Inspired by Silicon Valley, many cities and nations around the world are trying to build startup and technology hubs – to spur innovation and economic development. In Asia, Shenzhen, Singapore, Indonesia, and Bangalore have become known as startup hubs. But another nation that’s fighting to earn a seat at the table is Malaysia.
On the outskirts of Kuala Lumpur, the capital city and home to 1.6M people, is district of Cyberjaya, which has for years been a place for technology companies to plant roots in Malaysia. It’s also the home base of a newly created government agency, MaGIC (Malaysia Global Innovation Centre), which seeks to transform Malaysia into Asia’s startup capital.
My friend Cheryl Yeoh, founder of Reclip.it (acquired by Walmart Labs in 2013) was selected to be the founding CEO and helped kick off the new org this April. Over the summer, she told me about her plans to bring founders, makers and startup folks to KL and share their stories and lessons on building companies with the Malaysian community.
Of course I was in. So this November, I got to spend three very interesting days with Malaysia’s emerging startup community. Here’s what I learned.
Meeting Founders, Talking Through Problems
After 24 hours of traveling (from New York to Frankfurt to Singapore to Kuala Lumpur) I landed Friday morning, had a quick lunch with the team and sat down for office hours. Over three hours, I met with nine different teams who were coworking out of MaGIC’s space and talked about their challenges. Most teams consisted of just one or two people and had an MVP that they were trying to build out.
From an peer-to-peer learning/teaching platform to a app development shop trying to build their own games to software that extends the functionality of enterprise HR software, these founders were enthusiastic, but often too product-focused. I told many to spend more time talking to customers and uncover user needs.
One stand out was a team that had built an online reservation platform for golf courses. They had a team of five, a modest amount of investment, actual customers, and a go-to market strategy for tackling a multi-billion dollar market. I wouldn’t have been surprised if that pitch had come straight out of YC demo day.
With the team at MaGIC
Sharing Stories, Making it Real
The next day I gave an all-day workshop, which started with what I called “a choose-your-own startup adventure”, where I identified key moments in building Ridejoy, presented the audience with options, and let them think through what they’d do before sharing what happened. In the afternoon we covered the eleven startup pitch archetypes I’ve written about here, growth tactics (which I borrowed liberally from The Traction Book), and ways to stay sane while doing a startup. The crowd was enthusiastic, though most were still in the “thinking about doing a startup someday” side of the continuum. Along the way, I put a couple folks at various stages of doing a company in the hot seat for quick Q&A sessions.
Hot Seat #1
One participant was building a rideshare platform for commuters just outside of Singapore. Apparently there are several large Facebook groups that exist simply to find rides, with the largest being 10,000 people strong, and this founder was acquiring inventory and attracting new users by aggregating all the ride posts from the four largest Facebook groups.
Hot Seat #2
Another story came from an enthusiastic developer named Advent Cheng, who’s company QSmart had recently won first place out of 29 teams at AngelHack Kuala Lumpur. The product allows consumers to get in line for things like pharmacies or government services, where there’s no reservation system and you might have to wait several hours to see someone. He’s about 70%
Hot Seat #3
Finally there was a man who had built an digital marketing consulting business over the last decade, starting first with SEO and expanding into SEM, first with local Malaysian businesses, and now internationally, sometimes winning work away from bigger agencies like Satchi and Satchi. I think it was great to have participants see someone who was further along in his business, and hear some of the challenges he faced along the way.
A Great Team with Wind at Their Back
Beyond the many enthusiastic founders who came to the event, I found that the staff at MaGIC be smart, helpful, and best of all – experienced in starting or operating businesses. There was Norita, COO at MaGIC, a woman who operated a food manufacturing / packaging business for over a decade. They made ready-to-eat packages of Asian food that could be stored at room temperature to distributors across the West, including Tesco in the UK and whitelabled at Trader Joe’s in the US.
Several staff members had experience running e-commerce businesses, either via dropshipping, or through directly producing and shipping their own product. Of those who didn’t directly have startup experience, they were at least very technical and conversant in the language and culture of Silicon Valley. The worst sin a startup accelerator / organization can make is to not have founders at the helm, and MaGIC has definitely avoided that.
The team’s got a lot of momentum. When I came to Kuala Lumpur, MaGIC was just coming off a very successful five day kickoff of their first signature program, called MaGIC Academy. They brought entrepreneurs and startup folks from around the world, including Cezary Pietrzak (Founder of Cezary & Co.), Neil Patel (Co-founder of Crazy Egg, Hello Bar and KISSmetrics), Khailee Ng (Managing Partner of 500 Startups). 500 people attended one of the 40 presentations and workshops, Career Fair, and Investor Day events and one of MaGIC’s first big campaigns for the community. It injected a ton of buzz into the community and paved the way for a strong reception for new initiatives going forward.
The Challenges Ahead
Of course, it takes more than coworking space and some founder war stories to build a thriving startup community. You need a robust ecosystem, from investors, to larger tech firms, to a market of consumers and businesses willing to trying new products and services. You also need examples of successful companies.
There’s JobStreet.com, the become biggest job board in Southeast Asia, as well as iProperty, another public tech co that’s Asia’s largest online property group. Both are tech firms founded a few years back and as now publicly traded companies, they can’t quite inspire the same way as actively growing startups. One company that does fit that category is MyTeksi/GrabTaxi, an Uber-like service for hailing cabs founded in Malaysia that raised $65M in a Series B this October. There are many other Malaysian startups (Angellist shows 242) but they have yet to become major forces – yet.
A great startup hub also has a pleathora of designers and engineers excited to work at startups. I was told that many of the best Malaysian engineers like working at bigger companies where they can just focus on the tough technical problems and nothing else. The lack of entrepreneurially minded tech talent and that definitely makes it difficult for the community to build lots great products. MaGIC is running two dozen folks people through a three month Dev Bootcamp-style coding camp which I was told would roughly double the number of Ruby on Rails developers in the entire city. Even if that’s a bit of an exaggeration, it’s a good indication of the challenge ahead.
What’s Next?
Like any good startup, MaGIC have big ambitions and a lot of work ahead. And they’re not alone, StartupMalaysia.org, founded in 2011, hosts a number of programs including Startup Weekends and training programs for youth and professionals to get more involved in tech and the startup scene.
I was encouraged by what I saw during my short stay and hope to visit again to see what comes next. Next time you find yourself in Southeast Asia and you’re looking for some startup inspiration, head to Kuala Lumpur and drop by the MaGIC offices. You’ll find some friendly faces and a few team building what could be the next world-shaping technology company.
(Big thanks to Cheryl, Allan, Syahrul, Heislyc, Imran, Dr. Lau, Vivan and the rest of the MaGIC team for their help making this trip happen!)