Every few decades, the global economy gets rewritten. We are living through one of those moments now. Tariff walls are going up between the world’s two largest economies. Supply chains that took thirty years to build are being unwound in real time. Capital that once flowed freely across borders is increasingly asking permission first. The language of “globalisation” has quietly given way to the language of “friend-shoring,” “de-risking”, and “strategic autonomy.”

For a region like Southeast Asia, comprising 11 countries, a population of over 680 million and GDP north of US$3.8 trillion, this fracturing is not an abstract geopolitical story. It is the operating environment where we build companies every day. 

And having spent the past decade running a hospitality business across Singapore, Indonesia, the Philippines, Vietnam and beyond through a global pandemic that nearly ended our business; a Thailand exit that felt catastrophic at the time; and now an expansion push into India and Australia, I have a fairly unsentimental view of where this region actually stands.

The world is splitting into blocs, SEA doesn’t have to pick one

The most consequential shift in the global economy right now is not a single tariff or a single election. It is the slow reorganisation of trade and capital into competing blocs — a US-aligned bloc, a China-centred bloc, and a shrinking pool of countries still trying to trade with everyone.

Southeast Asia’s structural advantage is that it has never had to choose, and largely still doesn’t. ASEAN’s intra-regional trade share sits at roughly a fifth of total trade, which sounds modest until you realise it means four-fifths of the region’s commerce still flows outward: to China, the US, the EU, Japan, India, the Gulf. That diversification, which used to look like a weakness (no single dominant trade relationship, no scale), now looks like the region’s best insurance policy against a world where picking the wrong side can be economically ruinous.

Foreign direct investment into the region has held up remarkably well precisely because of this hedge value. Manufacturers pursuing a “China+1” strategy have poured capital into Vietnam and Indonesia. Data centre and semiconductor investment has flowed into Malaysia and Singapore. 

None of this happened because Southeast Asia offered the cheapest labour or the biggest market. It happened because the region offered optionality at a time when optionality has become the scarcest resource in global business.

Also Read: Founders’ playbook: What it really takes to scale beyond Series A

What running hotels in emerging markets actually teaches you

I want to be honest about something: resilience is not a strategy slide. It is what’s left after you’ve made expensive mistakes and survived them.

Building RedDoorz across multiple Southeast Asian markets has reinforced one lesson above all others: resilience is not something you plan for on a strategy slide. It is built by continuously adapting to changing market conditions, regulatory environments, consumer behaviour and economic cycles.

The temptation during years of abundant capital was to believe that success in one market could simply be replicated elsewhere. Experience has taught us otherwise. Every market has its own dynamics, customer expectations and operating realities. Sustainable growth comes from understanding those nuances rather than assuming a single playbook fits all.

That lesson matters even more today. As the global economy becomes increasingly fragmented, businesses that remain flexible, disciplined and locally relevant will be far better positioned than those pursuing expansion based purely on scale.

Indonesia as the proof of concept

If there is one market that validates the thesis that domestic demand, not global trade flows, will carry Southeast Asia through this period of fragmentation, it is Indonesia. With a population of 280 million and a rapidly expanding middle class, Indonesia’s growth story has never depended on being the world’s factory floor or its financial hub. It depends on Indonesians spending money in Indonesia—on travel, retail, and services.

That is precisely the demand RedDoorz has built its business around, and it is why Indonesia continues to anchor our macroeconomic backdrop even as global trade gets noisier. Our customers are value-seeking domestic travellers, and our supply partners are independent hotel owners looking to formalise and grow. Both sides of that equation are local, self-reinforcing, and largely indifferent to what happens between Washington and Beijing. In a fracturing world, businesses anchored in domestic consumption, not cross-border trade, have the most durable ground to stand on.

Also Read: The 3Cs+1 framework: Navigating geopolitical fragmentation as a founder

Building optionality into the business

The same philosophy should shape how founders across the region think about their own next chapter. Rather than committing to a single geography or expansion path, the stronger position is building a flexible, multi-brand or multi-format platform that can pursue opportunities across Asia-Pacific as markets evolve.

