By Gopi Ganesalingam, Vice President, Enterprise Development, MDEC
Buoyed by a long history as a hub and gateway between East and West, Malaysia continues to be well positioned in the digital world today with much to offer globally.
Malaysia’s digital economy has contributed 18.3% of overall GDP in 2017, according to the Department of Statistics Malaysia (DOSM). Entrusted to lead Malaysia’s digital economy, Malaysia Digital Economy Corporation’s (MDEC’s) key aims include fast tracking notable homegrown tech companies into regional and global markets.
I am pleased to note that this year, we have seen many of our tech companies move up to a new plateau. Before I talk about this exciting milestone, let me spend a few moments on how this story began.
Back in 2014, MDEC noted that we lacked global tech players, which can often act as juggernauts – driving the creation of skills, new jobs, innovation, higher revenues, and higher Gross Domestic Product (GDP). To address this, MDEC created an initiative called the Global Acceleration Innovation Network (GAIN) programme to identify and help companies scale up rapidly.
Companies selected for the GAIN programme need to have a very good, scalable business model, which is based on a digital platform, and energised by vision, determination, the right team and of course the passion to expand globally.
When I took up the helm of GAIN on 1 February 2015, adopting an entrepreneurial spirit within the GAIN team was of paramount importance. The effectiveness of the GAIN platform is really powered by four pillars: market access, mentorship, visibility, and access to finance/investment matching for expansion.
We knew we already had the entrepreneurial and innovative potential within Malaysia, borne out of a long history of rich diversity in our nation. The challenge was in bringing together the right platform for companies to takeoff and grow fast.
A new plateau
Today, our digital economy is mature; we have a diverse set of companies on the GAIN platform across sectors that include cloud, big date, IoT, eCommerce, cybersecurity, drone technology, robotics, finance and FinTech.
This year, we are continuing to perform well and our companies are expanding within and beyond ASEAN. We are also continuing to look at market immersions and market access into the Middle East, Eastern Europe, India, China, and Australia. We are also looking into innovation and funding capacity in Japan and the US.
In the last three months alone, we have seen our local tech companies taking off into wider arenas. These include Aerodyne, which has shown phenomenal growth from when the company joined the GAIN programme. From two markets, Aerodyne, which is listed within the top #3 in the world of drone services, now operates in more than 25 markets, and now is “paying it forward” by collaborating with us in forums and market access initiatives.
Other examples of local innovation that I’d like to highlight include: Soft Space, which is now recognised to be #1 in the world for ‘soft sim” technology; MyBiz, which won #1st place in the World Procurement Awards; GHL was named by Edge to be part of the Billion Ringgit Club, and we must not forget Pentamaster, Vitrox and Elsoft, both of which were named and featured in Forbes Asia’s 200 Best Under a Billion Dollars. The success of these companies clearly demonstrates that our first plateau, to help GAIN companies grow into ASEAN tech champions, has become a reality. Now, we want to elevate them into the global arena.
In terms of numbers, we took 150 companies and measured their final revenue in 2014, then in 2017 and so on. We found that the average revenue Compound Annual Growth Rate (CAGR) for a tech company was 16%, while companies on GAIN programme were growing at 170% CAGR over three years. When we looked at export revenue, ‘normal’ tech companies were growing at 27% CAGR, while the GAIN companies were growing at 47%. We expect these numbers to grow as we expand into more countries.
It is clear that our nation’s GAIN story is continuing to gather momentum. This year, companies on the GAIN programme are forging ahead boldly.
Mindset change: Pay It Forward
When journalists ask me what excites me about GAIN, I can talk endlessly about all the different aspects of the platform! But if pressed to give one answer, I would say I am delighted by the definite leap ahead in ‘mindset’ by our GAIN company leaders.
This visionary shift owes much to the Silicon Valley Immersion programme. Indeed, this programme has proved to be a key pivot in effecting this mindset change. We’ve facilitated the immersion programme, which is run by entrepreneurs, for three years. Basically, the aim was to echo and build on the ‘thinking’ behind Silicon Valley’s innovative, entrepreneurial ecosystem.
We take about 65-70 of these entrepreneurs to Silicon Valley, where they learn how the ecosystem works, how the thinking works, how ‘paying it forwards’ works, how to cultivate talent and innovation, how to develop business models, and so forth. And they bring these learnings back into the Malaysian ecosystem. This is another key move in the GAIN programme: these mentors build on their Silicon Valley experience; they have learned how mentorship can be done effectively and efficiently for the mutual benefit of both parties.
Today, these mentors are mentoring startups, and some have even invested into up and coming concerns.
As I have said a few times recently, mentoring is fuelled by the power of “paying it forward.” The mentors help the startups avoid mistakes; offer insights, and open doors for them. But the mentors also learn from helping these new startups. Some of the mentors are from the ‘old school,’ but when they start talking to the younger entrepreneurs, they start looking at the digital platforms being created, and basically they are disrupting themselves (some even acquire these companies).
Storytelling and the Global Arena
In an earlier piece published in March 2018, I talked about the power and critical importance of storytelling. I wrote at the time that the next chapter of a company’s growth story demands answering the overpowering need to stand out from the crowd. This will always remain a challenge for most companies throughout the entire life cycle of the company: it’s the pressure to adapt.
Visibility is powered by storytelling. You can’t build a powerful brand without addressing the challenge of finding and telling your story.
I think we currently lack both in Malaysia; it’s probably a cultural thing. In the three years that I’ve been working in GAIN, we have found so many companies with absolutely great products who have yet to break out. We help them by running programmes about storytelling and how important it is. Tackling topics such as: How you tell a complete story in 30 seconds (elevator pitch); How you say it in 1 minute; in 5 minutes; in 30 minutes” This is very important for an entrepreneur, whether it is to market, to brand, to raise money; storytelling essential.
Incidentally, I find it slightly ironic that while some of our tech champions are beginning to gain renown regionally, and even globally, yet they still find it a struggle to truly unlock their potential in our own market. In football, ‘home advantage’ is the well-known inclination for teams to perform better at their home ground than in ‘away matches,’ – and its existence is well known in a wide range of team sports. In the same spirit, it would be wonderful for us as Malaysians to appreciate and support our homegrown companies here!
As I said, one of MDEC’s key aims in leading Malaysia’s digital economy includes helping homegrown tech companies grow into global tech icons. A great deal of this comes back to storytelling as a key driver of visibility. Let’s continue to turn the tide by telling our great stories of what we have to offer – globally and locally!