Exclusive Interview: Empowering the Malaysian Startup Ecosystem with Digi | Techsauce

Exclusive Interview: Empowering the Malaysian Startup Ecosystem with Digi

digi is one of leading mobile operator in Malaysia and owned by Telenor Group. This year they have set up accelerator program to support tech startup ecosystem in their country. At dtac accelerate's Demo Day batch 4, Praveen Rajan (Chief Digital Officer of digi) and Julie Ng (CEO of VASE) also joined this event. Before they took the stage, we caught up with them for exclusive interview, in which they spoke about Malaysian startup landscape and how digi supports them.

digi accelerate

The objective of digi accelerate and how long did you take to set up and establish this program?

Praveen: So Digi is part of the Telenor Group and one of its sister companies is Dtac. Digi has only just established its accelerator program this year but we have learned so much from Dtac. And with Dtac having been established since 2013, we have learned from all their experiences; now they are in batch four. From their experiences, we have used their learning to start the Digi Accelerate program. The purpose for us, the objective for us in Malaysia, is to nurture startups that are from Malaysia. If you look at Southeast Asia, or ASEAN, every country is different. Every country has different challenges, different languages, so our role is to make sure the startups from Malaysia have a chance. And that is the main focus: to nurture as many new startups as possible.

In terms of the startup landscape, so when you compare with other countries, like Indonesia, Thailand, Malaysia and Singapore, can you explain more details about the status? Or what is the current situation of the ecosystem?

Praveen: I think if you look at the three ASEAN countries that Telenor is in, Myanmar, Thailand, and Malaysia, we all operate a bit differently because the status of the economy in each country is very different. If you look at Malaysia against Myanmar, Malaysia has got a lot of broadband penetration, so most homes have some type of broadband; Myanmar does not. The differences create different solutions. Different types of startups come out of this. I think if you look at Malaysia right now, one of the advantages for startups coming out of Malaysia is that most of them would have a good command of English and also the local languages of Malay, Chinese, and Tamil. So building a startup in Malaysia, you may be able to quickly scale out to some countries. If you look at Thailand and what has been achieved with the Dtac Accelerate program, I think the Thai community is very strong and it creates a lot of new startups and a lot of new people believe in it. That’s something that may be a bit missing from the countries like Malaysia right now. So I think each country is different.

Which type of the industry are you focusing on? 

Praveen: I think it’s very difficult for us to pinpoint a category. I think even when (Julie can comment later) when we started the accelerate program, we put up some guiding categories – I think it was about twelve different categories. But we said don’t worry too much about the category. If your business can make good revenue, and can create value for real people, it’s worth looking at. Generally, for us as a telco, same as Dtac, same as Telenor Malaysia, we are in the business of serving end users, using the internet. So some of the things you mentioned like logistics, education, financial services, these are all common things that every telco is interested in. But for the accelerate program, we said to keep the categories open so we can encourage people to participate.

What are key strengths of Malaysia?

Praveen: Like I mentioned just now for Malaysia, the infrastructure is there. There is good infrastructure, there is a good workforce in terms of languages, but in terms of what is currently right for disruption you see a lot of more on financial services. More on FinTech and education (EdTech); those are two key areas. The IoT space for enterprises is also a big opportunity. Healthcare is also another big opportunity. I think that some of the inefficiencies that you may see in Thailand, like some of the startups that I have presented today, those problems also exist in Malaysia today. And their synergy is there.

And in terms of the collaboration between Digi and Dtac, can you explain more about this?

Praveen: There’s a few parts. One is, Dtac has already established a Dtac accelerator program for a few years now. Everybody in Telenor, not just Digi, is learning from what Dtac has done, taking what has worked to bring into their own countries. So that’s one. So there is sharing between the companies. Two, the companies, the startups that come out from Thailand, from batch one, two, and three, if they need to expand to say, Malaysia or Myanmar, all the Dtac team does, Ming, will pick up the phone, call one of us, and we try to connect people. Half the battle is usually connecting the startup with the right people in the country, so that is some of the ways we work together today.

Which startup companies from Thailand already have the collaboration?

Praveen: We are working with Skootar. For TakeMeTour, before they go off to Thailand, and sometimes, if they pass by the airports where the Digi stalls are, we do promote it. And also if you go to our loyalty and rewards program, we also actively tell our customers that if you are going to Bangkok, this is one of the options you have and you get to go at a discount, so we’re already effectively advertising to them, even before they step into Bangkok.

Let’s go to the startup side. Can you explain in more detail about Vase does?

Julie: Vase is an on-demand market research platform that helps businesses of all sizes to understand more about consumers and the market. So what happened is that market research has always been something that only the big companies can do because it’s incredibly expensive, but at the same time, it is slow. So what we step in is that we provide and democratize the market research industry, so that small businesses and entrepreneurs can all do quick market research which is a fraction of the cost – we are thirty-seven times cheaper.

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So before you started this startup company, what did you do?

Julie: So basically, we actually started out as a validation platform. We all know that in the startup world, we need to validate our ideas before doing it. I have been doing validations for the past five years. And hence, we actually found out this pain point, that there is no way for us to validate quickly.

Who are your main customers?

