Newsletter #8: Mindsets on innovation - the west VS the rest.
6 minutes reading time. Thoughts on startups, growth, and technology 🚀
Hey there,
This week, I want to discuss the differences between running a startup in developed VS emerging market.
My interest in the topic dates from back in 2016 when I embarked on a trip to Hong Kong to write my master thesis on the topic of entrepreneurship in developed vs emerging markets. Four years later I have been part of the largest accelerator in the region, ran two startups, met many investors and attended countless startup events.
Typically, entrepreneurs in emerging markets approach building a company like chef cooks learn to cook, namely by following iconic recipes until they become great. Meaning, a lot of entrepreneurs based in developing markets tend to replicate proven business models. Even the language we use follows this thinking: e.g., Alibaba as the "eBay of China", Flipkart as "the Amazon of India", Grab as "the Uber of Southeast Asia”, etc.
And that approach seems to be working fine as each startup mentioned above has reached an incredible success and scale.
Source: Greenhouse’s LinkedIn page
But that's not where it all ends, my experience in Southeast Asia taught me that startup ecosystems mature in the following way:
Local entrepreneurs replicate successful models but focus on local markets
As the eco-system evolves, founders start applying existing technologies to solve local problems in unique ways. Go-Jek is hardly a copycat of Uber, it may have been in the beginning but now it's a “super-app” that allows you to buy food, medicine, cinema tickets, pay your bills, send items, travel, and even order massage from your living room.
There is definitely an element of innovation that many people do not see at first glimpse. Entrepreneurs who face the constrains of resources ever-present in emerging markets invest a ton of grit and creative thinking which leads to innovations in product, the path to market, or monetization. Not to mention that the scale in fast-growth economies is completely different because the total available market is often much bigger due to the large population.
What remains to be seen is whether breakthrough innovations will ever take place in emerging markets. Do we expect to see innovations as impactful as the personal computer or the internet emerging from regions like Southeast Asia? Or perhaps, we will continue to experience unique solutions, built on existing technologies that have high scalability in developing markets but would struggle to become global successes?
“The something of somewhere is mostly just the nothing of nowhere.” Peter Thiel
Articles worth reading:
Rise of the Super App: Mobile-First Product Ideas from China - Apps like WeChat and Alipay in China show us what’s possible when an entire country leapfrogs over the PC era directly to mobile. And while the contexts and nuances differ significantly, there are lots of product ideas that companies can learn from China (not just the other way around) — especially given the trends of “super apps”, whether for work or for personal use.
Mindsets for Thinking about Innovation In — and Competition from — China - China has been in the headlines lately for the ongoing acceleration of its capital outflows and concerns over the reliability of its reported economic data. As various businesses and investors hastily adjust their forecasts and expectations, to me, this period of uncertainty represents an opportunity for companies from developed markets: To take the time to learn, reflect, and consider what their China strategy should be.
Google X Head on Moonshots: 10X Is Easier Than 10 Percent - Moonshot thinking starts with picking a big problem: something huge, long-existing, or on a global scale. Next, it involves articulating a radical solution – one that would actually solve the problem if it existed: a product or service that sounds like it’s directly out of a sci-fi story.
A quote worth remembering:
By James Clear, author of Atomic Habits.
"Your success depends on the risks you take. Your survival depends on the risks you avoid."
A book recommendation:
Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think by Hans Rosling, Ola Rosling, Anna Rosling Rönnlund - This is probably one of the most important books people need to read. It helped me to understand better the difference between the developed and developing world while showing me how the world is not as bad as most people believe. Factfulness is a fantastic book and I wish more people would read it, the world would definitely be a better place.
Available as an audiobook as well, check it out.
A productivity tool I use:
To keep track of and protect all my passwords, documents and other sensitive information in a world where we experience more and more cyber-attacks and uncertainty I am using 1password.
Check it out here.
Onward and upward 🚀