As we’re progressing into the age of digital economy, it is no longer about putting Thailand on the map as merely a tourist destination. It is perhaps time, a long overdue one, for the Land of Smiles to turn the page and venture out of its comfort zone—to rectify what is no longer working, to adjust to changes and to catch up with the rest of the world. Embracing the new economy entails a transformative shift from being an agricultural (Thailand 1.0) and industrial-based (Thailand 2.0-3.0) country to a value-driven one. More simply put, we are moving on from a nation that teems with cheap, unskilled labour to one with more emphasis on creativity- and knowledge-based businesses that contribute towards a new phase of boundless opportunities.
But it will take more than a couple of speeches and a marketing gimmick to push the stagnant economy forward and out of the current middle-income trap. Our government’s objectives for the transition into Thailand 4.0 seem straightforward—to elevate the country’s competitiveness with digital innovation, to generate equal opportunities through information and digital services, to develop human capital to serve the digital era and to revolutionise government operations for better transparency and effectiveness. The question is, can we achieve these goals within the planned 20-year timeframe?
While there are several different areas we can discuss regarding the hopeful formation of Digital Thailand, we’re going to explore how local tech startups, although still at its early stages, are perhaps the most exciting players in this roadmap. Dubbed the new economic warriors, they are vital in driving the country’s digital ecosystem towards the right course. To gain a greater understanding of Thailand 4.0 and more insights on the growing startup sector, we meet with some of the local spearheads of the industry— Sompoat Chansomboon, DTAC’s director of business innovation and dtac Accelerate; Tiwa York, head coach at Kaidee; Natavudh Pungcharoenpong, venture partner at 500 Tuktuks and co-founder of Ookbee and FavStay by PomPome; as well as Amarit Charoenphan, co-founder of HUBBA and Techsauce Thailand.
“We see ourselves as a small family for thais who have big dreams—dreams that would create better lives with the help of technology” — Sompoat Chansomboon
As they all agree, Thailand 4.0 is about stepping into the digital economy age, enabling people to have easier access to technology and encouraging them to make the best use of it. “Numbers aside, it is really about having a mindset placed on embracing new business models, creative destructions and innovation; it is about solving local and global concerns on an easily applicable and scalable level,” adds Amarit. And, as Natavudh comments, Thailand needs to act fast. “Today, for instance, companies are paying huge sums of cash for advertisements on Facebook and Google. But we have to keep in mind that these are not local companies; that our money is going out of Thailand and to those countries. So it is important to have our own players.”
While startups are only one aspect of a much wider network, they play a significant role in boosting the economy. “Millenials are really driving the startup ecosystem and challenging the status quo of how we do things,” says Tiwa. “And by them activating new ideas and opportunities, I think that’s truly building the foundation for Thailand in the future.” Sompoat gives us an example from dtac Accelerate. “Within less than 24 months, the young entrepreneurs under our portfolio were able to create a company value of around two billion baht altogether, and they are growing 500 per cent each year. Imagine how long that used to take 10 years ago? So this is huge. You will also see that over 70 per cent of our startups can secure their own funding, bringing foreign currency into the country,” he shares.
But in order for startups to thrive, what is needed is a supportive ecosystem that allows entrepreneurs to fully focus on being innovative. “Without funding, a lot of great ideas will not have the capital to be developed. Without government support, they might not be able to launch due to regulatory and tax issues. Without great service providers, they might have to spend enormous amounts of money on legal fees or IT protection. So startups are not the only heroes—it takes more people from varying segments to help these players operate at their highest level,” says Amarit.
So, with increasing buzz surrounding the tech startup scene, is there enough support? In 2016, the Thai government launched a striking 20 billion baht fund to finance the growth of local startups. But all four interviewees agree that money is not the biggest issue, as what startups need in order to grow is a substantial list of regulatory support. “Having the right business structure and policies in place will push stronger growth and attract more investments,” says Tiwa. “The reality is that it is easier for entrepreneurs to set up companies or invest in businesses in other countries, be it Hong Kong or Singapore.”
“It’s a very competitive space where other countries are not being passive” — Amarit Charoenphan
We ask the gents about the regulatory adjustments that could make big impacts on our startup ecosystem and allow for new business models to emerge, and they pretty much agree on the same concerns. “Matters like peer-to-peer lending or stock options for employees are still in the grey or illegal area in Thailand. Many are also comparing Thailand to our neighbours, where they have incentives for investments in startups or have grants and policies that encourage people to become entrepreneurs and investors. Then there’s also our uncompetitive tax structure,” Amarit shares.
