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Why Y Combinator startup Strikingly skipped China, Japan and headed for Southeast Asia

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Strikingly team with users at a Chicago meetup. Photo credit: Strikingly

Two weeks ago, the entire Strikingly team hung out at Block 71, the epicenter of Singapore’s tech startup community. Here on a workaway trip — think work and vacation combined — the Y Combinator startup, which has built a tool for building single-page sites, announced that it will be permanently based in Singapore to focus on the Southeast Asian market.

While consisting of a group of China-born founders based in California, Strikingly has interestingly decided to focus on Southeast Asia instead of going after China and Japan (its second biggest market), or hunkering down in the United States.

Here are two reasons why: Strikingly has seen rapid growth in users in the region. It is also a place to hire affordable, high-quality English speaking talent, especially from Singapore, Malaysia, and the Philippines.

Although the United States is still the startup’s main market, many of their customers already have websites and they are converting to Strikingly. However, many Southeast Asian users are building a website for the first time.

“That’s why we see a chance to come in at the early stage, especially given that English is not a barrier,” says David Chen, co-founder and CEO of the company.

Striking out China and Japan

Although both China and Japan are attractive, Strikingly has decided not to base itself there.

Localization would be a huge hassle, not only in terms of language, but also the differences in social network usage in both markets. Tencent Weibo and Qzone are the top social networks in China, while the Japanese market is fragmented with Facebook and Twitter getting into the fray with Line and Mixi.

The bottom line is that building up the Japanese market takes a lot of time. Unlike Southeast Asia, it’s not an economy that’s influenced by happenings in the United States or Europe. David says:

Japan is too contained. The way we interact with users is different. The services they use are different. In Singapore you use Eventbrite. They don’t in Japan. In United States people use SoundCloud. But not in Japan.

China has its own unique issues. The country has strict rules on domain and server registration. Because of connectivity problems between the United States and China, Strikingly would need to operate a local server in China to ensure smooth user experience, but at significant maintenance costs.

Finally, David does not think the China market is ready for a single-page site builder yet, so he’s waiting for the right moment to enter.

Operating lean, keeping the team together

While expansion has come early for the startup, it is fundamentally still in the early stage, having raised $1.5 million from Y Combinator, Innovation Works, and more. It currently has a lean team of seven, and has managed to grow to 75,000 registered users in under a year mainly through word-of-mouth.

In terms of global expansion, building a cohesive team was as important a factor as market size or barrier to entry. According to Angela Ognev, the company’s Chief Happiness Officer, it’s about finding people with both a mentality and skillset fit.

“We want to build a family and instill a hacker culture,” she says.

While hiring from the United States is out of the question for now due to high labor costs and competition for talent, Angela will be seeking people in Southeast Asia to join the company.

(Editing by Charlie Custer)



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