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21 Entrepreneurs Share Why You Should Launch A Startup In Asia

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Are you an entrepreneur?

Or secretly building your startup and soon to be the next entrepreneur?

When considering where to startup, you might want to consider Silicon Valley.

Building a new startup in Silicon Valley certainly is the golden path every aspiring entrepreneur take; however, the Valley also isn’t the only place for every tech startup.

Let’s be honest.

Silicon Valley has become extremely noisy and hyper competitive, which is making it increasingly difficult to break your company away from the others.

You might be thinking: “Okay, So where on earth should I launch my startup?”

Well that is the million dollar question, isn’t it?

And the answer is・・・

*Drum roll*

One part of the world that you should launch your startup is SOUTHEAST ASIA.

How do I know this? and how can I allow myself to say that?

Because I have done tons of research myself.

Southeast Asia is becoming one of the booming startup hub to start a new company today.

The network here and the opportunity in Southeast Asia has grown exponentially in the past few years alone. Just to give aspiring entrepreneurs a glimpse of the region’s inherent advantages, I’ve laid out the top five reasons you should consider moving your startup to Bangkok.

So for this important topic, I had to bring in help from some of the best founders and entrepreneurs in their respected fields.

As you probably have guessed from the headline, 21 entrepreneurs from Southeast Asia will share their wisdom with you.

I asked them the following question:

Why entrepreneur should launch startup in Southeast Asia?

Note: this is definitely one of the best collections of entrepreneur startup tips out there in Southeast Asia. When you see the contributors on this post, you will understand why.

If you don`t agree, send me an email and I will lash myself with a wet noodle. This post is over 4,000 words and you should bookmark this page for future reference.

So, let’s look at what makes Southeast Asia so attractive for entrepreneurs today.

If I were to give a proper introduction of all of the entrepreneurs with all of their merits, the list of their achievements alone would surpass 4,000 words by far.

I would definitely advise you to check out every single one of the entrepreneurs.

Without further ado, here are the entrepreneurs…

(Click on the links below to go directly to the experts.)

Name list here…

Martin Toft Sorensen | Christian Mischler | Yod Chinsupakul | Michael Cluzel | Djoann Fal | Andrew Henderson | Harprem Doowa | Tim Russell | Juliette Gimenez

Pol Chattharakul | Jorge Jimenez | Matt Mayer | Jun Hasegawa | Natt Kawinrachataprida | Natasha Stewart | Giff Pochara | Jason Ho | Nicolas Rahme | Anna Vanessa Haotanto | Mark Laothavornwong | Surawat Promyotin |


Martin Toft Sorensen MD and C0-founder at WearYouWant

martin toft sorensen_wearyouwant_founder

 

SEA is still blue ocean, the startup eco-system has matured and funds are there to be raised. It’s a perfect 3-in-1 combo!.

Fast growing economies, a population of 600 million, strong interest from both regional and foreign VC’s and governments finally starting to nurse startups, what’s not to like?

What is WearYouWant?

WearYouWant was founded in 2011, has placed itself amongst the leading online marketplaces for fashion in Thailand. Sourcing products from more than 200 physical fashion and beauty retailers and distributors around the greater Bangkok area, WearYouWant assembles a unique collection of approximately 15000 items of apparel, accessories, skincare, haircare and makeup.



Christian Mischler
 CO-founder of HotelQuickly

Christian Mischler_HotelQuickly_cofounder

Southeast Asia is a booming part of the world; with an incredibly high pace of development the region is catching up quickly with the developed economies of the world. There is more and more disposable income available, the middle-class is rising, and people are ever-connected (virtually and physically).

For entrepreneurs this is a rewarding situation and many businesses can successfully be established that serve the future demand of the massive population in this geography.

What is HotelQuickly?

HotelQuickly promotes spontaneous travel by being the most dependable part of it. Their technology helps people travel better. This brand inspires people to have fun and just go! HotelQuickly enriches and enhances South East Asia by providing the highest hotel standards at the best prices.


