A Systems View Across Time and Space
Table 3 Finding and keywords from interviews with 22 IDEs in Thailand on factors contributing to the lack of successful startups/IDEs in Thailand
Interviewees | Interview Finding | Finding Keywords | ||
|---|---|---|---|---|
No | Profession | Business Sector | ||
1 | CEO, Co-Founder | AdTech | • Recent Startup Thailand events fell short t of expectations, potentially due to factors like the COVID-19 situation. To enhance impact, the government should leverage technology from existing Thai companies, benefiting the country's overall products and GDP • Significant salary increases for Tech Talent by banks and large companies pose challenges for IDEs in attracting such talent • Government and educational institutions should play a role in fostering coding skills due to a shortage of Tech Talent graduating each year • The presence of foreign Giant Tech companies like Lazada and Shopee presents challenges for local startups, emphasizing the need for careful consideration of tax implications • Noteworthy disruptions in the Thai market, such as Choco facing challenges, highlight the importance of government intervention to address such issues • In the dynamic tech landscape, the government should actively support Thai Tech Startups dealing with challenges resulting from the entry of foreign players and disruptions in the market | • Startup Thailand Events • COVID-19 Impact: • Technology Leveraging • Tech Talent Challenges • Coding Skills Shortage • Foreign Giant Tech Companies • Market Disruptions • Government Intervention • Foreign Players and Disruptions |
2 | CTO, Co-Founder | AdTech | • IDE success is no longer guaranteed, and media focusing solely on IDE news needs content diversification • Co-Working Space businesses face challenges in the current IDE landscape • The future of Venture Capital (VC) investment in Thailand depends on ASEAN economic trends. Successful COVID-19 management, especially in health-related IDEs, may attract more investor interest • Investors favor IDEs with clear B2B revenue models over B2C models due to concerns about continuous cash burn • The global shift towards Deep Tech IDEs faces challenges in the Thai landscape, including brain drain and the limited size of the market • Establishing Deep Tech or True AI businesses requires substantial funding and regional recognition, presenting challenges for Thai IDEs on a broad scale | • IDE Success Uncertainty • Media and IDE News • Challenges for Co-Working Spaces • VC Investment Future • Investor Preferences • Challenges in Deep Tech Shift |
3 | CEO, Co-Founder | AgriTech | • Our business addresses challenges in accessing agricultural equipment and technology, facing issues with unclear legislation for categorization and tax collection • Venture capitalists seek quick returns, but agricultural businesses take longer to yield results • Recommend establishing a sandbox for experimenting with income tax separation, supported by policies that encourage experimentation, requiring top-down directives for executive support | • Equipment and Technology Access • Misalignment of Timelines with Venture Capital • Sandbox and Policy Support |
4 | Business Development, Co-Founder | BioTech | • Company prioritizes addressing agricultural challenges, choosing government funding to avoid investor control concerns during fundraising • Complex and delayed government funding disbursement raises doubts about the intended growth of the IDE-focused business • Government should create a sustained ecosystem for farmers, as current projects lack continuity, typically lasting only 6 months to 1 year • Universities should develop programs for nurturing IDEs businesses, involving mentors with practical success in the field, not just theoretical academics | • Investor Control Concerns • Government Funding Disbursement • Sustained Ecosystem for Farmers • University Programs for IDEs |
5 | CEO, Co-Founder | BioTech | • IP registration issues lead to reliance on an external company due to prolonged processing at Chulalongkorn University • University communication falls short compared to external firms, missing the promised 2-week response time despite multiple corrections during reviews • Propose transferring invention ownership to the university for independent management • Establishing a separate company raises ethical questions about work quality for faster market entry in Crown Property Bureau-funded projects • Propose special privileges for professors involved in IDEs, allowing the use of IDE work for academic advancements, or extending academic contract time for IDE activities | • IP Registration Issues • Communication Shortcomings • Invention Ownership • Ethical Questions • Special Privileges |
6 | CEO, Co-Founde | E-Commerce | • Decreasing government support for university IDE activities limits opportunities for new-generation innovative businesses, influenced by factors like unutilized student grants and economic challenges such as the COVID-19 pandemic • Previous thin spreading of government support for IDEs among multiple teams led to significantly reduced funding for each, resulting in closures for some teams due to insufficient development funds • The current complex process for securing state funding hinders IDEs, with intricate disbursement procedures and prolonged waiting periods conflicting with their need for substantial and rapid growth • Mentors are crucial for newcomers in the IDE field • IDEs hesitate to seek funding from private Accelerators, limiting their presence in Thailand • Government participation in supporting them would significantly benefit the IDEs ecosystem | • Government Support/Participation • Thin Spreading of Support • Complex Funding Process • Importance of Mentors • Hesitancy toward Private Accelerators |
7 | CEO, Founder | E-Commerce | • Thailand underutilizes technology, missing opportunities, especially evident during the COVID-19 Work From Home situation, relying heavily on foreign tech. There's a call for a mindset shift to extensively use technology in Thai businesses and enhance innovation-driven enterprises (IDEs) • Fostering IDEs requires a long-term perspective, with insights from places like BLOCK71 in Singapore emphasizing continuous knowledge development, grooming, and an IDE-friendly environment • Encouraging Corporate Venture Capital (CVC) with government-backed tax incentives for R&D investments is recommended. Collaborations with market bases, funding, and mentors contribute to IDEs' sustainable growth • Fruitful collaboration between large corporations and IDEs is possible (e.g., Central Group acquiring 75% of MEB), highlighting the potential for rapid business expansion. • Government support through tax incentives for R&D investments is crucial • A mindset shift is needed in larger companies, emphasizing the importance of passionate individuals to drive technological disruption • Timing is crucial, requiring a mindset change in large companies before effective Corporate Venture Capital (CVC) can occur | • Technology Underutilization • Mindset Shift • Long-Term Perspective for IDEs • Corporate Venture Capital (CVC) Encouragement • Collaborations for Growth • Government Support • Crucial Timing |