Natavudh tells us that huge amounts of funding could go to waste and even damage the digital ecosystem if wrong investment decisions are made. “A better option would be to initiate a proper fund matcher that would pair them up to the right investments,” he says. “It’s a very competitive space where other countries are not being passive. They are actively recruiting talented professionals to join their country,” Amarit adds. And speedy execution is a must. “In a time when startups live and die by the day, when mobile applications could be built in 72 hours or when businesses could grow in two years, it is really difficult for entrepreneurs to have the patience to wait many years for the regulations to change.”
What we’ve discovered is that the startup community is not just strictly business. It is a tight knit circle in which members offer genuine support to one another and all share a mutual goal: impacting lives through technology. The reason may be because Thai startups are still at their infancy stage—we don’t have what tech people call unicorns yet (ones with a value of over one billion US dollars), while countries like Indonesia, Malaysia, Singapore and Vietnam all have their own. “It’s still very new so people are still confused. When a bunch of confused people come together we sort of need to help each other out,” laughs Natavudh. Tiwa agrees: “There’s still a lot of educating and maturing to do. At Kaidee, we’re an elder brother to younger startups, giving them the guidance they need especially when they’re not sure what to do next. And this is simply out of our support for Thailand because we think we can grow together.”
Led by venture partners Krating Poonpol and Natavudh Puncharoenpong, 500 Tuktuks is under 500 Startups, a global venture capital seed fund and startup accelerator that has invested in around 1,800 tech businesses. 500 Tuktuk is the first major Silicon Valley accelerator and seed stage investor in the local market. Having launched in Thailand for 18 months now, they manage 15 million US dollars in assets and have invested in around 35 startups. According to Natavudh, their plan is to invest in at least 100 companies over the next three years.
Director of business innovation Sompoat Chansomboon tells us how incubator programme dtac Accelerate is helping to strengthen the local startup sphere. “We see ourselves as a small family for Thais who have big dreams—dreams that would create better lives with the help of technology,” he shares. Established in 2013, it will be launching is fifth batch, and a four-month intensive bootcamp, in May.
With a budget of around 100 million baht per year, the accelerator house emphasizes helping early-stage startups spiral their success with world-class curricula, intensive mentoring by local and international experts (imagine prominent tech names such as Nir Eyal, Scott Bales and Ash Maurya), investment opportunities and business support. “We are bridged to more than 25 venture capitals under our network, which is why we can confidently say that 70 per cent of our startups receive secure funding and grow very fast,” Sompoat tells us.
Head coach Tiwa York shares that Kaidee started of as an intrapreneur venture. Launched in 2011 as DealFish, rebranded to OLX in 2014 and, finally, renamed to today’s Kaidee in 2015, it was founded in the belief that buying and selling second-hand items will help Thai people reduce, reuse and recycle. The company was recently ranked the second “Top Tech Employers” to work for in Thailand by NIDA.
Some fun stats: Kaidee has about seven million monthly unique users with 1.2 million items listed on sale per month. Every 17 seconds, an item is sold, while every two and a half minutes, a car is sold on its platform. In 2016, there were 80 billion baht worth of items sold and about two million items in total. With 264 active categories, its top five includes cars, mobile phones and tablets, motorcycles, Buddhist amulets and property, respectively.
Over the past few years, co-working spaces have been an emerging niche market in Bangkok. Founded in June 2012, HUBBA, the city’s original pioneer of co-working spaces for tech and creative startups started with co-founders Amarit and Charle Charoenphan’s desire to create a shared working space for young entrepreneurs. They envisioned a place where like-minded individuals could connect and inspire one another. Shortly after its inception, HUBBA grew hand in hand with the tech startup scene. “We took off together,” shares group CEO Amarit.
“When we started, a lot of people were already in technology. But there wasn’t events going on, visible investors, accelerator programmes, government interest or much media coverage. It was going to be the future of business and economy, but nobody was talking about it.” A month after their launch, they decided to host their first tech meet-up, in which around 180 people showed up. It was on that day that they realised what an amazing community it was and they wanted to help it grow. With three thriving flagships to date, HUBBA has been connecting many local startups with investors worldwide.
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