Different markets require different propositions, customer segments and operating models. Our objective is not simply to grow a single brand, but to create an ecosystem of hospitality brands and capabilities that can adapt to local market conditions while leveraging shared technology, commercial expertise and operational scale. In an increasingly fragmented world, strategic flexibility is far more valuable than rigid expansion plans.

The same thinking also underpins our decision to pursue a listing on the Singapore Exchange. Singapore remains one of Asia’s most trusted financial centres, offering strong governance, regulatory certainty and access to long-term institutional capital. As geopolitical and economic uncertainty continues to reshape investment flows, we believe businesses will increasingly be valued not only for growth, but for resilience, credibility and the ability to execute across multiple markets.

The task ahead

The world is fragmenting into competing spheres of influence. Southeast Asia doesn’t need to choose one. Its greatest strength lies in remaining the region where ideas, capital, talent and trade continue to converge. In a world defined by uncertainty, optionality is the only real currency left—and Southeast Asia is uniquely positioned to create it. 

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On July 25, Defense Secretary Gilberto Teodoro Jr. ordered the Armed Forces of the Philippines to widen its Direct Commission Program (DICOM), fast-tracking cyber, AI, and engineering talent into commissioned officer roles. Defence spokesman Arsenio Andolong was blunt about the logic: some of the country’s best hackers are unemployed, and the state would rather channel that talent than lose it to cybercrime.

Most coverage stopped there — a recruitment story. That’s exactly why the real opportunity is still sitting open. Recruiting a few hundred officers doesn’t build or run a modern military’s cyber backbone. It’s a talent signal sitting atop an integration, training, and sustainment gap that no single Philippine agency can close alone — and one that almost no SEA integrator has priced into their pipeline yet.

The size of what’s actually up for grabs

DICOM sits within a much larger machine: the AFP’s Comprehensive Archipelagic Defence Concept and its Horizon 3 modernisation phase, which, for 2026, carries a defence budget of roughly ₱430 billion (US$7.08 billion), with tens of billions earmarked specifically for cyber and command-and-control systems.

Set against that budget is a workforce gap DICT itself has been flagging for years: roughly one cybersecurity professional for every 2,000–3,000 citizens, against a mature-economy benchmark near 1-in-200. Other estimates put unmet demand at around 180,000 professionals just to cover 10 per cent of critical institutions.

Put those two numbers side by side, and the gap is the opportunity: a ₱430-billion (US$7.08 billion) modernisation program with nowhere near the domestic technical bench to execute it, and almost no regional integrators actively positioned to fill that bench. This isn’t a crowded RFP market yet — it’s closer to whitespace.

Where DICT and CICC actually fit — and why most pitches miss half the buyer

Here’s the mistake most outside vendors make: they treat the AFP as the only buyer. It isn’t. The Philippines built a division of labor after the Cybercrime Prevention Act (RA 10175) and the law creating DICT (RA 10844): law enforcement (NBI, PNP-ACG), intelligence (NICA), national defence (DND/AFP, NSC), and — sitting in the middle — network protection, split across DICT and its attached agency, the Cybercrime Investigation and Coordinating Center (CICC).

• DICT is the policy author. It drafts the National Cybersecurity Plan and runs the NCERT and National Security Operations Centre, monitoring government networks and coordinating incident response. Pending legislation would require incidents touching critical infrastructure be reported to DICT/CICC — a compliance layer above any AFP-adjacent system.
• CICC is the coordination secretariat — and, by its own sector’s account, thinly staffed on the technical side. An agency chairing the National Cybercrime Inter-Agency Committee with almost no in-house bench is a market of its own.
• The overlap is a friction point competitors haven’t noticed. DICT’s own leadership has floated redirecting reformed hackers into civilian training — language nearly identical to DND’s pitch. Two agencies are quietly courting the same narrow talent pool, uncoordinated.