Yod Chinsupakul CEO and Co-founder of Wongnai

Yod Chinsupakul_Wongnai_founder

First of all, Thailand and SEA is a great place to live. There are a lot of talents especially in marketing, sales and design. Though diverse, the market is big enough, combined and individually.

There are 600 million people in the region including 60 million in Thailand, 100 million in Vietnam, 200 million plus in Indonesia. There are less competitions compared to more established markets. And finally, the people here adopt things very quickly! What not to like!

What is Wongnai?

Wongnai was established in 2010. It is now the N.1 restaurant review application in Thailand with over 600,000 registered members. Wongnai currently can be found at Wongnai app for iOS, Android, Windows Phone and Blackberry. For those of who wonder the meaning of the word “Wongnai” is a Thai word means “insider”.


Michael Cluzel Group CEO and Co-founder of Eatigo

Michael Cluzel_Eatigo_CEO

My 2 cents on why SEA is a good location for an entrepreneur to launch a new platform, service, or comapny with its 600+ million population is a significant market, size-wise, with solid macro level context (good purchase power, good mobile internet penetration, young population, high degree of social upward mobility, consumer orientation) and a fast developing startup ecosystem with several countries leading the way on new legislation to facilitate creation of start-ups.

The most exciting part is the relatively low level of competition and penetration of e-commerce which allows for fantastic prospects on growth rates.

What is Eatigo?

If you love food and restaurants, you will love Eatigo. Eatigo operates in the food and beverage e-commerce arena and is focused on markets in Southeast Asia. Privately funded and based on proprietary technology, eatigo is revolutionizing how people across Asia look at dining out.


Djoann Fal CEO and Co-founder of GetLinks

Djoann Fal_founder_Getlinks

South East Asia see emergence of a middle class with world class buying power & mobile-social media saavy that will become one of the top 5 Global Internet consumer market by 2020.

What is GetLinks?

GetLinks is a Curated TECH hiring marketplace for Asia, operating now in three countries, Thailand, Vietnam and Singapore. They aim to help the 25M tech talents in Asia to find their dream jobs in top tech companies and startups.


Andrew Henderson Managing Partner of Nomad Capitalist

nomadcapitalist_founder

It’s nice to see people making investments and committing themselves to businesses of all sorts, not just the tech sector that helps drive entrepreneurship in the United States. For people here in southeast Asia, both developed like in Singapore and developing like much of the region, the feeling that you can succeed simply with a little cash and a little foresight if everywhere.If you’re still fighting to start just the right business in your home country, I highly suggest you investigate opportunities here.

It was quoted from his original article.

What is Nomad Capitalist?

Nomad Capitalist offer offshore Strategies from real people. Nomad Capitalist can help you find the best countries in the world to bank, do business, invest, and become a citizen.


Harprem Doowa MD and CO-founder at Frank.co.th

Harprem Doowa_founder_frankco

My opinion is that launching your startup here gives you the opportunity to see silicon valley 10 years in the past. All the changes, regulations, startups, and culture that silicon is experiencing now is what we will be experiencing 10 years from now. Other than that, there is also the opportunity of 1 billion customers available within a close proximity. It is also dirt cheap for entrepreneurs with funds from the US as the exchange rate and purchasing power really does work in their favour.

What is Frank.co.th?

Frank.co.th is part of EdirectInsure Group which operates leading online insurance platforms in Asia with offices in Hong Kong, Thailand and Taiwan, offering motor insurance to the consumers in Asia at the price they can afford, in a language they can understand.
Frank.co.th was born in 2016 with the aim to provide people an alternative by buying insurance direct versus through brokers and agents. Theirr ambition is to be the best motor insurer as measured by their customers and employees.


Tim Russell Founder and CEO at Tineri

Tim Russell_Tineri_founder

Southeast Asia is a great region for launching a startup! The low cost of living makes it an affordable base for new, bootstrapping startups, and there is a large pool of affordable development talent to choose from, particularly in Vietnam. There’s a large and rapidly growing ecosystem of investors, accelerators and networking groups. And the rate of economic growth in the region means it is attracting a lot of investor attention.

