Having kept their borders shut for close to a quarter, countries around the world are coming out of the daunting shadows of coronavirus as a ray of hope shows itself in the form of subsiding new cases.

As policymakers introduce new social distancing measures and people once again fill up office buildings, the world is, without a doubt, making its way towards the post-pandemic new normal. Nevertheless, amid the recovery, came the resurgence of a US-China dispute.

Being the world’s largest economy, it is said that when America sneezes, the world catches a cold. Now the world’s biggest exporter, China poses a similar level of influence. Certainly, when the superpowers are engaged in a tug-of-war, the global supply chain is bound to be disrupted. In relation to that, emerging markets in Southeast Asia (i.e. Thailand and Vietnam) are expected to be beneficiaries of investment (factory) relocations due to their pleasant investment climate.

However, the Philippines, in particular, is expected to be one of the smallest beneficiaries, if not a loser. This is by no means arbitrary, as the country’s foreign direct investment (FDI) inflows have been falling incessantly since 2017, reaching a four-year low of US$7.65 billion last year when its regional peers experienced an uptick in FDI.

Once viewed as one of the most prospective emerging countries, why is the Philippines so unappealing in the eyes of foreign investors?

For starters, the Philippines lacks a nurturing climate for business investments. Referring to World Bank’s Ease of Doing Business Index as an indicator of investor-friendliness, the country was ranked at 95^th, compared to 2^nd for Singapore, 12^th for Malaysia, and 21^st and 70^th for Thailand and Vietnam respectively.

Also Read: Why it is important for tech companies to expand outside metro cities in the Philippines

To further elaborate, it was revealed that the Philippines is especially inadequate in providing credit and enforcing contracts, in which it ranked 132^nd and 152^nd respectively, in addition to other challenges such as cross border trading issues and property registration. Seeing that these factors have a substantial bearing on businesses’ sustainability as well as their ability to expand, it is hardly surprising that foreign investors are discouraged.

Other than that, the current Philippine government’s policies have also put pressure on foreign capital inflows. In anticipation of the Corporate Income Tax and Incentive Reform Act (CITIRA) from the government, investors remained wary of the future status of their tax incentives.

Currently still pending in the Senate, the CITIRA bill intends to reduce corporate income tax by one per cent every year, from the current level of 30 per cent to 20 per cent by 2029. Intended to spur foreign investment, the viability of the bill has raised a number of questions, as capital gains tax on unlisted shares of resident foreign corporations and nonresident foreign corporations is expected to increase from five to 15 per cent, prompting investors abroad to take a wait-and-see stance.

On top of that, political risks have also deterred foreign investors in recent years. The government’s “anti-oligarch” and “anti-big-business” rhetoric has raised doubts on regulatory bodies’ justness in reviewing and renewing contracts in the Philippines.

For instance, the state water regulator recently cancelled a 15-year extension of the water utilities’ concession with Manila Water and Maynilad after pressure from Duterte. The existing concessions will expire in 2022, instead of 2037 as initially agreed in 2009. At the same time, raging allegations of human rights violations in the country (think the killing of drug addicts) have also come under international investors’ radar.

As a result of the mentioned incidents, the Philippines is seen as a relatively unfavourable destination for investment with raging political instability.

Also Read: Grab launches new card to encourage cashless payments in the Philippines

Naturally, as an enabler of businesses, many have wondered if technological advancement could improve the status quo in the Philippines and, in turn, facilitate FDI inflows. Undoubtedly, by helping the unbanked and fostering credit, technology could make business processes more efficient.

Notwithstanding that, political risks and failures to enforce business contracts would surely weigh on investments. Thus, in order to spur FDIs, the government needs to take the sanctity of contracts and regulations to heart, thereby instilling political stability in the country.

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I recently wrote about whether the startup ecosystem in Laos was ready for a unicorn. This time we turn our attention to Cambodia today and explore if it’s ecosystem is ripe for the exponential growth as recently seen in Indonesia and Singapore.

Adopting a top-down approach, we will briefly analyse Cambodia’s macroeconomy before exploring deeper if the population is ready for the tech boom. Lastly, we will dive in to explore whether the ecosystem is strong enough to cultivate and support this growth.

Rocketing economic growth

According to World Bank statistics, Cambodia’s economy is spearheading the economic boom in the region with an average GDP growth rate of eight per cent between 1998 and 2018, making it one of the fastest-growing economies worldwide. As a result, Cambodia reached a lower-middle-income status in 2015 and the government aspires to attain upper-middle-income status by 2030.

All these statistics paint the picture of a booming economy ready to take on the powerhouses of the region and startups will play a key role in the transformation.

However, these macro indicators only represent the economy as a whole. Therefore, we will need to explore deeper if the anticipated tech boom can be supported by Cambodians.

Also Read: How student entrepreneurs can tap into the fintech ecosystem in Cambodia

Tech-savvy demographic

With a staggering 47 per cent of the population aged under 25, Cambodia’s greatest asset lies in its youthful population. Combined with a mobile and internet penetration rate of 120 per cent and 84 per cent respectively, it is safe to say tech-savviness resides among the top traits of the population. Instrumental to this growth? Cheap data plans.

With 4G data plans starting at US$1 for 10GB, it is small wonder why seemingly everyone in Cambodia utilises a smartphone. With access to the internet and its wide outreach, the sky is the limit for Cambodia as it looks to technology to drive its next phase of growth.

Deep diving into the ecosystem

Thus far, the Cambodian economy (economic growth fuelling increased business prospects and investors) and its population (high digital penetration resulting in citizens being constantly exposed to new technologies) look ready to support the growth of tech startups in the Kingdom.

However, the key to producing successful startups is the ecosystem in place to support entrepreneurs in the uncertain road to create a company. Given the novelty of ideas startups look to solve, it is paramount to have the right community providing advice and resources for them to navigate through the notoriously plentiful difficulties in their journey.

At this juncture, given the young demographic and high mobile usage statistics, the majority would have the view that Cambodians are youthful, tech-savvy and open to change.

However, we have missed the fact that the key consumers with the highest spending power in the economy are middle-aged career professionals that grew up before the tech boom swept across the country. Therefore, it is often opined that the Cambodian consumer market is not receptive to new ideas that startups propose.

Also Read: Will Laos be home to a unicorn someday?

What’s stopping them

BookMeBus founder, Chea Langda, certainly shares this view. BookMeBus was conceptualised in 2015 as a ticketing platform which allows travellers to book their bus tickets within Cambodia and across the borders of neighbouring countries. Chea shares specifically that there is a very little trust given to online platforms by locals and they often worry online products might not be authentic.

More than this, they have a stigma that buying things through an agent is always more expensive and full of scam. This myopic fixation has led consumers to forgo the pain points BookMeBus solves, convenience and cost-savings. Thus, consumers fail to fully value the service and utilise it.