Also Read: Human-centric skills in the age of AI: How to never lose touch with humanity in the workplace

Vendors who only build a relationship with DND miss half the approval chain. That’s precisely why “zero competition” isn’t hyperbole — most firms aren’t even mapping the right buyers.

Eight concrete plays for SEA integrators — before this stops being whitespace

• Systems integration and interoperability layers — stitching legacy AFP comms, newly acquired foreign platforms, and DICT’s NCERT/NSOC feeds into one auditable architecture, instead of another siloed point solution.
• Managed detection and response for under-resourced agencies — CICC’s thin technical bench is a direct opening for outsourced SOC-as-a-service and incident-response retainers tied to existing reporting requirements.
• Workforce-scale training and certification pipelines — bootcamps and university partnerships, in the spirit of the UP–DICT microcredentials model, producing hundreds of vetted operators a year — not the handful DICOM can commission.
• Sovereign, auditable software builds — co-developed or locally-built detection, logging, and command-support tools that satisfy data-sovereignty and JV-ownership rules foreign closed-source vendors can’t.
• Multi-year sustainment contracts — maintenance and local technical support built in from day one, addressing the exact failure mode analysts cite in past hardware procurement.
• Compliance and reporting tooling — dashboards that help agencies meet the pending DICT/CICC critical-infrastructure incident-reporting mandate, a near-guaranteed procurement line once the legislation passes.
• AI-readiness and data-governance consulting — auditing data pipelines and setting decision-vs-flag guardrails before any model goes live, positioning integrators as foundation-builders, not platform-sellers.
• Regional threat-intelligence sharing infrastructure — tools that let the AFP participate in allied information-sharing (e.g., under the US–Philippines defence guidelines) without breaching data-localisation rules — a genuinely unmet niche.

Firms that check off two or three of these — not just pitch a single flagship platform — are the ones positioned to actually survive procurement cycles that move slower than the news.

Why the whitespace exists — and won’t stay open forever

The AFP’s own modernisation is still assembling itself in phases — Horizon 1 gave frigates and jets, Horizon 2 gave rocket systems and submarines — and analysts call the process piecemeal, project-by-project rather than unified. Few local firms have end-to-end integration experience at this scale. Commentators still point to the Jose Rizal-class frigate program as a cautionary tale of systems bought without maintenance planning — a risk cyber platforms carry just as heavily. That gap is real, but temporary: the government’s own legislative pipeline is working to close it.

The barriers that are keeping the field this empty

Ownership ceilings

Under RA 12024, foreign firms need a Filipino JV partner holding at least 60 per cent. RA 11647 lets the President block foreign investment in “strategic” cyber industries outright — exactly why most foreign players haven’t bothered.

Hardware-first procurement law

RA 10349 and RA 10055 were built around buying hardware, not software expertise. Pending bills would add a dedicated innovation office and capacity fund, but expect processes calibrated for frigates, not SaaS — for now.

Budget volatility

Of ₱90 billion (US$1.48 billion) proposed for 2026, only ₱40 billion (US$659 million) was firmly programmed; the rest depends on new revenue. In 2024, the Senate had to restore a ₱10-billion (US$165 million) cut to cyber-related projects. Structure contracts to survive a legislature that treats this funding as negotiable.

“Ghost project” scrutiny

The AFP has uncovered ghost projects within its own modernisation spending — treat that scrutiny as a filter favouring credible operators over opportunists.

Data localisation tension

Industry groups warn broad localisation mandates can isolate defenders from threat-sharing. Systems must satisfy sovereignty rules without severing allied intelligence-sharing under US-Philippines defence guidelines.

These barriers explain why the market stays thin. They’re not permission slips for foreign platform vendors — they’re a moat that favours integrators with a real local partnership and patience.

Also Read: The anti-hustle manifesto: Why being strategic beats being the best

Is anyone actually opposing this?

No official has publicly opposed the DICOM expansion itself. The friction is structural, not ideological:

• Congress has already cut cyber-related modernisation line items under budget pressure.
• Analysts have asked whether the AFP can compete on pay, warning the role could become a career “killer” for professionals used to private-sector terms.
• Internal audits surfacing ghost projects suggest caution about how loosely new cyber money should flow.
• DICT and DND are running parallel, uncoordinated outreach to the same small hacker population.

