Building Startup Cities in Africa and Southeast Asia

Startup Cities in Africa and Southeast Asia

First, some history about this post:

  • The readers have spoken  —  I’m going to write about startup culture in Africa and Southeast Asia!

  • Oh shit, I actually know very little about startup culture in Africa and Southeast Asia (even though I lived in Malaysia and Singapore for 21 years).

  • After doing some research, I’ve learned about a bit more about these places but my knowledge is far from comprehensive.

  • I know, I’ll write about the history of Silicon Valley first to provide context.

  • The more I read the more I realize the depth of my hubris. I’ve never even been to Silicon Valley.

  • Fuck it, I’ll write a ‘lessons learned’ post.

Why I’m interested in Silicon Valley

As previously mentioned, I’ve never been to Silicon Valley. But the 408 area code has taken on the status of a technological and entrepreneurial holy land in my mind.

In the past decade, startups in the Bay Area have sought to disrupt every imaginable industry from personal investing to space exploration to indiscriminate one-night stands.

Still, if you’ve been following the Silicon Valley narrative in recent years, you’ll pick up on some disturbing trends.

From social media standoffs between tech workers and locals to anti-gentrification activists blocking Google bus routes, it looks like San Francisco natives are getting tired of the extended spring break shenanigans of a city full of startup founders gone wild.

Earlier this year, I saw this comment:

YCombinator grads are like Goldman Sachs bankers in every way, but without the money.

For the uninitiated, YCombinator is like summer camp for startups.

I love YC.

I’d come to despise the bankers of Wall Street after their excesses and irresponsibilities that had been dragged into the public spotlight in the wake of the Great Recession.

So the thought that my entrepreneurial heroes might be this decade’s villains was distressing.

Trying to understand the way things are today, I decided I’d look into the past for clues. Maybe I’d figure out the secret of Silicon Valley’s success  —  or discover the key to identifying its successor.

In fact, forget the Valley

Lessons learned about Silicon Valley, distilled

  1. Silicon Valley wasn’t always Silicon Valley. In the 1950s, the area was known as the Valley of Heart’s Delight  —  an agricultural paradise. In the 1960s, agriculture was replaced by a ruthless explosion of manufacturing, which in turn collapsed in the 80s to give way to the knowledge economy we know it for today.

  2. If corporations founded by Stanford alums were to form an independent nation, it would be the tenth largest economy in the world, with an annual revenue of $2.7 trillion.

  3. World governments from Russia to Vietnam have sought to emulate the success of Silicon Valley, with varying degrees of not-success. The problem might lie with the governments themselves — startup investors need to have a nose for the kind of bullshit most bureaucrats spend their days swimming in. In America, Silicon Valley is about as far from Capitol Hill as you can get, give or take a couple of states.

  4. Paul Graham argued years ago that all you need to create a technology hub are rich people and nerds. Of course, you need a specific kind of rich person (preferably with a technological background), and the right kind of nerd (the regex-will-save-the-day kind, not the League-playing kind).

  5. Startup culture requires a healthy disregard for authority. ‘Move fast and break things’ as a philosophy that applies to more than just product. Some startup founders take this to the extreme and become borderline anarchists, but think about the preferred referential for a startup developer: hacker. It’s unlikely to produce a mind that can disrupt technological empires while conveniently ignoring inefficiencies in political systems. It’s no accident that Silicon Valley is in America (again, see: Silicon Valley dreams of secession).

  6. It took at least three decades to build Silicon Valley. You can argue that it took longer (it depends if you consider the foundation for Silicon Valley to be the rise of Shockley Semiconductor in the 50s, or Microsoft and Apple in the 80s), but thinking about decades is a good way to view the maturation of tech hubs. There are many excellent write-ups on the role Shockley played in grandfathering Silicon Valley, so I won’t get into it here.

((Rich people + nerds) * culture * time) / government interference = startup city?

Got it.

Cape Town

Why I’m interested in Africa

I really enjoy discussions with my third culture / AA / international friends about where we’re going to end up working, developing our careers, and starting our families.

The consensus we normally end up reaching is that most of us would like to spend our early careers in the States or the United Kingdom, but we’d move on to what we considered the ‘developing world’ as we grew older and wanted to be in charge of our own ventures.

China, India, Vietnam, Malaysia, the Philippines. I think one time we even briefly touched on Russia.

Africa never came up.