From a personal point of view, as a travel tech startup it makes perfect sense for us to be here given that SE Asia’s travel industry, both inbound and outbound, is the fastest-growing in the world.

What is Tineri?

Tineri is a brand new solution that allows tour operators and travel agents to provide their clients with a stylish, engaging and user-friendly mobile itinerary app that turns static itineraries into living, breathing, interactive travel experiences! Tineri launches in Beta mode in August 2016.


Juliette Gimenez Co-founder and CEO at Goxip

Juliette Gimenez_ceo_goxip

Southeast Asia is definitely a market that cannot be neglected with the first reason being the continuously rising mobile penetration in the area. Technology has developed so rapidly that we are able to lower the cost of production of a smartphone dramatically to be more and more affordable for people from emerging countries to acquire. The cheap smartphones open their eyes up by giving them their first opportunity to access to Internet instead of owning an expensive PC and they realise there is so much they can do with it. This gives entrepreneurs or startups a great opportunity to introduce their ideas and products to the population through their new mobile devices and give them the experience that they never had before.

Secondly, people in Southeast Asia tends to be very social media centric. Their new smartphones allow them to go onto Facebook or other social media platforms for the first time where they got access to a vast amount of information like never before. They are very active in interacting on the platforms which makes a easier job for startups to engage with them socially through running campaigns to acquire users, brand building or retain users.

Last but not least, the labour and cost of living is cheap in the Southeast Asia region so it helps with the expenses of a startup since they usually began with very little capital money. So overall, given the huge mobile penetration, the social nature of the population and the low workforce or living expense, we see there will be a lot more startups trying to enter this area to capture this fast growing economy of Southeast Asia.

What is Goxip?

Goxip is the fashion discovery platform. You can browse celebrity and community content for the latest fashion ideas from around the world. Whatever inspires you, whether it’s from the catwalk in Paris, magazines or something you see in the street – Goxip helps you discover or find that piece of fashion you cannot live without. Discover trends, find inspiration and share you own styles. Goxip has been built as a mobile-first platform for fashion-conscious, dynamic consumers who stay trendy on the go.


Pol Chattharakul Founder of PoolSub Space

Pol Chattharakul_ceo_poolsub
Thai Market is very unique but sometimes difficult. Thai people still needs everything easy to use and solve their laziness which is a good point to do startup. There are tons of problem and need for all startup to solve with their products, such as food or logistic (Line Messenger seems to be alright here but their fare is still expensive), personal logistics such as taxi, even UBER and Grab still have hard time in here cause it’s not appropriate enough for Thai ‘s expectation, Marketplace (Lazada have a lot of one time users due to their poor quality in delivery and standardize of things, most people get unacceptable products ‘ quality), Matching (If you can do matching like single speed dating there is a big market, or business matching).
If you can start your startup successfully in anywhere in Southeast Asia, you will easily expand to other countries in SEA. So it will be a huge marketplace because modern Thai culture is very influencial towards all SEAS countries. Every Indo-China ‘s Country can watch thai TV and they love to watch.
The idea is that if you can survive in the hardest market that means you can success in every markets.

What is PoolSub Space?

It is the first service office and coworking space in Charoen Nakorn Rd, opposite side of the river from Bangrak. PoolSub Space opened the co-working space zone in the early of February 2016. Next year, they have a plan to create Meeting Hall on the 3rd floor, which included meeting room, workshop space, and event space.


Jorge Jimenez Founder of TopFunded

Jorge jimenez_topfunded_founder

The idea of growing a business in an emerging region that has a huge population of young mobile first users with increasing disposable income sounds exciting. However, there are local challenges that entrepreneurs must be prepared to deal with and a knowledgeable local team that understands each countries consumer shopping behavior, cultural differences, and regulations is needed.

What is TopFunded?

TopFunded is a tech investment research blog covering startups, venture capital, mobile and ecommerce insights in Southeast Asia.


Matt Mayer Founder of ReignDesign

Matt Mayer_founder_reigndesign

Two main reasons.

