Breaking into new markets isn’t easy. Startups which are accomplished in their own country aren't guaranteed success in other markets. Different markets have different requirements and needs. Startups would first need to get acquainted to the new market, which entails connections and partners. Expanding blindly could prove risky.
The right support is now here. MaGIC is poised to further help startups looking to broaden their reach through the Global Market-fit Programme (GMP), the latest programme under their ASEAN Centre of Entrepreneurship (ACE) initiatives. GMP is designed for startups ready for expansion (Series A above) and maturing to the next stage – including regional expansion.
“When launching into another foreign market, our startups could be more vulnerable expanding alone, in dealing with nuances of a foreign market. Key challenges are usually lack of understanding of regulations, language barriers, infrastructure support among others. Navigating inherent competition in the market of entry is another key area”, says Dzuleira Abu Bakar (pic), the chief executive officer of the Malaysian Global Innovation & Creative Centre (MaGIC).
“With established networks forged by government agencies such as MaGIC, some of these risk factors and hurdles can be lowered. It really is ultimately the survival of the fittest. There have been successful Malaysian startups which have expanded regionally, and we believe there are more that can do the same - given the right support.”
“The programme has been designed, inspired from the paths and key success factors of Malaysian-bred tech leaders which have expanded abroad such as Aerodyne and DF Automation,” Dzuleira tells Digital News Asia.
She goes on to stress that its value lies in the strong regional focus with industry-specific partners and mentors. “This then is wrapped with a dedicated mentorship platform and exclusive network access to MaGIC's regional entrepreneurship ecosystem,” Dzuleira explains.
Filling a piece of the puzzle
Since its establishment in 2014, MaGIC has been fostering the growth of startups through more than 20 global and regional programmes, with value creation of more than US$400 million (RM1.7 billion).
This includes the ACE initiatives, the Global Accelerator Programme (GAP), e@Stanford and Startup Exchange – all programmes designed to suit each stage of the startup lifecycle (based, of course, on industry development and market feedback).
These programmes have seen tremendous success. e@Stanford, for instance, saw 118 participating startups leading to a value creation of US$110.2 million (RM456 million), with notable successful participants being the likes of Dropee, Leaderonomics and Plus Solar.
Under ACE, MaGIC has run three Startups Exchange Programmes to Thailand, Indonesia and Vietnam, with a 43% expansion success rate.
There was, however, a puzzle piece that needs filling – one that pertains to aiding startups develop a product market fit and build the traction necessary for maturity.
Hence the creation of the GMP which is meant to fill this mid-maturity stage gap in the Malaysian startup ecosystem. It will be kicking off with Virtual GMP 2020 online, with an aim to assist Malaysian startups in navigating common obstacles when expanding to other countries.
It does so by first providing market validation – helping startups ensure that they have what it takes to meet the needs of the foreign market. GMP also offers network and insights to each market, including access to a wide range of partners, corporates, investors and ecosystem players, plus mentorship from industry experts.
“We believe the market is growing and there is space for improvement and choice. MaGIC’s programmes are unique and we offer connections that complement what startups need for expansion - including offering additional support and channels to access new markets,” says Dzuleira.
Value adding to immersion programmes
GMP is specifically designed to address an issue with most immersion programmes, which often ends when the trip is concluded, lacking ongoing follow-up. “We want to address this, and allow the startups to improvise on their current business model between two planned trips,” Dzuleira stresses.
GMP will feature a first immersion trip for data gathering. Following that, a five-day design sprint workshop will be held on the return to derive a new product-market fit strategy that is specific to the new market. After that comes the validation trip to test the new product market fit strategy, which includes a programme assisting in to adjust the current business model for international expansion.
“Additionally, startups will be assigned to an international mentor for 3 months to hand-hold during expansion,” she adds. “These added values are what makes our GMP unique.” The programme will also have an emphasis in creating a unique selling proposition (USP).
Dzuleira admits that, in terms of programme design, some overlap is inevitable with existing programmes in the market. “But the core of the programme fills a gap in the ecosystem, as we have gathered from alumni. In business, unique tech or service is not the only requisite to be successful. The ability to scale up, access untapped markets, enhance brand positioning, access to funds and partners, are also crucial to the success of their business. This is where GMP comes in,” she expounds.
GMP will focus on three markets: Taiwan, Europe and India – choices made after MaGIC gauged the interest of their partners in these markets and after considering their characteristics, looking at cultural fit, market maturity, startup ecosystem and the likes.
“There is also the added advantage because we speak the same languages as those in these countries,” Dzuleira notes.
“Additionally, Taiwan has been positioning itself as the gateway into Mainland China - possibly making it an attractive destination for our startups. Meanwhile, we also chose to adopt a lighter touch with Europe for now, before launching into a full programme next year.”
The vertical focus areas for the 3 markets are listed here: https://www.mymagic.my/gmp
In ensuring that the startups are matched with the right partner in each country, the GMP places an emphasis in the selection and matching of their startups with MaGIC’s programme partners, potential partners, clients, mentors, industry experts and government officials for two months before the actual programme kicks off.
“It leverages the ecosystem to provide added connections. We will be reviewing the growth and progress of our startups in these markets for 24 months as part of the programme, and will extend assistance where possible,” says Dzuleira.
The Covid-19 pandemic has, undoubtedly, impacted pre-existing plans that startups may have to expand and scale-up. “As they pivot to survive and recover, GMP provides another opportunity or platform for startups to go regional,” she adds.
With many startups resetting their strategies and pivoting in order to survive the pandemic, Dzuleira says that this brings about opportunities for partnerships and collaborations.
“In some cases and industries, the barrier to entry for new products are now lower, thereby presenting new opportunities,” she notes. “MaGIC has opted to take a bold move to encourage startups to grab these opportunities and we believe there is an appetite amongst mid-stage startups who are ready to move beyond our borders.”
Augmenting that will and determination is MaGIC’s raison d’etre to continue playing a key part in building, bridging and boosting the growth of startups.