But after listening to Jonathan Berman’s excellent interview in the HBR podcast Why Africa’s Time Is Now (summarized neatly here) and reading Salim Virani’s A Startup Accelerator For The World’s Poorest in the same week, I started to pay attention.

Lessons learned about Africa, distilled

  1. Africa represents a massive, increasingly stable, and relatively untapped market opportunity. What this means is that entrepreneurs have a chance to contribute to critical systems like infrastructure, education, retail, and healthcare instead of toys for the rich like the laser hair helmet.

  2. Sure, it has its share of startups that are more or less copies of their more successful American predecessors, like the Amazon of Africa, the Groupon of Africa and so on.

  3. But most parts of Africa have leapfrogged computers completely to a phone and tablet-based technological ecosystem. This means the chance to completely reimagine many of the aforementioned systems, instead of playing catch-up with traditional Western models. Just check out Kopo Kopo (helping businesses accept payment by mobile phone) or mPawa (job search via SMS) for examples of innovation in a mobile-only ecosystem.

  4. African professionals are just as well educated as their peers anywhere else in the world, despite the mainstream depiction of the continent. Here’s my favorite quote on the matter:

"Today you’ll be in negotiation with someone from Africa and learn the man’s been to Oxford, Cambridge and Harvard and speaks six languages. I barely speak English.”

Cherry-Picked Examples of African Startups

Just reading the one-line pitch for Ugandan-based startup Tugende brings a smile to my face —  ‘Opportunity through ownership, via motorcycles’.

Boda Boda means Motorcycle Taxi

Via motorcycles. How perfect an example is that of something uniquely not Silicon Valley?

Or consider Greenlight Planet, whose stated mission is to bring ‘ultra-affordable solar home lights to the world’s 1.5 billion off-grid villagers’.

Beautiful, mobile-responsive landing page?Check.

Pitching potential investors on the strength of an allegedly unique distribution channel? Check.

Sounds every bit like a typical Silicon Valley startup  —  except already changing the lives of almost 4 million people by providing both an energy solution and a means of supplemental income to those in need.

Smiles that could thaw even my icy heart

Building scaleable, inherently viral, and above all useful products for the world’s poorest? Nothing typical about that.

You want to talk about a paint point? Try gasoline lamps.

On the subject of hacking distribution, Cape Town startup Paperight allows any copy store with dreams of also being a book store to, well, also be a book store.

Netflix?

Think about how hard this idea would struggle to gain traction in the US, and remember that never-before-seen distribution channels for all the things a developing country needs are up for grabs.

On-demand books at a copy store? On-demand engine parts at a 3D printing station? Why not both (.gif)?

And further exemplifying the idea of ‘building for the world we live in’ is my personal favorite, the portable hotspot BRCK.

The durable BRCK puts your home wireless setup to shame with its ability to keep 20 devices connected for 8 hours and also seems to be somewhat… Waterproof? Think about what that means for the perpetually-looming Internet of Things.

BRCK

Connect to the Internet to send a message to your friends, or throw it through a window to send one to your enemies.

I need to stop talking about Africa like it’s a single damn country. But to be honest, I still know jack-all about the continent. This is because as I was beginning my investigation, the challenges and opportunities I uncovered started to sound familiar.

Almost like there was an entire region of the world I grew up in that was facing similar issues.

Kuala Lumpur

Why I’m interested in Southeast Asia

For starters, I was born there. I was raised in Singapore until the age of 6, after which my family moved back to Malaysia, where I lived until I transferred to the United States at the age of 21.

More objectively, it’s one of the world’s great emerging markets, with all the opportunity that implies — and often overlooked in the shadow of South Asia (India) and East Asia (China, Japan, Korea).

Lessons learned about Southeast Asia, distilled

  1. Our lower cost of living is great for bootstrapping entrepreneurs looking to extend their runway significantly, as long as you’re not traveling to SEA in the hopes of finding local technical help.

  2. Apart from Singapore, the startup scene of every country in the region is still in its infancy. Using Fred Wilson’s framework for thinking about startup ecosystems in terms of decades, it’s helpful to think of Singapore as being in its second decade (with entrepreneurs in the game for a second or third time), and the other SEA ecosystems as still being in their first decade (copying what works elsewhere, with some successes but mixed with a lot of failure).

  3. Every single country in the region, including Singapore, suffers from the same problem when it comes to startup innovation: a crippling aversion to risk in both investors and founders. It’s far easier to raise capital for a franchise than a startup.