First, the cost of living in most South East Asia countries is lower than in Europe, the United States or big cities in China. As a startup founder, that means you can afford to have a longer runway to test and verify your ideas.

Second, countries like Thailand and Indonesia are great test markets: they are large enough that there’s a big group of young, tech-savvy consumers who want to try new products, but smaller and less saturated than say the US or China where any business idea already has 20 startups competing in the same space.

What is ReignDesign?

Reign Design is a multicultural software design agency. They specialize in the design and development of mobile applications particularly for Android and iOS phones and tablets. Reign Design helps every kind of business from startups right up to the brand-name clients like Porsche, WeightWatchers and Standard Chartered.


Jun Hasegawa Founder and CEO of Omise

Jun Hasegawa_ceo_omise

Why entrepreneur should launch startup in Southeast Asia? Southeast Asia is full of opportunities. The market is huge, there is high potential for growth and most importantly is that the market is still not saturated. A large part of the region is still working on the development of technology and the infrastructure. SEA is a very attractive region to tap into especially for businesses that involve with e-commerce.

What is Omise?

Omise believes in providing their clients with the best in class online payment gateway product and service this industry has to offer. In order for Omise to become the trusted partner with clients, they deserve nothing short of the latest technology and competitive rates. They aspire to innovate and develop new products that provide value, and make Omise the leading payment gateway solution in Asia.


Natt Kawinrachataprida from YSIS PR, YSIS Entertainment

Natt kawainrachataprida_founder_ysis

I call myself an entrepreneur. I was mentored and built an import & export company at 17, opened a company with a partner to import & distribute Italian wines at 18, established a retail alcohol shop at 20, founded a PR agency at 22, and recently launched an entertainment brokerage at 27. The combination of ambitious talents, logistics, state of the art facilities, the continuously expanding startup communities, not to mention lifestyle, Southeast Asia has plenty to offer.

Thailand, in particular, gave me the life of opportunities. As SEA consists of many bustling westernized metropolitan cities, the advantages of starting up here is the opportunity to meet the best of people from all walks of life- those you wouldn’t normally meet in your environment in home country. The best thing is- if you launch something and you fail- it’s acceptable. I find that people accepts and move on quick! I found the networking aspect to be useful to facilitate business opportunities, but I would advise startup founders to start learning how to UTILIZE your network of contacts.

Connections is everything in Asia, so for any startup who has mastered the art of networking, it’ll be very useful for the hustle. So, why should entrepreneurs launch a startup in SEA? Why not! Nothing to lose but everything to gain!

What is YSIS PR?

YSIS PR is an integrated marketing communication agency founded in the 2013. Since then they have represented various clients in different industries throughout varieties of work. YSIS PR provides both offline and online marketing strategies to create brand awareness and call to action.

What is YSIS Entertainment?

YSIS Entertainment is an international celebrities, personalities and live production brokerage for Southeast Asia, and Southeast Asia to the rest of the world. The company and their celebrities will also be represented by Natt’s legal partner, Mr. Bastien Trelcat of Harvey Law Group.

Natasha Stewart CEO of MSNA Group

Natasha Stewart_founder_MSNA

Entrepreneurs should launch startups in Southeast Asia, especially Thailand because Thailand offers an attractive and competitive package of tax incentives, imposes no foreign equity restrictions, granting easily the visas and work permits and waives restrictions on land ownership by foreign tech startups. If you are looking to do business in Thailand, you need to consider getting investment promotion from the BOI. You can read more about Thailand BOI on our website.

What is MSNA Group?

MSNA Group is an English speaking accounting company in Bangkok that provides the following services:  Accounitng, Taxation, Audit, Payroll, Due diligence, Company registration, Foreign business. MSNA is the official bookkeeper for the American Chamber of Commerce in Thailand and the Thai-Canadian Chamber of Commerce.


