3 big problems with the Thai startup ecosystem

When talking about the startup ecosystem in Thailand, it can’t be denied that, besides the normal key players like VCs, business sectors, or co-working spaces, telecom operators are one of the most active players in this ecosystem. They each have their own incubator programs. More over, True and AIS also have their own VCs under their umbrellas. This trend of a telco’s involvement in startups is something I’ve seen in other countries such as Singapore’s Singtel, Indonesia’s Telkomsel, and Philippine’s Globe Telecom. Glad to see it’s happening in Thailand.

I wonder what telcos think are the problems in the startup ecosystem and why they want their incubator programs (and VCs) to be part of the solutions.

A Bangkok-based newspaper, Telecom Journal and Innovation, talked to the head of the three incubator programs – AIS’s Prattana Leelapanang, True’s Punnamas Vichitkulwonsa, and Dtac’s Sigvart Voss Eriksen. It turns out they see three main problems:

1. Financing

Finding funds to survive is a classic problem. All three agreed that the source of funding for a startup in Thailand should be from venture capitalists willing to invest in exchange for a stake in the company. However, they all also shared the same concern that a startup needs a clear and realistic business model, which many do not have.

2. Product Differentiation

I can’t emphasize enough how just creating a product or an app does not mean it’s a successful startup. Yes, you may have an app in either the Apple App Store or Google Play. But what’s next? There were more than 900,000 apps as of June of this year in Apple App Store alone and over 1 million apps in Google Play. So where do you belong? How will your startup differentiate itself? Differentiation is really important. We’re talking everything from partnerships with other service providers, quality, and unique positioning. Not to be discouraging, but we all know it’s a “winners-take-all” kind of market.

Golden Gate Ventures stated its reason for investing in Noonswoon was because “the company model is unique”. Builk is a rising star among the Thai (and Asian) startups because it tackles an industry startups don’t normally consider – construction.

3. Personnel

It’s not just about competing to take market share or being chosen by the customers. In the Thai startup ecosystem, a good staff is also something companies have to compete for.

Yod Chinsupakul, Wongnai’s CEO and co-founder also believes personnel is definitely a key issue in Thailand:

Building a team is one of the most challenging things. We want efficiency and not just adding to the number of people to the company. It’s not just about finding a developer. You have to find one that believes in the project.