Mar 27, 2020 by Brian Ma
I’m starting an accelerator for southeast asia. For those that aren’t super familiar with the region, that means companies that primarily serve customers in countries like Singapore, Indonesia, Vietnam, Malaysia, Thailand, and the Philippines.
Those of you that tried to reach me last week have gotten an auto response that I’ve stepped away from Divvy. Divvy is doing great and I’m very thankful for my cofounders, team, and investors for supporting me through this transition. Given all the emails I’ve already received asking ‘What’s next’, I thought it would be easier to write about it publicly and post about what I’ve been up to.
Making the decision to leave the company I founded has been one of the hardest decisions I’ve had to make in my life, but just like I knew back in 2016 that I had to start Divvy Homes or else I’d miss the Proptech wave, now again I’m faced with the dilemma of starting Iterative or else I’ll miss the Asian century.
Southeast Asia is growing incredibly fast. After founding, helping, and just generally being around startups for the past 15 years of my life, I now know that growth rates are the signals you should follow. High growth rates lead to large TAMs very quickly. But why is this region growing so fast? A couple reasons:
So what’s the problem? Lots of capital, but not enough great startups. Why? Because founders aren’t hitting the milestones they need to be hitting for funding.
After now talking to over 200 companies (yes, you need customer development as an accelerator too!), it’s quite clear what’s happening. There’s a glut of accelerators in the region, but founders are still finding themselves not able to hit funding milestones to get to the next stage of growth. The VC’s here also confirm that this is true.
We meticulously track our “sales pipeline” with accelerator applications. Have spoken now to over 200 companies.
It kills me every time I hear about a company jumping from accelerator to accelerator diluting themselves to oblivion while making little to no material progress. For those in the US who haven’t seen this behavior before, this is a company diluting themselves 15-20% at one accelerator, not being able to raise money, and then going through another one for another 15-20% dilution. This is more common than reasonable. I’ve even seen companies go through 3 or even 4 accelerators. The worst thing that an ecosystem can do is to waste a high potential founder’s time and energy on things that don’t matter.
Just to make it more concrete, a few key themes have already surfaced on mistakes founders are making:
Founders need best practices, mentorship, and support to navigate their startups and we will provide that, along with our network of Silicon-valley based experienced mentors.
It turns out being a founder is REALLY hard, largely because it’s so different than anything else you’ve done in your life. We’re going to be here to help founders through it. While we’ll be providing capital from the get-go ($150k USD investment), the biggest value add will be our time working together during the 3 month program to make sure the company has the traction and position it needs to actually take off on demo day.
While I’ve built several companies from scratch before, I’ve never built a accelerator nor done investing full-time. I’m looking forward to learning from those that have gone before me and excited about this new challenge. Stoked to have the privilege to work with amazing founders as they embark on their journey to impact millions of people.
Lets do this!