Giff Pochara Founder of Uyoda

Giff pochara_founder_Uyoda

Being Thai myself, for launching a startup I know the importance of bootstraping with local connection. I can find early stage funding easier here and cost of living is relatively cheaper than other Southeast Asian countries which can decrease your burn rate. I have to admit that regulation to support startup isn’t mature yet, but I believe a lot of enrollment will happen near future which endorse more early stage startup like mine. even though regulation around startup isn’t mature yet, I believe a lot of enrollment Besides, Thai law makes entrepreneurs easier to hire talented people from abroad.

What is Uyoda?

Uyoda is a mobile platform offering entrepreneurs personalized expert advice and guarantee in meeting their objectives. Uyoda’s mission is to make hiring an expert to help on a project extremely accessible, at the same time empowering skilled individuals to help others and generate income.


Jason Ho Founder and CEO of D8ii limited

jayson ho_ceo_d8ii limited

Many people ask me this question and here are two points:

1. SEA has tremendous growth potential. There are lots of niches and pockets of underdeveloped sectors as well as relatively low competition eg many people doing things either poorly or badly.

2.  Fixed costs and cost of rental living is much lower so it really is appealing for those wanting to launch a digital business or even a retail traditional one.

What is D8ii limited?

D8ii Limited specialises in offshore outsourcing for startups and SMES. D8ii provide interim CTO for startup by providing fin tech solutions on web and mobile platforms as well as a full range of cross border services. D8ii is also the leading offshore solution for NodeJS.


Nicolas Rahme Business Development Manager at Siam-Shipping

nicolas rahmne_siamshipping

Southeast Asia became to be more attractive since few years because of the liberalisation of their economy. We can now focus on an open market with millions and millions potential customers. Southeast Asia provides us many reason of an ideal place to invest : cost of living, business location, entrepreneur networking opportunities, easy visa-free travel, free market economies, territorial tax policy and lifestyle.

What is Siam-Shipping?

Siam Shipping is a freight forwarder based in Bangkok,Thailand. They are always open to provide informations, advices and a personalized service to their partners by carefully managing every aspect of their needs.
With the many years of experience, Sea Fly Services is able to provide all the services required from a freight forwarder, including, but not limited to: Air and Sea freight, removal, relocation, packing services, custom Clearance.


Anna Vanessa Haotanto CEO and Founder of The New Savvy

thenew savvy_ceo

Southeast Asia is great for business due to the recent increasing support from government and corporations, exciting business environment and a maturing young population.

What is The New Savvy?

The New Savvy is the definitive financial and career guide for women. The New Savvy aims to empower smart, modern and independent woman through meaningful content that are relevant, practical and interesting.

Women have different needs from men and can benefit from unique financial advice. 41% of women are intimidated by finance and do not invest. Information available can be complex, technical and often times, exasperating.

They simplify the process to save you time and efforts, by providing dedicated insights that are fast, fun and easy to understand. The New Savvy advocates greater awareness and healthier financial habits to women.


Mark Laothavornwong from CareerBolt

Mark Laothavornwong

First, startup ecosystem in Thailand is booming insanely. Therefore it’s perfect timing for us entrepreneurs to ride on this wave. I used to live in San Fransico where I started my first startup. I found out that their startup ecosystem supported better, much better than here. And now that I’m lauching my second startup here in Thailand, I want to support this ecosystem. I truly believe people from Southeast Asia have entrepreneurial sprit just like the one in State. We have same vision and ambition to help anyone in the world from Southeast Asia.

So why entrepreneur should launch startup in Southeast is easy. I’m helping about a few thousand people a year. To leverage my business skill I have which is consulting firm, and if I launch startup here I can help more people which is my passion and dream.

Do you have passion and dream to help people? Come to Southeast Asia.

What is CareerBolt?

CareerBolt is a career Q&A and job portal for every professional worldwide. The site provides a platform for local communities, and career-related experts to share their experiences, and advice. Users will have a safe & professional place to ask any questions related to their career interests and will get answers from experienced knowledgeable users, including professional career coaches. our goal is for users to have useful know-how, insights, techniques, and tips that will help them achieve their ideal career.