None of this is opposition — it’s a signal that execution, not intent, is the real battleground, and where a patient, credible integrator wins.

Where AI fits — and why sequencing matters

AI is an obvious accelerant for a talent-constrained cyber effort: threat detection, log analysis, anomaly detection, decision support. That’s a legitimate line item.

But this is a matter of national security, not just good practice: Filipino institutions need their own foundations — trained analysts, governed data pipelines, clear rules on what AI may decide versus flag, and homegrown audit capacity — before layering AI on top.

A system deployed without that foundation doesn’t just underperform; it can distort judgment and create dependency on foreign black boxes the country can’t independently verify in a crisis. Integrators leading with “buy our AI platform first” are pitching the wrong stage. Those who build talent, data discipline, and audit capacity first — in coordination with DICT’s NCERT/NSOC infrastructure and CICC’s coordination role, not around them — win the long-term contract.

The bottom line

This is a ₱430-billion (US$7.08 billion) modernisation program with a documented skills gap, two agencies quietly competing for the same talent pool, and a legal framework still built for buying hardware rather than software. That combination is precisely why competition is thin: most integrators saw a recruitment headline and moved on, without mapping DICT, CICC, the ownership rules, or the actual services gap underneath. The integrators who understand the full buyer chain, respect the procurement realities, and build local capacity before selling AI shortcuts have a genuine multi-year opportunity — and right now, remarkably little company.

This article synthesises public statements from the Department of National Defense, the AFP, DICT, CICC, the Philippine News Agency, and independent defence-policy analysis. It is a market and policy overview for technology integrators, not legal or investment advice.

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The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.

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A few years ago, when a company said it wanted a “Southeast Asia strategy”, the request usually sounded reassuringly straightforward. The business would establish a regional base in Singapore, identify a few priority markets, adapt its messaging slightly and begin expanding. The technology stack was often global, the strategy was usually designed at headquarters and Southeast Asia appeared on the slide as one neat, manageable region.

Then the actual conversations began. A message that worked in Singapore needed to be rethought for Malaysia. A customer assumption did not hold in Indonesia. A platform selected globally raised questions about data storage or regulatory compliance locally. A hiring plan that looked efficient on paper struggled against very different talent markets, salary expectations and working cultures.

This is the part of Southeast Asia that outsiders often underestimate. The region is connected, but it is not uniform. For a long time, that complexity was balanced by another advantage. Southeast Asia could remain economically connected to both the US-led and China-led worlds. Companies could access American technology, Chinese manufacturing, regional capital, global trade routes and a growing consumer base without every commercial decision being interpreted as a political choice.

That middle ground now feels less comfortable. Decisions about cloud providers, semiconductor supply chains, artificial intelligence systems, investors, data centres and technology partners increasingly carry geopolitical weight.

What once looked like a procurement decision can now affect market access, regulatory exposure and long-term strategic alignment. Yet I do not believe Southeast Asia’s future depends on preserving neutrality at all costs. Its real advantage was never neutrality. It was translation.

The region is too important to be treated as a corridor

Southeast Asia is often described as a bridge between larger economies. It is an understandable description, but it is becoming an insufficient one. ASEAN had a population of more than 684 million in 2024. Trade in goods reached approximately US$3.84 trillion, while trade in services stood at nearly US$1.29 trillion. These are not the numbers of a region whose main function is simply to connect other powers.

Investment tells a similar story. Foreign direct investment into ASEAN reached about US$231 billion in 2024. UNCTAD reported that the region remained the leading FDI recipient among developing regions, even as global investment weakened. Southeast Asia’s digital economy was projected to exceed US$300 billion in gross merchandise value in 2025, up from roughly US$40 billion a decade earlier. These figures matter because they change the question.

