Kaylene Hong was Asia Reporter for The Next Web between 2013 and 2014, based in Singapore. She is bilingual in English and Mandarin. Stay in Kaylene Hong was Asia Reporter for The Next Web between 2013 and 2014, based in Singapore. She is bilingual in English and Mandarin. Stay in touch via Twitter or Google+.
It cannot be denied that Asia is currently in the throes of a tech startup buzz. The scene is getting more vibrant as investors flock to the region in a bid to tap on the rapidly developing market, with a report by Tech in Asia last month noting that Asia-Pacific’s average investment value per deal climbed 276 percent in Q2 2013 compared to Q2 2012.
As more and more startups launch in Asia, everyone is waiting for the next Samsung or LG — a success story that will ring across the world. Which startup can make it big on the global stage and bring pride to Asia?
There are always huge expectations on any startup to go international. Yes, conventional wisdom says that startups should aim big. Go international, kid, and your money will roll in. Build a product that everyone across the globe will love and you’ve made it.
Early this year, Dave Goldberg, the CEO of SurveyMonkey, told Harvard Business Review:
If you have a product business and you aren’t focused on international, you are missing out on two-thirds of your potential customers.
Asia has plenty of space for traction
However, does this concept of conquering the international space definitely apply to Asian startups?
There is great pressure on startups in general, especially those in smaller local markets, to prove that their business can scale so that investors will be attracted to the greater returns.
Many interpret this as going worldwide, and so Asian startups always have this idea to “go global” one day to reach the Western parts of the world. There is also some kind of prestige associated with being recognized by Americans and Europeans in the tech startup scene — after all, Silicon Valley is THE representation of success for startups.
Or is it? Does an Asian startup need to target the West in order to be considered successful?
I would argue no, given that Asia is a huge region facing unique problems and there is plenty of space for traction just simply within this continent — bear in mind that Asia is the world’s largest continent and the world’s two countries with the largest populations, China and India, belong in Asia.
Asia faces problems that are different from the West
The problem with Asian startups trying to go global is that their focus gets disrupted. In the midst of attempting to be the next big chat app like WhatsApp or photo-sharing app like Instagram, these Asian startups lose sight of the potential that Asia has.
Does Asia really need to solve first-world problems that people in the West tend to face? Not really. There are some highly-developed countries in Asia such as Singapore and Hong Kong, but in general Asia as a region is still developing — and developing countries face problems that vary greatly from their first-world Western counterparts.
Hugh Mason, the founder of startup incubator Joyful Frog Digital Incubator (JFDI) based in Singapore, notes that often Asians who are educated in the West tend to pitch startup ideas that address first-world “non-problems”. He says:
At JFDI.Asia we try to persuade teams whose ideas don’t fit the region to think again… Why don’t you see the yawning massive opportunities all around you?
He notes that Westerners who come into Asia typically have the reverse problem:
They arrive fired up with evangelical zeal on a mission to ‘save the natives’ like colonial-era missionaries. Instead of Bibles they come preaching the virtues of the latest B-C fad from the US, or yet another sure-fire make-you-a-millionaire-in-a-weekend lean canvas startup weekend on a boat with celebrities concept. Their underlying assumption is that social structures are basically the same everywhere and Asia is just lagging behind.
The crux of the issue: it’s precisely because Asia is lagging behind that there are plenty more opportunities for startups to grasp. As Mason explains:
All around us in Asia, a billion people want healthcare, education and access to goods and services that the developed world’s citizens take for granted. It’s like 19th Century America – a vast continent ripe with opportunity for products and services. But those products and services have to work with the geography and the culture of our region.
Darius Cheung, the founder of Singapore-based startup BillPin, concurs and says that 90 percent of the time, he would advise Asian startups to stay where they are. He cites Paul Graham, the co-founder of Y Combinator, as saying that noticing problems is the best way to have startup ideas:
Whether a startup is working on a local or a global product, there is a much higher chance that they truly are solving a problem they understand well by staying where they are.
Asian startups that have made their mark
This concept is best displayed by a few examples of startups in the region. Recently, third-party Chinese app distribution platform 91 Wireless hogged the limelight when Chinese search giant Baidu announced it would be buying it for a whopping $1.9 billion. Was there ever a need for 91 Wireless to “go global”? Not at all.
The Google Play Store dominates Western markets for Android smartphone apps, but in China there is a unique problem — a lack of a China Google Play Store. This is where the need for a third-party app store arose — and where 91 Wireless jumped in to take advantage of it.
Another Chinese startup Xiaomi (well, it started as a startup but has grown leaps and bounds now) is also a prime example of targeting a unique problem in the region. Noticing how the Chinese much prefer lower-priced smartphones but still wanted a certain level of quality — and that the market only had a few players — Xiaomi responded to the gap and produced an entire series of smartphones that boast of decent quality and sleek looks, at highly competitive prices.
In the second quarter this year, Xiaomi officially overtook Apple in the Chinese market, according to figures from analyst firm Canalys. Has Xiaomi decided to go global? No, at least not for now. Despite plenty of speculation that the company will ride on its popularity to go global soon, co-founder Bin Lin once said that that the company is happy being in mainland China, Hong Kong and Taiwan and has no plans as of now to start selling Xiaomi phones worldwide.
At JFDI.Asia’s recent demo day, a startup called OurHealthMate helps expat Indians find, book and pay doctors in India on behalf of their loved ones. It targets an extremely unique problem in Asia: how children who live overseas remit money to their parents meant to pay for healthcare-related expenses, but realize that their parents fail to make and keep medical appointments by themselves.
Burrowing into a more microscopic way of looking at things throws up another very clear demonstration of how startups should stay in their region. I live in Singapore: do I use US-based Yelp for food-related recommendations (even though they have a Singapore site)? No. I use Hungrygowhere, Burpple and the 8 Days Eat app from a leading magazine in Singapore — because I trust that they have a better grasp of the food scene right here where they are based.
Are these apps raking in huge amounts of money like Instagram or Vine or even Waze? Not really, but they provide services that are targeted at an audience which appreciates the services and end up using them frequently. And there are so many problems to be solved in Asia — from the minute “first-world” problems in more developed countries to bigger problems such as healthcare and education in third-world countries, that have not been explored.
Instead of yet another photo-sharing app, you could be the developer of an app in Asia that helps to connect midwives to women in villages who experience difficulty giving birth healthily. Will you end up being touted as the next big thing in Silicon Valley? Probably not, but your service would be in much higher demand.
Dominating a small(er) market is still a mark of success
It all boils down to being an expert in your area of expertise. If you barely have an understanding of Western culture, only gleaning knowledge from watching TV dramas, lay off the big American dream and focus on Asia — where there are plenty of problems to be solved.
JFDI’s Mason sums it up best:
Where are the next billion people coming online for the first time, right now? Asia. We have the talent, the money and the market. If the 19th Century belonged to the European colonial powers, and the 20th Century to America, the 21st will be dominated by Asia.
Headline image credit: Rouf Bhat via AFP/Getty Images, other images via Getty Images and Thinkstock, video via Xiaomi
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