Surawat Promyotin CEO and Co-founder at STYLHUNT

Surawat Promyotin

I have seven reasons why entrepreneurs should launch startup in Southeast Asia:

1. Large, emerging (high-growth) markets.
2. Opportunity to address problems that do not exist in more mature markets.
3. Opportunity to address problems that do exist in other markets, but that require unique approaches due to emerging, mobile-first market behavior.
4. Potential to create products that might scale to other emerging markets such as India, South America, Middle East, and Africa.
5. Comparatively lower labor and startup costs vs more mature markets.
6. Additional barriers to global competition: language, culture, policy, processes, logistics, market fragmentation.
7. Great people, places, and food!

What is STYLHUNT?

Search for Online Shops You Can Trust In emerging markets, where online shopping predominantly takes place through Facebook and Instagram, STYLHUNT allows shoppers to find shops they can trust in just a few clicks. This use case is currently underserved by Google search because it is not optimized for social media content and does not return relevant search results that signal or factor in trustworthiness. We address this issue by aggregating thousands of merchants and allowing shoppers to quickly filter through them on the basis of style and trust.

Conclusion

Congratulation!

If you are here, you have probably not read the whole list of advice from the entrepreneurs from Southeast Asia.

I would strongly advice you to bookmark this page for future reference. Because these insights from entrepreneurs can help you decide where to launch your startup.

I know that this post includes a truckload of insights and it may seem a bit overwhelming.

Relax and breathe. Let me ask you one thing.

Are you still wondering where to launch startup?

I don’t think so.

Here’s what to do next・・・

Leave a comment on where you are thinking of launching your startup and why.

You can be as specific or vague as possible.

_____________________________________

About the Author 

This article was written by Taiki Beaufils. Taiki is a Japanese social media junkie and the IT business developer of D8ii limited, a software development studio based in Bangkok. contact.

Entrepreneurship

The Brittle vs. Ductile Strategy for Business

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Companies and startups often pursue a path of “brittle strategy” and in it’s execution, it can be translated, in layman terms, into something like this:
Heard about the guy who fell off a skyscraper? On his way down past each floor, he kept saying to reassure himself: “So far so good… so far so good… so far so good.” How you fall doesn’t matter. It’s how you land!
– Movie : La Haine (1995)

Brittle strategy :

A brittle strategy is based on a number of conditions and assumptions, once violated, collapses almost instantly or fails badly in some way. That does not mean a brittle strategy is weak, as the condition can either be verified true in some cases and the payoff from using this strategy tends to be higher. However the danger is that such a strategy provides a false sense of security in which everything seems to work perfectly well, until everything suddenly collapses, catastrophically and in a flash, just like a stack of cards falling. Employing such approach, enforces a binary resolution: your strategy will break rather than be compromising, simply because there is no plan B.
From observation, the medium to large corporate company strategies’ landscape is often dominated by brittle “control” strategies as opposed to robust or ductile strategies. Both approach have their strong parts and applicability to corporate win the corporate competition game. The key to most brittle strategy, especially the control one, is to learn every opponent option precisely and allocate minimum resources into neutralizing them while in the meantime, accumulating a decisive advantage at critical time and spot. Often, for larger corporations, this approach is driven by the tendency to feed the beast within the company that is to say the tendency is to allocate resources to the most successful and productive department / core product / etc.. within the company. While this seems to make sense, the perverse effect is that it is quite hard to shift the resources in order to be able to handle market evolution correctly. As a result of this tendency, the company gets blindsided by a smaller player which in turn uses a similar brittle strategy to take over the market.The startup and small company ecosystem sometimes/often opts for brittle strategy out of necessity due to economic constraints and ecosystem limitations because they do not have the financial firepower to compete with larger players over a long stretch of time, they need to approach things from a different angle. These entities are forced to select an approach that allows them to abuse the inertia and risk averse behavior of the larger corporations. They count on the tendency of the larger enterprise to avoid leveraging brittle strategies, made to counter other brittle strategies. These counter strategies often fail within bigger market ecosystem as they are guaranteed to fail against the more generic ones. Hence, small and nimble company try to leverage the opportunity to gain enough market share before the competition is able to react.

