SINGAPORE--While many Asian countries are placing more emphasis on fostering innovation and entrepreneurship, inhibitions still exist in the form of culture, cost of living and the ability to get funds at the right time.
Derek Sivers, founder of CD Baby, said people tend to focus too much on the downsides when evaluating whether to start a business or not, particularly in Asia. The California-born entrepreneur, who now resides here, added that considerations include whether it is wise to forego a well-paying job for the insecurity and potential loss of capital should the venture fail.
Sivers, a panel speaker at the annual Global Entrepolis @ Singapore (GES) Summit held here Wednesday, said his observations were corroborated during a conversation he had with a Singapore entrepreneur recently. According to him, Lee Min Xuan, co-founder of PlayMoolah, an online service that allows parents to teach their children how to manage their finances from young, shared the need to venture out to the United States--in her instance, Silicon Valley in the San Francisco Bay Area--in order to start her online business.
Lee told him this was because she felt pressured by her parents' expectations, which is the norm in many Asian cultures, and the burden made it difficult for her to take the leap and start her business in her home country.
Comparatively, Sivers said entrepreneurship is the norm in California. In fact, he noted that out of his 100 friends there, only two had salaried jobs while the rest are business owners.
CD Baby's success, he recounted, could be attributed to "ignorant optimism". The entrepreneur said he neglected to consider what would be common business features such as including a Terms & Conditions section on his Web site, and grew his business with a staff that were oftentimes young, starting their first job out of school and had the optimism and courage to aim to meet the site's goals.
The entrepreneurship journey, he added, is also not a smooth one as he too had his share of failures before hitting the jackpot.
"If CD Baby had failed, I would have gone on to the next venture," Sivers stated matter-of-factly.
In terms of financial support, fellow panelist Troy Malone pointed out that having an angel investor climate like that of Silicon Valley is ideal, but not the most important factor for success.
Malone, Evernote's general manager for the Asia-Pacific region, pointed out that even with the strong financial infrastructure available to the Silicon Valley-based content repository service provider, it nearly folded due to a lack of funds at one stage. The then-startup was only given the opportunity to grow its business when an Evernote user, duly impressed with the service, offered to pump in US$500,000 of investments into the fledgling company, Malone stated.
Quizzed on how startups "feed themselves" when their businesses have yet to take off, Sivers pointed out that cost of living is an important factor during this period of time. He said that because he was able to live on bare minimum during the early stages of starting CD Baby, it allowed him the time to work on the business.
However, for those that have families to feed and have mortgages to pay off or are saddled with other financial commitments, the opportunity cost of starting their own businesses then becomes a bigger hurdle to cross.
Ultimately, Sivers believed that if startups are able to be "future focused" rather than look at the present struggles and challenges, it would give them the impetus and motivation to realize the goals and ambitions for their business.