There is No Glamour in an Asia Startup
Having spent over a decade building companies in Asia, I can testify that it is f**king hard. In the beginning, ignorance is bliss. You allow your sexy PowerPoint slides to seduce you into believing your big idea is flawless. Your projections are up and to the right and you feel invincible. You sleep great at night and have the energy and ego to believe you will change the world.
It's not until you quit your job, realize you have no health insurance, absorb the fact that VCs don't respond to your emails, and that you only have $2,000 left in the bank when reality sets in. You have been totally unaware of how misguided and flawed your plan really is. You are not sleeping quite so well… but you are resilient. You put your head down and execute. There is nothing glamorous about losing track of day and night, writing code, structuring a company, lawyers, tax law, or fundraising. But you persevere.
To this point, I could be describing the challenging journey of any startup entrepreneur from Palo Alto to Beijing. Here is where things got much harder for startups in Asia.
First, the startup ecosystem was young and trying to find its footing. There was minimal structure keeping entrepreneurs, investors, professional services, and higher education in sync. Silicon Valley is the output of the perfect storm that brought these pillars together as the foundation of a nurturing home for anyone with true entrepreneurial spirit and drive. This structure also plays an important role in vetting the good ideas from the bad, and that valuable screen was largely missing in Asia. Hotbeds of startup activity like Jakarta, Singapore, Hong Kong, and Beijing were getting better, but we were still years away from dissipating the friction that gets in the way of great ideas turning into real products and companies.
The second challenge was the deep-rooted cultural aversion to risk. The average Asian parents did not invest so much money and effort in their children's education for them to turn down a prestigious and well-paying job. Priority number one was saving enough money to buy a home, because only then was marriage and having children viable. There were no zero percent down payments in this part of the world. In many markets it was a 50 percent deposit, so there went your bootstrapping. The longer you waited, the harder it became to start a company.
There was also shame in failure. I have said before that in the US, people wear failure on their sleeve like a badge of honor. It says, "I had the guts to try, and here I am — stronger and smarter from the experience." In Asia, family and society viewed failure as simply the converse of success. Japan's startup scene suffered tremendously just because individuals were not given room to fail. And to fail and try again… well, that was just plain stupid, people thought. Asian VCs were not much better and absolutely gravitated to proven and scalable models.
The third challenge was that nobody wanted to work for a startup. Startups were not cool and very few people cared about equity as a currency. Once you were able to look outside the enthusiasm of the founding team, you would see that the fourth employee wanted security, market pay, and medical benefits. Until you could look and act like a real company, you would surely struggle to find talent. There was absolutely no shortage of young and talented engineers in Asia, but they were protected behind the fortress of the big companies they worked for. Instead of developing an amazingly ubiquitous application, they were more likely fiddling around with Pascal in the basement that housed their company's legacy technology. They were certainly not all starting companies or clamoring to join yours.
I had absolutely no doubt that Asia would rise to the occasion, though. It would be the very same entrepreneurs who were struggling with these challenges that would solve the problem for tomorrow's entrepreneurs. The lens through which entrepreneurship was viewed by skeptical outsiders would change only once we demonstrated success. Success takes time. Across Asia, we were seeing ecosystems form through the delicate interconnection of willing entrepreneurs, accelerators, risk-tolerant investors, education, and public and private services geared to serve startups.
As these ecosystems took hold, more companies received seed capital than ever before. The next step was for those seed-funded startups to break out and command the attention of venture capital. The Series A and B round announcements were few and far between. When more Asian companies secured growth capital, it would be a leading indicator that success was near.
Much of this has since changed. Asia's startup ecosystems have matured considerably, and the success stories that once felt so distant have arrived. But the cultural headwinds I described — the aversion to risk, the shame around failure, the difficulty attracting talent — have not disappeared entirely. They have simply evolved. The entrepreneurs who pushed through those early barriers helped rewrite the narrative, and that may be the most important contribution any of us made.