He subsequently shared that while it would be difficult to change existing mind-sets, public marketing campaigns will go some way to reduce such concerns. Therefore, it is paramount that this key demographic would be receptive to new online solutions as startups, even with a great product and market fit, can only go so far without customers to generate substantial revenue to fuel future growth.

Another hurdle faced by startups penetrating the Cambodian market is the high unbanked population. Statistics have shown that 78 per cent of the population is unbanked and less than 15 per cent utilise mobile banking services. Therefore, it has been tough for B2C tech startups to provide the optimal consumer experience with both exorbitant payment processing fees and limited digital payment outreach hampering their overall service.

However, similar to how successful entrepreneurs view difficulties as opportunities, this problem looks ripe for fintech startups offering digital payments to enter the fray and solve it. Given the success of digital payments in Indonesia, it is not surprising that more than 50 new startups have entered to capture what could be a future goldmine.

Mentorship

The scarcity of mentors is a by-product of the relatively young startup ecosystem present in the Kingdom. Due to a lack of entrepreneurs with experience in the field of building and scaling a startup successfully, budding founders have few mentors to turn to for advice in times of need.

Also Read: Cambodia’s Muuve scores funding from Ooctane to take its food delivery service to new cities

Given that research has shown that mentorship is one of the most important needs for a startup to succeed, the fact that over 50 per cent of founders have zero or very infrequent mentorship, is chilling. The uncertain environment that startups operate in due to the novelty of the problems they solve makes it even more important for mentors to be present in the ecosystem to provide experienced guidance for these young entrepreneurs, where more than 80 per cent reported to be working on their first startup project.

Support

Despite the above-mentioned challenges faced by the ecosystem, there have been steps in the right direction to nurture startups in Cambodia. Corporate giants such as Axiata, Toyota and Grab have sponsored incubator-like programmes and hackathons in a bid to provide young entrepreneurs with the platform to pitch their ideas and resources to assist in the implementation of their business ideas.

Regulatory frameworks in the Kingdom have also assisted in priming the ecosystem for growth. Over the last three years, the government has introduced significant policy initiatives aimed at propelling the tech sector and startup ecosystem to the next level. In its five-year national development plan announced in 2018, an initial vision of Cambodia’s digital economy was panned out.

The National Entrepreneurship Fund, with an aggregate capital of US$5 Million, was launched in 2019 and took government funding dedicated to the tech startup ecosystem to US$12 Million. Therefore, by virtue of the amount of resources poured in the build-up the ecosystem, it is clear that policymakers view startups as the next key driver for economic growth in the country.

Eyes on Cambodia

Overall, despite the young startup ecosystem in Cambodia being inexperienced and local consumers taking time to warm to new technologies, I do believe it is ripped and ready to usher in a new era of growth. The ecosystem has been receiving increased government support, both financially and in the way of policies.

Furthermore, the increased attention from others in the region has led to the creation of a conducive environment for investors to enter and boost the confidence of budding entrepreneurs to take the leap and create startups that would ultimately fuel Cambodia’s economic growth.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

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Throughout the years, we’ve seen and heard startups being labelled with terms that often come from the animal kingdom (one might be a mythical creature). Labels such as unicorns and camels seem to have shot up and gained interest over the years. We all love our labels — they sound good, make for a great short-cut to convey something and above all, add that extra bit of glamour.

But if we look closely at these words and all the associated buzz around them, we’d see that something is clearly rotten in the startup world. These labels have misguided many startups as they’ve been misconstrued and have lost their true meaning over time. It’s about time we started talking about losing the labels altogether and start focusing on what truly matters.

The animal kingdom

To help you better understand these labels, let us first take a look at some of the common ones and dissect what they truly mean. A common trend you’ll see is that they’re all labelled after animals.

Much alike to the startup world, the animal kingdom is made up of some strong personalities that exhibit unique characteristics and traits. We have seemed to liken them to the traits that stand out with certain startups.

However, the discovery of these animal labels did not happen overnight. The discovery of these animals came about with the ever-changing socio-economic and tech climate.

Here are some insights on the more notable animals in the startup world.

Also Read: For COMEUP 2020, the post-pandemic future will be led by startups

I believe the unicorn status has reached such ubiquity that it’s hard to kill. The other labels seem to be either a response to global situations or a response to the shortcomings of unicorns.

If we dissect the characteristics of these labels further, we will find that they’re based on the same fundamental set of startup traits. There is a lack of clear distinction between these labels and one would be safe to assume that these labels were unjustified.

It’s just a trend

Similar to how clothing labels come up with new fashion designs that trend. New startup labels come in trend over the years as well. However, there’s a little more science to why they came to be:

The Unicorn label came about in 2013, where startups were growing in valuation twice as fast as companies from startups founded before that. The growth was accredited to technological advancements, an increase of private capital available and fast-growing strategies among other things during that era.

Unicorns were once a rare breed, but in recent years, the stable of billion-dollar thoroughbreds has grown to about 350 unicorns around the world. In today’s world, unicorns represent more than a valuation figure. Rather, they represent a philosophy, an ethos and a process of building startups.

Fast forward three years in 2016, the Cockroach label crept up. During this period was where things got off to a very different start, with venture capital funding drying up amid wobbles for the global economy. This revealed problems in the business models of many unicorns and other fast-growing tech businesses. Most of which rely on VC money to fund their growth.

Also Read: 4 key growth metrics startups should watch closely

In the following year 2017, there was a realisation that unicorns were being rewarded for disrupting and razing non-profit and social enterprises comprising institutions like education, healthcare and journalism. This was when the Zebra label was introduced. The capital system at that point was failing society in part because it was failing zebra companies: profitable businesses that solve real, meaningful problems and in the process, repair existing social systems.

With the rise of “fake unicorns” with crazy valuations in 2018, the Rhino label entered the arena. It was the unicorn’s safer counterpart. SEA seemed to have the highest population of rhinos because it was entering the “golden age” of disposable income. Discretionary spending started to rise in a non-linear way and really great platform companies got built.

Fast forward to today in 2020, with the world facing a global pandemic, startups were one of the worst-hit groups of people. Startups outside Silicon Valley, however, seemed to be holding down the fort. In emerging markets, many companies have survived with less capital and ecosystem support. Thus, the label Camel came to be for their ability to adapt to multiple climates, survive without sustenance for months, and withstand harsh conditions.

What does this tell us?

That a slight change in the economic or tech climate might just bring on a new label that would most probably be attributed to another creature in the animal kingdom. But once again I believe it will just be another whimsical label covering the same narrative of “not being a unicorn.” As a founder, you should be more focused on being able to predict, identify and adapt to these ever-changing trends.

Labels offer no tangible value for founders

Why should we bother categorizing startups with labels if they offer no real tangible value? You might argue that these labels might give startup founders something to aspire to become or a way to model their startups after. But similar to religious dogmas and teachings, they all seem to converge in a similar end goal.

