Conventional wisdom says that Singapore is an attractive test market and launchpad for the rest of Asia. Indeed, that’s what its government agencies like to say. Actually, they’re not wrong either.
If you’re a startup that wants to go into emerging markets, Singapore may be a great place to set up your regional headquarters, but it most certainly isn’t your test market.
David Wilkie, an entrepreneur based in Phnom Penh, certainly thinks Cambodia is a great place to launch his business.
Previously consultant for development work with Silicon Valley startups. He later participated in the first Startup Weekend Cambodia, and won the competition with his idea, called SMS Dating.
Now renamed Chibi, David’s startup is an SMS dating and networking service that’s 100 percent anonymous and helps users make new friends.
The service, which will launch in a few days, does not require an Internet connection. Users simply sign up by sending a message, and they will be matched automatically. They can exchange contacts, or simply end the current chat session to start a new one.
Beyond texts services, Chibi will provide voice chat as well. He’s also in the midst of developing iOS and Android mobile apps.
Chibi’s revenue stream will come from charging users for using premium short code SMSes, which are short telephone numbers customers can use with the service to send and receive messages. These short codes can also be dialed.
While he has competitors in Asia, David claims that Chibi is different because it offers voice and text services in the user’s local language — either Khmer for Cambodia or English.
“This is important because many of our customers cannot read, write or speak English. With Chibi, even if you can’t read, you can still call the short code, listen in Khmer, and meet a new friend,” he says.
David’s startup is built for emerging markets. Cambodia fits that profile, with a high mobile peneration rate of 87 percent but a low internet penetration of 0.35 percent, according to research. Mobile internet usage is on the rise too (read: Consumer internet trends in SEA).
But with a small population of 14 million (almost three times of Singapore), David isn’t content to stay in the country. He sees Cambodia as a launchpad to Thailand and Vietnam, which has a population of 78 million and 86 million respectively.
If successful in Cambodia, he plans to launch locatized versions of Chibi in those countries.
There are several other advantages to starting up in the country.
With its low cost of living, David has been able to bootstrap without the need for investors. This has given him freedom to concentrate on market analysis, product development, market validation, and so on. Living and starting a business in Singapore, on the other hand, is much more costly.
Another benefit David enjoys is the highly competitive and less regulated nature of the mobile operating industry in Cambodia, due to the fact that there are eight major mobile operators there.
“I was able to secure a deal with one of the major companies in less than one month,” he says.