Eye on Southeast Asia: 6 Tips for Growing and Managing a Multi-Country Startup Operation

Kiren is the co-founder and CEO-Asia of Foodpanda. He is based out of Singapore and is responsible for launching and growth of eight countries in Asia. Prior to founding Foodpanda, Kiren was a senior engagement manager in the Singapore office of McKinsey. He blogs at Startitupasia and tweets at @kirentanna.

In the last few years, the startup scene in Southeast Asia has received a lot of attention with a few successful startups expanding regionally from their home nations. In Southeast Asia, the individual countries (except Indonesia) are not a really huge market for investors to get excited about, but as a region it is one of the hottest geographies in the world for investors. Hence a lot of startups are looking to expand here and capture this opportunity with multi-country operations.

Startups have taken different paths to expand regionally. Some have started off in one country (Singapore, Hong Kong are popular ones), confirmed the concept and gained traction, raised growth capital and then expanded to other countries (eg. PropertyGuru). Some other startups take a big-bang approach and start off by launching in multiple countries right from the start (as with Foodpanda, Zalora, Lazada, Groupon, etc).

Rapidly setting up and managing operations in multiple countries in Southeast Asia is a decision many startups face sooner or later in their lifetime. Managing this process with a central HQ while ensuring speed and quality can be a challenging task. Further, Southeast Asia is a very unique geography; it is considered a region as a whole but in reality it is a collection of similar, yet very different countries that each have very unique characteristics (stages of development, culture, languages, consumer behavior, regulations).

6 tips for expanding across Southeast Asia

In my one year as CEO at Foodpanda, we have launched Foodpanda and scaled up operations in eight countries. This experience has gained me a lot of first-hand experience on managing multi-country operations. In this article, I have listed down some of my learnings from this time. While a lot of the points in this article are written in the context of a startup that is expanding to several countries, most of the points are also applicable to young companies and even MNCs looking to expand and grow fast. For more traditional large companies, some of the points may be less relevant and an approach with a more central control may work better. Here are the six tips:

1. Hire the right team and keep them motivated

Nothing is more important than having really strong and capable country heads who have the mindset to think like CEOs. To manage multi-country operations, sourcing and hiring the right talent is the most important part of your job. Building a pipeline of really strong and motivated country heads is the number one factor to determine success. Hiring local country heads is a huge benefit, especially for countries such as Taiwan and Indonesia. But in many cases, strong expat country heads are able to do just as well if they can work well with the local team.

It is very important for you to know the country heads personally: their strengths and weaknesses, their personality type, and what motivates them. It is also very important to trust them and gain their trust and respect as well. Hence it is important to regularly interact with the country heads and fly down once every two to three months to each country to check on operations and build rapport with the staff.

2. Manage with budgets and KPIs and not by diktat

Giving the country heads independence to think like a CEO and keeping them motivated towards the goal is very important. The best way to do this is to assign them budgets and measure their performance through KPIs. The budgets need to be for each function (staff, marketing, sales, etc) to ensure proper spend on important areas. For KPIs, it is important to agree on the right set of KPIs for overall business as well as each key function.

This is relevant especially for staff budgets since different country heads have different kinds of teams that they want and are comfortable with. Some may want more marketing staff, some may want more sales staff, some more interns, some more FTEs. So one should define the overall guidance on the organization structure and size and then let them assemble their team within the staff budget.

3. However, set guidelines where required and then track it closely and share learnings

While it is important to give your country heads the independence to take their own decisions within the budgets and KPIs, its naive to assume that they will always make the right decision with the right approach. Hence, for critical business processes, it is important to define guidelines and directions, so they are aligned with the overall business goals. The most obvious is to align the guidelines on a particular initiative that is most important for that month (eg. growth, profitability improvement or cash-flow improvement, etc).