­­­Entrepreneurs put Cradle, MRANTI & Cyberview in the hot seat, here’s what was discussed

Perhaps one of the rowdiest panel discussions during NEXEA’s recent Entrepreneur Summit IV was the one titled: “Open Dialogue with Audience: Future of Malaysian Startup Ecosystem”.

On the panel were familiar names such as:

Moderating this star-studded panel was Adlin Yusman, the managing director of Endeavor Malaysia.

Unlike other discussions, this one was hosted as an open dialogue, inviting the crowd to send in their questions anonymously. And send they did.

Politics’ place in the startup ecosystem

Just a couple of minutes into the open dialogue, an “incendiary” (in moderator Adlin’s words) question made it to the top of the list.

The question was more of a comment on how the sender felt that politics were overly intertwined with Malaysia’s startup ecosystem.

Upon hearing this, Karamjit Singh, the founder of Digital News Asia (a media partner of the summit), hopped on stage and pointed out that this may be in the context of Rais Hussin Mohamed Ariff’s appointment as MRANTI’s new CEO.

For background, Rais is a politician who co-founded Parti Pribumi Bersatu Malaysia (BERSATU) in 2015, exited last year, and joined Parti Keadilan Rakyat (PKR).

To this, MRANTI’s Safuan had some insights to share.

“Agencies report to ministries, ministries report to ministers, ministers are politicians. Are we saying all politicians are not good? Not really, some are good,” he said.

He later also reminded, “They answer to the public. They answer back to you guys, to us.”

The key here, he believes, is to first understand what everyone wants. For startups, what they want is access to funds and access to talent, among other things. As to what the agencies want, it’s the ability to deliver their mandate and sustain itself such that it can continue serving the ecosystem.

And even if you disagree with the presence of politics in the business ecosystem, it’s still important to understand what the people in power want (their motivations), find the good in that, and settle on a common ground to serve the greater good.

“For me, I’m putting it out on record—ministers come, ministers go, prime ministers come, prime ministers go, CEOs come, CEOs go. But the ecosystem stays. So, to whom do I pledge my allegiance to? The ecosystem.”

Agencies’ roles in enabling better market access

Another question that the panel spent some time on was regarding market access. Specifically, it was how the agencies on the panel can help startups gain access to more customers.

For Cyberview’s Ang, the question on market access is more about bringing startups in Cyberjaya out of Cyberjaya into the world.

Specifically, through the programmes Cyberview has in place to assist the companies in Cyberjaya to get out of Cyberjaya and overseas.

“The thing about us is that we are focusing on Cybjerya alone, therefore we don’t have an amazingly large team,” he clarified. As such, the agency leverages the rest of the ecosystem players that are available, such as market access agencies like IPAs (investment promotion agencies).

An advice he gave was that when startups want to expand, they first need to understand where they want to go, where is the next stop is.

“And obviously set up your company and start your organisation with region in mind,” he said. “I think we don’t believe anymore with startups just starting their business saying, ‘Oh, Malaysia is my only market’, I think we need to look further at least regionally.”

MRANTI’s Safuan chimed in, opining that every company that is born digitally is actually ready to go global.

“I also feel that, to say that Malaysian startups have problems in terms of accessing market is also a bit difficult for me to believe,” he added. “Which part is actually difficult? Maybe the understanding of the market, what kind of requirement, the risk.”

Safuan shared that he’s dipped his feet in many different agencies, having spent 12 years in MDEC, two years in MaGIC, and two years in MRANTI.

“There is no wrong door, just take the first initiative,” Safuan believes. “Talk to us, if we can’t do it, we’ll talk to other agencies.”

Kashfi agreed with some of Safuan’s sentiments, saying that businesses in this digital age should be borderless as they operate on “internet time”.

Another thing Kashfi believes is that Malaysian founders must expand their mindsets and think beyond the Klang Valley. He pointed out that there are many other frontier markets across Malaysia that are worth looking into.

