Why I Got So Frustrated At ASEAN’s Start-Up Ecosystem After Coming Back From China
The problem was that I was stuck in the wrong ecosystem with VCs who don’t understand how world-changing 100 billion USD companies are built.
It’s super duper frustrating!
Don’t Be A Jaguh Kampung — They Said — In 2009
When I first came back from Singapore in 2009 as a fresh eyed 19 year old, I was excited to be part of the Malaysian start-up ecosystem, because my mentors and pioneers in the industry were urging Malaysian start-ups to think bigger and solve bigger problems.
Don’t be a just a jaguh kampung, they said.
I was excited because that was exactly why I was inspired by the power of entrepreneurship, the opportunity to make a significant positive difference in the world while making enough money to sustain it at a tremendous scale.
That’s Bullshit — They’re Only Looking For A Jaguh ASEAN — At Most
However, I soon realised that that was all bullshit.
When they say they were not looking for jaguh kampungs and start-ups that only serve the Malaysian market, what they really meant was to think a little bit bigger, but just a little, just ASEAN would do, not any further than that.
What’s Stopping ASEAN From Having A 100 Billion USD Tech Company?
Just start an ASEAN copycat of something, or bring a solution that exists elsewhere but has yet to be done here. ASEAN is enough, don’t think any bigger.
China’s Start-Up Ecosystem Is Already On Par With Silicon Valley
China’s start-up ecosystem is actually already on par with Silicon Valley.
They used to be copying from the west, but nowadays, the west is starting to copy from China, because Chinese start-ups have copied everything they can copy and have started to innovate and come up with innovations of their own.
VC round sizes in China have also grown to a point where they are on par with Silicon Valley, with start-ups raising 1–1.5 million USD pre-seed rounds, 2–5 million USD seed rounds and Series A upwards of 10 million USD.
Almost Every Chinese VC Told Me Wowwwz Would Be A Huge Company
When I pitched Wowwwz to Chinese VCs, almost all of them told me that Wowwwz would be a huge company, on par with that of Alibaba or Tencent.
The reasoning was simple, because the problem we are solving is a huge one that everyone is facing, and no one has solved it the way we are solving it with huge amounts of data and in a way that everyone would use everyday throughout their lifetimes.
They can see that very clearly.
They’re Not Just Trying To Be Nice To Visitors
I wondered if they were just being nice to me because I am a foreigner and a visitor, but it turns out that they weren’t. They were serious about it, and told me that the war for the best and the last dating app has just started, and Wowwwz is on the right track.
They Will Tell You That Your Idea Sucks Right In Your Face
If they think your idea sucks, they would tell it to you straight right in your face. They told a US start-up exactly why they think their idea would not work in China and their solution to the problem doesn’t really makes sense right in their face.
For some other start-ups, they bluntly told them that what they are doing has already been done in China a long time ago, but they can introduce them to those start-ups that are now already big companies that could be interested in acquiring them as part of their expansion plans to other regions, just like what Alibaba did with with Lazada.
Exact Same Pitch — 2 Drastically Different Responses
It’s amazing that the same exact pitch got 2 such drastically different response. How could it be that Chinese VCs could see how Wowwwz could become the next 100 billion USD start-up that everyone in this world would be using every day to meet all their relationship needs while all ASEAN VCs see is an overly-ambitious start-up that doesn’t generate any revenue during its first few years of its life.
It’s All Because Of Mindset
I realised that the difference is all in the mindset of investors.
People Who Have Seen It Happen (China ) Vs People Who Haven’t (ASEAN)
There is a stark difference in mindset between people who have seen how 100 billion dollar world-changing start-ups are built and those who haven’t.
In China, they have seen how Tencent and Alibaba was built, that’s why they understand what it takes to first solve a problem thoroughly before focusing on monetising, whereas those who haven’t don’t dare to take the risk.