  4. Retaining talent is a problem in all countries. Graduates regularly flee to the US, the UK, Australia, or — if you’re not Singapore — Singapore. I mean, even I’m hardly ‘talent’ but I’m writing this from a coffeeshop in Chicago. It’s true that given a choice, ambitious young people will mostly choose to live where the opportunity is greatest. But if you’re the government, you might as well not chase away the ones who actually want to give back by implementing backwards-thinking race-preferential policies (looking at you, Malaysia).

  5. We have a long way to go but there are good people fighting the good fight to build us a startup culture and reverse the brain drain. For a list of reasons why you should be optimistic about Southeast Asia — actually, just Malaysia (completely biased, I know) — check out Khailee Ng’s excellent presentation on Malaysian Startup Life in 10 Slides (thanks Gwen Yi for directing me to this, as well as sharing other invaluable insights on what’s happening back home). Don’t let the 17 slide marker fool you. The first 7 are about his pedigree and why you should trust him. Note that I have no such section.

Cherry-Picked Examples of Southeast Asian Startups

Most Southeast Asian startups look a little rough around the edges, but every now and then you find one  —  like this wearables manufacturer from Vietnam  —  with a certain level of, Shine.

Look like macaroons, no?

It’s like a Fitbit, but a Fitbit that you can bring to Nice Parties.

I highly encourage you to spend a couple of seconds checking the site out, because some of the product photos show people using Shine with suits and evening gowns and I was impressed.

Caveat: I’m easily impressed by widescreen photography on landing pages, in case you couldn’t tell from the selection of screenshots I’ve chosen to display.

Potential as an accessory aside, you sync the device with your phone by placing it on the screen(!) I can’t vouch for the reliability of this particular piece of hardware, but devices that talk to each other always get me excited (see above: BRCK).

So how come the first startup I’ve chosen to talk about for SEA provides what is undeniably a luxury good?

Well, while there are teams solving down-to-earth problems like Philippines-based TXTBKS (textbooks broken down into an SMS format) or Malaysia’s Watch Over Me (personal safety app), you generally get the sense that the regional talent is not engaged in the type of basic infrastructure innovation the African startups are.

Smash the patriarchy

Singapore, the leading startup ecosystem in the region, has been exploring B2B options like PayrollHero (a productivity app that uses work selfies as a clocking in mechanism), Pie (enterprise Pinterest with gnomes), and Collabspot (CRM in your inbox).

Malaysia, the region’s second wealthiest nation by per capita GDP, has Piktochart (infographic creation with Clip Art 2.0), SAYS (social news network), and — as a signal to other SEA countries that we’re in an ecosystem where we can afford to squander developer resources (not really)  —  Catmoji, the social network for cats.

Headlines

The point I’m trying to make is that there’s a significant market opportunity for infrastructure disruption. Most of our systems range from nonexistent (Laos, Cambodia) to halfway-built (Thailand, Indonesia), and there aren’t a whole lot of players competing for the space. It’s no controversial statement to say that we care more about food than technology.

If you were to survey a bunch of Southeast Asians about the most exciting local business they know, they’d probably name a restaurant, like Malaysia’s myBurgerLab. Using an example from personal experience, it was my concept for QuickSpoon that gathered the most excitement from friends back home.

I definitely don’t mean this as a bad thing. It’s just another nuance of the market that entrepreneurs and investors will have to consider.

Also, keep in mind that I’m once again painting an entire region with these generalizations. If you have objections or insights to the contrary, please call me out.

Best thing about startups in the developing world

I touched on this already when I called out the laser hair helmet (sorry iGrow — it’s nothing personal), but too many founders in the Valley end up solving problems for the 1% of the 1%.

In countries like Tunisia or Timor Leste, it’s easier to work on problems that matter — and ultimately make a difference in the lives of a lot more people.

Source /r/MapPorn

What’s Next?

  • Travel to Silicon Valley —  I realized that the fact I haven’t visited the city I’ve been writing about is an unforgivable sin. To remedy this, I bought a ticket to San Francisco in February.

  • Immerse myself in international startup cultures  —  this is a little difficult since my ability to travel internationally is restricted right now. In the meantime, I’ll be keeping my eyes and ears open for news and discussions  —  if you’ve got any interest at all in these topics or regions, come say hi.

Jun Ian Chan is a recent graduate new to the city of Chicago, USA. He works in the marketing department of CRM startup Base. Read more about him on his blog

Cover Image Credit: Terence S. Jones

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