Also Read: 3 mistakes early stage startups in Singapore make in product development

All the models of these labels basically point startups in the right direction in terms of running and sustaining their operations. Whether you’re a startup unicorn or camel, your business is still being fueled by the man-hours and ingenuity you put into the company.

If you’re a founder and you’re chasing a label for the hype and buzz it creates then you may have to reevaluate your decisions. Many startups have crumbled under the hype and the buzz because they were focused on impressing their stakeholders and the media rather than focusing on their product and people.

One such startup that took that path was Theranos Inc, a consumer healthcare technology startup, was once valued at US$10 billion at its height in 2015. Its leadership claimed it would revolutionise the blood-testing industry. However, the technological breakthrough that CEO Elizabeth Holmes and former company president Ramesh Balwani touted was never demonstrated, and the assertions of Holmes and Balwani amounted to outright deceit.

The company raised more than US$700 million by deceiving investors for years about the company’s performance. At the end of this saga, Holmes lost control of the company, returned millions of shares, and was barred from serving as an officer or director of a public company for 10 years.

The type of culture labels like unicorns breed has crept into the whole ecosystem in the most horrific way. Now, other startup founders also want the unicorn status and they are not shy to take the short-cut, or worst, the unethical route.

Chasing this proverbial label clearly seems to be doing more harm than good for founders in recent years.

It’s not about the label it’s about the business

Now don’t get me wrong. Not all startups aspiring to be the next big thing are destined for failure. Just like how we all have unique thumbprints, startups have their own unique business models and processes. They’re all running their individual races and they reach the finish line in their own unique ways.

Also Read: Tech for good: How 3 startups leveraged a messaging app to serve the community during COVID-19

Take the building and construction industry for example. You don’t see companies like Whiting-Turner on unicorn lists but yet companies like theirs have accrued billions in revenue without outrageous valuations. And that’s simply because they don’t fit in the prescribed label by definition.

So what are companies like theirs and many others doing right and what should startups be focusing on? I believe startups should be focused on the stuff that matters, like the following business fundamentals:

Revenue and profitability: The most common problem for startups is that they often do not have a clear path to profitability and return on investment. If your startup is focused or has a proven track record of actually building and scaling a customer base and bottom line then you’re already a step ahead from the others. Others being those that are less focused on the essentials and that is riding on their “innovative” concepts to rake in the moolah and customers.

Business model:  For a business to grow and succeed, it needs a strong backbone. A business model helps you define your customer value proposition and pricing. It provides a helpful guide on how to organise your business, whom you should partner with to generate revenue, and how to structure and manage your supply chain accordingly amongst other things.

Figuring out the right combination of partners, practices, and platforms isn’t easy. Getting it wrong is why so many startups fail. Likewise, getting it right is essential. Investing in things that truly matter like infrastructure and employees is a true indicator of vision and sound decision-making in a startup.

Sustainability: The market is actively looking for reasons to doubt billion-dollar-or-higher valuations. It’s important to take a step back and evaluate things like customer sentiment, the potential for brand growth, how well users respond to products, leaders’ pedigrees and track records, and so much more. That takes closer scrutiny and patience. Developing a resilient backbone indeed takes time, but in the end, it’s the type of framework that’ll weather turbulent market conditions and allow companies to go the distance.

Also Read: In brief: Investments in SEA startups double in Q2 despite pandemic; GreenPro invests in Ata Plus

Much the way all wildlife isn’t the same, all labels don’t share the same degree of long-term promises. No one’s interests are best served by prescribing a one-size-fits-all outlook to such a wide breadth of startups. Thus, focusing on the above-mentioned fundamentals should be the right approach moving forward.

The way forward

Startups are not cockroaches, unicorns, camels or rhinos — they are made by a group of people who can spot opportunities that others are not able to see yet and these people usually challenge the status quo. Building a successful startup is about grit, years of sacrifice, anticipating market volatility, managing the risk and, of course, a bit of luck.

Regardless of the labels used, there needs to be a change of focus in 2020. We need more founders focusing on startups that can actually be more self-sufficient or at least rely less on VC funds instead of dreaming and boasting about becoming the next unicorn. Instead of chasing after the labels, it’s high time we talk about becoming a fund-returning, profit-rich startup.

With innovation and tech growing at an unprecedented pace, no two startups can be described the same or be compared apple to apple. Our entrepreneurial journeys are unique to one another. That’s all the more reason to be cautious about the terms we use to describe startups.

In today’s environment, generalizing is both easier and more counterproductive than ever. I believe we can do better by simply shifting the focus away from the labels and double-down on what truly matters; building, growing and sustaining your business.

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Register for our next webinar: Meet the VC: Gobi Partners

Register now: What is corporate venture building and why this is the right time to look at capturing venture opportunities across South-east Asia.

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Surviving the pandemic continued to dominate the theme in the Southeast Asian startup ecosystem in July.

One of the most notable funding rounds of the month was announced by Indonesian travel tech giant Traveloka, who raised US$250 million. The funding round was first reported by Bloomberg in early July, though the company had also confirmed at the end of the month.

Interestingly, Traveloka had to have its valuation decreased by 17 per cent from their last fundraising. In their official statement, the company admitted to having been “profoundly affected” though CEO Ferry Unardi noted some recovery in their key markets.

Another impact of COVID-19 is that it became a trigger for businesses to migrate to online platforms. Startups that are helping this process had also announced funding, such as Indonesia’s Buku Warung and AwanTunai. AwanTunai stole our attention with their debt funding announcement, once again proving debt funding as a promising alternative for startups.

From the fintech sectors, we covered StashAway’s US$16 million Series C and Payfazz’s US$52 million funding rounds. Always a favourite of investors, we also covered a funding round for Walrus.

Also Read: Meet the most notable later stage funding rounds announced in May

Another popular sector is new protein with Burgreens and Karana announcing their funding rounds to grow their businesses, which all work in developing the alternatives to meat.

As the awareness of environmental impact continues to rise, investors are also aiming for startups that are building solutions to solve environmental woes such as SOLshare.

A unique sector that had secured a funding round in July is Partipost, a platform that works with social media influencers.

In the Philippines, edutech startup Avion School also scored funding as edutech startup in the region continued to gain popularity.

We recorded at least 17 funding announcements made in July with Singapore and Indonesia continuing to dominate, at nine and five announcements.

Also Read: Here are the early stage funding rounds announced by SEA startups in May

What is coming up next month? As always, there will always be sectors that remain popular among investors such as e-commerce, fintech, and green tech.

For fintech specifically, we believe that Ant Group’s upcoming IPO is going to rock the Southeast Asian startup ecosystem, tightening the competition among e-payments services in the region.

As the region continues to battle the impact of the COVID-19 pandemic, startups that are working to help conventional businesses migrate to digital platforms will be in demand. In a recent interview with e27, Marc Dragon of Reefknot Investments pointed out the available opportunities in the supply chain and logistics sector.

