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Does the coming of tech giants represent an opportunity for start-ups?

May 07. 2017
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AFTER Tencent's successful |joint venture with Ookbee with an investment of US$19 million, the trend of tech giants coming into Southeast Asia, most |importantly Thailand, is |apparent. 

However, will this move-|ment affect Thai start-ups in |a positive or negative way? |Let us analyse this situation carefully.

The opportunities are |endless. Start-ups that |complement the needs of big |corporates are definitely in |for a treat. An example would |be, once again, Tencent, |which seeks to be a content ecosystem on digital media, buying Sanook into their company is a huge statement. Or Alibaba acquiring Lazada to enter the South East Asia e-commerce market. 

A successful start-up in |this era would be one that fills in the gaps for big corporates, those that complement big |corporates' directions, and |leverage the big corporates' efforts to form a team from their own resources to work on a specific product. Big corporates' have a thirst for innovation, but why invest their own resources for research when they can just acquire an already proven and strong working start-up? 

For new start-ups looking for corporate collaborations, market acquisition, and existing with the big giants, the future is promising.

However, like all situations in life, there is a downside to this movement. Yes, there are more opportunities for start-ups to |be acquired, but if they aren't strong enough they are in big trouble. 

New start-ups with the same business model as the giants must be extremely strong. To compete with a giant that provides the same service, the competition becomes a survival of the richest. 

Would you be able to compete with a billion-dollar company ready to burn cash for customer acquisition? The answer is it is "extremely difficult". A strong team with good mentorship is needed in order to survive.

It is hard for start-ups to |survive on their own without |any support. That is why |incubators and accelerators come into the picture. That's |why competition is through the roof for a place in the boot camp. To be strictly mentored and to have corporate support, is a recipe for survival. Yes, not all start-ups that went through an incubator or accelerators are guaranteed to succeed, but it would definitely help a start-up to survive. 

I am optimistic about the opportunities these tech |giants bring, and proud that Thailand is making its mark |in the start-up world as one of the start-up hubs in Southeast Asia.

Sompoat is director of dtac Accelerate division for DTAC

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