The question is no longer whether Southeast Asia can remain useful to both the US and China. The more important question is whether the region can turn its economic weight into capabilities, institutions and companies that are valuable in their own right. Being a convenient middle ground is helpful when the world is open and predictable. It is more fragile when larger powers begin asking partners, suppliers and markets to demonstrate where they stand.

Also Read: The localisation gap: Why multilingual AI isn’t enough for APAC markets

Translation is not the same as neutrality

In my own work across media, technology and regional communications, I often see the difference between a company that operates in Southeast Asia and one that actually understands it. The first brings a global strategy into the region. The second knows what must be translated. That translation might involve language, but it goes much further. It means understanding why trust is built differently across markets. It means recognising that regulation does not move at the same speed everywhere. It means knowing that a technology story framed around efficiency in one country may need to be framed around employment, accessibility or national capability in another. It also means accepting that “Southeast Asian consumers” are not one consumer group.

The region’s diversity is often described as a challenge. It is certainly not easy. But in a more fragmented global economy, the ability to operate across different political systems, commercial cultures and levels of development is itself a strategic capability. Companies that learn how to succeed here are forced to become better listeners. They must localise without losing scale, standardise without becoming rigid and build regional systems that leave room for local judgement. This is not passive neutrality. It is active adaptation.

The old regional playbook is already changing

Many organisations are not formally choosing between the US and China. They are doing something more practical. They are diversifying suppliers. They are reviewing where their data is stored. They are building separate technology or operational arrangements for different markets. They are asking more questions about vendor ownership, regulatory exposure and supply-chain resilience. They are also discovering that the cheapest or largest option is not always the safest long-term decision.

For years, regional strategy was often shaped by a relatively simple logic: select the biggest market, use the most established technology provider and consolidate operations wherever costs were lowest. The criteria are becoming more complicated.

Businesses now need to consider whether a system can satisfy multiple data regimes, whether a partner creates exposure to future export controls and whether a regional hub can continue serving every intended market if political conditions change. This creates additional cost and complexity. It can slow decisions that once appeared routine. But it may also produce better architecture.

A company that cannot depend on one supplier becomes more serious about interoperability. A business that must account for different regulatory environments becomes less careless about data governance. A regional team that can no longer copy and paste a global strategy is forced to build stronger local knowledge. Fragmentation is a burden, but it can also expose weaknesses that were previously hidden by convenience.

Also Read: The funnel was never neutral: What Asia’s markets reveal about Western marketing theory

Southeast Asia cannot localise its way out of every problem

There is, however, a limit to tactical adaptation. Local data centres, multiple vendors and market-specific campaigns may help companies manage immediate risks. They do not automatically give Southeast Asia a stronger position in the global economy.

The region still relies heavily on technologies, platforms and capital developed elsewhere. Many Southeast Asian markets remain better at adopting and implementing technology than creating the underlying systems that shape it. That is why the next source of regional advantage cannot simply be the ability to welcome everyone.

Southeast Asia must invest more seriously in its own research, talent, digital infrastructure and intellectual property. Regional companies need greater confidence to build for Southeast Asian realities first, rather than treating local markets as testing grounds for ideas developed elsewhere. There must also be more meaningful integration within the region itself.

It is difficult to speak about ASEAN as an independent economic force when businesses still face major differences in regulation, payments, talent mobility and digital standards from one country to another. The region does not need to become identical. Its diversity is part of its value. But stronger coordination would allow companies to scale within Southeast Asia before relying on distant markets for growth, capital or validation.

From connector to decision-maker

Southeast Asia will probably continue working with both the US and China. It should. The region’s relationships are too deep, its economies too interconnected and its development needs too varied for a simplistic choice between blocs. But staying connected to both sides is not the same as having a strategy. The narrowing middle ground is a threat when Southeast Asia is treated only as a market, manufacturing base or diplomatic buffer. It becomes an opportunity when the region uses this moment to build more of what it currently imports, strengthen ties within ASEAN and become more selective about the partnerships it accepts.

