What’s next path for Thai Startups?
Over the past three years, both the government and private sector have helped the growth of startups in response to the government’s Thailand 4.0 policy. In response, we have gathered viewpoints of experts about the future of startups in Thailand.
The growth path of startups has been satisfactory, experts say, however, Thailand is still in an early stage compared to other countries, who have been promoting startups for over a decade. The government should continue supporting startups to become a major force of the economy.
The ecosystem of Thai Startups
Yanchai Tantiratapong, chief executive officer of Bualuang Ventures, says startups in Thailand are on the right way, yet, further, development is still crucial, especially the startup ecosystem.
Currently, investment capital from venture capitalists (VCs) and angel investors are still minimal. Most funds are from corporate VCs, which prefer to focus on technologies that serve their core businesses. Consequently, the variety of funded startups is still minimal.
Cooperation with educational institutions is also insufficient. In many countries, universities work with startups and help develop their ideas effectively. In some cases, instructors even start their own companies. This kind of cooperation is still rare in Thailand.
Also, among the ecosystem of startups in Thailand are failed companies who could turn around at the end. Their experiences provide excellent case studies and help startups avoid repeating their mistakes.
Expand Vision, Expand Business
Thanapong Na Ranong, managing director of Beacon Venture Capital, said Thai startups had shown satisfactory growth, but most are still small players, far from being a market leader. In comparison, Singapore and Malaysia already have two-three startups unicorns that successfully raised funds from China and Japan. A unicorn is a startup valued at over US$1 billion.
“In Thailand, there are only a few leading players, even so, their businesses are still minimal compared to neighbouring countries, which already see fundraising worth several million dollars. Besides, the competition is very tense in Thailand; not only do they compete with each other, but they also battle with players from overseas,” Mr Thanapong said.
He advised startups to expand their businesses by joining forces with market leaders that have strong networks and a vast client base. Also, they should think of a B2B business model rather than business-to-consumer, which is a tougher arena.
Another weak point of Thai startups is that they like to adopt foreign startups’ business idea without realising the differences in local context, causing them to fail in the beginning stages.
Dusit Chairat, fund manager of AddVentures by SCG, said for startups to grow faster, they should begin with a promising idea that could evolve into a unicorn in the future. “A unicorn is like a hero who inspires others and draws tech talents who work in giant firms like Facebook, Google, Apple to come back to Thailand and work with them. If they can attract these people, they would also attract investors to Thailand.”
He cited the case of GoJek in Indonesia and Grab in Malaysia, which successfully attracted substantial capital worth billions of US dollars to their countries. The Thai government should provide support, such as easing of regulations to attract tech talents and foreign investors to Thailand, Mr Dusit said.
Global Innovation Hubs
Mr Dusit said Thai startups should look to expand their network to global innovation hubs, such as in Silicon Valley in the US, Tel Aviv in Israel, and Shanghai and Beijing in China. As financial resources in the region, SCG is connecting global networks into Thailand.
SCG recently joined hands with PlugandPlay, an accelerator from Silicon Valley that has networks of 200-300 startups. Previously, SCG invested in the early stage of Dropbox before it became a big hit all over the world.
With support from large-scale companies like SCG, startups can develop new and innovative ideas and expand their businesses rapidly and be able to expand business partners and customer base in the end.
Let Robots do the Work
Mr Yanchai of Bualuang Ventures, which has a long experience in overseas startups, said Thai startups should focus on developing deep tech, which includes automation or robot technology and artificial intelligence. Besides, their services should focus on solving customers’ pain point.
Mr Dusit agreed that they should look forward to the future focusing more on full automation and artificial intelligence than basic features.
Furthermore, to solve customers’ pain point, startups should look to neighbouring countries rather than specifically focusing on local markets so they can serve the broader market.