Prediction Discussions

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I like Patrick and we chat occasionaly so this is not a bashing post but just thinking about his predictions and my opinions on them.

1. Southeast Asia becomes a bigger internet market than America

I think if we are talking raw numbers then I guess so but when it comes to money spent and ease of payments I still think America is a bigger prize for an internet company but depends on the product. But yes, SEA is big and getting bigger. Fund place to be.

2. Funding will be harder to get (so conserve what you have)

I do not think I agree. I think funding is always hard but there is plenty of capital right now. What has changed to me is that the easy money may be coming to end and people who fund things wants to see real products, traction and ideas that can turn into real businesses. So the powerpoint insta startup days that get money before customers is probably over.

3. At least three companies will raise 9 figure rounds (USD100 million+)

I am guessing Patrick is speaking from first hand knowledge here and I think he may be right. Regardless the region will see more B,C, and D rounds which means bigger and bigger checks.

4. There will be another exit in excess of USD500 million

Agree. I think M&A activity will grow and possible an IPO here or there. That will be something to watch – Garena may be the first. Let’s all hope whoever gets out of the IPO gate does well since that will set the tone for everyone else.

5. The Year of China

Probably true but I think it not the same ways some imagine. I think China will continue to fund things, buy things, and be at the forefront of startup activity but I am not a beleiver that Chinese products will be able to get big outside of China. To be clear there are some Chinese companies such as MeiPai that have quietly built the world’s selfie and camera apps. Most users do not know it is Chinese and don’t care. In fact I think that strategy is devised by them but on the flipside if somone asks me will Alibaba win ecommerce in SEA or Amazon and I will tell you it is Amazon. Why? They just have a better stack and will appeal to more of the region’s sensibilities than Alibaba will. I will also add that I will vote for Amazon on the idea that until China opens up its markets to everyone for competition that I will choose the non-Chinese product. Going to be an epic battle for sure and good for the consumer.

6. There will be a widespread embrace of Fintech

In theory this should be true but I think the space is harder than people want to admit to. Banks are not wanting to be disrupted and they hold tremendous power. Regulations are not easy and many companies need to get regulatory approval prior to getting customers. On top of this any sort of regionality for most fintech products is quite difficult. In general I am bullish that there are lots of finance problems to solve but executing is harder than most people think.

7. Every week, a different startup will run out of money

Probably true. Why? Go back to number 2. Most startups should not have gotten the money in the first place and will have a hard time raising the money to keep going. Also many startups are realizing they don’t have a business or real revenue. These will fail. It’s okay. This happens.  It will be a nice cycle of housecleaning and will mean real startups can pick up the pieces, distressed assets and grab employees. All good.

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