by AUFA MARDHIAH
MALAYSIA is too focused on the glitz and glam innovation and less on the early-stage development of mid-stage start-ups, according to a Tech in Asia article.
For that, it said, Malaysia’s plan to farm unicorns will fail.
Cradle Fund Sdn Bhd senior VP for ecosystem development Ahmad Kashfi Alwi said the negative view provides Cradle Fund a fresh vantage point as to how Malaysia should go to market and assist its start-ups.
Furthermore, the group’s records show that unicorn births have dropped by 50% in the last quarter, confirming its belief that the crisis is global.
To combat this situation, Cradle Fund has applied several fundamentals in its system to help Malaysia’s start-ups.
Among them are that founders must be visionary to change the world by fixing market inefficiencies, as well as addressing and solving customers’ pain points.
Secondly, start-ups need to have a strong product proposition that will allow the transmission of innovation through their product as a conduit.
Thirdly, start-ups must have a clear path towards profitability and a strong business model that will ensure the sustainability of their ventures.
Last but not least, start-ups need a strong pitch for their investors and customers as the latter are not just buying a product, but also solutions and innovations. Nevertheless, success does not come by chance.
Ahmad Kashfi said Cradle Funds faced several challenges in achieving its goal to create 5,000 quality start-ups by 2025.
These included a lack of corporate sector participation, a lack of talent to build more innovations to solve people’s pain points, getting to market channels and ideation platforms for start-ups to build ideas into successful ventures.
Design Bespoke Programmes
Looking at the typical start-up lifecycle, Ahmad Kashfi believed that designing bespoke programmes that cater to the local start-ups at each stage of their life cycle would give them a fighting chance to survive.
Cradle Fund launched its MyStartup initiative following its data that 90% of start-ups fail in the first three years of operations.
Ahmad Kashfi highlighted that MyStartup — as a government initiative — aims to build an inclusive and sustainable start-up ecosystem for the future while also being cognizant of the needs of the current generation, and balancing between environmental sustainability, social wellbeing, transparency and good governance.
“We started to see results in less than two years,” said Ahmad Kashfi during a session at the Energy Asia 2023 conference recently.
The MyStartup initiative comprises several components — ideation-based threat, where Cradle Fund runs a national-level hackathons that allow start-ups to work closely with various agencies and ministries in solving real-world problems.
There are also enrichment programmes to match mentors with start-ups and place interns into start-ups; 33 accelerator programmes geared to assist start-ups in refining their minimum viable products and accelerator programmes geared towards more mature start-ups looking to fundraise.
Looking forward, Ahmad Kashfi said Malaysia has to broaden its horizons, explore beyond its current market and look at other opportunities.
For example, Cradle Fund examined the current trends that drive the environmental, social, and corporate governance (ESG) agenda (based on the top 10 energy industry trends and innovations in 2023) and discovered that renewables are the largest contributor to impact in this vertical and discovered the importance of the Internet of energy and the long tail of other tech trends such as energy storage and blockchain, among others.
“By date, this presents us with a huge opportunity to further accelerate and invest in start-ups within the space.
“Our intent, purpose and goal is to be the hub for start-ups. For this, the government is committed to providing the necessary platforms for funding and for our current start-ups to accelerate. However, we need the participation from everybody to make this a reality,” added Ahmad Kashfi.
More ESG Awareness
Ahmad Kashfi has seen an increase in companies venturing into renewables and the Internet of energy.
“There is demand for start-ups that drive impact in the sectors due to ESG and sustainability being an important agenda these days.
“More and more start-ups are also starting to embed ESG as part of their business model and we strongly believe that sustainability should be part of their business model, not just a green-washing agenda,” he added.
- This article first appeared in The Malaysian Reserve weekly print edition