The startup scene in Malaysia is seeing tremendous progress now, as most of us would agree. The government is trying to push for growth and development in this sector, most notably through MaGIC (Malaysian Global Innovation & Creativity Centre), an accelerator programme which was set up last year.
While there are various opportunities for funding, programmes targeted at entrepreneurs, as well as global mentors brought in through MaGIC, there’s only so much the government can do to spur the local startup scene in Malaysia. What are the biggest problems for entrepreneurs here? Here are some thoughts which were shared on popular Q&A site Quora.
Ditesh Gathani, Intellectual polygamist
The fail stigma is pretty strong. I would like to hear more Malaysians ask, “What would you do different in your next startup?”.
By and large, Malaysian VCs [venture capitals] have accounting backgrounds. This translates to less domain knowledge/exposure and a misplaced focus on reducing risk.
Governments are the biggest ICT [Information and communications technology] spenders, yet it’s difficult to crack that market unless you’re willing to make ethical compromises and play the race game.
Lack of concrete strategy (marketing, ops, funding), often too much exuberance, leading to the juvenile problem of high risk due to weak planning. On the investors’ side…folks often demand guaranteed returns instead of taking a portfolio approach — this puts blinders on management options. On the management side…folks often articulate their visions as a feeling, not as a reasoned set of inferences, with empirical data to back up those inferences.
I have never done business in Malaysia and would not know what real problems entrepreneurs face there.
But from my brief understanding of my entrepreneur friends, like anywhere else in the world, there is no such “biggest” problem, but multiple smaller problems which make life difficult:
1. Difficult access to funding
2. Monopolistic nature of markets
3. Lack of knowledge on entrepreneurship
4. And lesser respect to intellectual property as a whole, compared to established markets
There are some, which, I think if we take away, will lessen the hurdles significantly.
As Ditesh wrote, the fail stigma might be a reason for (3). The lesser people are willing to commit and learn from their mistakes, the lesser knowledge we will have. With small success rates, it will be difficult to create a more vibrant and larger angel investor scene, which leads to (1).
Most of my entrepreneur friends tend to look for tenders from governments for businesses. Governments are one sector which I avoid, as I do not understand how will I grow from getting tenders (i.e., continuity) and have little patience for them.
But I do understand that if done with care and with a long term vision, it can still be a viable business strategy. The long term vision is of course to not get tenders anymore.
From the the usual tenders, to government involvement in many sectors, I think there is a somewhat unhealthy monopolistic nature to the market overall.
Lack of access to domestic and international markets: lack of resources to promote products in overseas markets (money, manpower and knowhow), difficulty in getting their products on the display shelf — especially in hypermarkets and supermarkets — and limited distribution capabilities.
Hafiz Zainudin, Technopreneur & Technology Consultant
Depends on the industry you are in. If you rely more on government projects, then it is not that easy to win tenders without “connections”. If you are more consumer-centric, then a lot more marketing effort is required. If B2B, there is a certain business “culture” you may need to blend in with. If you are not open minded, don’t think about becoming an entrepreneur.
Author’s note: Are you an entrepreneur? Do you face any of the challenges mentioned?