April 30, 2013 00:00 By Asina Pornwasin The Nation
There are plenty of opportunities and also challenges for Thai tech entrepreneurs, industry experts tell NForum
It is the right time for Thai tech start-ups to be at the forefront of the tech industry amid readiness of all factors in the ecosystem. There is a chance but it is also a challenge for Thai tech start-ups to latch on to it, take a risk and go, said panelists at an NForum on “Tech Start-up: Challenges in the Thai Way”, hosted by The Nation at the office of Microsoft Thailand last weekend.
The panellists confirmed that now is a time of opportunities for tech start-ups, to catch up, as there is a lot of readiness in the ecosystem. This includes technologies like cloud computing; devices, especially mobile devices including smart phones and tablets; and support from technology firms and investors, especially corporate venture capital. The important thing is the readiness of the tech start-up themselves. They have to be ready to take a risk in order to get the chances to succeed like other tech start-ups overseas.
Jay Jootar, chief officer executive of The VC Group, said tech start-ups are growing not only in Thailand but around the world. This is the fourth round of boom for tech start-ups around the world. The first round was the Silicon boom, and Intel was the successful start-up. The second round was the personal computer era, defined by the successes of Microsoft and Apple. The third round was the dotcom boom, Google and Cisco being beneficiaries.
Currently, there is another round for tech start-ups, and this time it could have a bigger impact on Thailand’s tech industry. Media is an important factor to drive inspiration.
“Now, in Thailand, there are a lot of corporate venture capitalists, who are potential investors for tech start-ups. These VCs are strategic investors who are more patient in waiting for return on investment. They have the ability to support tech start-ups with more than just investment, such through marketing and distribution channels,” said Jay.
Thanapong na Ranong, vice president of Business Development, InTouch, said that in 2007, when he was in charge of business promotion for Thai software, there were hardly any tech start-ups. Once, he was in charge of start-up promotion at Intouch, a lot of tech start-ups entered the fray. He said the current ecosystem is ready for tech start-ups, including tablets, smart phones, and app store, which are leading to a market boom at the moment.
Pratthana Leelapanang, senior vice president of Digital Business at AIS, said the company has almost 300 companies ranked from small to medium firms working as content service partners with AIS. The rapid growth of smart phones and mobile devices encouraged the growth of tech start-ups. The success of start-ups in other countries has also inspired Thai tech entrepreneurs to start their own businesses. This year is an exciting time for start-ups in Thailand.
Krating Ruangroj Poonpol, senior vice president of the products division at DTAC, said this is a time of opportunity for tech start-ups in Thailand. It is the first time in a decade when tech start-ups in Thailand have the most readiness in the ecosystem. For example, global incubators and global investors are now eyeing Thailand.
Natavudh Pungcharoenpong, chief executive officer of Ookbee, a successful Thai tech start-up that develops and provides an e-book platform, said that right now there are a lot of opportunities for tech start-ups. It is a lot more than in the past few years when he started Ookbee, with its first idea to develop an e-magazine platform that would allow readers to get it for free. He spent six months for development. It got only 20,000 users in 60 days. Currently, it has 10,000 new users per day. It has increased by 20 times in 28 months.
“There are a lot of opportunities. Tech entrepreneurs have to not only think about product development and service, but they also have to consider the business model – who their potential customers are, how to sell to them, and how to monetise them. Now, there is a lot of readiness in the ecosystems such as payment platforms and distribution platforms,” said Natavudh.
Ookbee has 150 applications. AIS Bookstore is the best one that contributes almost 40 per cent of the total revenues for the company.
“Not only telco, but now also co-working space, investors and media are going to support tech start-ups. This year is the best time for tech start-ups. There are still opportunities for start-ups to catch up with. After this, the good opportunities might be taken,” said Nattavudh.
Support for start-ups from tech firms and investors is now flourishing. The two mobile operators, AIS and DTAC, have also launched their dedicatedly designed programmes to support tech start-ups in Thailand.
He said DTAC offers support to Thai tech start-ups through the DTAC Accelerate campaign, with shortcut keys for Thai application developers to world-class learning experience at Silicon Valley. The first activity of the DTAC Accelerate programme is a mobile application competition under the theme ‘Wizard of App’, to seek top app developers to get world-class learning and working experience at Silicon Valley, the world’s renowned city of the high-tech industry, along with other rewards worth totally Bt50 million. The mobile app contest is only the beginning of the shortcut to the success DTAC offers. More and more inspiring projects under the DTAC Accelerate programme will follow in due course.
Ekaraj Kongswangwongsa software industry development manager at Microsoft (Thailand), said that Microsoft (Thailand) supports tech start-ups through the Microsoft BizSpark program that provides technology, support, visibility, and community to start-ups and entrepreneurs at no charge. The three-year offer provides start-ups with access to a global community of advisers, investors and partners as well as Microsoft software and services.
Microsoft BizSpark extends special offers to help top start-ups grow their businesses. These offers are available to start-ups who are members or alumni of an Accelerator Program. The Windows Azure $60K Offer helps cover cloud-computing costs by providing up to US$60,000 worth of Windows Azure over two years, 100 per cent of Windows Azure usage for the first year and 50 per cent off Windows Azure retail for the second year. Through this offer, every dollar start-ups can save on their cloud computing costs means more money for them to spend elsewhere for hiring developers, investing in marketing, acquiring new customers. To get the Windows Azure $60K Offer, they must be a member or alumni of an Accelerator Program, developing software, less than five years old and be a privately held firm that is making less than $1million annually.
Meanwhile, Pratthana said, AIS will not focus on direct investment in tech start-ups but its emphasis is to help start-ups in the markets and enable them to meet potential customers. AIS plays an interface role between start-ups and customers.
Patai Padungtin, principal and evangelist at Builk Asia, one of the successful Thai tech start-ups, said the key factors are a repeatable and scalable business model. Before he set up Builk.com, he ran Longkong Studio. The software company stuck to the service-oriented business that could always keep developing according to customers’ requirements. He said the tech start-up business requires less initial investment. Tech start-ups can always adjust the details of their products and services during development and the market-trial period as the investment required is low.
“Tech start-ups offer a chance and a challenge because you always have an opportunity to improve your products and services, without incurring too much cost. There are many successes in Thailand right now, but there are also many failures,” said Patai.
Beware of bubble
Oranuch Lerdsuwankij (@mimee), co-founder of Thumbsup.in.th, one of the famous online media in Thailand, said the cost of establishing a tech start-up is not too high for Thai tech entrepreneurs but the success factors for tech start-up is the knowledge of grooming a tech start-up. Incubators are a key factor to assist tech start-ups to be success.
Ponthep Sethiwan, co-founder of Launchpad Co-working Space, said that start-ups in Thailand still had opportunities and room for growth for the next couple years. The issue of concern is a bubble in start-ups as the media highlights only successes such as Ookbee, Builk.com and Tarad.com. They have passed through hard times before becoming successful.
“My concern is that the young generation might be misled by the successful cases because there are also a lot of failures. Setting up and running a start-up requires a lot of hardwork and consistency to become a success. It is a trade-off,” said Pornthep.