Julie: Yes, so we have three types of customers. One is large enterprises like Digi. They are actually our paid clients so what they do is they use us as strategic research. The second type are agencies; we mainly work with digital and advertising agencies, so those agencies, they have a lot of connections with a lot of existing brands so they use us as part of their added value package to offer their clients. The third one is SMEs and startups; they use us generally for idea validations, public validations and lead generations.

The key important thing that I know about this type of platform is acquiring the users; so how can you acquire them and what is the strategy to acquire them – this is the first question; the second question is how can you gather quality data from them? Like maybe the numbers, in terms of the quantity and quality.

Julie: The thing that is interesting is that we are very strong in terms of gathering respondents, so on average our respondent acquisition cost is actually sending at eight cents per US dollar. We mainly use social media. Ninety per cent of our responders are all coming from referral campaigns so that’s to answer the quantity side. For the quality side, it’s our job to find out more and more, about, for example US respondents. The first step we do is that we ask them up front a pretty long survey so to make sure that they are the right candidate to do the survey. We want to screen out those people that are not suitable to do the survey at all and that’s how we find out their background information on the first step. For the second step, we update the profile every three months so we ask other questions because once you become our respondents and answer more and more surveys, all those data actually key into your own profile and that’s how we know more and more without asking you directly, and that is how we check and validate whether there is fraud or not.

How can Digi help your company?

Julie: Digi helps us in a lot of different things, so other than being a financial investor they are also a strategic investor. Firstly, they help us in a lot of different connections including, next time when we step into Thailand, we will have Dtac already as a partner.  Secondly, also because we are a B2B company, we need reputation and credibility in order to get big customers to actually believe in us; it’s not only just about the quality of the data, we also need to know who are backing us up. So in terms of reputation and credibility Digi helped us in a lot in this and as a B2B company we thrived in three months also because of this. There’s one more thing; we also worked closely with the market research team in Digi. Telco is one of the largest spending market researchers in the whole country and we definitely learned a lot from them.

How to create a barrier to entry?

Julie: So it’s very easy going back to the data. The thing is quantity does not mean everything, so we need to know more about them in order to get that quality. So for example, if you want to target 18 to 25-year-old housewives – to be honest, a lot of platforms can do that but if you want to target 25 to 35-year-old housewives who buy groceries three times per week and so on, more and more niche, you actually need more and more surveys to get that data out and when one person, one respondent, answers more and more surveys, that’s how we build a defensibility. Because for newcomers who want to come in to gather all that data, they need to ask a lot. So actually in a lot of startups, first time/first move/first advantage does not really exist, but for data companies, it exists.

Apart from being partners with Dtac, sending the startups into Thailand’s program, what else do you help the startups in your country with? Do you have a co-working space? Or any programs inside your country?

Praveen: We currently run a few programs. The Digi Accelerate is the accelerator for which we are partnering with Dtac and Telenor Myanmar this year; that is one program. For the ideation side, pre-accelerator, we have another program called Digi Incubate, so there we are running programs to help young individuals to think about their ideas. So they may not have a team yet, but at least they are thinking about their idea. How can we help them get to the next stage? Very recently, yesterday I think, we have also announced a new ideation lab together with Magic and Uber in Malaysia. This is to encourage ASEAN entrepreneurs, people with ideas in ASEAN not just Malaysia, to participate and submit their ideas. So that’s a third example of another program. We are also working closely with government agencies and ministries, especially the Ministry of Education in Malaysia, where we are now coming in as a partner to introduce coding in schools. So now in Malaysia, when you are going into your primary one or secondary school you will now learn how to code and Digi is now a partner in that. So we believe throughout the eco system, from the time you are in school, we want to be able to cultivate talent and get people to think about starting a new company. So those are some of the things we are doing today.

Any advice for new grads? working as startups or joining big enterprises first?

Praveen: I think the advice we would give most of us in Digi today is that if you have a chance, especially if you’re a fresh grad coming out of school or university or even if you haven’t decided on a university, the startup option is not a bad one. It’s something you should be very brave to go out and do because it’s much easier to do it when you are much younger and you should go out and push, so with so much support in the network now, in all the countries, it makes a lot of sense for you to do that. And even if you feel – and Digi is not the only one in Malaysia doing this, there are a lot of people now trying to help the ecosystem. So the advice I would give is really be brave and you should do it, and don’t doubt it.

In terms of the entrepreneurs, do you have any advice for the new startups?

Julie: So, definitely not considered advice but I think something that we have experienced – because this is not my first startup – so what I have experienced is that sometimes, not just in terms of the attitude and persistence and determination to want to do something, we also need to have some prerequisites and knowledge in terms of what we want to carry out. So for example, the reason why we work well as a team is because throughout the cofounding team, we each have our own strengths and we need that dominant knowledge in order to actually to go further.

What is your next plan in your country and also to expand to the outside?

Julie: Yes, so currently we mainly really want to build our reputation and credibility in Malaysia so that every time that people think about creating market research, they will think about us, so that is our main focus right now. We are building our own backend mobile especially on the analytical side; we want to let people to see real time data, but first we are looking into expanding, currently we are in Singapore but definitely we need an extra round of funding to actually do more in Singapore.

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