Asia's Tech Renaissance
While the Asian tech start-up scene has grown quickly in recent years, it still trails Silicon Valley by some way, says global industry players.
As hubs for tech entrepreneurs pop up all over the world, many are casting their eye towards Asia, which boasts fast-growing consumers markets and a growing pool of entrepreneurial talent.
The potential for the region's start-up scene was a key topic explored at the Kauffman Fellows Venture Capital Summit held at the end of January in Singapore. The event featured guests from the global VC community, including representatives from firms such as Sequoia Capital, Andreessen Horowitz, Accel and Google Ventures.
Places like Singapore and Beijing have been touted as potential rivals to Silicon Valley. Yet there are still some way to go before Asia's hubs can match the capital and innovation of the valley, speakers at the event said.
While there have been some big-name triumphs, like China's Alibaba, these are still few and far between. This relative lack of success stories, coupled with a dearth of engineering talent in the region, is a major roadblock to Asia's tech start-up scene realising its full potential.
The tendency for Asians to shy away from high-risk ventures to pursue stable careers is also an issue in some countries. Shailendra Singh, managing director for venture capital firm Sequoia India. He noted that more role models are needed in the region to inspire talented individuals to take the leap into entrepreneurship.
However, Helen Wong, a partner at Qiming Ventures said ted that the situation is different in China, where "you don’t need to encourage people to be entrepreneurs".
Southeast Asia’s start-up ecosystem, meanwhile, is still somewhat nascent compared to Silicon Valley, according to Alexis Horowitz-Burdick, founder of Singapore-based cosmetics online retailer Luxola. “More than just exits, we need to focus on how an ecosystem gets built; we need people to invest back into ecosystem. I don’t think there is a secret recipe for it.” Luxola was acquired by luxury brand LVMH’s cosmetics subsidiary Sephora last year.
Yet, things have come a long way in recent years. Ross Veitch, founder of Singapore-based online travel company Wego, noted that getting VC funding in the Republic has become a lot easier as investors are now more receptive to start-ups. In another encouraging sign, he said that there is also more local capital flowing into local tech companies here. Horowitz-Burdick added that Singapore was the easiest place to start a company in Southeast Asia.
One big trend sweeping the tech world is the growing use of mobile devices to connect to the Internet. This trend is particularly important for the tech scene in Asia, which boasts the highest mobile penetration in the world. The region is estimated to house around a billion cellphone users.
And in developing markets like Indonesia and Myanmar, many consumers first experience the web through their smart phones. As such it is key that start-ups make their products mobile-friendly. William Tanuwijaya, founder of Indonesian online marketplace Tokopedia, revealed that 75 percent of the company's traffic comes through mobile phones.
Smartphones with larger screens and faster connectivity has helped fuel the conversion from desktop to mobile. To meet this challenge, start-ups need to invest in mobile app in-store campaigns and push notifications rather than more traditional paid searches, said Veitch.
That said, adapting to the mobile world is easier said than done. "We have tried going with outsourcing our development or going hybrid and what worked best was building a full in-house native client app development team."
However, the importance of mobile in Asia means that startups in the region can capitalise on opportunities not available in other markets, helping differentiate them from their counterparts in the West.
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