Revenue Is A Non-Factor — In Fact You Will Lose Hundreds Of Millions In The First 7 Years
When Chinese VCs told me that they think Wowwwz is on the right track and has the potential to become the next Tencent or Alibaba, I asked them why, and told them that I have no revenue right now.
To my surprise, they told me for the type of start-up Wowwwz is building, revenue during the early stages is a non-factor. In fact, they told me that we will probably be losing hundreds of millions of US dollars or even billions for the first 5 to 7 years at least.
Once Everyone Is Using Your App Everyday — You’ll Make Billions Every Quarter
But they understand that once you have iterated enough, built out your platform and solved the problem you are solving thoroughly so well that you are the last and best app there is that is orders of magnitude better than anything that exists before and when everyone in the world is using your app everyday, you’ll be making billions every quarter just like what Facebook and Google are doing today!
Find the latest Facebook, Inc. (FB) stock quote, history, news and other vital information to help you with your stock…finance.yahoo.com
This Is A Concept ASEAN Investors Seem To Be Unable To Get
This is EXACTLY what I have been trying to tell ASEAN VCs for years!
It seems like this is a concept that ASEAN investors just seem unable to get. They would think that you are being arrogant and naive.
No One Said An ASEAN Start-Up Is Only Limited To ASEAN
I totally understand where ASEAN VCs are coming from. I agree that there is a huge difference in the maturity of the ASEAN ecosystem as compared to developed ones like Silicon Valley and China.
The ASEAN market is a much smaller market that can’t possibly support such valuations and such a clientele. There also isn’t enough later stage funding and rich companies who are willing to experiment with new services to support such start-ups.
I get it. I totally get it!
But who said that an ASEAN start-up is only limited to ASEAN?
Wowwwz is built to be global from day one, we just need enough resources to get started properly in ASEAN, proof that what we are doing really works and deploy our platform in Silicon Valley or China and raise money and grow from there.
ASEAN has more than enough money and talent to at least get us started up until Series A and are ready to truly start our journey to global prominence via Silicon Valley.
Stop Only Investing In Copycats — Invest In Truly Innovative Start-Ups Like Wowwwz That Can Go Global As Well — World-Changing Start-Ups Deserve A Chance Too
It is really time for ASEAN VCs to stop only investing in copycats and regional solutions that generate revenue instantly that have limited potential. They are great and should be funded as well, but shouldn’t we also give truly innovative start-ups that aim to solve global problems and have the potential to be the next Google or Facebook like Wowwwz a fighting chance to get started properly?
The Sad Impression China Has On ASEAN Start-Ups
The Chinese VCs were incredibly honest with me, and told me the truth about what they really think about our ASEAN start-up ecosystem and their impression of it.
Nothing Innovative Coming Out Of ASEAN
Frankly, they feel that there is nothing truly innovative coming out of ASEAN, with the exception of Wowwwz, most are just regional copycats or regional solutions that already existed for a long time elsewhere.
Are ASEAN VCs Stuck With Un-EXITable Dividend Paying Start-Ups?
There is nothing wrong with that, China has plenty of that too. In fact, they started with that, but eventually, they started to innovate and come up with entirely new and innovative products to solve big problems themselves.
In ASEAN, there’s none yet, except a start-up like Wowwwz.
Round Sizes Are Too Small — Our Series A Is Smaller Than Their Seed Rounds
A Chinese VC also told me that they generally don’t invest in ASEAN start-ups until they reach at least Series A because our round sizes are just too small.
Most of our Series A rounds are smaller than their seed rounds. In ASEAN, you see start-ups raising 2 million USD or 4 million USD Series A rounds; in China and Silicon Valley, start-ups are raising 2–5 million USD seed rounds.
Why Start-Ups Today Need To Raise More & More Money Just To Get Started?
Seed rounds in ASEAN are closer to 200–500k USD if you are lucky, while Silicon Valley and Chinese start-ups can raise anywhere from 1 to 1.5 million USD pre-seed with just an idea, and I’m not talking about people with a proven track record here.