Perhaps Southeast Asia’s greatest advantage is that it has never had the luxury of believing in one universal playbook. Businesses here already know how to work across contradictions. They understand that what succeeds in one market may fail in the next. They know that relationships, regulations and consumer expectations cannot always be reduced to a regional spreadsheet. That knowledge is becoming more valuable as the rest of the world becomes less predictable. Southeast Asia may have less room to sit comfortably in the middle. But comfort was never the real advantage.

The real advantage is knowing how to operate when there is no single centre, no universal model and no easy answer.

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Investors often say they back exceptional founders and ambitious ideas. In practice, they also invest in the environment surrounding those companies.

When Airwallex, founded in Melbourne, made Singapore its global headquarters, the decision was about more than location. The city offered access to regional customers, a familiar regulatory environment and a deep pool of financial and technical talent.

The company later established San Francisco as a second global headquarters as it expanded in the United States, recruited engineers and strengthened its links to American investors.

The pattern is instructive. Airwallex positioned different parts of its organisation close to the resources they needed.

Venture capital may be invested in an individual company, but the company is rarely assessed in isolation. Investors also consider whether the surrounding ecosystem can provide employees, customers, advisers, follow-on funding and eventual buyers.

The startup is being assessed as part of a system.

Capital is more concentrated than ideas

Entrepreneurial ability is widely distributed. Venture funding is not.

Most global venture capital continues to flow towards a small number of established technology centres. Artificial intelligence has intensified this concentration, with enormous rounds going to companies that already sit close to major investors, research institutions, computing infrastructure and specialist talent.

This does not mean that the strongest ideas are produced in only a few cities.

It means investors are judging the probability that an idea can become a large, financeable and eventually liquid business.

A venture investment is usually described as a bet on a company. In reality, it is a chain of bets.

The founders must build the product, recruit the right people and persuade customers to adopt it. The company must survive mistakes, management departures and difficult funding conditions. It must then expand into larger markets, raise more capital and eventually produce an acquisition, public listing or another form of liquidity.

A strong ecosystem lowers the perceived risk at almost every stage.

Also Read: Southeast Asia in the 2026-2030 world order: Trade, chips, AI, and capital

Ecosystems make mistakes more survivable

Startups rarely develop according to plan.

Products change. Customer acquisition proves more expensive than expected. A senior employee leaves. Regulation intervenes. A prospective lead investor withdraws before a financing round closes.

In an established startup hub, the company may have several routes out of difficulty.

An investor may help recruit a replacement executive. Existing angels may provide bridge financing. A specialist lawyer may restructure the deal. A corporate partner may become a strategic investor or acquirer.

In a weaker ecosystem, the same setback can become terminal.

The difference is not that startups in mature ecosystems avoid mistakes. Their mistakes are more likely to be survivable.

This is one reason an investor may prefer a moderately promising company inside a functioning network over an apparently exceptional company operating alone.

The first has access to institutions, talent and relationships. The second may depend almost entirely on the continued performance and personal connections of its founders.

These advantages rarely appear in a pitch deck. Investors still price them.

Success leaves infrastructure behind

Startup ecosystems grow through repetition.

A company raises capital and hires employees. Some of those employees later launch businesses of their own. Founders who sell companies become angel investors. Early backers use successful returns to raise larger funds. Lawyers, recruiters and advisers develop specialist expertise through repeated transactions.

Each successful company leaves behind knowledge, capital and relationships.

This is why mature ecosystems are difficult to replicate. Governments can build innovation centres, launch public funds and subsidise accelerators. They cannot quickly reproduce decades of interaction among universities, technology companies, investors, professional advisers and experienced founders.

Silicon Valley remains the clearest example. Its advantage extends far beyond the amount of money managed by local venture firms. It comes from the constant movement of people and knowledge between established companies, startups and investment funds.

Singapore has developed a similar role within Southeast Asia, although on a smaller scale. Funds are managed there. Regional headquarters are established there. International deals are structured there. Investors are familiar with its legal and regulatory environment.

Capital attracts more capital because it leaves infrastructure behind.

