- Better policies for startup growth and more corporate involvement
- There is a need for stronger founder mentality among local startups
WITH the Malaysian startup ecosystem said to be lacking some key elements, especially founder to founder connections, Inbaraj Suppiah’s inaugural Cyberjaya Startup Summit 2018 (CSS) held on May 12 & May 13, was timely indeed. Inbaraj, who is also founder of Pixaworks Creative, explains that he carefully selected the theme for the event to reflect entrepreneurial responsibility and contributing to Malaysia’s growth in the long term. “It’s about creating and disrupting industries to rebuild our economy and create jobs. Business should not just be about making quick money,” he shares.
In the opening speech of the conference, the CEO of Malaysian Global Innovation and Creativity (MaGIC), Ashran Ghazi echoed these sentiments and commended Inbaraj for choosing the theme. Being a believer of the United Nations (UN) Sustainable Development Goals, Ashran tells startups to look at and tackle problems from the UN perspective. “To grow on a global scale, UN’s sustainable goals are as global and large scale a problem as you can think of.”
In the spirit of the “Sustainable Entrepreneurship” theme at CSS 2018, a panel session on The Future of the Malaysian Startup Ecosystem was held to provide some insight into where the startup landscape is heading. The session which was moderated by Digital News Asia founder, Karamjit Singh, consisted of some panellists who are among the ecosystem’s movers and shakers. They are founder of WTF Accelerator and crowd platform, PitchIn, Sam Shafie, founder of 1337 Ventures, Bikesh Lakhmichand, venture partner at TinkBig Ventures, Andrew Tan, and the president of the Global Entrepreneurship Movement (GEM), Dhakshinamoorthy Balakrishnan (Dash).
With the future of startups as the overarching agenda, the speakers talked about government policy and corporate interest in the ecosystem and also touched on points about founder mentality and raising funds.
As the cofounder of pitchIN, one of the six equity crowdfunding (ECF) platforms licensed by Securities Commission, Shafie is looking forward to improved policies and a more open market to allow better startup growth. He also pointed to the timing of things with the force behind the creation of Cyberjaya back in the seat
“Tun Mahathir Mohamad, who started the Multimedia Super Corridor (MSC), is our prime minister again and the infrastructure is all in place. So, it will be exciting to see what’s next,” Shafie says. The MSC is a special economic zone established in Cyberjaya with 10 Bill of Guarantees to attract global high tech businesses into Cyberjaya while encouraging local entrepreneurs to chase their tech dreams as well.
Meanwhile Bikesh pointed out that the local startup scene is at a convergence point experiencing a shift towards more involvement from corporates. The corporate sector’s persistant focus of the startup community points towards a healthy and beneficial symbiosis, he surmises.
Bikesh says startups fail mainly because they cannot get customers while corporates struggle because they lack new products. “A lot of corporates reach out to us because they don’t have the right team to build the solution to address their pain points. So they look for startups that can do it and offer money and access to customers in return.”
In order for startup founders to work hand-in-hand with corporates, their products or business ideas need to attain validation through the large ecosystem players such as accelerators and investors.
Founder mentality and validation
Andrew Tan, a serial entrepreneur with the distinction of being the first CEO to list on Malaysia’s MESDAQ Securities exchange in 2002 and having listed a company in Singapore as well, warns that entrepreneurship is no easy feat. “Entrepreneurship is about opening up your life to unlimited possibility. Yet, those who venture in may find that their competitors are more talented and work three times harder than them.”
In terms of funding, Andrew says “The worrisome thing is founders often congratulate each other not on the success of their business but solely because they managed to raise some funding.” Yet, raising money just means that the entrepreneur has to run hard to meet the new revenue targets. He explains that there any many business ideas out there but it all boils down to execution in the end.
As a venture capitalist, Andrew is a big proponent of startups having cold, hard data to back up their business model. He gives founders something to think about, “Think about your market penetration angle and unfair advantage. What makes you the right person to execute this idea? Are you able to offer a more convenient solution that’s more cost-efficient?”
In general, Bikesh acknowledges that the Malaysian ecosystem is maturing gradually with more people leaving their jobs to become entrepreneurs. “People are realising that if companies are complaining about how difficult it is to hire quality talent, there should be no reason why they wouldn’t be able to get a job if their entrepreneurial journey fails.”
Nonetheless, he says one important aspect of founder mentality is being able to accept feedback when their product is simply not good enough. Describing himself as undiplomatic and blunt, Bikesh says “You need to know when your product is bad and no one will fund it – and I will be that person. As an investor into startups himself, before investing in one, Bikesh and his team will spend 5 days with any startup they are keen to invest into. “We conduct a thorough assessment and go through their business for checks and balance.”
Addressing the question of whether the ecosystem should filter out people that are not deemed to be of entrepreneur material, Dash says No. “Back when I started my business, I didn’t know if I had the correct mentality or not. I became an entrepreneur out of necessity because I just knew I had to survive and I didn’t want to work for other people.”
He strongly believes that the founder mentality in the local landscape will evolve and strengthen with time and says, “If centuries ago people had decided that learning science was only for the elite, the scientific method would never have been democratised and taught to children in schools.” Fast forward to today and people can learn about some of the key foundations needed to succeed as entrepreneurs, he notes.
Rounding up the session, Shafie stresses on the importance of connectedness within the local startup ecosystem. “The future of the startup ecosystem depends on those that have done well to give back and help those at ground zero.” In the Silicon Valley, this ethos to reach back and help others climb up is called, Pay It Forward. Whether Malaysia can achieve this same ethos in its startup ecosystem remains to be seen.
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