By Kwanchai Rungfapaisarn
Ong said the Thai ecosystem is in an expansion stage, boasting a growing number of startups, together with abundant government support, active involvement from major companies setting up corporate venture capital funds, and access to “seed stage” investors.
Monk’s Hill Ventures, cofounded by Ong, is a technology venture fund based in Southeast Asia. He is also an independent board director of YY Inc, IE Singapore, IMDA, and Solve Education, as well as a trustee of the Singapore University of Technology & Design (SUTD), where he chairs the investment committee of SUTD’s endowment fund.
He said that to be successful in their business, startups need to work both really hard and really smart. Also, they need to pick large markets.
“The strength of Thailand is its open market with demands coming from various directions. So, there is a lot to go after. It’s a sophisticated marฌket with high mobile Internet penetration and big spending power,” he said. “The growing amount of spending on social commerce is just one of the indicators that a lot of the consumercentric solutions that many startups are doing will do very well and take off fast.
“Meanwhile, the weakness of Thailand is that the ecosystem is still relatively young and it still requires strong mentorship and/or talent that can significantly accelerate the startup’s growth. Most startups operate on a trial and error basis today and need a lot of essential knowledge sharing in the ecosystem where they can learn from each other. The majority of the startups have not expanded to other regions, hence the knowledge base around how to scale up takes some time to build,” added Ong.
He said that globally, tech is enabling every single business vertical to innovate and use technology to become different. It makes a big difference to the growth of the economy and is happening across the board in terms of market adoption and potential for product development from consumer retail to insurance and healthcare – across all verticals.
At the height of this cycle blockchain technology is coming into its own, particularly the blockchain based cryptocurrencies. The blockchain revolution began with cryptocurrencies like Bitcoin, which uses blockchain’s distributed ledger technology as the “middleman” for currency transfers and for transactions not backed by the bank or government.
Businesses relying on the transactional needs that include a fee for acting as an intermediary are vulnerable to disruption by blockchain technolฌogy, he said. The banking industry is expected to drive billions of US dollars in business value with their bankbased blockchain projects designed to digitalise banking operations and the supplychain process.
“Currently, climbing up the hype cycle are bots,” said Ong. “Chatbots are going to be really useful. Over the long haul, it’s going to be part of the whole infrastructure, moving away from keyboards to a conversational interface with artificial intelligence [AI]. Business opportunity lies not in the AI itself, but in using AI to create value. We prefer ‘deep value’ over ‘deep tech’. The most valuable companies today – Apple, Amazon, Facebook – are now the biggest deeptech giants, but their businesses weren’t built from deep tech. Hence, it’s more important to create deep value, and using deep tech to create more value for the business,” he said.
“Thai startups follow the global trends in that, in every sector in Thailand, you’re likely to find interesting startups and all the consumercentric solutions are available. If there’s one interesting thing they could do, it is to recruit Thais from Silicon Valley,” Ong said. “I think the government and corporations here are pushing to support entrepreneurship and it is working. We’re starting to see some interesting companies come out.”
He said that startups are currently not going to be major contributors to the overall economy. But over time, they will be increasingly significant.
“If we look at how much FDI [foreign direct investment] Indonesian startups have brought into their country when they really just got started a few years ago, you’ll see the potential impact startups can bring.” He noted a report by Google and management consulting firm AT Kearney, which found that in the first eight months of 2017, Indonesian startups collectively raised $3 billion (Bt94.08 billion) in 53 investment deals. “Overall, it definitely has the potential to boost GDP and the employment rate,” said Ong.
“Key driving factors are opportuniฌties in the market. The way that consumers and the market interact with the startups lubricates the ecosystem and will bring about more opportunities. More demand and opportunities in the market will continue to drive growth in the startups and the community. We believe Thai consumers are sophisticated and tech savvy. It has the preexisting conditions that allow the startups to grow and do well,” said Ong. Across the board, there are lots and lots of opportunities in Southeast Asia, especially in Thailand, and in many verticals, he said.
“Fintech is going to be big. Primarily because fintech is not just one industry. From insurance, to lending, to payment – each one of them is huge. Each one of them has the potential to disrupt the economy to improve the productivity of the economy in the whole region,” he said. “Credit worthiness will be one of the most important factors. With more transparent information and an alternative credit scoring system that allows access to better information and riskbased pricing, capitals are going to be more efficiently deployed and SMEs are going to be a lot more empowered.
“The second vertical is healthcare – using healthcare informatics, healthcare data, to improve health in the population either to ensure compliance to new rules, or for just keeping healthy,” he said.