Southeast Asia is not one startup market

Southeast Asia is often presented as a single growth opportunity. Its startup economy remains highly fragmented.

The region has a large population, growing digital markets and substantial technical talent. But differences in language, regulation, purchasing power and corporate behaviour make regional expansion difficult.

Singapore occupies a distinctive position.

Its domestic market is smaller than those of Indonesia, Vietnam, Thailand or the Philippines. Yet it provides many of the legal, financial and professional institutions through which investors fund companies operating across the region.

Also Read: AI is Vietnam’s new capital magnet

Vietnam offers a different proposition. Its appeal is linked to the scale and growth of its domestic economy, technical talent and the possibility that companies can build meaningful scale at home before expanding abroad.

Thailand has strong infrastructure, large corporations, sophisticated consumers and a substantial financial system. Yet its venture market remains limited relative to the size of its economy.

This reveals an important distinction.

A country can have abundant capital without providing much venture capital.

Banks generally assess borrowers through repayment capacity, established cash flows, credit history and collateral. Venture investors finance companies whose value depends largely on uncertain future growth.

A developed banking system does not automatically create a strong startup-financing system.

Investors think about exits early

Founders tend to focus on securing the next round. Venture investors must consider what happens several rounds later.

A fund’s returns depend on selling its stake through an acquisition, public listing or secondary transaction.

A market may produce many promising startups, but investors will remain cautious if it produces few credible exits.

The absence of liquidity weakens the entire ecosystem.

Fund managers struggle to demonstrate returns. Successful founders cannot easily recycle wealth into new companies. Employees receive limited benefit from equity compensation. International funds become reluctant to finance larger rounds.

The ecosystem may create businesses without completing the financial cycle required to sustain them.

This is why exits matter as much as startup formation.

A good product does not guarantee market access

The experience of DocDoc, a Singapore-based healthcare technology company, illustrates the problem.

Grace Park and her husband, Cole Sirucek, developed the business after their infant daughter was diagnosed with a rare liver condition. The experience exposed how difficult it was for patients to compare specialists and treatment options.

DocDoc built a platform designed to help patients identify appropriate care.

The problem was real. The product alone was not enough.

Commercialising it required relationships with insurers, hospitals and established healthcare institutions. In a regulated sector, those partnerships can determine whether a technically strong product reaches customers at all.

The same is true elsewhere.

A fintech company needs access to banks, regulators and payment networks. A biotechnology company needs laboratories, hospitals and specialist advisers. A climate technology business may depend on utilities, industrial partners and public procurement.

Investors evaluate these dependencies because a company lacking regulatory access or distribution partners may require more capital, take longer to expand and face fewer exit opportunities.

The idea may travel easily. The infrastructure required to scale it does not.

Also Read: Rewriting the rules: Southeast Asia as climate capital proving ground

Geography still shapes trust

Cloud computing and remote work have expanded the range of places from which companies can be built. They have not eliminated the importance of professional networks.

Venture capital depends heavily on information and trust.

Investors cannot assess every startup from first principles. They rely on referrals from founders, lawyers, accelerators, angels and other funds.

A referral does not guarantee funding, but it can determine which company receives serious consideration.

In a mature ecosystem, founders are more likely to be one introduction away from an investor, executive, customer or adviser who can solve an immediate problem.

Outside these centres, finding the right person and establishing credibility can take much longer.

The delays accumulate.

A competitor in a stronger ecosystem may raise capital faster, recruit earlier and reach customers before a company outside the network secures its first serious investor meeting.

Venture capital is an amplifier

Venture capital seldom creates an ecosystem from nothing.

More often, it accelerates places where talent, customers, capital and entrepreneurial experience have already begun to accumulate.

This explains why comparable startups can receive very different valuations and funding offers. The difference may say less about the quality of their ideas than about the strength of the machinery surrounding them.

Good ideas are widely distributed.

The systems capable of financing them, scaling them and returning capital to investors are much harder to build.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. You can also share your perspective by submitting an article, video, podcast, or infographic.

The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.

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