[Opinion] How Startups in Southeast Asia Can Continue to Scale Effectively by Ruban Phukan | Techsauce

[Opinion] How Startups in Southeast Asia Can Continue to Scale Effectively by Ruban Phukan

This article is contributed by our guest, Ruban Phukan, Co-founder and CEO of GoodGist Inc

Tech startups are booming in Southeast Asia, fitting with the overall global picture of market growth that is surging in the digital economy—we are on track to see a $600 billion gross merchandise value by 2030 in the region. Additionally, research from Jungle Ventures finds that tech startups in Southeast Asia have a combined valuation of around $340 billion, with this set to triple by 2025. Contributing factors come from the evolving working population as the region continues to develop with space for additional income growth and urbanization expansion. It all means that Southeast Asia is set to continue cementing itself as a tech startup hub. But there is still plenty for these startups to work on to scale effectively, focusing on their local clients without losing sight of global progression. Let’s take a look at how Southeast Asian startups are addressing these challenges, what issues might remain, and how they can utilize partnerships all over the world in spite of these problems.

The Hiring and Partnerships Conundrum

We know that Southeast Asia’s tech ecosystem is thriving, with startups based here expanding their operations in the region. Unfortunately, many of these startups have prioritized only commercial talent from sales and customer success, instead of hiring local tech talent. And yet, many big tech giants have recently made employees redundant, leaving a huge pool of talent to tap into. However, for a startup, knowing how to operate without splashing huge expenditures on new recruits is a real challenge. This is where outsourcing services can really help companies with global scaling ambition by providing them with access to experienced technical talent in Southeast Asia at a lower cost.

Although ideally most businesses want to keep everything in-house, it can be time-consuming and expensive. It’s all about finding a balance, and partnering with top global or national companies allows startups to leverage existing expertise and infrastructure. 

For instance, several E-commerce giants in Southeast Asia have already formed partnerships with local banks and telcos to facilitate their expansion and diversify across the region. But obviously, it is not as simple as that for many startups. 

Autonomous Solutions for Partnership Enablement

Tasks such as onboarding, content creation, support, knowledge management, and reskilling are all areas where alignment is needed, and cultural differences between teams in different countries can really have a negative impact. This is where managing partnerships through autonomous learning and a knowledge management platform can be a really effective approach. This can help to ease the burden of training by creating personalized learning paths for any level of proficiency.

Another difficult challenge that partnerships will bring to the table is managing compliance with industry standards and legal requirements across different regions. These platforms can provide detailed guidelines on regulatory compliance which are tailored to each region's legal context. Continuous updates on the platforms ensure that partners are always operating within the latest regulatory frameworks, reducing the risk of non-compliance and any associated penalties.

Necessary Government Support

In terms of government help, in Thailand, there is support for tech startups through various initiatives like the Thailand 4.0 policy, which aims to foster innovation and drive digital transformation. Nationwide implementation of narrowband IoT technology has also been a vital component, with various applications, born out of startups, such as vehicle tracking and smart parking, have reached the commercialization stage, while others, like smart metering, are still in the trial phase.

Additionally, 5G IoT solutions have been introduced to cater to segments such as smart factories, logistics, and utilities, efficient data collection, analysis, and remote monitoring. This leads to increased efficiency, reduced operating costs, and better preparedness for future digital platforms.

Governments around the world, backed by private-sector partnerships, must continue investing in digital and physical infrastructure to create an environment where companies can expand confidently and run successful businesses. Hurdles, such as insufficient infrastructure in rural areas, often make it difficult for businesses to operate effectively, even though the demand for digital products and services is growing in these areas. This is why strategic investments are needed to lower the cost-to-serve and accelerate digitization across the country.

Another area where governments can play a critical role is driving multilateral policy frameworks such as trade and cross-border data governance agreements and infrastructure standards. International alignment can help businesses provide cross-border services and technologies and stoke growth across the region. Without alignment, digital fragmentation can be particularly challenging for small businesses that have fewer resources to navigate policies.

Progressive Opportunities

A recent study looking into Entrepreneurship, Start-Ups, and Innovation (E-S-I) in ASEAN and East Asia, states Women entrepreneurs, especially those leading SMEs and local businesses, will be powerful engines driving ASEAN's expected e-commerce growth towards 2030. 

However, we need to ensure female leaders are given the platform to thrive by granting equal access to finance, internet infrastructure, and training. Initiatives by organizations like UNCTAD's eTrade for Women can help upskill female entrepreneurs and facilitate cross-border opportunities. Lastly, we cannot forget that sustainable entrepreneurship, which focuses on developing innovative solutions to environmental challenges, is a vital trend. Multi-stakeholder collaboration between public, private, and community members is needed to create enabling policies and funding.

There are many interesting avenues to explore in the Southeast Asian tech market, but startups must navigate complex challenges to scale effectively. Key strategies include embracing partnerships, leveraging government support where possible, and promoting inclusivity and sustainability. 

The success of execution lies in effective knowledge management across different stakeholders - customers, partners, employees, and governments. However the traditional approach to knowledge management with manually researched, created, and maintained knowledge bases is broken and doesn't scale. This is where the advancement in AI and especially Agentic AI frameworks can help deliver the speed and scale needed for successful knowledge management.

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