In this episode of the DevReady Podcast, our hosts Andrew Romeo and Anthony Sapountzis are joined by Chris Tran, Founder & Managing Partner at CapConnect; and Board of Directors at TiE. Chris talks about the Southeast Asian market and the founders’ elemental role in shaping a better tomorrow by solving today’s problems. Chris compares the markets in the West with the emerging market of Southeast Asia and explains how solving problems and gaining traction are essential, regardless of the market.
Chris highlights how we are on the verge of multi-decade change given the unprecedented set of circumstances and how that affects a founder and their ability to raise funds, execute strategy, know the markets, and then ultimately exit. He urges the founder to be conscious of the following:
- Understand the geographical shifts in the economy
- Think about what platforms will appeal to consumers in the near future as we arguably enter the fifth industrial revolution
- Understand how money flows when operating the business and how it is affected by all that is happening around the world.
Citing Singapore as an example Chris says a lot of change in the tech space can be credited to the government’s consistent drive to make it a tech hub. He furthers that Australia underutilizes its opportunities despite having a fantastic ecosystem where it has a good hunting ground for typically Western acquirers like the US, North America, and Europe and also has a great stock exchange. Inconsistency in policies is a challenge, he adds.
When asked what drives his passion, Chris shares that he is amazed by how founders who on a risk-adjusted basis take a backward financial bet and oftentimes do it at the expense of well-paying jobs and overall stability in their bid to solve problems of today to make a better tomorrow. So, helping founders achieve their goals is at the core of what Chris does. And what makes a founder successful when so many others fail? Chris’s answer is rather simple and yet profound—in addition to being hardworking, building the right team, and listening to what people want, founders need to
- Be in the right place at the right time with the right exposure
- Be able to understand the shifts and pivot accordingly
- Have an investor-friendly capital strategy
Talking about the increasing reliance by founders on VCs in the last few years, Chris says that following up with the VC is really important, and a founder needs to make sure that they are on the VCs mind. And when asked about the involvement of founders with the VCs, here’s some sound advice from Chris:
- If you are in the earlier stages (USD 5-10 million/annum), remember that the VCs are backing you and not your business. So, you’ve got no choice and you have to do everything on your own.
- If you are doing fine and have a business with a high valuation, spend time making sure that there are VCs that champion you and want to invest in the business.
- If you’ve got USD 10-15 million/annum in revenue and you are looking at making profits in the near future, you should not nickel and dime and hire a great CFO and build investor relations and control the narrative in the market.
His advice is, “It’s not the best technology, but it’s the best technology that finds the product market fit that’s going to win.”
Topics Covered
- Chris’s work in the South East Asian Market
- What founders need to consider when moving into a new market
- Government’s vital role in making Singapore a tech hub
- Australia’s underutilized opportunities in the tech space
- Inconsistency in policies can be problematic for founders
- How do the founders tap into the South East Asian market?
- Understanding VCs
- Why do founders succeed?
Key Quotes (Time Stamps)
- “It is really amazing—the work that you do with founders that actually build something to solve a problem for today to build a better tomorrow.” (1:04 – 1:14)
- “We are up for a significant and multi-decade change and there’s just no two ways about it. We are at the end of an unprecedented set of circumstances which would never be repeated in history again. And I don’t want to put too fine of a nuance on it. And it’s across a lot of things which affect a founder and a founder’s ability to raise, a founder’s ability to actually execute strategy as to which markets are available to him or her, and ultimately, the exit.” (1:47 – 1:20)
- “The absolute and consistent drive by the Singaporean Government to make it a tech hub. This is a government that gave four VCs, a decade ago, something like a ridiculous five for one matching grant. I mean, can you imagine the Australian government going up to VC and saying, hey, for every dollar you invest, I’m going to give you $6 to invest? And if you lose it, that’s fine because I want you to build Silicon Valley in Sydney or Melbourne.” (6:00 – 6:26)
- “But if we think about the technology capitals around China, the U.S. and Israel, all of them had a very strong geopolitical reason to invest in technology. But Singapore has actually decided to do technology to ensure that it’s relevant in the 21st century. And I commend it. So, their ability to put their money where their mouth is, the ability to have things like Singapore FinTech Festival which is the world’s largest fintech vessel, and they dump millions into that…” (6:45 – 7:13)