The recent downfall of Indonesian fashion e-commerce startup Sorabel will also provide some valuable lessons for startups in the same field. It is likely that we will see more funding rounds for fashion tech companies; however, as with the case of Traveloka, these funding will focus more on survival instead of growth.

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Image Credit: Frank Busch on Unsplash

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Singaporean businesses slow in embracing finance transformation: SAP survey; This results in companies losing US$340M annually to inefficiencies and manual processes; 33% of local employees say that they still submit expenses manually by filling out a form and enclosing physical receipts. Fintech News

PE-VC investors see steady valuations, improved exit environment in 2021, says DSA survey; PE firms have a higher appetite for new investments compared to VC firms both in 2020 and 2021; Vietnam ranks highest among markets where investors are most confident about placing bets in 2020. DealStreetAsia

Traveloka confirms US$250M fundraise, admits historic drop in biz activity due to COVID-19; Bloomberg recently reported the traveltech firm was in advanced talks with Siam Commercial Bank, FWD Group, GIC, East Ventures, etc. to raise the amount at ~US$2.75B valuation, roughly 17% less than its most recent fundraising. e27

‘It’s gonna be an economic apocalypse, but some industries are here to stay’: warns William Bao Bean of SOSV; Good businesses are still trading at a premium price; The fact that many investors continue to fund startups such as Ula, Tiin Tiin, and TurtleTree indicating that some companies are not cracking under uncertainty. e27

Could Sorabel have been saved? Co-founder Jeffrey Yuwono speaks out; COVID-19 struck the firm during the most vulnerable point in its funding strategy and devastated its core customer base; From a capital perspective, despite the uncertainty, the company procured several offers, including a term-sheet pulled at the last minute as uncertainty reached new levels in late March. e27

Digital wealth management startup StashAway raises US$16M Series C led by Square Peg; This takes he fintech firm’s total funding raised to date to US$36.4M; It claims its portfolios have generated annualised returns ranging from 11.1% for its highest risk portfolio and 4.3% for its lowest risk portfolio since its launch in July 2017. e27

Did the growing CAC in Indonesia lead to Sorabel shutdown? Experts speak; The strategy and operating cashflows control weren’t strong enough for the fashion e-commerce firm to convince investors; Thus, when the startup ran out of cash, there was simply not enough time for it to pivot the strategy towards a better profit margin. e27

Singapore’s financial services sector unlikely to contract ahead, says MAS; Fintech firms have raised US$336M in equity funding in H1, 2020, up 19% on-year, with US$137M of M&A; Tech has remained a key priority for the central bank, with recent investments in digital infrastructure having proved particularly effective amid the pandemic. DealStreetAsia

Building a global tech innovation brand with Taiwan’s vibrant tech ecosystem; Over the last decade, there has been a concerted effort across both the public and private sectors to encourage Taiwanese technopreneurs to not just innovate in their own market but also tap the 1.2B China consumer market, with an eye on global reach. e27

Entrepreneurship in a pandemic: Seeking success through economic turmoil; Building stronger relationships with employees, biz partners should take precedence over aggressive competitive behaviour; Creating unity through virtual social gatherings or checking in with one another when working from home can relieve the added pressures on the business. e27

Why corporate accelerators are dying and what they should do to thrive; Corporate accelerators that came into existence in 2010 surged to over 120 but dropped to 71 active programmes in 2017; Without alignment in objective and timeline, corporates are more likely to write off the potential and success of a startup after 1 run which eventually led to premature termination of the programme. e27

Oyo founder Ritesh Agarwal launches early-stage VC fund; Aroa Ventures aims to invest in consumer, technology, leisure infrastructure sectors; Aroa will look to invest in startups with annual revenues of US$500K-US$1M; It will have an average deal size between US$1M and US$10M. Mint

Without desks and a demo day, are accelerators worth it?; Before the pandemic, accelerators could advertise their value by lending desk space once used by Airbnb, Twilio and Brex’s co-founders, plus a glitzy demo day; Now, stripped of their in-person element, the actual value of an accelerator programme is being tested in new ways. TechCrunch

Taiwan’s TNL Media Group raises US$8M to build its publishing and data analytics businesses; It launched as a bilingual site to give millennial readers an alternative to traditional media outlets; It also has an office Hong Kong and a media vertical dedicated to covering SEA. TechCrunch

Why you need design thinking and proofs of concept to level up your biz; Design thinking is a development process that helps teams understand and empathise with their users’ needs, pains and intrinsic motivations. 70% of new startups flop; CB Insights finds that the number one reason for this is that there’s simply no market need for their product; TheNextWeb

Why streaming services need to adapt to survive in Asia; They’ll soon begin to lose their captive audience to the great outdoors, they need to be vigilant in these uncertain times and future-proof themselves for what lies ahead; Understanding the need to entice consumers to keep membership for the coming months will determine the future success of streaming platforms. e27

Exploring trends reshaping Thailand’s e-commerce scene; The COVID has spurred the growth of e-commerce, which is worth over US$4.32B; An evolving trend is the increasing engagement with brands and established stores; Engaging customers through games, competitions, and entertainment helps to build brand loyalty and connections. Tech Collective

Smart launching commercial 5G service on July 30 in Philippines; The PLDT-owned telco has poured nearly US$5.3B in overall capex spend over the past 5 years; PLDT also has partnered with Cisco and Huawei, to transform its IP fiber transport infrastructure into a fully automated, software-defined 5G-ready network. NewsBytes

MDEC partnering with more tech players to produce digital tech experts; Premier Digital Tech Institutions and Data Partner Universities will work closely with more tech partners to extend the Digital Tech Faculty Expert Programme; This will allow the tech partners to contribute to the growth of industry-ready skills required in the workforce. Bernama

3 mistakes early-stage startups in Singapore make in product development; Often, founders, especially first-timers, spend too much time perfecting their products; Develop only essential functions, release to the market as soon as possible to test the market, and iterate according to actual user behaviours. e27

Why it is important for tech companies to expand outside metro cities in Philippines; Expanding outside the metro cities enables businesses in general to experience low attrition, as well as help their employees save on commute time since traffic occurs seldom in provinces. e27

Starting a digital biz? Here’re common pitfalls to avoid; Bad marketing campaigns increase CAC, which is a crucial metric for a digital venture; You need to truly understand the target audience in order to optimise ads. Startup Thailand

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Diversity and inclusion have always been a big theme in the tech startup ecosystem, even in places such as Silicon Valley. Often, not for a good reason.

In 2017, following a sexual harassment allegation made by a former Uber engineer, NBC News reported that bullying against LGBTQ individuals in tech companies “are driving them out” of the industry.

Citing a study by Kapor Center for Social Impact and Harris Poll, the report wrote, “LGBTQ employees were the most likely to be bullied (20 per cent) and experience public humiliation or embarrassment (24 per cent), both at significantly higher rates than non-LGBTQ employees (13 per cent).”