Because Of That — Only Looking To Invest In Verticals They Have Perfected To Expand
Because of that, when they do invest in ASEAN via a special purpose fund, they are only looking to invest in verticals that they have perfect in China as an expansion plan.
Namely Logistics, Payments & E-Commerce — China Backed Funds For This Purpose
Things that they have perfected and are looking to expand to ASEAN via acquisition or investment are logistics, payment and e-commerce. There are a couple of specially set up China backed funds that are set up specifically for this purpose.
Wowwwz Is An Exception
The good news, and also bad news is that Wowwwz is not part of this category. Wowwwz is a truly innovative start-up solving a global problem that could become the next Google, Facebook or Tencent, we are one of the rare innovative start-ups from ASEAN who dare to take on big global problems.
The War For The Last & Best Dating App Has Just Started In China
From what I have seen, the war for the last and the best dating app in the world has just started in China, I came across competitors heading in the right direction that have raised way more funding than us pre-seed just to get started.
We Have The Better Vision & Solution — But Can’t Be Part Of It Because We Are From ASEAN
While I was there, I did extensive research on them and turned entire buses of students and entrepreneurs into focus groups to understand what they were doing and how they were doing it.
After understanding what was happening, I believe that Wowwwz still has the better vision and solution, and they are a couple of key things that they are currently doing wrongly.
We could win this war if only we had enough resources to at least build out our vision.
Unfortunately, we can’t be part of that war and get funded by Chinese VCs because I am a foreigner from ASEAN and are based and stuck in ASEAN.
If I Was A Chinese Citizen In China Right Now — They Would Have Funded Wowwwz
If I was a Chinese citizen based in China they would have funded me a long time ago.
The problem was that I am a foreign national, and for a pre-seed start-up — because we haven’t launched in China, that’s why we are considered pre-seed there, you would need to raise an amount that is larger than a normal pre-seed round to be able to own any equity in a Chinese tech start-up.
It’s Legally Impossible For A Foreign Pre-Seed Start-Up To Get Funded By VCs In China
I was excited to find that Chinese VCs believed in what I was building, and went on to do extensive research on how I could possibly get funded by them as a foreigner.
Unfortunately, it turns out that it is legally impossible for a foreign pre-seed start-up to get funded by VCs in China. There turns out to be a minimum requirement of how much you need to raise in order for foreigners to own a stake in a Chinese tech start-up, so it would be okay if you are raising Series A onwards, but for the amount you are raising pre-seed, the amount would be too small for a foreigner to qualify.
These Chinese VC funds can’t invest outside of China or Silicon Valley because that is what their prospectus dictates, so to get investment from them, you would have to incorporate a company in China, which is a problem if you are a foreigner and the paid up capital in your company is too small to meet the minimum requirement, which sucks.
There are Chinese backed VC funds set up for the sole purpose of investing in ASEAN, but these funds are different, they have been set up with a mandate to invest in things they have already perfected in China which they can expand to ASEAN, in particular logistics, payments and e-commerce, like what Alibaba did to Lazada.
Unfortunately for me, Wowwwz does not fall into that category, the war for the last and the best dating app in he world just started in China, but their funds can’t invest in ASEAN start-ups while their ASEAN funds can’t invest in start-ups outside their mandate.
Balik Tongsan Then You Say? — I Can’t — Because I Am Malaysian
I am proud to be Malaysian, that’s the whole reason why I came back from Singapore and am sacrificing so much in hopes of one day helping Malaysia fulfil our full potential.
I crave for the day that we are truly 1Malaysia, a Malaysian Malaysia.
Ironically, at this point, it seems like I would only be able to do it if I “balik tongsan” where the start-up ecosystem is ready to fund something like Wowwwz. Unfortunately, even that isn’t possible, because although I can blend in into their culture and speak their language fluently, I am still a Malaysian, not a Chinese citizen.
I can’t just “balik tongsan”, because I am a Malaysian citizen. I am an outsider.
