In Southeast Asia, local culture beats the Silicon Valley formula

This article summarizes an episode of Vietnam Innovator Digest’s video series featuring Vinnie Lauria, founding partner at Golden Gate Ventures.

Vinnie Lauria, founding partner at Golden Gate Ventures/ Photo credit: Golden Gate Ventures

Expanding across borders requires more than just a passport and a proven playbook. According to Vinnie Lauria, founding partner at Golden Gate Ventures, succeeding in the Southeast Asian market requires throwing out the standard Silicon Valley playbook.

Otherwise, foreign startups that merely copy and paste their domestic strategies are setting themselves up for failure.

Lauria says companies shouldn’t copy what worked at home when expanding globally. Instead, they should adapt to local cultures, empower regional leaders, and prioritize human insight for long-term success.

The cost of ignoring local culture

Using a plan that worked before in a new place costs money and can fail. When rich companies grow, they fail because they don’t understand the local culture. To succeed, they must change their leaders and their product to fit the new place.

Lauria uses the Japanese ecommerce firm Rakuten as an example. The company lost millions in Indonesia because it built the wrong team.

“Rakuten ended up losing 10 to 15 million dollars building out their operations,” Lauria notes. “They didn’t really hire the right senior local team and give them the right authority to make decisions.”

Technology also has to change. Carousell struggled in Indonesia because the local internet couldn’t handle their normal app. Lauria explains that they fixed this by making a smaller app just for that country, which he calls a “perfect example of transcreation.”

Building trust in new places
Small cultural mistakes can ruin business deals. Thinking that business is the same everywhere breaks trust. Leaders need to learn how people in other countries make deals and what they expect at work.

Lauria remembers a five-million-dollar deal that failed because of a small, last-minute money request. He notes that the Australian company was offended, explaining, “They were like, ‘This breaks trust.’ They literally got out of the room.”

How you look also matters differently in each place. Lauria learned this when wearing his normal clothes from Silicon Valley in Asia.

“If an entrepreneur showed up in a suit to a VC meeting at Silicon Valley, it would be an immediate no,” he says. However, in his first meeting in Asia, his casual clothes made them think he was a bike messenger.

Finding good people locally

Working in a hard market can break a new company. Local founders often have good technical training and don’t give up easily, which helps them last longer than their rivals.

The need to focus on one thing