- “Australia has an amazing ecosystem where it has a good hunting ground for typically Western acquirers, the US, North America and Europe and also has a wonderful stock exchange which operates very well and more or less, even though it’s not perfect, it’s got an investor base that can appreciate the software and good quality technology companies.” (7:44 – 8:06)
- “So, if we look at Bitcoin, I know it’s a dirty word, but the reality is, is that it had traction and potentially still has traction because it solves the need in the market.” (14:04 – 14:14)
- “That’s what we see—the more enablement of the individual and the more around other technologies that help individuals or people create their own communities.” (15:03 – 11:12)
- “Working together and building bridges is the only way that we’re going to move forward as humanity.” (16:04 – 16:09)
- “Vietnam is 100 million people. Vietnam is not sneakers and T-shirts; it is mobile phones, it is electric cars. Just to be really clear. So, that is going to be the next manufacturing story.” (16:21 – 16:34)
- “And so, the U.S. is an amazing country. Arguably, history’s most successful civilization. Quite rightly, founders should look at the U.S. Absolutely. There is good high spend there. But equally, are there other opportunities beyond China? There’s Vietnam, which is the next manufacturing hub. Are there other consumer markets such as Indonesia? Which. by the way, has roughly a GDP per capita, twice that of India. That should be a consideration mindset.” (16:35 – 17:04)
- “One of the sad things I think about, in Australia and the U.S., is inequality is growing. So don’t be surprised if these models, funnily enough, have more global application because we are seeing more bottom of the pyramid and, things are just getting harder for a lot more people. And also, what we’re seeing, which is catalyzed by the Ukraine war, is a lot of aqua-culture, agriculture tech. So, how do you more efficiently get that product from the farm? How do you use IOT for fishing, normal fishing? That’s happening in Indonesia, as we speak. There are companies with hundreds of millions and at the end of the day, I think it is that we will need these solutions to make sure that we have sustainable and clean sources of food for everybody.” (22:28 – 23:19)
- “The advice we’re giving when we see founders is, look, if your VC isn’t already contacting you about how you are going on runway, etc., it actually means that you’re not their top of mind. So, you better get to the top of mind. Most of the VCs I’ve had, have already done the portfolio review around December and then waited for the results come January – February and worked out which of the bets they would back. So, if you’re not talking to your VCs or they haven’t told you, you’re in trouble.” (29:34 – 30:03)
- “Let’s remind the founders that a VC is taking a bet on you and a whole bunch of others, and the VC is expecting some values. And there’s no VC that is going to be able to provide all the resources to 100% of their portfolio. The end.” (30:16 – 30:35)
- “I am passionate because I see this incredible cohort of people called ‘the founder’. And if you really think about it on a risk-adjusted basis, they’re making a backward financial bet. Most of them give up really good jobs and stability, depending on the jurisdiction, and particularly in Asia, they’re finding a lot of cultural difficulties, and fear of failure, which I think Australia is a lot better at. I mean, fear of missing out, having to explain to your parents why you’ve left a stable job. And in Asia, it’s worse, right? Particularly if your parents have mortgaged everything for your education.” (31:17 – 31:59)
- “But at the end of the day, we need these people (founders). These are the people that are solving problems to make a better tomorrow for all of us. I just feel incredibly privileged to work with them.” (32:25 – 32:36)
- “The founders that are successful, apart from having all the classical elements of hard-working, willing to listen, build the right team, all that kind of stuff, I see, are either lucky or have the ability to find themselves in the right place at the right time and have the right exposure. And to identify shifts. I mean, how many times have we seen a successful start-up that was successful because there was a shift or, the converse not successful because they didn’t see it coming, right? So probably to answer your question, I would say be conscious of the shifts, and try to be in the right place at the right time.” (34:28 – 35:17)
- “By definition, if you’re a start-up, you are unprofitable. You’ve got no choice. You need to have a very investor-friendly capital strategy.” (35:17 – 35:24)
Social Media Clips
- Factors to consider when entering the South East Asian market (1:20 – 5:29)
- Why is money coming to Singapore? (5:49 – 7:36)
- The Australian Advantage (7:38 – 8:09)
- Founders navigating the inconsistencies in policies (8:35 – 11:34)
- Move towards AIArtificial Intelligence (AI) is a very large and broad spectrum of technologies which most people would be familiar with through...? (13:36 – 15:12)
- How do the founders tap into the South East Asian market? (17:06 – 19:59)
- What types of start-ups/businesses are funded in Singapore? (21:13 – 23:19)
- Evolution of the Fintech market in Singapore and new opportunities (23:49 – 27:20)
- Market for the VCs (27:58 – 30:03)
- What fuels Chris’s passion? (30:39 – 32:36)
- Who are the ones that succeed? (33:55 – 35:54)
- Building support for the Founder (36:39 – 39:06)
Useful Links
TiE Singapore | Website
