"Start-up" is a word increasingly heard in Thailand over the past two years, a trend set to continue, especially in the technology field.
I can’t remember the exact cause of this trend in the Land of Smiles. But I believe that it was because of Builk, the very first Thai start-up company that went abroad two years ago, which ignited the entrepreneurship of Thai people. It was the first time for me as well to get into this world.
Since then, I heard a lot about start-ups and I believed that I knew almost everything about this phenomenon, but in fact I did not.
We started a photo-sharing product named Molome three years ago. We didn’t even know there was such a thing as a start-up in this world. We just did it out of passion. We loved photography, we loved to share photos on social networks, and we knew that many other people loved it too. So we developed a photo-sharing application and aimed to make it available for everyone on every single platform.
Last year we started finding investors for our product. And we were lucky enough to be chosen as a part of a Singapore-based incubator programme named JFDI (Joyful Frog Digital Incubator). There we learned a lot and were able to feel that it was the first time that we had moved into the real world of start-ups.
The two years that we had spent studying about start-ups in Thailand couldn’t even compare to just 100 days there. And this is what we learned.
Start-ups are about proving an assumption. There are two terms that people always confuse and can’t differentiate, SME and start-up. Actually they can be easily separated. A small or medium-sized enterprise starts with a business, to do something for profit since the beginning, while a start-up is about something you are not so sure will work but you are trying to find the answer. So don’t worry if you find that the direction you are heading to doesn’t work, it is very normal for start-ups. You just need to move fast!
Passion is the key. The success rate of start-ups is only about 10 per cent. And the process takes anywhere from five to nine years. That means the founder has to be with it every single day for at least five years. And believe me, if you don’t love it, just one year is already too long. But as well, to be full of passion doesn’t mean you will be successful. It just means that you can be with the project until it is successful.
Teamwork is another key. You have passion. You have an idea. But who are you, and can get it done? Investors know well that ideas are cheap. Anyone can think, but not everyone can do. The best team needs to consist of at least one who can think and at least one who can do, in other words, a CEO (chief executive officer) and CTO (chief technical officer).
Focus. The most important thing that every start-up’s founder has to do is to focus, or the product will definitely fail. If the founder doesn’t focus, who will?
Everything needs to be measurable. As I said above, start-ups are about finding the answer to whether the idea works or not. So how could you find the answer if it couldn’t be measured? It is important that every single move can be tracked and measured.
Failure is not bad. If you read the success stories of start-ups around the world you will see that most of them have failed before. But finally, they were successful with the next (or the next of the next) product. Why? In the start-up ecosystem, failure is not bad. It is just an answer to the question of whether your idea works or not. It is just a way of learning. You gain a lot of experience all along the way. “Fail early to succeed sooner” – this is one of the most critical points that the Thai start-up community needs to get into its mindset. One failure is not shameful; not even trying to do anything because fear of failure is.
Valuation is not equal to profit. Whatsapp was acquired by Facebook for US$19 billion (Bt618 billion) but the annual revenue is hundreds of times lower. It is the best case study showing that the valuation of a start-up is not equal to profit. The mission of a start-up is “to maximise value creation”. And sometimes, to increase the value, it might need several million bucks without any return. That’s why investors are needed in this ecosystem. Anyway in most cases, revenue and profit are included in the value estimation.
I must say that the start-up situation in Thailand is still in a very early stage. Very few correctly understand what a start-up is. In addition, the Thai start-up ecosystem still lacks some essential parts, especially investors, accelerators and role models. There are a lot of things to do and a long way to go to make this ecosystem complete.
Anyway, things are obviously getting better and better. Thanks to everyone who keeps pushing. Let’s see how is it will be going in the next 12 months.
Sittiphol Phanvilai is innovation director of Hua Lampong Co Ltd and CTO of Molome Pte Ltd.