Ductile strategy :

The other pendant of the brittle strategy is the ductile strategy. This type of strategy is designed to have fewer critical points of failure, while allowing to survive if some of the assumptions are violated. This does not mean the strategy is generally stronger, as the payoff is often lower than a brittle one – it’s just a perceived safer one at the outset. This type of approach, will fail slowly under attack while making alarming noises. To use an analogy, this is similar to the the approach employed with a suspension bridge using stranded cables. When such a bridge is on the brink of collapse, will make loud noises allowing people to escape danger. A Company can leverage, if the correct tools and processes are correctly put in place, similar warning signs to correct and adapt in time, mitigating and avoiding catastrophic failure.
To a certain extend, the pivot strategy for startups offer a robust option to identify the viability of a different hypothesis about the product, business model, and engine of growth. It basically allows the Company to iterate quickly fast over the brittle strategy until a successful one is discovered. Once found, the Company can spring out and try to take over the market using this asymmetrical approach. For a bigger structure, using the PST model combined with Mapping provides an excellent starting point. As long as you have engineered within your company and marketed the correct monitoring system to understand where you stand at anytime. Effectively, you need to build a layered, strategic approach via core, strategic and venture efforts combined with a constant monitoring of your surroundings. This allow you to take risks with calculated exposure. By having the correct understanding of your situation (situational awareness), you will be able to mitigate threats and react quickly via built-in agility. However, we cannot rely solely on techniques that allow your strategy to take risk while being able to fail gracefully. We need techniques that do so without insignificant added cost. The cost differential between stranded and solid cables in a bridge is small, and like bridges, the operational cost between ductile and brittle strategy should be low. However, this topic is beyond the scope of this blog post but I will endeavor to expand on the subject in a subsequent post.
Ductile vs Brittle :
The defining question between the two type of strategies is rather simple: which strategy approach will guarantee a greater chance of success? From a market point of view this question often turns into : is there a brittle strategy that defeats the robust strategy?
By estimating the percentage of success a brittle strategy has against the other strategies in use, weighted by how often each strategy is used by each competitor you can determinate the chances of success.Doing this analysis is a question of understanding the overall market meta competition. There will be brittle strategies that are optimal at defeating other brittle strategies but will fail versus robust. However, the robust one will succeed against certain brittle categories but will be wiped out with other. Worse still, there is often the recipe for a degenerate competitive ecosystem if any one strategy is too good or counter strategies are too weak overall. Identifying the right strategy is an extremely difficult exercise. Companies do not openly expose their strategy/ies and/or often they do not have a clear one in the first place. As a result, if there is a perception that the brittle strategy defeats the ductile one, therefore the brittle strategy approach ends up dominating the landscape. Often strategy consulting companies rely on this perception in order to sell the “prêt a porter” strategy of the season. Furthermore, ductile strategies tend to be often dismissed as not only do they require a certain amount of discipline, but also the effort required in its success can be daunting. It requires a real time understanding of the external and internal environment. It relies on the deployment of a fractal organisation that enables fast and risky moves, while maintaining a robust back end. And finally, it requires the capability and stomach to take risk beyond maintaining the status quo. As a result, the brittle strategy often ends up more attractive because of its simplicity, more so that it’s benefit from an unconscious bias.

The Brittle strategy bias:

Brittle strategies have problems “in the real world”. They are often unpredictable due to unforeseen events occurring. The problem is we react and try to fix things going forward based on previous experience. But the next thing is always a little different. Economists and businessmen have names for the strategy of assuming the best and bailing out if the worst happens, like “picking pennies in front of steamrollers” and “capital decimation partners”.
It is a very profitable strategy for those who are lucky and the “bad outcome” does not happen. Indeed, a number of “successful” companies have survived the competitive market using these strategies and because the (hi)story is often only told by the winner’s side only, we inadvertently overlook those that didn’t succeed, which in turn means a lot of executives suffer from the siren of the survival bias, dragging more and more corporations into similar strategy alongside them.
In the end all this lot ends up suffering from a more generalized red queen effect whereby they spend a large amount of effort standing still (or copying their neighbors approach). This is why when a new successful startup emerges, you see a plethora of similar companies claiming to apply a similar business model. At the moment it’s all about UBER for X and most of these variants. If they are lucky, they will end up mildly successful. But for most of them, they will fail as the larger corporations have been exposed and probably bought into the hype of the approach.
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About the Author
This article was written by Benoit Hudzia of Reflections of the Void, a blog about life, Engineering, Business, Research, and everything else (especially everything else). see more.
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Entrepreneurship

