3 things Southeast Asian founders should consider before starting a startup

Photo credit: Michal Bednarek / 123RF

This article is part of Tech in Asia’s partnership with Monk’s Hill Ventures where we publish articles that feature the firm’s valuable insights. For more articles in this series, go here.

In my conversations with other founders and friends, the question “Would you do a startup again?” creeps up every now and then. A few years back, I left a VC firm to build my startup, Custom Tribe. Reflecting on that decision, I now often advise many would-be founders to think long and hard about it.

From my conversations with fellow Southeast Asian founders and ex-founders, here are three things to consider before taking the leap.

1. Opportunity costs are high

To quote an old friend and mentor, you’re giving up three times the opportunity costs: a stable paycheck, your career progression, and X amount of money to found a startup.

Let’s break this down:

Salary is underrated

Southeast Asia is unique in that depending on which country you’re in, what you give up in monthly paycheck can differ from a few hundred dollars to a few thousand dollars. Make sure you consider that before realizing that you haven’t had a paycheck for six months.

Your career takes a different turn

A conventional career progression typically means specializing in one set of skills and moving up the career ladder to be known for those skills. Doing a startup changes this. You need to be versatile and well-rounded. This often means halting your progress on a specialized skill to develop other necessary skills. While your profile shifts from being “a part of an operation” to “leading an operation,” you also lose the proportionate growth in that specialized skill (and industry) compared to your peers who stayed on.

Raising funds may be new to you

Fundraising for the first time is disorienting, especially at the pre-seed stage. While many of us in Malaysia and Singapore turn to government grants/convertibles as a start, the rubber only meets the road when you start talking to angel investors/early-stage VCs. Compared to selling big-ticket projects in your day job, the dynamics change when you’re selling yourself and your team for the same amount. Hence, many first-time founders end up putting in a significant amount of their hard-earned savings.

I recommend listening to Kathryn Minshew’s fundraising experience for reference. It may need to be adjusted to local culture, but the gist is there.

2. You have to consider your family

Families are quite different in Southeast Asia than in the West. In addition to staying with our parents well into adulthood, many of us still observe traditional familial values like filial piety, social expectations, and familial obligations. This is even more so if you’re the first in the family to (fill in with anything that makes an Asian family proud).

3. You’ve been taught to never fail since birth

So where does this lead us?