BUDDING entrepreneurs and inventors need to be more business savvy if they are to successfully transform technology-related ideas into commercially viable ventures, says Cradle Fund Sdn Bhd chief executive officer Nazrin Hassan.
“I think this is something prevalent with Malaysian entrepreneurs. They tend to focus a lot on product development but forget the market side of things. It’s not just about the technology,” he told StarBiz in an interview.
Nazrin said one needs to prove that the idea addresses a need in the market, that the solution the idea brings is better than what is currently available.
There must be a mechanism in place to make people pay for that idea.
He believes the country has strong growth potential in information and communications technology, outsourcing and creative content spaces, but both entrepreneurs and aspiring entrepreneurs need to sharpen their business skills.
“We don’t lack good technologies. We lack good business people.
“There is a need to increase the business acumen of the people in the technology space,” he said, adding that it was necessary for them to understand market demands to grow their business.
Nazrin opined that the level of leadership and ecosystem of a country played an important role in the maturity and success of entrepreneurs.
“There has to be mentors, commercialisation partners, technology innovators, financiers, companies that will buy the technology and exit mechanisms for venture capitalists (VCs).
“We have to put all this together to create the ecosystem,” he said.
However, he said ecosystems were driven by market forces and thus requires time to develop and reach maturity.
Nazrin said one of the ways to drive this forward was to further improve the linkages between the business, technology and education communities.
“Technologists cannot create products without knowing what market demands are, businesses cannot grow if they do not incorporate technology into their processes and the education sector would not get anything out of their research and development if they do not engage the market.
“So these three parties have to tighten their collaborative efforts to nurture the growth of entrepreneurs,” he said, citing the Silicon Valley in the US as an example of how these elements have closely worked together in creating successful technology start-ups and entrepreneurs.
He also said the private sector could play a more vibrant role in developing a larger pool of VCs and angel investor community.
“There is still a seed funding gap in the market and this is still the biggest deterrent to the growth of technology companies,” he said.
Nazrin said most angel investors or high net worth individuals in Malaysia had achieved success in traditional industry domains like banking, manufacturing and trading. “With few having made it big in the technology domain, they are not likely to look at making money in this sector,” he said.
He added that until market mechanisms develop, the Government would have to step in to fill that funding gap.
Cradle Investment Programme (CIP) is a fund managed by Cradle Fund under the auspices of the Finance Ministry. In June, Cradle Fund announced a revamp of the programme, now dubbed CIP Catalyst.
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