Dance with Unicorns: How AppWorks Nurtures Startup Founders in Greater Southeast Asia

The Face: Jun Wakabayashi, you’re an Analyst covering Southeast Asia for AppWorks , please tell me more about your experience there. 

Jun: AppWorks is both the largest startup accelerator in a region we like to call “Greater Southeast Asia”, which is essentially ASEAN+TW, and we are one of the region’s most active early-stage investors. When we started in 2010, our efforts were centered on jumpstarting the startup ecosystem in the region, beginning with our homebase in Taiwan.  During this time, the first wave of eager entrepreneurs was just starting to figure out how to capitalize on the mobile internet wave. After noticing a similar emergence happening in Southeast Asia, and identifying several synergies with Taiwan’s own digital economy and technical talent pool, we began to bridge the two ecosystems closer together, giving birth to the concept of Greater Southeast Asia (GSEA). My mission now is to continue connecting founders in the ecosystem and to establish AppWorks as a household name in GSEA. We now spend a good amount of time in Vietnam as one of the markets in this region.

What community values ​​does AppWorks bring to the market?

Our motto is “By Founders, For Founders.” This ethos permeates everything we do. Having been founders ourselves, all of our decisions are made with a founder-first mentality, catering to founders’  best interests and helping them grow. Our accelerator, for example, is completely free. Contrary to many other accelerators you might come across, we don’t take equity or charge any fees, yet we still provide founders with the necessary resources, mentorship, and connections to get their businesses off the ground. That’s because we don’t believe in charging founders for what we do, and we also know that funding can actually be counterproductive in the early stages before a startup reaches product-market fit. That said, if startups reach a point in their journey where a capital injection can significantly help them scale, then we’re happy to initiate those discussions as we also manage a VC fund.

I think our value has resonated quite well with founders in the region. Our community now encompasses 376 active startups and 1,113 founders across GSEA. Together, AppWorks startups generate US$4.97B in annual revenue, have created 11,162 jobs, and boast an aggregate valuation of US$4.72B. 

What strategy does AppWorks target in the field of technology? 

AppWorks focuses on a theme that we call “ABS,” that is AI, Blockchain, and Southeast Asia. The advent of mobile 10 years ago completely redefined the global paradigm, specifically in how industries work and operate and how people went about living their daily lives. We’re now looking towards the next 10 years, which we believe will be transformed by AI and blockchain, particularly in fast emerging markets such as Southeast Asia that have traditionally “leap-frogged” developed nations in terms of technology adoption. The majority of talent, data, and capital is currently controlled by big tech—companies like Amazon, Facebook, or Google— but we believe these two nascent technologies will eventually come down the cost curve and access will be democratized, even among startups. In due time, AI and Blockchain will be more of a “must have” rather than “nice to have.”

How does a startup approach the investment fund from AppWorks?  

We believe that taking investment should not be a decision made on a whim. Founders should only work with people who they trust and who believe in their vision, and vice versa for investors. In some instances, founders will either find a shared contact who helps them make a warm introduction to us, or they simply reach out to us on their own. We also highly encourage startups to join our accelerator, which is a six-month program that fosters the kind of sharing and dialogue that enables founders and investors to get to know each other better.

One framework we focus on a great deal in the accelerator is something we call the 3Hs: Heart, Head, and Hands. Essentially, that means we look at the founder’s passion and determination, or their Heart; their ability to learn, their Head; and their ability to execute, which we call their Hand. Having this kind of context about a founder helps us to understand the position they are coming from during conversations about funding. Founders who enter our accelerator are encouraged to talk to us about their capital needs at any time, either during or after their accelerator experience. We’re always open for a chat.  

In terms of ticket sizes, we’re able to write checks ranging from US$200K to US$10M, focusing on startups that operate in the broad areas of AI, Blockchain and the Greater SEA region — an investment thesis that we shorten to an acronym, “ABS.”  

At what stage do you believe technology is developing? Which technology trends will lead the market in the near future? What are some signs of a clear shift in global startup trends, in recent times?

GSEA startups present a unique situation when you look closely at their origin stories, and the characteristics of this region. First, GSEA is a fast-growing region encompassing over 650 million people and the world’s third-largest number of internet users, many of whom are just experiencing an increase in affluence, broader ranges of consumer choice, and digital transformation. This has created a massive wave of opportunities that has sprouted the dozen unicorns in this region that you see today.