What Kills A Startup

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1 – Being inflexible and not actively seeking or using customer feedback

Ignoring your users is a tried and true way to fail. Yes that sounds obvious but this was the #1 reason given for failure amongst the 32 startup failure post-mortems we analyzed. Tunnel vision and not gathering user feedback are fatal flaws for most startups. For instance, ecrowds, a web content management system company, said that “ We spent way too much time building it for ourselves and not getting feedback from prospects — it’s easy to get tunnel vision. I’d recommend not going more than two or three months from the initial start to getting in the hands of prospects that are truly objective.”

2 – Building a solution looking for a problem, i.e., not targeting a “market need”

Choosing to tackle problems that are interesting to solve rather than those that serve a market need was often cited as a reason for failure. Sure, you can build an app and see if it will stick, but knowing there is a market need upfront is a good thing. “Companies should tackle market problems not technical problems” according to the BricaBox founder. One of the main reasons BricaBox failed was because it was solving a technical problem. The founder states that, “While it’s good to scratch itches, it’s best to scratch those you share with the greater market. If you want to solve a technical problem, get a group together and do it as open source.”

3 – Not the right team

A diverse team with different skill sets was often cited as being critical to the success of a starti[ company. Failure post-mortems often lamented that “I wish we had a CTO from the start, or wished that the startup had “a founder that loved the business aspect of things”. In some cases, the founding team wished they had more checks and balances. As Nouncers founder stated, “This brings me back to the underlying problem I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made.” Wesabe founder also stated that he was the sole and quite stubborn decision maker for much of the enterprises life, and therefore he can blame no one but himself for the failures of Wesabe. Team deficiencies were given as a reason for startup failure almost 1/3 of the time.

4 – Poor Marketing

Knowing your target audience and knowing how to get their attention and convert them to leads and ultimately customers is one of the most important skills of a successful business. Yet, in almost 30% of failures, ineffective marketing was a primary cause of failure. Oftentimes, the inability to market was a function of founders who liked to code or build product but who didn’t relish the idea of promoting the product. The folks at Devver highlighted the need to find someone who enjoys creating and finding distribution channels and developing business relationship for the company as a key need that startups should ensure they fill.

5 – Ran out of cash

Money and time are finite and need to be allocated judiciously. The question of how should you spend your money was a frequent conundrum and reason for failure cited by failed startups. The decision on whether to spend significantly upfront to get the product off the group or develop gradually over time is a tough act to balance. The team at YouCastr cited money problems as the reason for failure but went on to highlight other reasons for shutting down vs. trying to raise more money writing:

The single biggest reason we are closing down (a common one) is running out of cash. Despite putting the company in an EXTREMELY lean position, generating revenue, and holding out as long as we could, we didn’t have the cash to keep going. The next few reasons shed more light as to why we chose to shut down instead of finding more cash.

The old saw was that more companies were killed by poor cashflow than anything else, but factors 1, 2 and 4 probably are the main contributing factors to that problem. No cash, no flow. The issue No 3 – the team – is interesting, as if I take that comment ” I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made” and think about some of the founders and startup CEOs I know, I can safely say that the main way that any decision was made was by agreeing with them – it was “my way or the highway”. I don’t therefore “buy” the team argument, I more buy the willingness of the key decision makers to change when things are not working (aka “pivoting” – point 9).

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About the Author

This article was produced by Broadsight. Broadsight is an attempt to build a business not just to consult to the emerging Broadband Media / Quadruple Play / Web 2.0 world, but to be structured according to its open principles. see more.

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