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Galixo is a partner of Seedstars World, a global Startup competition focused on emerging markets. This interview is the second one part of a series to explore with Seedstars World the different startup ecosystems and cultures in three very different parts of the world: Middle East/Africa, Asia and Latin America. SeedStars World just hold regional startup competitions in India, Thailand, Singapore, China, Japan and South Korea. They left Sydney for their last step: Latin America.
We left you in South Africa, you had finished regional competitions in the African continent and you told us about the great startups and the immense potential you found there. So from Africa to Asia was there a ‘tech ecosystem’ clash? What was strikingly different but also what was similar?
There was definitely a clash. We were in some of the developed scenes across Southeast Asia and East Asia like Singapore, Hong Kong, Tokyo. So the level was completely different at this stage. You could see this in the innovation aspect of the startups, the educational background of the entrepreneurs and also in the quantitative and qualitative aspect of the startup ecosystem, meaning there are much more incubators, accelerators, competitions, demo days, hackathons going on throughout Asia than in Africa and the Middle East right now. So I would say these were the main striking differences.
What is the Startup ecosystem and culture like in India, Thailand, Singapore, China, Japan and Korea? Just a few words that can best describe each one of them.
Bangalore: “Definitely a tech scene. High-quality developers, programmers, an emerging and growing community of entrepreneurs. Accelerators and coworking spaces blooming everywhere. More access to money.”
Bangkok: “Very new scene. Startup ecosystem is unequal. Strong clash between local and expats startups – local startups tend to lack this marketing and business aspect that strongly defines expat startups. Accelerators and coworking spaces are just starting but blooming. A hot tech scene with high potential: 65 M people, 50 M internet penetration, so it’s an interesting market to start with”
Singapore: “The government ‘s involvement is big. Very present. Quite easy access to grants for seed stage startups, which creates a strong startup ecosystem. A lot of money for seedstage. “
Beijing: “China is the most mysterious country. Difficult to understand consumer trends or the entrepreneurs’ community. A completely unique and quite closed ecosystem focused on China, thinking local and not global (which makes sense when the population is over 1.3 billion). Startups target cities because in themselves they can be as big as countries. A main challenge for us was to understand users: English is not standard and Mandarin dominates; social media is another world – Twitter is Weibo, Facebook is RenRen – and everything is very much focused on social gaming. The interface with the consumer is totally different. The business angels and VCs are also a closed community. Innovation is there. Our winner for instance presented an interesting product to cope with the whole aging population: a watch that has sensors (your heat, your heart beat etc.) embedded to monitor health condition with a back stage platform. But there are still many copycats. It will be interesting to see how it will evolve in the next years.
Hong Kong: English-speaking. Open and connected to the rest of the world. A lot of expats. A nascent startup ecosystem. The startup scene did not need to be very developed because there have been other much more important industries shaping the economy such as banking/finance or import/export. But now the HK government launched a campaign to encourage startups to be incorporated in Hong Kong and attract foreign talent. It focuses on China because it is next door. But it is thinking global.
Seoul: A very interesting ecosystem. A relatively small country (compared to China and India) with startups that think global with products ready for the global market. Entrepreneurs were very educated, spoke a perfect English. A strong influence coming from Silicon Valley due to its ties to the US is tangible. Very smart and innovative ideas in online social media. The Korean government now is taking action to become an attractive place for startups. You have amazing coworking spaces and accelerators. So a huge potential lying ahead.
Tokyo: Surprised to find out it is quite a closed ecosystem. Very few expats with 99% of the population that is Japanese. A big population, so sufficient to themselves. The tech scene is centred on the domestic market. The digital culture is app-driven, social gaming-driven. A very different consumer and user behavior than other parts of the world. Their games are specific to the Japanese market. Their monetization is quite unique to Japan, never seen such monetization models elsewhere (check out the revenues of Puzzle & Dragons, the Japanese mobile game developed by GungHo Online Entertainment). The entrepreneurial spirit still lacking but with the economic crisis, this is now starting to change with new initiatives and some very good coworking spaces and incubators as well as some successful exits. But like in China and South Korea, in Japan the big corporations still lead in the tech scene, startups are still small players.
Two general comments that apply for the whole region that are interrelated:
You met with startups, incubators, accelerators, VCs in each city you’ve been so far. So which country in Asia has the strongest ecosystem in your view and why?
Singapore because it has all the components combined together: good startups, money, a super active ecosystem with countless coworking spaces, accelerators, incubators, competitions etc. and most importantly government support in incorporating startups and providing funding, resources. Seoul was also impressive, the startup community is growing quickly and the government is starting to help build an active ecosystem. Now we’ll have to see how things develop. And in both cities, we don’t know yet if we’ll see big exits or buyouts.
What impressed you the most in your Asian Startup Tour?
The fascination with Asia is how quickly they can stand up, how they can build themselves, how they can adapt. They are excellent and smart copiers, meaning, they are analysing what worked and what did not in the West and trying to build better products, in a fast and agile way. This is a big strength.
How do you predict the future for Startups in Asia? Will they have the ability to compete in the near future with the like of Silicon Valley? Are we close or far from there?
Silicon Valley still seems very far away from any tech scenes we’ve seen so far. As far as Asia is concerned, it is catching up on many aspects, but the tech innovation culture and especially a culture of failure that is lacking is still a big issue in order to be able to compete with Silicon Valley.
Will you be more present in South East Asia next year, are you thinking of holding competitions in Indonesia, Malaysia and Vietnam where the startup community is growing in number and quality?
Absolutely, we’ll hopefully be in these 3 countries. Also Philippines. We heard so much about the startups there. Very good feedback. We’re looking forward to meeting them.
You are currently in Sydney. Just a few words and also any expectations about Latin America?
Sydney is great. In Australia, the market is relatively small so startups have a very global strategy. They have a product that could potentially work everywhere. Cool coworking spaces and accelerators. Money, funding may be lacking because it is not in the mentality, so the infrastructure behind is not well set.
Expectations on South America: it will be very interesting, we’ve heard great feedback, we’re expecting to see quite developed startup ecosystems since the government in Brazil, Chile is backing startups. We are interested in finding out if they are as good as what we’ve heard.