While there have been actions taken to ensure a more welcoming ecosystem for minorities, reports of incidents like this inevitably led us to raise the bigger question: What about us in Southeast Asia?

In the past few years, women in the tech industry have spoken up about their challenges and tribulation in an open forum, particularly at the height of the #MeToo movement. If you have been to tech conferences in the SEA region, you might notice that they would have at least one session that specifically touches women in tech themes.

Women in tech issues have been widely discussed in the region –something that e27 applauds and supports. However, we find that there are many elements of diversity that we do not often touch in the ecosystem.

Also Read: Riding the irony: Can Indonesian GO-JEK afford supporting LGBTQ rights in a country that condemns it?

Recently, at the height of the #BlackLivesMatter movement, we aim to look at racial diversity in SEA tech startup ecosystem. We only managed to scratch the surface, but we aim to encourage further discussion. And eventually, action.

This time, we want to look at LGBTQ issues in the SEA startup ecosystem.

LGBTQ in Southeast Asia

If you ask an LGBTQ individual in SEA about how they are being treated by society, the answer will vary depending on where they reside.

While countries such as Thailand are perceived as more accepting, being the first in the region to approve a draft bill for the legalisation of same-sex marriage, other countries leave a lot to be desired. Homosexuality remains illegal in Malaysia and Singapore; apart from experiencing abuse and discrimination, their existence is often unrecognised by society.

In the tech industry particularly, one incident stood out.

In 2018, Indonesian tech giant gojek made headlines when the #UninstallGojek hashtag become a trending topic on social media. The hashtag was triggered by a statement by a gojek executive in his personal social media account, praising the company’s LGBTQ-friendly policies.

Also Read: Top 5 Chinese LGBT apps in 2017

As reported by The Jakarta Post, “Many Twitter users have posted screenshots of them uninstalling the gojek app from their phones in protest of what they perceived as Gojek’s approval of homosexuality.”

The executive was then sanctioned over his statement.

The way we see this incident is that as a leading tech company in SEA, gojek actually supports diversity and inclusion in their operations. But being a company that operates in Indonesia, where homosexuality is not illegal but frowned upon, it could not help but to adhere to society’s expectation, no matter how discriminatory it is.

This might lead to confusion on where the company actually stands in the matter of diversity, and how far it will actually go to defend it within its operations.

e27 has reached out to gojek to understand more about their stance on diversity and inclusion, but they have not responded by the time of publication.

Outside of the tech industry, as a comparison, a similar case happened to FMCG giant Unilever in Indonesia this year. The public threatened to boycott its products when the company announced its support for the LGBTQ community; the announcement was made on its global Instagram account.

CNBC reported that the incident had led to a 2.17 per cent drop of Unilever Indonesia’s shares in the stock exchange.

Also Read: 5 startups with LGBT pride

The voice of the people

But how is it like being an LGBTQ individual in the region’s tech ecosystem?

While the experience of several individuals can never represent the stories of many, e27 speaks to two sources to understand their perspective.

We speak to Ika Belerma, Quality Analyst at ThoughtWorks, and Faustine Tan, Sales Director at ZUZU Hospitality, who are open to sharing their experiences.

In general, both claimed to never experience any form of discrimination while working in the industry, apart from occasional misgender for Tan.

Belerma defines discrimination in the workplace as special treatment or preference over a candidate, based on their non-professional background, that might prevent a minority from moving ahead in his career.

“But I had definitely experienced micro-aggressions in the previous companies … in the form of slurs or seemingly innocent jokes,” he explains. “When that happens, I just tried to speak up and tell them it’s not acceptable.”

For Tan, in her experience, people in the tech industry already has a great awareness of diversity. She believes that education level has a lot to do with it.

“Luckily, all of us in startups industry are exposed to the right network and communities with the majority of people having a proper education, [which is] a university degree,” she says. “Education level has a contribution in shaping people and helping them understand … not to label [a person].”

Also Read: World’s largest dating app for gays sets up shop in Taiwan

Beyond the individual level, some companies are also giving LGBTQ employees room to express themselves through various initiatives during the Pride Month celebration every June. Belerma took the opportunity to educate his peers by sharing educational content through the email blast, chat groups, and even a TikTok challenge.

When asked about whether the activities aim to move beyond ad hoc events to focus more on advocacy, Belerma believes it is a good idea. But more commitment is needed.

Does he think tech can be a safe haven for LGBTQ individuals, the way fashion and beauty industries do?

“I certainly hope it’s true, but I think this is also something that depends on the geographical context. It’s also a complex question because there is still patriarchy here, with men dominating the area. But I do see some companies trying to provide a safe space. And I think that’s where we are going to go,” he answers.

Regarding what companies can do to ensure diversity in the workplace, Tan points out the practice of putting gender and racial preferences in job vacancies which remains prevalent in some Southeast Asian countries.

“Putting gender in job vacancies is so outdated,” she stresses.

When being asked about the importance of having a role model of successful LGBTQ individuals in tech (figures such as Tim Cook or Peter Thiel), Tan and Belerma have different opinions.

Also Read: Startup Impact Summit 2020 lends insight to break into Hong Kong startup industry in 2-day virtual conference

Belerma thinks it is quite important as it can show aspiring tech industry players what they can achieve. Meanwhile, Tan believes that a role model should only be judged based on their achievements, value, and impact.

“Most of my role models are male [and] they come from the closest circle: My own boss, mentors, and some investors,” she says.

For LGBTQ individuals aiming to make it in the industry, Tan has some last words to say.

“Accept who you are, be patient with the process of understanding yourself, define your self values, then live with it!” she closes. “So the company or community will see those values coming out from within you.”

Conclusion

When it comes to diversity and inclusion, tech companies in Southeast Asia might find themselves being pulled into different directions. They might want to implement  LGBTQ-friendly policy in their operations and to communicate this to the general public. But it can be challenging in an environment where showing support to the LGBTQ community might taint companies’ public image and lose their customers.

Ideally, we want tech companies to be the change needed in society, the way they are disrupting transportation or grocery shopping. But we are also aware that changes do not happen overnight.

What we can suggest is to start by looking within. Create a policy that supports a safe workplace where every individual, regardless of their background, can thrive. Use gender-neutral language whenever possible, hire people solely based on their capabilities. Never take aggressions lightly, however trivial. Expand benefits to non-traditional partners. Give support whenever it is needed. Educate yourself and practice what you have learned.

If companies are not able to speak about their initiative publicly, then at the very least, their employees would know that they are being seen and supported. If their society cannot give them the safe space they need, then let them find it in their employers.

This is also a way for companies to prevent performative allyship. Because we know that action and consistency are what matter –beyond displaying a rainbow flag on your Twitter handle just because it is Pride Month.

