In football, playing at your home ground is better for you and worse for your opponent. Your chances of winning are significantly higher than if you played away from home. But you see, what improves your chances of winning and diminishes theirs is not black magic, but business and psychology.
When it comes to setting up a company, there are many more things to consider besides having a good business plan and strategy. Where you are running the company is critical in the behaviour of your business. I say behaviour because today’s companies are human-like, dynamic and constantly changing rather than a plan that is set in stone.
The external environment which hosts your business will absolutely affect the trajectory of your business. From the types of business partners you will get, to the talent you are recruiting, the market you are immediately facing, investors, strategic partnerships to user demographics; there’s a plethora of factors that are outside of your control once you set up your company in a certain location.
So, why start a company in Malaysia and not, say, Silicon Valley, London, Beijing or even Singapore? Let’s examine why young, Malaysian-based companies like Grab, iflix, 123RF, Pestle & Mortar, and Piktochart are growing ahead of its competitors across the region. We attempt to grapple with this question from an external point of view, rather than internally reviewing their individual business genius.
#1: Our government is investing into start ups
(Photo credit: MaGIC)
Did you recently stalk an old friend on Facebook and found out they are now working for a startup? Or know someone who knows someone who is behind an exciting young brand? Forget about the monsoon season, it is the Startup Season here in Malaysia.
Universities and colleges, both local and abroad, are offering more opportunities for those entrepreneurial. From entrepreneurship majors to an entrepreneur’s club, individuals with an innate drive to start their companies are equipped with the experience, people, and tools to start their first (possibly, of many) companies after university.
Additionally, large-scale government initiatives are catalysing the growth of entrepreneurship in this country. The Malaysian Global Innovation & Creativity Centre (MaGIC) hosts aplenty of immersive programs to kick start new companies and products. FutureLab, for instance, was one of 25 top Malaysian startups selected to grow with MaGIC’s [email protected] program. Entrepreneurs are further supported with capital from various institutions such as Cradle Fund, a startup-centric investing programme owned by the government, and private companies like 500 Startups plus a growing network of crowdfunding platform. (By the way, you can speak with our mentors from MaGIC and Cradle to know more)
Once you secure the funding you need for your early stage startup, the next thing is to have a space to begin working on your crazy ideas. I know, that’s when the headache comes in right? Fear not! Coworking spaces are mushrooming major business hubs in Malaysia and moving into a coworking space can really benefit your early stage startup. Coworking space reduces the cost of office space rental for you which helps you retain organisational flexibility. No more buying your own furnitures and moving them! Also, entrepreneurs can choose a pay-per-use option or a time-based plan which are still cheaper than leasing a building entirely. This is the best part: sharing a common space with other startups creates that burst of creativity and productivity because you can easily discuss ideas with other startup founders! Sure, you can find such spaces all over the US or Singapore but if you check the prices, leasing a coworking space in Malaysia is much cheaper for your startup both in the short run and in the long run. (Need consulting? Don’t ask me, ask our mentor who owns Co-labs Asia).
The changing times into a digital age is a large force for youths to pick a career that will not be easily replaced by robots, and entrepreneurship, the business of solving problems for people, happens to be one of them. Besides the entrepreneurs who want to make change, there are also a lot of other people who want to make sure entrepreneurs succeed. So, you should start a company in Malaysia because you are part of this nourished environment that gives you access to the opportunities that you need to thrive.
#2: Kuala Lumpur is a swelling digital market
(Photo credit: Chilli Hot Water)
Startups thrive on the untapped digital market because traditional industries are occupying the heavy, physical nuts and bolts of the economy. While big companies are slow to go digital, Malaysians are rapidly embracing the digital economy and already spend a significant amount of time on their devices. 91% of 30 million Malaysians own and use a smartphone, and it is companies like Grab and iflix who will capitalise on these opportunities to disrupt traditional industries. These young companies are agile and quick when hiring talents, introducing products to the market and encouraging adoptions of their products.
So, yes, there are some successful startups in Malaysia but why should you still start a company here?
That’s because there are so many more industries and products that can be disrupted with your creativity. For instance, there are still so much room left for innovation in Malaysia in areas like artificial intelligence, virtual reality, wearable technology. Oh, don’t forget that Malaysia is also a hub closely connecting your products to the ASEAN regional market. Starting a company in Malaysia and gradually expanding it across the region is a common, yet often successful, strategy that entrepreneurs do, and it works (see AirAsia, iMoney and EasyUni).
Today, 40% of SE Asia’s 660 million people are active internet users and this is expected to grow to 60% by 2020. This means there’s a large, growing and untapped market who largely share a similar lifestyle as we do. Our problems could be their problems, and our solutions could be their solutions. The geographical proximity between Malaysia and these countries is a huge plus because travelling across offices will take much less time than, say, from the UK to the US.
The growing market in South East Asia and our familiarity with it are compelling reasons to start a company here. As Tony Fernandes puts it, a business who conquers its homeland market is best suited for regional expansion. Starting a company in Malaysia makes sense if you’re a Malaysian because once you find something that works, your product is immediately ready to expand to our neighbours’ markets.
#3: You know the people
(Photo credit: SAYS.com)
What’s the difference between a high performing, shiny company and a company that nobody talks about? It’s the people – the people in your organisation and the people who buys your products. That’s what separates you from the pack. As an entrepreneur, you benefit from starting your company in your home ground in two ways: the advantage of having the contacts AND knowing the market.
How does having contacts and networks help you and your company? Well, highly successful companies often differ from their identical yet low-performing counterparts in that they have better, brighter people working for them. One of the biggest problem in recruitments is that it is hard to know them as a person. But that’s not the case for your friends. Knowing people not only helps you hire better, but also connect you with strategic partners and influential people who can help you. Sometimes in business, it’s not what you know but who you know.
You also have a good understanding of the market. What does this even mean? By growing up and living alongside our fellow Malaysians, you know what problems we face on a daily basis. Whether it is the unreliable transportation systems, the troubles of finding a parking when buying lunch, or spending a lot of time waiting for the doctor’s appointment, there are many ways an entrepreneur can solve a real problem for real people, and make money out of it. As entrepreneurs, the first step is to recognise problems as opportunities. As compared to someone who is not local, you already know ahead of them what kinds of things help people and what motivates them to buy your stuff.
So why start a company in Malaysia from a people perspective? Because really, most people are nice and we have a collective culture. We also come from a multilingual society who deserves to contend at multiple countries internatioanlly. Believe it or not, we have been very lucky in finding mentors who really just want to help you on FutureLab.
Looking to learn more about the entrepreneurship in Malaysia? Want experienced mentors to help you materialise your startup idea? Click here to explore and join the FutureLab Startup Launchpad program!