It Is Extremely Frustrating Because You Know That You’re Right — But Can’t Do Anything Because You’re Stuck In An Ecosystem With VCs That Do Not Have The Right Mindset
If I was wrong about Wowwwz and everything I am building, I would gladly accept my mistakes and move on.
But it gets super frustrating because you know you are right, can see that you are right and have validated that you are right about Wowwwz and its potential, but you just happen to be stuck in the wrong ecosystem that doesn’t have the necessary mindset to understand truly innovative world-changing start-ups like Wowwwz.
That’s Why I Needed To Try To Start A Paradigm Shift In Thinking Among ASEAN VCs
Because of that, I need to try everything I possibly can, including sharing my story and this web of articles in hopes of starting a positive paradigm shift in thinking among ASEAN VCs to learn how to invest in truly innovative and world-changing start-ups like Wowwwz that would have a significant positive impact on the world, become the first 100 billion USD start-up from ASEAN and 1000x your entire portfolio.
I Need To Try Everything I Possibly Can — Even I Risk Offending Some People
I have no choice but to try everything I possibly can, before I can truly said that I have tried my best and given my all, even if it comes with the risk of getting blacklisted by some VCs and offending some people. I really have no other choice.
I Need All The Help I Can Get — From ALL OF YOU Reading This — To Have A Chance Of Building Wowwwz To What I Envision It To Be & Helping Everyone In This World Find True Love & Live Happily Ever After
To be able to build Wowwwz into what I envision it to be and help everyone in this world find their right life partners whom they can grow old together and live happily ever after with, I would need all the help I can get.
If you are reading this, I need your help.
Help Me Build Something That Can Impact Your Life — And Everyone Else’s Lives
Do spread the word about my story, my 10 year journey trying to do this and my upcoming Youtube Channel about love and relationships to as many people as you can so more people will know about it and hopefully, we can start a paradigm shift in thinking among the local start-up ecosystem together.
Kindly, like, subscribe and SHARE it with all your friends.
Help me build something that can impact your life, and everyone else’s lives in this world. A lot of people’s lifetime happiness is in your hands, help me, so I can build tools that help them find their lifetime happiness.
Come on, let’s do this and make the world a more loving and lovely place together!
I hope you will help me out a little here so that I can build the tools to help everyone in this world find their soulmate whom they can grow old together and live long happy lives with.
If you have access to a brand, company, working building, community or even VCs, let me know; I can help you build a community of people who like your product or brand and introduce them to each other, or bring a community closer by introducing people at the same building or company to each other!
You can reach me at firstname.lastname@example.org or LinkedIn.
Don’t forget to SHARE this story and all related stories to as many of your friends too, we need to more people to spread the word so we can start a positive paradigm shift in our ecosystem.
Also, you can help by downloading the app, give us a good rating, subscribe to my Youtube Channel about relationships-coming soon, leave your email, join this Facebook Group and check back every few months for cool updates.
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JohnsonKhooTV — Subscribe to my upcoming Youtube Channel where I will be talking about real life stories about love & relationships
FB Group To Stay Updated On Wowwwz’s Journey — Join this Facebook Group so you can stay updated on our journey, new features and new stories and new updates on our quest to build a start-up that could help everyone in this world find true love and live happily ever after
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More stories and articles can be found on my blog johnsonkhoo.com or via this link to a list of all published stories here.
Help me out, because many people’s lifetime happiness is in your hands.
Once you’ve downloaded the app and signed up, you can also start to meet other amazing single people in Kuala Lumpur or Singapore who share the same values and interests as you by scanning the QR codes below.
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SCAN with Wowwwz to meet amazing single people in Kuala Lumpur!
SCAN with Wowwwz to meet amazing single people in Singapore!
Do SHARE this with as many of your single friends as possible so they can find their soulmate soon, we can get more traction, and raise the funding necessary to build you more cool features that will help amazing single people meet each other and amazing couples grow their relationship!
Let’s do this together!
The world needs YOUR HELP so all of us can find true love!
You have the power to become a superhero!