Bad apples in the startup ecosystem

  • There are bad apples in every ecosystem dragging people down
  • The real question is whether founders can rise above it all to take it to next level

Bad apples in the startup ecosystemI HAVE been hearing quite a bit over the last few weeks how the startup community in Malaysia is just not up to par.
From complaints about entrepreneurs being overly secretive and unwilling to share insights, to the dominance of the 'give me' mentality. Frankly, the picture being painted is not pretty at all.
“Rotten apples in the community pull other startups back. There is no support system, everybody wants help but nobody contributes,” said an obviously frustrated startup personality who only wished to be known as Bob.
“Even when we put events together, at a financial loss, to help people and try and bolster the ecosystem spirit, those with petty attitudes still complain about the most trivial things like the fees they need to pay,” he added.
Granted, I have met a few of these bad apples — those who are out to get as much from the landscape without a care for anyone else.
Sure, you could argue that the years of easy funding from Government sources cultivated the lingering and still prevalent breed of 'grantprenuers' who want to secure funding before even bothering to move forward with their ideas.
“Everyone expects a handout! We have even been asked why we don’t seek government funding for the events we organise,” Bob said.
With that kind of information about the scene, you would be forgiven for thinking that without the luxury of these government handouts, very few local startups would exist.
After all, angel investing for seed-stage startups is essentially about using your own money or hitting mum or dad up for RM50,000, but that’s not the first thought on the minds of many of our budding entrepreneurs.
Of course, there is some vast generalising here, as the bad actions of a few appear to be drowning out the good work of others.
At the same events where I meet these entitled bad apples, I have also met genuinely passionate individuals who prefer to make their mark through private sector support or the market itself.
In another conversation with a slightly less frustrated startup veteran (let’s call him Charlie) about the local ecosystem, I got a sigh, a shrug and the following remark, “Well, there’s nothing to share!”
Bad apples in the startup ecosystemIn his view, there have not been enough successful local exits in the last three years to enable those with the relevant experience to guide and mentor the next wave of startups, let alone enough expertise in areas such as growth hacking or dealing with a user base of 100 million.

“There are only a handful with the kind of experience relevant to startups and the guys who are willing to mentor and share insights are still busy running their own companies,” Charlie added, pointing to Ganesh Kumar Bangah (pic) of MOL Global and Mark Chang of JobStreet.
Charlie also pointed to Tan Swee Yeong, an entrepreneur who has been an angel investor since 2010 after exiting successfully from his startup, UnrealMind Interactive Bhd, which provides mobile content.
He called Tan the most prolific angel investor in the country at the moment, having invested in about six startups to date, including Milk A Deal, Nexx Studio and Ocision.
“He’s the Ron Conway of Malaysia,” quipped Charlie, referring to the American angel investor often described as one of the 'super angels,' who was an early stage investor in Google, Ask Jeeves and PayPal.
The bulk of gatherings and events in the space are organised by those who have a passion to help build the community, but are not successful entrepreneurs themselves.
“With not that many skilled entrepreneurs to share with the community, you get conversations mostly centred on the basics such as finding the right co-founders or user acquisition,” he added.
Charlie also pointed to the larger picture of doing business in Malaysia, where it has long been acknowledged that the path to success usually comes via the public sector.
“Our role models are all wrong. Our top 10 richest people in the country all have links to government projects or entities. Extremely few have built up a massive consumer-facing business from scratch,” he added.
In order for the ecosystem to mature, all involved must also learn to respect the sanctity of ideas and proposals of others.
“Too often, I see proposals being co-opted by others who proceed to make a fortune without any regard for the original thinkers. With that still being an issue, it is no wonder there is such a high level of distrust in the market,” another friend, Dan, added.
But for all the griping about bad apples and inadequate expertise, Dan also provided another perspective to the issue.
He recalled that at a recent dinner, he posed the following question, “Which is the second best startup ecosystem in the world, after Silicon Valley?”
It turns out that even at a table filled with international experts and startup veterans, no one could come up with a definitive answer.
“They were all genuinely stumped,” Dan reported.
According to him, part of the reason why it is so difficult to answer the question is because while Silicon Valley is considered the benchmark, it is, in reality, almost a “freak of nature."
A set of unique factors and developments that, through sheer luck and will, coagulated into a hub, which attracted money and entrepreneurs.
“Everyone is trying to copy the success of the Valley but that is like wanting to be a squash player and comparing yourself to Nicol David. You will always feel like you are inadequate and that is not constructive,” Dan noted.
He proposed that to truly get a better sense of where Malaysia sits in the spectrum of ecosystems, a new set of benchmarks was needed which more accurately measured an ecosystem without modelling it on Silicon Valley.
“We are obviously not there yet but you may find that we are not all the bad. In fact, six out of the eight largest Internet companies in South-East Asia are Malaysian,” he said.
So is there a message to today’s column?
Well, try not to be a selfish jerk and when you do make it big, and consider giving back to your fellow entrepreneurs. It’s not always about money; sometimes some insight from one who has been down the same road really makes all the difference.

This column originally appeared in the Metro Biz section of The Star and is reprinted here with its kind permission.

Previous Instalments:

Rise of the clones
Funding for all

The right frame of mind

Advice from the shadows

Learn from a great imposter

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