The first of these unicorns, SEA Group (inclusive of Shopee, Garena, and AirPay) went public on the New York Stock Exchange in November 2017. This was a huge stamp of approval for the region, validating its commercial viability and growth prospects for investors and corporations worldwide.

I believe we’re now entering a new phase of development. Unicorns like Grab, Gojek, Lazada, Tokopedia, and Traveloka are increasingly focusing more on customer engagement and retention rather than rapid acquisition. Furthermore, they’re now the ones cultivating the next generation of entrepreneurs, passing down the best practices and technical acumen, while in some cases also serving as exit channels for earlier startups.

The region is still young and land-grab opportunities still abundant. Many of the regional VCs including ourselves have raised US$100M+ funds to help close the series B gap that many of the more mature startups in GSEA will invariably start to face.   

Where is Vietnam in the AppWorks market expansion strategy? How will AppWorks approach the Vietnam market in the near future? Can you give your assessment of the potential to develop technology trends in Vietnam? 

Vietnam is a market with incredible potential. Aside from Indonesia, there is probably no other country that offers both the scale and the growth story. Vietnam has a large and young population, a fast-growing economy, a rising middle class, and massive talent pool. The country’s economic development, rapid urbanization, and digital adoption over the past three decades—going from one of the poorest countries in the world to comfortably middle-income—has also been nothing short of a miracle. Collectively, these factors have opened up an abundance of opportunities for tech startups, ranging from logistics to education to healthcare.

Vietnam exists as one of the several countries where many AppWorks founders have started up or launched operations, and it will continue to be a central focus of our research and investment.

And even with the incredible economic stress and shifting investment landscape brought on by COVID-19 and the health crisis, strong and durable economies like Vietnam will remain important centers for startup growth.  

Please talk more about the Founder Forum series in Taiwan and Vietnam? What is the big lesson you want to convey through the sharing of guest tech founders at events? The impact behind the success of each of these events? 

Being a founder is hard. There are so many things going against them, whether it’s technology, talent, regulations, or competition. And above all else, it’s incredibly lonely being a founder. With Founders’ Forum, we’re trying to get entrepreneurs to talk to each other, learn from each other, swap experiences, stories, and playbooks. At the end of the day, we want to help them shortcut failures and increase the probability of success. And if nothing else, they can hopefully walk away with a new friend, partner, or mentor. 

The trend of entrepreneurship spread around the globe thanks to the explosion of technology. The line between success or failure is super thin. What skills should startup founders cultivate to have a chance at success?

Even in the best of times, in the early stages, founders need to learn how to do less with more, and validate assumptions with limited resources, while moving fast in a hypothesis-driven manner. After finding a scalable business model, founders can then start focusing on cultivating their leadership skills, specifically as it relates to things like communicating effectively and operating efficiently. In the long-term, learning how to foster a dynamic, sustainable culture to develop talent from within will also be paramount.

Through the activities at AppWorks, how will you inspire the young founder community in GSEA?

We believe in paying it forward. Our community is now 10 years old, encompassing over 1,100 founders across GSEA, all of whom have spent time in our six month accelerator program. Many of these founders have gone on to build some great businesses, achieve significant milestones, and accumulate invaluable experiences that they want to share with other young founders who face obstacles similar to what they faced at an early stage.  

For any founder participating in our accelerator, this becomes their network, for them to tap into to obtain the knowledge and key insights built up through years across several markets in GSEA. We will continue to facilitate sharing sessions and workshops to help these founders pass on these insights and inspire the next generation of founders.

The following is an excerpt from an interview with AppWorks Analyst Jun Wakabayashi, which ran in Vietnam’s The Face on March 17, 2020.

AppWorks is a leading startup accelerator and one of the most active VCs in Greater Southeast Asia. AppWorks Accelerator receives applications for its AI and Blockchain accelerator in Taiwan twice per year. For more information, founders are encouraged to visit appworks.tw, where we publish the application before each cohort period.

Jun Wakabayashi is an Analyst working with AppWorks Accelerator and funds investment across Greater Southeast Asia. Born and bred in America, Jun brings a wealth of international experience to AppWorks. Jun received his Bachelors in Finance from New York University’s Stern School of Business.