- Will more startups look at the same acquisition model to plug their gap?
- Will US, Europe engineering startups look to move engineers to SEA?
ENGINEERING talent catches my attention this week and mainly because of an article and a conversation I had.
The article was Masyitha Baziad’s piece on Indonesia’s online beauty community platform Female Daily Network (FDN), and I was struck by the following quote from its dynamic CEO, Hanifa Ambadar.
“We have grown so much over the past few years with very minimal technology deployed and just a tiny tech team. It has helped us reach where we are now, but in order to scale the business, we need good technology and a dedicated tech team.”
It’s not unusual that she felt they had reached a level of growth where she didn’t feel safe outsourcing their engineering needs as that meant sharing strategic and tactical information to outsiders.
So, Hanifa goes out and does something I have not seen happen yet in the startup space – she acquires a software team. In her case, as her focus is on reaching her community via mobile, she acquires a Silicon Valley based mobile development company J-Technologies (J-Tech) that has its own interesting story.
Last year, its CEO, Han Kao, moved the in-house development team moved to Indonesia to reduce costs while keeping his user interface and experience (UI/UX) design team in the US.
I rarely hear of founders talk about how their technology and tech team will determine the company’s future, so this was refreshing. At the same time, you can bet that with Hanifa having only raised US$1 million (RM4.11 million) in 2014, her acquisition offer to Han involved giving him equity in FDN.
The question now is, will this open up the eyes of engineering startups in the Silicon Valley and even Europe to contemplate a similar move and open up similar possibilities for them? I am sure their engineers will be happy to encourage the founders of such a move – especially if the base will be in Bali!
Startups in the ecosystem are familiar with the services of AgilityIO but the company founded by Chok Leang Ooi and three others focuses on helping startups at the ideation and early stage with their engineering needs. It is not geared to be supporting them into their scale up stage.
Meanwhile the conversation I referred to earlier was with a Silicon Valley based engineer who has just returned to Malaysia. As he is contemplating his next career move, he shared that his conversations with ecosystem players has immediately flagged to him the lack of quality software engineers and as a result the difficulty startups have in scaling their engineering capabilities, which is not just about adding more bodies but in having engineers with leadership experience.
“Even the more established and well-funded startups are grappling with this challenge,” he observes.
And startups don’t need to reach the funding and growth levels of a Grab before they experience these problems as well. Of course Grab’s challenge in finding a leader for its engineering team have been well followed as well.
Bottom line, the engineering gap is the startup ecosystem is not new and won’t be going away anytime soon. But has Hanifa shown a quick way to solve it? And what will the returning Silicon Valley engineer do? Join an established startup to solve their problems or attempt to solve the wider ecosystem problem?
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