Last week, we featured thoughts from Renuka Sena, Co-founder and Chief Executive Officer of Proficeo Consultants and Bikesh Lakhmichand, Founder of 1337 Ventures on what a troubled economy could mean to startup founders in Malaysia. For further reading, click here.
As a follow-up, we spoke to Gopi Ganesalingam, Chief Digital Industry Officer (CDIO) of Malaysia Digital Economy Corporation (MDEC) on what founders need to do to be prepared for in the next six months.
Here’s what he has to say.
“The landscape we are in is changing and so are the customers. For the next six months, if founders want to be resilient founders must be ready to pivot again and again.
“Inflation has hit many countries and we are already observing the effects spilling over from war between Russia and Ukraine. Valuations will be affected and they will not be what they were two years ago,” Gopi tells Disruptr.
He further points out that the ecosystem has always thrived on the back of an assuring economy and as a result, founders had taken their cash flow for granted. With the arrival of Covid-19, many got caught and only then realised the importance of managing their cash flow and raising investment at the right moment.
At the same time, the pandemic taught founders to be ready for anything that comes their way and one of the most important lessons learnt by many was the need to pivot and adapt. It was a wake-up call for many, Gopi tells Disruptr.
“It is important for startups to continue watching trends surrounding their customer base and to focus on areas that require pivoting in the next six months. Mindset has to change and young founders in the game must learn the importance of getting themselves a mentor,” Gopi says.
He also urges founders to pay close attention to marketing strategies and to always join sessions to further absorb key points that will help them to pave their way accordingly.
Despite the challenges ahead, Gopi is optimistic that entrepreneurs will always be able to find their footing with the right strategies in place.
Providing The Right Assistance At The Right Time
According to Gopi, MDEC has pivoted since the start of the pandemic in 2020 to help founders in a financial dilemma. With over 200 startups facing financial challenges during the pandemic, over 70 had managed to get funding through the agency’s 102 venture capital network.
To further help, MDEC has also introduced alternative funding options through its partnership with 12 Equity Crowdfunding (ECF) and Peer-to-Peer (P2P) platforms to help entrepreneurs tide the economic challenges and provide cash flow relief.
In the 2nd half of 2021, the agency introduced its Global Technology Grant (GTG) initiative to nurture global champions, drive investment and catalyse a digital innovation ecosystem through the development and commercialisation of commercial-driven products or services.
For Type 1, the GTG aims to help local scale-up tech companies who are ready to enter their first global market or expand their existing global market presence via technology innovation and commercialisation of market-driven products or services. The purpose, ultimately, is to drive a potential Malaysian unicorn in the making.
Type 1 of the Grant covers up to 50 percent of total project costs or up to RM2 million, whichever is lower, for locally owned companies. As for foreign-owned companies, the grant covers up to 30 percent of total project costs or up to RM2 million.
Under Type 2, the GTG targets foreign technology companies to set up Centres of Excellence to conduct high-value tech innovations and R&D activities leading to the development and commercialisation of market driven, innovative products and services for the global market, on top of contributing to the development of the ecosystem. Type 2 covers up to 30 percent of the project cost or up to RM2 million, whichever is lower.
Furthermore, the agency also introduced the 4th IR Catalyst Grant (4ICG) to be used solely for the purpose of co-creation, problem-solving and commercialisation of 4IR solutions. On another note, entrepreneurs looking for coaching can get the necessary aid through the Founders Grindstone.
The programme offers intensive workshops conducted by authorities from various investment firms, venture capitals, equity crowdfunding platforms and legal firms. Gopi also highlights that the programme will also equip founders with the necessary understanding of regulatory and legal issues that they might face while raising funds.
For young founders looking for assistance, MDEC works with 17 different accelerators to help early-stage entrepreneurs work on their go-to market strategy and identify areas that require improvement.