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Image Credit: Andrew Leu on Unsplash

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Against the backdrop of canceled international conferences and lost opportunities for startups due to the pandemic, COMEUP 2020 promises to be a silver lining. To this end, startups are invited to use this opportunity to connect with leading investors, companies, and government agencies from South Korea and other countries. They’re also encouraged to use this platform to grow their business in South Korea, Asia’s fourth largest economy and a global leader in ICT, and home to tech majors like Samsung, LG, Kakao, and others.

COMEUP was launched in 2019 to promote the Korean startup ecosystem at home and abroad. The event, which was developed in the same vein as other similar global events, saw over 21,000 attendees from 60 countries in 2019. Also in attendance were more than 4,900 startups and 650 VCs. COMEUP is hosted by the Ministry of SMEs and Startups, the Korea Institute of Startup and Entrepreneurship Development (KISED), and the private startup ecosystem, at the Dongdaemun Design Plaza (DDP) in Seoul.

This year’s event will be held from November 19 to 21, 2020, and will be live-streamed to tens of thousands of viewers globally. Carrying the objective of supporting startups to expand globally, the annual event has started accepting applications from startups for the opportunity to virtually present their pitches. 

Online Pitching opportunity for startups from all over the world

This year, the event will hold online pitching sessions for global startups to get an opportunity to showcase their startup to investors and other stakeholders. More than 700 investor firms are expected to attend.

Promising startups can sign up for the virtual startup pitch from July 24, 2020 to August 23, 2020 (GMT+9). The virtual startup pitch consists of a total of 120 teams divided in 2 leagues:

• The Rookie league (36 teams) will accept applications from startups that are less than 3 years old and have raised less than 410K USD investment
• The Rocket league (84 teams) will accept applications from growth-stage startups.

All 120 startups selected will receive support in creating their pitching videos, which will be showcased during the event as well as streamed online. Additionally, they’ll meet with investors and media representatives. There will also be an award ceremony based on public votes.

Also read: Disaster Tech innovation is key to mitigating the impact of natural disasters

Meet the Future – Post Pandemic, Led by Startups 

COMEUP 2020 will carry the theme ’Meet the Future – Post Pandemic, Led by Startups’ and will consist of 12 sessions based on three focus areas: Social System, Work and Life. Check out the sub-topics for each focus area:

• Social system – COVID-19, Politics, Digital healthcare, and environment
• Work – open innovation, Robotics & AI, remote work, and manufacturing
• Life – commerce, education, entertainment, and offline retail 

Some of the featured speakers this year are Chris Lee, CEO of SM Entertainment; Emmanuel LaLagarrigue, Chief Innovation Officer, Schneider Electric; Sophie Kim, CEO, Market Kurly; Saeju Jeong, CEO, Noom; and Henry Chesbrough, Professor at UC Berkeley. Investors like Sequoia Capital, Vickers, BAM Ventures, Collaborative Fund, and Grab Ventures are expected to attend as investor mentors. 

HyunWook James Jung, COMEUP Secretary-General, stated, “Our expert-led Organizing Committee consists of functional teams like program planning, operations and PR. We are doing our best to prepare an online global conference so that practical assistance can be provided to the startups participating.”  

For more information about COMEUP 2020, visit their website here, where the conference will be live-streamed.

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Cyber Security Agency of Singapore invests in Group-IB

The story: Singapore-based threat hunting and intelligence company, Group-IB, has received a grant under the Cyber Security Agency of Singapore’s Cybersecurity Industry Call for Innovation, powered by TNB Ventures.

The plans: To complete the development of its AI-driven cyber investigation solution uncovering hidden connections to dismantle cybercriminal underworld.

What is Group-IB?

Its solution addresses critical cybersecurity challenges in detecting and predicting cyber threats from a myriad of sources, including discussions in the DarkWeb, correlating them with threat actors to establish their alleged identities.

It is intended to help law enforcement (LE) officers, police cybercrime investigators, threat intelligence and DFIR specialists as well as SOC analysts.

The solution will speed up cybercrime investigation process, shorten the time for assessing the severity of cyber threats, and will allow the prevention at early stages.

Japan’s giftee invests in AdEasy

The story: AdEasy, an online marketplace for buying offline advertisement space, has received funding from Giftee Malaysia, a subsidiary of Japan’s eGift service provider giftee.

This round of funding is on top of the over US$455,000 raised in two previous rounds of crowdfunding, and angel investment.

Plans: To enhance the AdEasy platform, and continue the implementation of advanced campaign tracking and measurement for advertisers.

The mutual benefits: AdEasy’s network of advertisers and technology solutions provide a platform for giftee’s expansion into the region.

The e-gift system fits well within the AdEasy platform and provides businesses with more opportunities to engage and acquire new customers through eGifts.

Wellcure secures seed funding

The story: India-based Nearbuy.com founder Sumeet Kapur’s new venture Wellcure has raised US$200,000 from Inflection Point Ventures.

What is Wellcure?

Wellcure is a health-tech platform aiming to democratise natural healing. It caters to all health and wellness needs — physical and mental

It claims to have a user base of close to 100,000 and aspires to reach one million by the next year.

It has the ability to specifically cater to the needs of the customers by offering curated content along with the practical feasibility of offering recipes, e-books, online guided programmes, and live events.

Aqilliz, MyRepublic create blockchain-based loyalty programme

The story: Aqilliz, a technology company that specialises in blockchain-powered solutions for digital marketing, has launched a loyalty programme, in partnership Singapore telco MyRepublic.

Titles MyRewards, the programme application was developed as part of the IMDA Blockchain Challenge which looks to explore the applications of blockchain to drive greater operational efficiency and business model innovation in the telecommunications sector.

The benefits:

As part of the pilot programme, post-paid MyRepublic subscribers received an invitation to download the MyRewards mobile app. From February to April 2020, MyRepublic customers could earn points based on their monthly bill which could be redeemed at any of the company’s 19 retail outlets islandwide through an in-app QR code system.

In addition, MyRepublic users also had the option of earning points by connecting to over 20,000 Wireless@SG hotspots islandwide at locations including shopping centres, libraries, community centres, and other public venues. MyRewards points could then be spent on in-app purchases for retail vouchers and other branded offers, rewarding consumers for their participation.

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Building a travel-tech business in the midst of the COVID-19 outbreak. Sounds crazy?

Hugh Batley is just doing that, and this entrepreneur is confident that his startup will weather the ongoing crisis.

Based out of Singapore, TruTrip was started at the end of 2019 by Batley, who is originally from the UK, along with Pinky Tham.

Batley previously worked in the digital marketing industry across Asia, Europe and the Middle East, whereas Pinky was Facebook Southeast Asia’s Partner Manager.

The duo planned to officially launch the product in April this year but the virus onslaught shattered the plans and it forced them to postpone it to August this year.

“For sure, COVID-19 has changed our plans,” he tells e27. “But we were lucky as we were able to move very quickly. We were already moving into a remote style of working to help with collaboration across our teams.”

