access of Malaysian companies as their base.”
And indeed, that interest has spiked since China’s Belt and Road initiative and Jack Ma and Alibaba’s involvement in Malaysia’s Digital Free Trade Zone. Puan is seeing the result of this heightened interest in SEA with a stream of Chinese tech companies visiting Green Packet proposing joint ventures.
Yasmin attests this strong interest to the Chinese government throwing its support behind stronger trade ties between the two nations. Aiming to build on this momentum MDEC’s “top priority” according to her, is to bring in Chinese venture funds and to place some MDEC staff in China. “This is too big an opportunity for us not to focus on.”
Meanwhile Puan notes that while the focus tends to be on the large tech companies, there are so many second tier Chinese companies with multibillion revenues. And they all share the same characteristic – they have quality products but lack the culture, language and international knowhow to access the market here. “We should leverage on our advantage and create partnerships with them,” says Puan who is aiming for RM700 million revenue in 2018 for Green Packet and “hopefully RM1 billion by 2020”.
A familiar Asian weakness
The discussion on marketing saw a familiar weakness crop up with Malaysian entrepreneurs seen as ill equipped culturally in mastering the art of the “humble brag” as Yasmin put it. Not to be confused with digital marketing, this marketing cum branding role is the founder’s responsibility to define and grow into with Vishen, not surprisingly, articulating it best.
Besides running a company that he hopes will make a dent in the universe, Vishen is also an author whose 2016 book, The Code of the Extraordinary Mind was a New York Times and USA Today Bestseller and with a 2017 made documentary (not released on TV yet), that received an Emmy nomination.
Being in the education industry, specifically personal development, Vishen has a strong grasp of the art of the story as evidenced by his mission of wanting to make a dent in the universe by changing education for 1 billion people.
He points to Elon Musk as someone who knows how to tell a great story. With SpaceX being a vertical trucking company that supplies the space station, and with over 10 other similar companies, what Musk did was to proclaim that he wanted to make man an interplanetary species rather than focus on the immediate boring role it was playing.
“So, you’ve got to learn to tell that good story,” he says acknowledging that it’s something Malaysians don’t pay enough attention to, pinning the reason on the fact that storytelling is not part of the Malaysia education system.
But it is not just about telling that good story he cautions. Building a great product, especially in the digital world where, over the past decade, word of mouth and recommendations now carry immense weight and are even more important than any marketing activity. Which is why, over the past few years he has been hiring more artists, designers, film makers than marketing people.
“I realise you have got to build the best darn product in the world and define best by what’s happening in the US. Our education app has to be better than anything by American companies,” he says. Entrepreneurs who don’t benchmark such risk being discarded as a small regional play or worse, he warns.
The product takes on a higher degree of importance because one’s story is built around their product and this is something that people don’t get he says.
As compelling as Vishen’s point about telling the story was, a founder who has raised millions for his startup notes that there is no one size fit all solution when it comes to marketing. Indeed, Neoh shared that he has a different perspective as they compete fiercely with local eCommerce companies and where Fave’s main focus is on “competing fiercely to build a better customer experience” which is the differentiator as they act as an enabler for SMEs to sell their products.
With its emphasis on the startup ecosystem, Yasmin expressed the hope of seeing a US$50 million to US$100 million VC funding injection this year into one or more Malaysian based startups. “Even a startup being acquired will inspire,” she says as MDEC seeks more stories that will help inspire entrepreneurs and fuel the ecosystem.