TLDR:
The start-up and venture capital funding landscape has been significantly impacted by the challenges of the Covid-19 pandemic. Start-ups have faced funding difficulties and lower valuations, resulting in cost-cutting measures and even business closures. However, the traditional Silicon Valley start-up narrative, which focuses on raising large amounts of money over multiple rounds, does not work effectively in Southeast Asia. Instead, a new narrative is needed, which emphasizes building enduring businesses with a long-term focus on profitability and a shift away from constant fundraising efforts. Start-ups in Malaysia and Southeast Asia can benefit from adopting this new narrative.
This new start-up narrative for Malaysia and Southeast Asia should include the following:
- Build an enduring business rather than focusing on a “build and flip” model.
- Change the financial model to prioritize profitability over high revenue growth with losses.
- Limit the amount of money raised to avoid dilution of ownership and excessive spending.
- Allow founders to focus on running the business instead of constant fundraising.
- Consider an initial public offering (IPO) as an exit strategy rather than relying solely on trade sales or mergers and acquisitions.
This new narrative encourages founders to build purposeful, profitable, and enduring businesses rather than solely focusing on raising funds and aiming for high valuations. It emphasizes a long-term perspective and a shift away from the traditional Silicon Valley model that may not be suitable for the Southeast Asian market. By adopting this new narrative, Malaysia and Southeast Asia can foster a more sustainable and successful start-up ecosystem.