“On top of that, our team volunteered to temporarily reduce their pay. Plus, the Singapore government did a great job in getting support for the sector. With these changes done so early (80 per cent in February), we were able to significantly lengthen the runway,” he adds.

Business travel post-COVID-19

The virus outbreak has no doubt disrupted the world and put the global travel to a halt. For months, businesses were forced to make drastic changes to the way they operate and dig deep into their cash reserve to cope with the pandemic.

With the number of cases declining, countries are re-opening their travel corridors by stage in most major cities. As travel restrictions across the globe are beginning to ease, green shoots of optimism are sprouting in the industry, with corporate travel being among the first to get back on track.

Also Read: Being geek and gay in Southeast Asia: What startup ecosystem can do to foster diversity and inclusion

A survey by the Global Business Travel Association (GBTA) shows that more than half of its members are considering travelling for business in the near future.

TruTrip aims to tap into this opportunity. A business travel management tool, TruTrip provides companies with an online tool to book, manage and approve their business travels — all in one place.

Its features include enabling customers to automate and customise their travel policy to their business needs, besides offering an “extensive inventory” of hotels and flights, from full-service airlines to local low-cost carriers.

Its basic free-to-use offering comes with everything a business needs for basic travel management, including inventory, policy setting and implementation, approval flows, an online booking tool and a few other tools and information.

“Moving away from the entry offering, companies can customise their travel solution with tools and data to have the right solution for them. They include features like risk management, insurances, and finance integrations,” Batley explains.

For several companies on its builder programme, TruTrip is working on the first tranche of customisations (apps), which will be launched in mid-August.

TruTrip has a dedicated team connecting and building out new inventory partnerships and relationships all the time, says Batley. “For flights, we will be offering inventory from TravelFusion, Sabre, direct airlines, and SkyScanner. This part of travel is largely commoditised. Travellers do not appear sensitive to the purchase mechanism/channel as long as they can get competitive pricing and the experience is smooth.”

In his view, too many travel management companies (both digital and traditional) have spent a lot of time focusing on the transactional side of travel, sometimes at the expense of the traveller. 

The ongoing crisis has accelerated the glaring need to think more about travellers’ health, care and well-being, as well as how well your travel solutions fit into your business.

“This re-focus onto the management side of travel is where we bring value — for both the traveller and the business,” he says.

The startup’s primary market is Singapore and it has already bagged several clients but Batley doesn’t disclose the number.

At present, TruTrip has around 25 full-time employees. With its core teams based in Singapore, Kuala Lumpur and Jakarta, it also has people working in the US, the UK, India, China, Thailand and Taiwan.

Despite the ongoing crisis affecting his business, Batley is cautiously optimistic about the future.

“Communities are feeling the pain from COVID-19 at so many levels but, at the same time, we also know there is a need to re-establish services and the economy. We are starting to see the green shoots of recovery in the sector. The right type of travel (not just any travel) has shown to bring significant value to businesses, and it undoubtedly will again. We are in a great position to help businesses restart, in a supportive and managed way, their travel,” he remarks.

Right now, the company has its operations only in Singapore but plans to expand to Malaysia by late September. “We will be working to get these two markets right and successful before expanding further,” he shares.

Multiple partnerships

TruTrip has partnered with Riskline, a travel risk intelligence company, to equip business travellers with fully integrated and thorough-country briefings of COVID-19 risk level information, travel disruptions, latest entry and exit requirements as well as real-time travel alerts of every country.

This is a pre-trip step for travellers to have a clearer idea on the extent of the outbreak, safety measures and recovery rate as it might differ from your home country.

It also provides a Trip Companion feature to not only provides you with booking information but also with the latest risk alerts from Riskline and Real-Time Flight Data through its partnership with Cirium.

The Real-Time Flight Data will let travellers know about any flight disruptions as well as gate and terminal information, providing the information they need.

In the event of significant flight disruption, TruTrip’s support team is available to help its customers.

“Last-minute cancellation of flights will be one of the unavoidable scenarios too, as most governments will execute travel restrictions depending on the volatile recovery rate. We have worked with FWD Insurance to bring you flexibility without the airline premium; with our TruFlex offering we make all bookings refundable up to 90 per cent of the original price paid, up to 24hours before the flight,” he boasts.

Besides, the travel-tech startup has also partnered with Dr Anywhere to provide travellers with convenient and accessible health & wellbeing services. A traveller can even speak to them whilst he/she is abroad.

Opportunities

Batley feels that with platforms like Agoda, SkyScanner and Traveloka, the transactional aspect has hit that lowest sustainable bottom — the only savings left to have are eroding profit margins or investments in the user acquisition.

“There has been no run-away success, especially in this region, when looking at corporate travel management. We believe this tells us the problem is not being solved,” he says.

“There are many solutions to existing problems in the market but they are overly complex. If we can simplify that path then we see an ecosystem benefit,” he said.

According to Batley, although his team is cautious about the recovery of the sector, they do not need a full recovery for the business to make sense, unlike larger businesses currently in the space.

“For TruTrip, we look forward and have three core truths. People will still travel for work and travel will return as a norm to many roles in the mid-term (perhaps not the same norm, but a norm). Travel was on track to be an over US$125 billion in Southeast Asia by 2025 — perhaps that now looks like US$70-100 billion, but that is still a very interesting market to be a part of,” he shares.

Also Read: This is the era of virtual accelerators. Are you ready?

Travel Management has been changing for a long time and the experiences in the early days of COVID-19 exposed how underprepared many businesses were. The change that already started is now accelerating and businesses are requiring more than a great online booking tool with competitive pricing.

“Outside of major travel spenders (US$5 million/year), there are very few travel management solutions that offer an integrated and accessible approach to delivering what we see as true travel management,” he said.

The startup has raised some small funding, but fundamentally it is a bootstrapped business. “Funding appears to be more exciting to many entrepreneurs but for us, a business with the right fundamentals is more rewarding. Once we have proven a hit with our user base, there may be a case for investment to expand or indeed if the recovery is slower than expected. But we will look at that towards the end of the year,” Batley concluded.

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Image Credit: TruTrip

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There’s no doubt that the world is changing rapidly; faster than any era before this.

A decade ago, it was unimaginable to own refrigerators that would be able to inform us when we are running low on groceries, yet now we are in the era of the ‘Internet of Things’.

Every second we see 127 new IoT devices connected to the web and in 2019 there were a total of 26.66 billion active IoT devices. As technology changes, it becomes more affordable and readily available, making it easier for masses with ideas to build a product that can potentially change the world.

Just look at how Airbnb and Uber have revolutionised the hospitality and transport industry. Looking at the pace of change, there is no guarantee that companies with a significant customer base and revenue will make it in this digital era if they continue to remain status quo.

With this constant threat, corporates have been exploring different ways to integrate innovation into the organisation. One successful corporation that has consistently innovated is Samsung.

