Few things sound more appealing than being able to give someone a business card bearing your name followed by "founder", "co-founder" or "chief executive officer" of a firm you nurtured. But the hard truth is that chances of success in the entrepreneurial world of the 21st century are wafer-thin -- statistics show that 90% or more of start-ups fail.
Most of these very rare success stories originate in the United States, where the culture is much more conducive for thousands of fearless entrepreneurs. The numbers are lower in Asia and very small in Southeast Asia.
Southeast Asia is clearly not Silicon Valley yet, and culture is one of the reasons.
"Asians have a different attitude when it comes to failure," said Eddie Thai, venture partner of 500 Start-ups, a global venture capital (VC) seed fund and start-up accelerator.
"Failure in Asia is seen quite negatively and this reduces the willingness to take risks," he told Asia Focus on sidelines of Echelon Thailand, a two-day conference that brought together regional entrepreneurs and experts in Bangkok recently.
In addition, he said, the culture of giving needs to be developed further in this part of the world, at least when it comes to business. Compared to the United States, charity and mentorship in Asia are still very limited.
Southeast Asia is relatively new the whole tech-focused start-up ecosystem. To begin with, experts say, it needs more accelerators and incubators -- companies or groups that help start-ups grow faster and navigate them in the right direction.
"The future success of young entrepreneurs can be greatly helped by support from their elders," said Mr Thai, citing the example of Apple.
Apple founders Steve Wozniak and the late Steve Jobs were able to get mentorship from their angel investor from the very beginning. Mr Wozniak now advocates more generosity among already-successful entrepreneurs, said Mr Thai.
Having an environment that welcomes foreign talents is also crucial, according to Victor Chua, investment director at Gobi Partners, an early-stage VC.
"If a country doesn't allow foreign talents, it will not going to be good for the start-up scene," he told Asia Focus from Kuala Lumpur.
Governments should promote more organised and consistent efforts to gather local incubators and accelerators, urged Bangkok-based Apichai Sakulsureeyadej, director of the IT solutions company MSL Software (Thailand) Co Ltd and co-founder of Iyara VC.
"While there are foreign people coming in, mostly it's all about making money. What's more important is to teach [local entrepreneurs] how to groom and tweak products to grow in the market," he said.
BROADER VISION
Another challenge facing start-ups environment in Southeast Asia is the inability of local entrepreneurs to think globally, or even regionally, say experts.
"Most of the time, people in Southeast Asia struggle to capture only the domestic market," said Mr Apichai, "No one starts off with a vision that is very global and from a venture capital perspective, that is limiting."
In a country such as Singapore, entrepreneurs are forced to think outside of their geographical limitations and small population size, while in Thailand or Indonesia, start-ups are obsessed with local market domination and becoming global is only a bonus.
These domestic preoccupations usually don't reflect global demand, especially in developed markets where deep-pocketed users and early adopters reside.
"We have the capability but we lack that global vision," added Mr Apichai.
In his view, Asean start-ups should be groomed better with a broader geographical perspective and a more comprehensive understanding of the world. He describes success as "the ability to find that one gap which exists everywhere".
Maximilian Bittner, chief executive officer of Lazada Group, Southeast Asia's leading e-commerce portal, said many Asean entrepreneurs were not looking at the region from a holistic perspective.
"Look at the whole of Asean as one opportunity and you will have a much bigger potential target audience," he said on the sidelines of the Bloomberg Asean Business Summit held in Bangkok recently.
Gobi Partners' Mr Chua agreed, saying he saw signs that this finite mentality was changing, with some companies that used to be inherently local now trying to go overseas.
"This is a good sign for Southeast Asia to become an investible region," he said.
However, going regional can be very challenging, he said, as a business must fit its products and services to vastly diverse demands and stages of development in each market.
"Market fragmentation is the major challenge in Southeast Asia. With 10 diverse countries growing at different economic stages, it becomes much more challenging for start-ups to conquer the whole region."
'GEO-ARBITRAGE'
Another factor hindering the success of entrepreneurs in developing countries is the lacked of supportive business and financial structures, experts said.
Unclear and weak legal frameworks in most developing countries lead to limited trust, which also discourages investment and collaboration in Asia, said Mr Thai.
Even in some countries with good infrastructure and young talent, there are still challenging factors, said Conor Bracken, founder and CEO of Andovar, a content localising company.
In Thailand, for instance, foreign ownership is still an issue. The country also has high accounting costs with poor standards, poor access to financing and banking, high taxes and auditing fees, lack of investor protection, and poor English skills, he said.
Mr Bracken, who has been a permanent resident in Thailand for two decades, said Andovar benefited from "geo-arbitrage", having headquarters in Singapore with offices in Thailand, Colombia, India and the United States.
In Singapore, his company, with only one part-time CFO and no full-time staff, benefits from well-structured tax laws, labour, accounting and financing infrastructure in a way that many developing Asean markets cannot offer.
His advice to Thai, Indonesian or Vietnamese companies with over 1 million baht in revenue is to set up an office in their home country and then apply as a separate entity in Singapore or where the start-up ecosystem is more mature.
"Today, the gap between Thailand and Singapore is narrowing, but the legal, accounting and financial framework in Thailand still lags behind as much as ever," he said in an earlier interview.
Under the path toward a digital economy, the Thailand Board of Investment (BoI) offers both tax and non-tax incentives. Projects that meet national objectives will be granted corporate income tax exemptions for 5-8 years as well as exemptions of import duty on machinery and essential materials used in manufacturing export products, as well as non-tax incentives.
However, experts point out that these incentives are no different from those offered for decades to conventional manufacturing businesses, and that start-ups require a different type of push. Accordingly, regulations should be tailored to their needs.
"It's not the tax issue that [governments] should worry about, it's more how they can capture the market and grow fast enough. We need to rethink how the incentives are being laid out," said Mr Apichai.
"A start-up generally does not make enough money to pay tax anyway."