As such, he believes entrepreneurs shouldn’t just talk about expanding into other countries, but also look within Malaysia itself.

He added, “I think the conversation should be more about having that right mindset and go-to market strategy to become a regional player from the get-go.”

“If you don’t have regional ambition, let’s not talk about being able to attract more VCs to invest in your startup if you’re less ambitious compared to startups in other markets.”

With the right strategy, coupled with the right infrastructure and programmes, Kashfi believes that founders not only have a fighting chance to become a regional business, but a global one.  

Building a futureproof business

The next question had asked about the problem spaces that entrepreneurs can focus on that will be relevant in the coming 10 years.

To this, Safuan shared that some areas of focus could be autonomous technology, life sciences, and sustainability.

“No one in this room can actually ignore that unless you have a rocket ship and a bungalow in Mars,” he said about sustainability.

With that in mind, renewable energy as well as manufacturing are some more areas to look into.

“Malaysia should be not only be looking into automation and robotics but net zero manufacturing,” he explained.  

Do non-tech businesses have a chance at funding & support?

Someone asked whether there were any investments for SMEs, and more specifically, F&B businesses. In a similar vein of thought, others asked, “There is a lot of focus on tech startups. How about non-tech, what will be the consideration?” as well as “Why does funding only focus on tech? Do you guys fund other industries as well?”

Answering the question first, Kashfi reminded that Cradle gives grants to startups, so they don’t exactly “invest”.

Furthermore, the mandated focus for its grants is indeed to support early-stage tech startups.

“So, let me give a little bit of context between SMEs or non-tech business and tech businesses, and why we feel that it is important to also double down on our efforts to support tech businesses,” he continued. “First of all, what is a startup? The definition of a startup is a temporary organisation looking for a repeatable and scalable model.”

In comparison, SMEs have a repeatable, but not necessarily scalable, business model. Here, the playbook has been written—there’s a clear business model methodology as compared to a startup. As such, SMEs have clearer access other forms of funding, such as SME loans or bank loans.

“For startups, the possibility or the success rate for them to get loans is much lower because they don’t have a set track record,” Kashfi elaborated. “That is why at Cradle Fund, we believe, we should be doubling down our focus on supporting tech startups.”

That said, he shared that he wouldn’t concretely say no, that Cradle doesn’t fund F&B businesses, because there may be overlap between F&B and tech.

He pointed to Indonesian unicorn Kopi Kenangan as an example of how some established VCs are starting to invest in that space.

“They’re F&B businesses, ultimately, but I think the point is, it’s not the category of the business but whether they have an IP to accelerate the repeatability or scability of the business, whether it’s tech-enabled.”

That said, he clarified that Cradle doesn’t invest or support non-tech businesses for the time being. However, he reminded that there are other agencies in Malaysia that are dedicated to supporting SMEs.

Many more curiosities

There were many other questions submitted during the course of the dialogue, but sadly, the time slated wasn’t enough to address all of them. Here were some other questions we would’ve loved to hear insights to:

One final question that the moderator was able to quickly address was yet another “incendiary” one.  

This person further added, “Example like event today, it’s just a show to let [the] government enjoy the show instead of entrepreneurs.”

Essentially, this person seemed to be criticising the event or the panel to be a “showboat”, as Adlin paraphrased.  

“Can I see a show of hands, how many of you are entrepreneurs?” Adlin asked in lieu of answering directly. “How many of you have raised funding?”

Even without counting, the number of hands that dropped was obvious. With that, Adlin was able to show the true reason why events such as the Entrepreneurs Summit exist—to bring entrepreneurs closer to the support they need.

Similarly, while there may be times that entrepreneurs may feel certain agencies or programmes seem disingenuous or self-serving, it’s important to remember all the founders that continue to require support and guidance.

As Safuan had said earlier, the loyalty and allegiance, and thus focus, should always go back to the ecosystem.