We can’t possibly better our startup scene by standing still. We need to improve and improvise on the things that we’re already good at.
RECENTLY, I had the privilege of being involved in two projects — one a study on the long-term efficacy and relevance of an early-stage funding agency, the other on the role of mentors in early stage ventures.
While both projects were “par for the course”, it did stir some long-standing issues regarding the technology commercialisation and entrepreneur development space, to which I will return shortly.
I think we have achieved much in this space. Over the last three years, the tech startup scene has grown by leaps and bounds, driven by Gen-Ys and Millennials. I have also noticed more foreign funds, ostensibly based out of Singapore, but visiting Malaysia to scout for deals.
We’ve even had a unicorn emerge — goodness! Who would have thought?
Another recent phenomenon is corporates jumping in with funds of their own. These are corporates with a capital “C”. Blue chips like Axiata, Digi, Maybank, Alliance Bank, even Khazanah are beginning to recognise the value of the startup scene and getting their feet wet. This is something that wasn’t possible a decade ago.
My old friends at BiotechCorp will probably lament that outcomes in life sciences have not kept pace with the rest of the tech sector, but even there, I would argue, there have been qualified success, given the massive challenges evident from the outset of the National Biotechnology Policy (NBP). Without the NBP, we would not have realised our forte in medical devices, green technologies, nutraceuticals and wellness and niche industrial biotech.
While some would argue this is not the “hard tech” expected from the sector, we have to start somewhere. More than 200+ BioNexus status companies have forged the path since 2006, and more will follow. Even as the NBP draws to a close, I believe the best is yet to come.
Meanwhile, funding has admittedly “tightened”, but I would argue that everyone saw this coming with the Government needing to wean industry off of grants and handouts. To be fair, there are now more funding options with equity crowd funding and angel funding.
Additionally, there is also more depth in the assistance provided today by agencies like Malaysian Global Innovation and Creative Centre (MaGIC), Platcom Ventures and Cradle Fund, just to name a few.
Today’s startups need to be leaner and meaner money-wise, and be able to leverage other forms of support better. As the Government gradually vacates this space and the private sector steps in, the focus will be on the bottom line: If you don’t make the cut, you are out, baby!
Malaysian tech startups today are more aware, better prepared and more focused than before — testimony to the effort and resources poured into this space by a literal alphabet soup of agencies and private sector entities. Awesome guys, let’s keep it up!
But before we go off and celebrate, I think there is a still a number of things we could get better at. So here are some things I have noted, thanks to those two projects mentioned earlier.
Firstly, alumni networks.
Yes, almost everyone has a community to speak of. Some are “formal” in the sense that they are part of an official group, while others are less formal, simply being “graduates” of programmes run by those entities. Over the years, thousands, have gone through their doors.
I think an alumni network is the greatest unrealised resource in the eco-system today. Think of the experience, knowledge and expertise accumulated by the CEOs, founders and innovators. The successes they have achieved as well as the failures.
They are valuable resources as mentors, not to mention networks.
One of the best things about the top US B-schools like MITs Sloan School of Management and Harvard are their alumni groups. They are not only a source of expertise and funds, but also help place new graduates, invest in ventures, help with research and open doors for fellow alumni.
I believe this concept can be emulated.
Alumnis are one thing, but we also need to mould communities out of them that stick together and thrive. There must be a reason to participate. Access an alumni’s knowledge base and networks could be that reason, but we need to create other reasons around that (think “stickiness” in website terms) to create a critical mass of trust and gratitude, if you will, that will ensure these communities thrive.
This leads me to the other thing we need to get better at – giving back.
Let’s get people to volunteer time and money. If more founders and CEOs give back, a virtuous circle may emerge that will strengthen the community.
Next, we also need to get better at collecting, tracking and measuring data on everything that we do.
Some programmes are better at this than others because they are essentially “closed loops” or exclusive groups, e.g. MSC and BioNexus status companies. MDec and BiotechCorp have arguably better data than even the Companies Commission for the companies that they look after.
In this age of big data and analytics, it’s amazing how much is not or can’t be tracked. Either way, it’s a loss. We need to measure what we do. Without measurement, we will not know where we are heading. Imagine if we had a central database of every venture that has been a part of this eco-system. The data that could be mined to ensure better deal flow management among agencies, optimisation in terms of new programme designs and matching of grants.
And finally, the perennial bug bear: integration.
We need to get better at integrating our products and services within, as well as between, agencies and entities.
The benefits of an optimised eco-system of support and assistance just cannot be underestimated. If we integrate better, we will get to avoid overlaps and duplications, and gaps become apparent.
How about this — entrepreneurs that fail to make the cut for a grant are channeled to another programme run by another agency who then guides and fixes the issues and later re-channels them to the originating agency or even other agencies?
In an ideal, highly-integrated eco-system, there would not be any “rejects” — just repackaged and improved deal flows.
Razif Abdul Aziz is Chief Operations Officer of Cradle Fund Sdn Bhd and the Malaysian Business Angel Network (MBAN) executive director.