Rob Zepeda is the founder of Playbasis, a tech startup providing gamification solutions. Originally, Rob is from the US and has worked with Activision for several years. He came to Thailand because of his love for martial arts and soon discovered that Thailand is not only a beautiful place to be, but offers great business opportunities. In 2012, he founded Playbasis and got funded by Ardent Capital.
Rob welcomed us with a cup of coffee at the Ardent co-working Office. We quickly got talking about general stuff. Rob’s passion is Startups and so the discussion quickly turned to doing business in Asia and Thailand in particular.
Doing business in Asia has its challenges, but the positives far outweigh the negatives.
Doing business in Asia has its challenges, but the positives far outweigh the negatives. While the world is increasingly becoming ever more globalized, it is still important to make sure any business, whether you are a scrappy startup or enter the market with an established brand name, recognizes the cultural differences and operates accordingly. Perfect examples are the numerous cultural and national holidays that are unique to the region. A business operating in this market needs to factor these holidays in to the go-to-market strategy.
Other challenges include things like purchasing power, internet penetration, credit card penetration, educational system differences, total addressable market size, and the basic challenges of building a professional network when you are new to the region.
In Thailand, the concept of face is very important. Face is something one never wants to lose, and so most people here tend to avoid conflict and avoid voicing contrary opinions. The network one builds in Thailand usually starts from childhood and continues to extend and strengthen over one’s lifetime. It is very common to do business with childhood friends here. Often those relationships are critical to getting business done.
Let’s take a company like the CP Group. They are a massive and own a variety of business units. If you are a startup and you can work with one company in the group, you will have a greater chance to work with all of the companies. As a result you definitely don’t want to make enemies. And you would never want to be too vocal in your desire to directly compete in the market with an incumbent. A helpful, humble, yet confident attitude would serve a startup business much better.
A helpful, humble, yet confident attitude would serve a Startup business much better.
In the US, a competitive attitude is more openly accepted. People love the drama, and they will reblog, or will post about this guy, or this guy. Recently I saw one big VC taking a stab at Dennis Crowley, the founder of Foursquare, and was saying something how he was not convinced (by Foursquare). Dennis Crowley fired back, and it is all on Twitter – public, everybody could see it. You wouldn’t see these kind of things here, because the business community is actually so small, that you eventually will end up with the same people over and over again.
The only way this will change, and that is why I think Startups are so important, is that with a Startup you have the opportunity to create wealth out of nothing. All of the sudden you can have all those young people that can get rich. They don’t need the family money, or other people. They can just start generate wealth for themselves and the people around them. Prior to that, if you wanted to get anywhere in life, you had to know someone. Startups are an opportunity to break out of that.
With a startup you have the opportunity to create wealth out of nothing.
In general you have the 3Fs (family, friends and fools), if you don’t want to give up shares at the beginning.
Yes, but before all of the incubators and VCs, that was the only source of funding, and if you were a Thai Startup it was almost impossible for you to get funding outside of Thailand, because nobody wanted to invest here. Now we are starting to see all those new incubators, accelerator programs and competitions, and even VC’s entering into Thailand. Singapore is now becoming the preferred place to do business in the region, because of all the tax benefits, ease of business, VC’s and government funding schemes.
The problem with Singapore is of course that it is such a small country. Whatever you launch will hit the ceiling very soon. VC’s are starting to realize: We need to test our products in countries in new markets outside Singapore. They are trying to get into countries like Thailand, with a significant number of consumers, internet users, and social media addicts. Economically Thailand is very stable and the Startup scene started to grow over the past year.
The great thing about Thailand is that if you can make it work here, you can make it work almost everywhere, if you can solve all the problems around localization, translation, and adaption to the local market. There are enough people here that can test your product. There are enough businesses here to do B2B. It’s relatively easy to attract foreign talent because the expat community is quite large.
The great thing about Thailand is that if you can make it work here, you can make it work almost everywhere
Very often foreigners want to come and are actually looking for opportunities.
Yes indeed. The quality of living is very high. Some of the stresses associated with running a Startup can kind of be offset by being able to go for a weekend to a beautiful beach and eat great food.
How often do you do that?
(Laughs) Not as much as I should. You know, I feel very fortunate that whenever I wanted to, I could just hop into my car.
It’s much more the feeling of being able to do it, rather than actually doing it?
Yes. It’s very different from New York or San Francisco. Of course, San Francisco has the ocean, but they don’t have these beaches. Of course, in Silicon Valley they have a lot of great things, but the costs of living are extremely high. The other great thing about being out here is that although the amount of money and valuations are much lower than in the US, the cost of living are so much lower as well. In the US a new Startup, sometimes just and idea, will raise around a million USD out of a four million valuation. Out here it’s not like that at all. Very, very rarely will you see someone raise a million dollars, at any kind of valuation.
Of course, as you said, the market is not developed yet. There are not so many success stories.
Yes that’s true, but that’s even true for Singapore. Another problem that we have here in Thailand is that lots of Thai Startups are too focused on the local market. I think at this day and age you have to be globally focused.
Don’t you think that depends on the project?
Well yes, but the point is that the VC is looking for an opportunity big enough. That’s the difference between a lifestyle business that makes you and your friends and employees wealthy and a business that is looking to raise money from institutional investors. They want at least 10-20x return on investment. They value their time very highly, so if they are going to invest, they are going to spend time with you, mentoring and so on. There are some investors that want to see your business go public at one point. That’s what I mean.
For me the goal is to potentially build a company that can employ a thousand, two thousand people. That’s the kind of Startups I’m very interested in. Building a photo sharing app or a food review app, that’s fun and there is a place for it in the market. However, I’m not sure if that is going to become the next Google. In fact, it is likely going to be a feature that Google or Facebook are going to add.
That’s why I’m much more interested in building a company that can get to a stage of a Microsoft, Google, Paypal, or LinkedIn. These kinds of powerhouse companies, that really change things and potentially can change the world. I want to do something much more important than sharing pictures.
Thai Startups are too focused on the local market
You don’t really get so many of these kinds of people here that have really big ambitions. But that are the things that get me really excited. That’s why I’m very impressed with Ookbee and Builk. They are growing to a stage where they are doing partnerships oversees, in different countries. They are starting to become very important companies. Maybe not to the point of two thousand people, but they are leading the market here. That’s very interesting. They are on a path to an exit at a very high valuation and I think they are going to help set the foundation for the tech Startups to follow.
They are doing great stuff. But they are B2B companies, not necessarily B2C. If you want to reach those numbers as a B2C company you have to work much harder. If you have ten B2B partners a year that can be ok, but for B2C you need like four million or so transactions a year, and that’s very difficult. Primarily, because you have to bring real value to the customers, more than all those games, Facebook, Line, Twitter, whatever. Otherwise customers will disengage. On the phone it’s just a fingertip away. That is actually what we are trying to solve with Gamification.
We continued talking, of course. In part two Rob talks about Gamification, Playbasis and how he came to Thailand.
Ardent Capital is an investor of e27.
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