The South Korean conglomerate first introduced the C-Lab innovation programme in 2012 to nurture in-house ventures and established the Samsung Global Innovation Center to drive innovation globally subsequently. In 2013, the South Korean conglomerate spent US$13.4 billion which is equivalent to 6.5 per cent of its total revenue to find new ways to grow, innovate and improve.

Over the past six years, the tech giant spun off 40 companies and registered 6,469 new patents in the US ranking them as the second-highest patent winner in the US.

Also Read: In brief: eBay launches e-commerce accelerator in Singapore; Circles.Life introduces eSIMs

With such a positive outcome, it’s surprising to see that corporate accelerators that came into existence in 2010 surged to over 120 but dropped to 71 active programmes in 2017.

Let’s take a look at what led to the downfall of most corporate accelerators.

Challenges of Corporate Accelerators:

Misalignment in objective and mindset

One of the most paramount decisions for corporate accelerators is to identify the objective of why the organisation is running the accelerator programme. This would dictate every aspect of the programme, ranging from how it should be conducted, the strategies as well as the type of startups that would be brought in.

Most corporates running an accelerator programme came in with the intention to run a self-sustaining and profitable accelerator. They expect the startups in the programme to function like other business units within the organisation and generate revenue from Day 1. Audits are conducted annually to evaluate the success and performance of a department or programme and they expect to see growth and returns in the reports.

On the other hand, startups need time to validate, prototype and scale before their first taste of success. More often than not, the amount of time startups take to succeed is deemed as too long in corporate terms. For example, Airbnb was conceptualised in 2007, it took two years for them to launch, grow and raise their seed round, and they only became profitable in the second half of 2016 (after nine years!).

An interview with Marc Shedroff, COO of Samsung Global Innovation Centre (GIC) revealed that one key factor that contributed to their success was alignment and communication. They spent a lot of time aligning with the entrepreneurs they work with on what they can expect from GIC which helped to remove distractions and empower both teams to deliver.

Without alignment in objective and timeline, corporates are more likely to write off the potential and success of a startup after 1 run which eventually led to premature termination of the programme.

Also Read: 6 notable accelerators and incubators in Southeast Asia for startups of all sizes

Corporate mentors lacking in startup experience and commitment

Experience is a valuable asset that cannot be bought, yet it is critical to the success of a business. The insight that startups can learn from books is incomparable to learning from a mentor that has walked the path before. In most corporate accelerators, the organisation works with startups that generate solutions for their industry. They would introduce mentors within the organisation that are experts in the industry and would be able to equip the startups in the programme with domain knowledge.

This information would be useful when the teams are trying to validate and build their prototype but it poses a problem when the startups go beyond that stage. While they are experts in their domain, they have limited entrepreneurial experience.

Without going through the trenches themselves, the corporate mentors would only be able to provide theoretical academic knowledge to help the startups.

On top of that, mentors of the corporate accelerators hold a day job within the organisation and are not compensated based on the success of the corporate accelerator. It’s no secret that it takes long hours, numerous of trial and error, multiple iterations before a startup can thrive.

With little incentives, this makes it harder to find mentors with relevant experience and expertise to commit the excessive hours to mentor the startups in the programme.

The number of dedicated resources and budget that each organisation is willing to invest plays an important role in dictating the fate of the corporate accelerator.

Lack of corporate-startup collaboration

It is estimated that 90 per cent of startups fail. To mitigate this, startups join corporate accelerator programmes to gain access to the corporate’s network, expand their revenue stream as well as for the reputation boost of working with renowned brands in the industry.

Also Read: 6 notable accelerators and incubators in Southeast Asia for startups of all sizes

In return, corporates would be able to leverage on startups creativity, innovative ways of working and new technologies.

While this relationship would often start out positively, having an accelerator programme does not necessarily equate to the collaboration working out automatically. Effective collaboration is often hindered by how corporates are structured, the organisational culture and internal processes. For startups, one of the challenges they see in corporate-startup collaboration is the long cycle times and slow decision-making from the corporate team as multiple departments and layers of approval are involved in any decision made.

The collision in organisational structure and strategy would cause corporate-startup collaboration to start off on the wrong foot which eventually leads to futile effort and frustrations.

While the future of corporate accelerators might seem bleak, not all is lost. There are still corporate accelerators out there that are thriving and generating stellar startups.

Let’s take a look at what has been done right.

Strategy #1: Alignment of short term goals with long term decisions

As mentioned earlier in the article, having a unified goal between the corporates and startups is a critical factor to determine the success of the programme. Taking time out to align the goals of the corporates and startups as well as getting the buy-in on the monetary and timeline from the various business units within the organisation is essential prior to the launch of the programme.

Insights from the business units will help to set the direction of growth and change required by the organisation and will provide greater clarity on the goals, models and strategies that the corporate accelerator should adopt. Looping in the decision-makers on the onset would ensure that key stakeholders in the corporate accelerator are involved and prevent the programme from being a lost cause.

Also Read: Meet the 7 leading startup incubators and accelerators in UAE

With the full support from the business units and understanding that it takes time for corporate accelerators to generate success, this increases the likelihood of the programme taking off.

Besides setting and aligning the goals, regular check-ins with the various stakeholders to evaluate the progress is necessary. The check-ins allow all parties involved to address their hopes, expectations, iron out frustrations and introduce changes when needed to keep the programme moving towards the final goal.

Strategy #2:Creating opportunities for the community

Besides funding, a key draw for startups to join the corporate accelerator programme is the network that corporates bring. To attract high potential startups, corporates should leverage their connections and bring various stakeholders of the ecosystem together.

To support the growth of early-stage tech startups in India, Airtel launched their corporate accelerator programme in 2019. This allows startups in their programmes to gain access to opportunities and distribution networks that they would not usually be able to. At the same time, Airtel can value-add their corporate partners by introducing creativity, providing technology and value-adding to the services they provide.

Through building up the ecosystem, it brings in product adoption and partnerships opportunities which value-adds all the key players of the ecosystem and strengthens the offer of the corporate accelerator.

Learning from the startups that have been through StartupX’s programmes, they would first launch in their home market before scaling to the region. However, they often face challenges trying to navigate through the diverse market, complex policies as well as language barriers.

Tapping on the corporates network when expanding into new grounds would increase their chances of success. For instance, the SAP IoT Accelerator, offers startups their customer base and platforms to their startups, allowing the teams to test their ideas while they expand.

Also Read: Need help building and growing your startup? Here is a list of accelerators in Singapore

At the end of the day, corporate accelerators are not merely a trend. To keep the corporate accelerator model alive, corporates would need to be more proactive and rewrite the rules of the game by focusing on the basic principles of pragmatism, aside from all the hype and buzzwords.

In a market where there are limited high potential startups, only by improving the offers, refocusing their budget and resources would ensure the success and continuity of corporate accelerators.

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