At Startups.be we have one thing or two to say about the (generally untapped?) potential of Asia for international startups. Our latest GoGlobal mission took us to Singapore, where we spent one-week learning, exploring, and connecting with the entrepreneurial ecosystem over there.
Our 'marathonic' visit brought us together with big and small companies alike (Google, Standard Chartered, PSA, Otonomos and Bambu, among others). Here is what experienced entrepreneurs shared with us: the advantages, trends and drawbacks of starting up in Asia.
Our program included exhibiting at Innovfest Unbound conference: Southeast Asia's largest innovation festival
There is no doubt Singapore is the indisputable fintech hub of the region. It is strongly regulated due to its heavily involved government so the opportunities for companies in this industry are great.
With just taking a look at the many government-backed benefits for starting up there, the moniker Singapore Inc. becomes obvious. The perks of starting up in this smart nation range from lots of financial support and resources facilitated by both the public and private sectors, a high number of foreigners (around 40% of the population in the city are expats) and a growing pool of technological talent.
Ned Philips from Bambu, one of the most promising fintech companies in Asia, puts it in a very clear way: the rivalry with Hong Kong, the other regional tech giant, is beneficial for startups in Singapore. "Since the two want to be the fintech hub and startup heart of SEA, there is a lot of competition which leads to authorities in both countries to invest in their tech ecosystems. The results are palpable: you can create your company in a few easy steps, get access to private or public funding and the Singaporean government goes as far as to even pay for your interns".
Zaqy Mohamad, Director of ASEAN accounts and Business development at EY, narrows down the government's smart nation strategy to two pillars: transport and healthcare. All types of technologies related to these factors are getting the most attention and investment. Both necessary to tackle two obvious realities (optimising land and taking care of an aging population), Singapore has breakthroughs like driverless taxis (currently in a trial period) and a unique identification number to fully encompass all services, e-government and private sectors alike.
So... how good is Singapore as a destination to start up? Well, New Zealand has recently overtaken Singapore as the best country to do business, according to World Bank. We think that slipping to runner-up after 10 years atop the ranking means it is still pretty good, right?. So if you are thinking about expanding there, you should check out Arnaud Bonzom's Entrepreneur toolbox , a guide to all the resources available in "the second best country in the world to set up a company".
Session with Zaqy Mohamad at EY offices in Singapore
Closing the gap
“Asia has never had an efficient banking system. So good news is there is no need for retraining”, claims Philips. For him and many of the experts that shared their views during our weeklong mission to Singapore, the idea that emerging economies have great potential for business opportunities driven by information technology applies to several of the Asian markets.
Philips suggests looking at other countries in the region. “When it comes to blockchain, Korea is getting more and more attention. It is a domestic market, but interesting technology”. He also highlights Malaysia as the second best-developed market, just after Singapore. He claims it is a safe market to tackle, with a convenient population of 30 million people and good potential for technology development.
"There is no match to Singapore", affirms Joachim Vandaele from The Hub, though he thinks the tide is changing. In his opinion, Singapore will remain as the tech and startup core of the region, but less-developed countries with big markets like Philipines and Indonesia are gaining ground. A move that never gets old is to incorporate a company in Singapore, keep the administrative headquarters there, and immediately shift operations to a bigger and less explored market.
"We see more and more entrepreneurs getting started here and then moving to the Philipines, which is a very interesting place for tech startups thanks to its large population, the growing economy and a vast base of Internet users who are very involved in social media", points out Vandaele. These factors make the Philippines more and more attractive as it develops an ecosystem to accompany the launch, development, and maturation of startups.
Very populated, Indonesia has also moved quickly in developing new technologies to benefit its ever growing markets. This sole country represents 40% of South East Asian economy and its lagging financial and banking development implies an open door to fintech solutions.
But at the end of the day, "Singapore government always pushes to remain as the landing pad, the gateway to SEA", concludes Vandaele.
“Get an office!”
iText first looked into the Singaporean market in March 2014 when it compared its figures with companies such as Adobe and wondered whether iText could grow its business in Asia to the same percentage.
At the beginning, they got there with the support of imec and FIT using benefits like travel vouchers and one-year office space. Then, in April 2015, they incorporated and by July that same year, they had their first Belgian employee actively working from Singapore. A lot has been going on since then, including a growing team, new Asian destinations and an office of their own.
Their piece of advice for expanding to Asia? “Having an office makes the difference: your business becomes tangible and you can build your community in an easier way.” , recommends Bruno Lowagie, founder of iText. In terms of community, “since Asians like buying local, having a strong partners network is key”. Another suggestion is to keep an equilibrated mix of local and expats in your staff, which works very well.
Dividing and focusing on your top countries is also wise: in the case of iText they have worked their way to have an extensive network of resellers in Japan, India, Hong Kong, Korea, China, Taiwan, and Singapore. Some have proven to be more difficult markets for the company, like Korea, while in other countries, like India, iText is a success. You can read more about iText’s journey to Asia here.
Other takeaways? All the entrepreneurs we encountered during our mission hinted having an international pool of talent in your company does the trick. In the case of Singapore, higher education is superb, with a great focus on innovation-driven careers, though one of the lowlights could be the predisposition to bring up troubleshooters over creative thinkers. That's where western desing and business development profiles become especially handy.
Another potential drawback to note is the cultural approach to entrepreneurship. According to Vandaele, "there is a lot of stigma in Asia surrounding failure...which even reflects in the language: in some dialects of Chinese, failure translates as death".
Finally, competition is tough and entrepreneurs establishing their companies in this ambitious nation need to be committed. As Koen Cardon, CEO at Katoen Natie, made very clear during one of the first sessions we had: "If you come to Singapore because it's nice, come as a tourist. If you come to do business, be serious about it".
To learn more about our GoGlobal mission to Singapore and see what the participants thought of it, have a look here.