Key differences in the startup ecosystem in Silicon Valley vs Malaysia and Singapore
I’m super blessed. My startup, SushiVid was recently accepted into one of the awesome programs that sent entrepreneurs from Malaysia to Palo Alto for a two-week intensive entrepreneurship program. It’s called the e@Stanford.
I honestly never thought I’d get this far with my first startup. Two years in, as far as I knew, I was just working daily, trying new things, building new features, sales meetings after sales meetings, investors after investors, I’m just been working!
Going to Stanford was like a break for me. A place where I could just absorb with an open mind, what is happening around the startup scene, what others think of the space I’m in, how I could be a better leader.
I wrote this article for our blog but thought I’d share some of my thoughts here as well.
So, here are some of the biggest differences I found:
Startups rule the school
The most glaring difference between San Fran and Malaysia (well, may be even Asia in general) was how receptive people were to startups. We guess that’s because startups are only in their infancy in Asia, and only starting to be seen as a viable career option. But in Palo Alto, startups are the norm. So much so that investors practically throw money at us entrepreneurial folk — regardless of whether we even have a product. Seriously. It was astounding to us that pre-product, pre-website, pre-prototype even entrepreneurs can command a US$5m or US$8m valuation for their company. They can even ask for US$1 million at a crazy 5–8x valuation. We. Kid. You. Not. Contrast Malaysia where that would be nigh on impossible. Here at home, unless you’re a serial successful startup founder and you ask for $1m for your prototype you will only get a 3x valuation, which means that your company is only worth US$3m.
Our government has got it going on
From what we could see, Asian governments are far more active in fostering startups than the American government. Maybe it’s because startups are already quite mature in the states (and the entire Bay Area is so supportive already). Maybe it’s because orange is the new black (if you follow what we’re saying). Whatever it is, government startup intervention is just way stronger in Asia. For instance, just look at the Singapore government initiative, SPRING Singapore, that gives out grants to startups. The Malaysian government has a Cradle fund in place for seed stage and pre-seed stage grants to startups. There’s also MaGIC, which is not only an accelerator, but a workspace and an overall ecosystem providing support to get Asian startups through events AND organises trips to Stanford (like the one we just returned from). Governments here are focused on ensuring that startups have access to the best and latest technology and even have grants in place to support that. This is something we really didn’t see much of in the US. In fact, one of my friends in Dallas was so envious that our government had actually paid for us to learn about entrepreneurship and is that committed to us improving our business. We cannot express how grateful we are for the opportunity to have gone to Stanford.
Bigger, bigger,bigger
It’s the land that brought us super sizing, so it shouldn’t really be a surprise that US startups focus on growth prospects. In fact, growth is pursued with dogged determination and single-mindedness. In America they don’t consider early revenue to be reflective of value, because there’s an understanding that your model will pivot and evolve a few times. While revenue is viewed else where as demonstrating traction and a proven model, in Asia revenue is a means of determining your worth at that point in time. Asian investors (well ours at least) focus on breaking even at 1.5 years. As a result, we are constrained from trying for those scalable things that will make our platform even greater. Instead we have to start selling and serving clients because of the need to break even from the start. From speaking with the other attendees, I would dare say that about halfare facing the same creativity stifling hurdle. It’s disappointing, but it largely reflects the differences in our values; Asia is a traditional and conservative society after all.
The dreamers vs the money makers
It’s fair to say we were in awe of some of the startups we encountered in Stanford; the world’s best engineers concentrated in one area, working together for the common good. It really seemed like the US startups were focusing on how they can improve things, be it the environment, health or public safety. One of our professors had even invested in a startup that is making immigration checks more efficient and less intimate and invasive (say farewell to those awkward encounters with officials who are paid to touch you up). Asian startups on the other hand tend to focus on e-commerce, payment gateways, logistics, marketing and the standard Grab Taxi and Gojek style services that focus on consumers. All very useful and innovative, but a bit devoid of the feels. That’s not to say there aren’t equally great ideas coming out of our region, just that our focus is a little different at this stage while we play catch up.
Take-aways
Our trip to the land of the free was everything we could have dreamed of. And while it would be easy to think that America is so far ahead of us, among all the differences there were reminders that there really is no place like home.
Want a laugh?
No holiday is complete without a home movie, right? Well, here’s our pitch video. It’s cringe worthy, but hey, it got us to Stanford!
