Years from now, tech billionaires may want to thank the credit collapse that led to the Asian financial crisis. Many people here in Asia believe that the economic disaster that befell them actually pushed the current wave of entrepreneurs on to this track of newfound wealth.
Back in 1997, a region of more than two billion people — ruled by autocrats, socialist democracies, monarchies and various crumbling versions of government — found their economic growth story stone-cold frozen.
In the past two or three years, this complex ASEAN (Association of Southeast Asian Nations) economic story is simplifying and reversing, as everyone from Silicon Valley super angels to China’s homegrown billionaire founders are boiling up new recipes for growth in venture capital and tech startups by putting money into anything local and anything mobile, cloud and IoT.
The boom is palpable. In the first quarter of 2015, the APAC region secured $9.4 billion (U.S.) in VC investments.
Part of Q2’s wave has included Dave McClure and his 500 Startups posse, who just invested an undisclosed sum into Hubba Thailand, the first co-working space in the country, with the hope of harnessing this complexity and this new momentum.
Anita Chan, half of the duo building Sam the Local, a bespoke local travel agency-as-an-app, says that it’s actually the complexity of ASEAN and the rush of investment dollars into the market that makes it such a great time to be a local investor and founder.
“With so many different elements going into play with each Asian country and their unique culture and language, we think now is a good time for us to connect them and for us to learn from each other,” says Chan, who is based in Hong Kong with her co-founder, Maggie Lau. “We believe,” Chan added, ”the human communication will help to make the world a more connected place and allow us to further understand all of these elements.”
From industries moving to mobile, to merchants tapping into ASEAN and China’s growing consumer market through e-commerce, founders are finding that in Asia, if you want to grow, you have to master media as well as tech, because growth is all about conversations that build trust and weave communities together.
The reason could be simple. Relationships work first, then money. Media companies and media professionals in Asia are finally getting their due, being asked on board companies to help stitch together vastly disparate market sectors and companies.
This is part of something called Internet Plus, a term created by some Hong Kong government agencies as part of marketing attempts to boost investment in mobile and cloud tech for traditional industries.
Times changed, and people began to realize, if you have a global view, you can be successful. David Chung
App marketing executive Jason Chiu of CherryPicks thinks this is where the future is for all of Asia. “The next wave, a huge wave, is to get into the IoT…putting internet technologies in traditional industries,” says Chiu. “If you are the guy who knows both industries, you will have a unique advantage, because of cloud, mobile, advanced material and big data, it makes it possible the traditional industries are now ready to be combined.”
If he were a new tech founder, “[he] would find interdisciplinary resources so that [he] gets a team where the team knows both sides. That’s where creativity and innovation gets very interesting.”
Pony Ma, founder and chairman of Tencent, may agree. He recently told more than 1,200 people at a Hong Kong entrepreneurship conference that in the early days of his platform, he pretended to be several different women to chat with new users. It was the only way he could get to 30,000 users in a critical period. “I had no other way because we were only a small company,” said Ma. “Sometimes I needed to put on a photo of a lady to make sure we had a hot [online] community.”
Younger founders have found that media and communications is what they need to educate staff on culture. There are already brilliant engineers in Asia, and what’s needed, say some investors, is a hybridization of roles. Engineers need to learn marketing, and everyone on teams needs to know how to manage the customer and creativity story.
Pote Supromajakr, a partner in Expara Ventures in Bangkok, says that the firm spends a great deal of time working on creating repeatable models for this kind of education. It’s harder, because a lot of founders and investors want to repeat the Silicon Valley hype-and-invest model.
That doesn’t work as much here, where even the established players are still doing vanguard business work to break open and establish dominance in Asia’s emerging market ecosystem, locally and regionally.
“Marketing for awareness and brand equity is considered less important to direct acquisition of customers,” says Supromajakr. “Given that they have finite ‘external’ resources, most of the resources should be focused on the most cost-effective ways to attract early-adopters and the core customer base. There are many different acquisition strategies that are somewhat less-obvious and has worked well but it varies subjectively depending on the nature of the business.”
Supromajakr says building strong data models that come from testing a workable product is actually the way forward, something that Western investors often miss. Most buyers and investors in Asia want to see numbers first, not a marketing narrative. “Too many pitches with a strong focus on ‘would be’ and ‘will be’ doesn’t get the attention of anyone,” says Supromajakr.
That happens with strong partnering between local partners and established technology infrastructure leaders, a practice that may be easier right now in Singapore and Hong Kong, two rivals for the mantle of Asia’s Startup City.
One of the first tech centers to drive that practice is Cyberport in Hong Kong, which has been making a drive to lure Silicon Valley accelerators and investors to Hong Kong to check out the scene, which is booming.
After laying claim to much of Hong Kong’s tech infrastructure innovation, its management team is now focusing on media, global road shows and blogging to tell its story, with investments in local operators like Casey Lau, who co-manages StartupsHK.
David Chung, Cyberport CTO, has been working on this mission since the Asian financial crisis in the late 1990s, often unrecognized as most of the world paid attention to San Francisco and Palo Alto. He saw then a shifting geo-political and economic situation in China, ASEAN and other countries.
In an evolution that was also happening in Bangkok, Manila, Singapore, Seoul and Jakarta, entrepreneurship in traditional sectors like real estate and finance, insurance and logistics was finding opportunities in mobile and web.
Professionals were leaving secure jobs — or getting fired from them due to economic collapse — and they began to start their own things in mobile, communications, marketing and the web.
“We have been observing big changes around the globe, especially in this part of the world,” says Chung, CTO of Cyberport, who is part of the team that screens thousands of applications each year for its Silicon Dragon incubator. “Times changed, and people began to realize, if you have a global view, you can be successful.”