8 | COO, Co-Founder | EdTech | • Starting a company involves overcoming challenges in accounting, taxation, and legal aspects, emphasizing the need for practical experience to avoid unforeseen mistakes, especially in investor negotiations • Limited companies face obstacles, such as the inability to issue Stock Options to employees, leading to delays and the necessity for stock issuance agreements • Challenges in hiring foreign workers include minimum capital requirements, occupation restrictions, and minimum wage requirements for employees from specific countries • Creating a specialized fund for business investment is advantageous due to clear operational guidelines • Concerns exist about the government's capability to integrate the entire supply chain to foster collaboration between businesses | • Starting a Company Challenges • Stock Options for Employees • Hiring Foreign Workers • Specialized Fund for Business Investment • Supply Chain Integration |
9 | CEO, Founder | EdTech | • Challenges in establishing a Thai IDE ecosystem include team readiness, product-market alignment, and dominance by a few large companies • Government support is sought for policies, legal frameworks, and incentives like tax-free ESOPs, improved pay incentives, and measures such as tax-free investments and matching funds • Issues with fund registration and hiring skilled foreign employees lead IDEs to adopt unconventional hiring methods • Clear fund matching with growth stages, particularly government support for early stage investments, is crucial to prevent businesses and investors from moving abroad • Grants with defined KPIs in the pre-idea stage ensure follow-up and set clear goals for further VC investment • Thailand's lower investment in IDEs than the USA suggests the need for improved tax laws at every growth stage • Lack of competition in the Seed Stage, exemplified by 500TukTuk, leads to longer evaluation times for IDE investments • Clear milestones for CVC, specifying KPIs for each growth stage, are recommended • Sectors like Fintech, Edtech, Agritech, and Traveltech are identified for IDE focus. Deeptech IDEs should engage customers before seeking venture capital, proposing partnerships with large companies invested in R&D • To enhance the ecosystem, supporting CVC investments in IDEs for mergers and acquisitions is suggested • Clear processes for growth acceleration and acquisition timelines should be established for a conducive IDE environment in Thailand | • Thai IDE Ecosystem • Government Support • Fund Registration and Hiring • Fund Matching for Growth Stages: • Grants in Pre-Idea Stage • Tax Law Improvement • Lack of Competition in Seed Stage • Clear Milestones for CVC • Focus Sectors for IDEs • Supporting CVC Investments • Establishing Clear Processes |
10 | CEO, Founder | FinTech | • Thai IDEs face obstacles competing with foreign counterparts due to legal limitations, leading to higher costs compared to foreign exchanges without similar requirements • Legal constraints impede certain activities in Thailand • The country lacks rapidly growing technology firms, reflecting a global trend • Thailand's middle-income status over the past 10–20 years limits technological advancements, especially in technology-based businesses, risking loss to foreign entities • Absence of services like Line or Grab in Thailand is attributed to the country's lagging legal framework • Bitkub, a significant Thai-owned financial platform, exists due to resistance against external pressure • Tax disparities with foreign platforms present challenges for Thai authorities amidst global technological advancements | • Legal Limitations • Lagging Legal Framework • Lack of Technology Firms • Middle-Income Status • Resistance Against External Pressure • Tax Disparities |
11 | Co-Founder | FoodTech | • Challenges for academic founders, emphasizing limited business expertise and the importance of well-connected board members for networking and development • Legal challenges in healthcare, particularly customer unfamiliarity and complex registration processes in Thailand • Emphasis on the need for universities to raise IDE awareness among faculty and students, highlighting the positive impact of IDEs on universities through published works and attracting individuals interested in innovative ventures | • Talent Challenges • Legal Challenges in Healthcare • University Awareness and Impact |
12 | CEO & Co-Founder | FoodTech | • Scalable operations and a substantial market are crucial for IDEs to attract investors and potentially become Unicorn Startups • IDEs mechanism involves joint ownership for collaborative product development, inspired by Google's approach • Clarity is lacking in ESOP and Convertible Note regulations in Thailand, requiring clearer rules for employee ownership • Thailand's incomplete Investment Ecosystem needs a Startup Hero for substantial growth, as quantitative support lacks a focus on individual success • Government engagement in IDEs procurement could catalyze Thailand's first Unicorn Startup • Collaborative efforts between public and private sectors are more effective than mere financial support • Legal adjustments, aligning with practices like Singapore's, are essential for building trust and attracting more investors • Universities should focus on Deep Technology research, emulate models like MIT, and foster entrepreneurship by adapting curricula and encouraging investment Holding companies | • Scalable Operations and Market • IDEs Mechanism • Regulatory Clarity • Incomplete Investment Ecosystem • Government Engagement • Collaborative Efforts • Legal Adjustments • University Focus |
13 | Co-Founder | Health Tech | • Limited IDE investments in Thailand prompt businesses to diversify into SMEs for survival • Safety concerns make launching a Health Tech Startup challenging; a broader experimentation sandbox would be beneficial • State-level medication data linkage could significantly benefit Telemedicine businesses • University education lacks direct relevance to IDEs, emphasizing the need for practical experience and an expanded business-related curriculum • Initiating innovative ventures is smoother within universities; the government should enhance the Investment Ecosystem to better support innovation • Small companies face growth challenges | • Limited IDE Investments • Health Tech Startup Challenges • Telemedicine and Medication Data • Relevance of University Education • Innovation Initiatives within Universities |
14 | CEO, Co-Founder | Health Tech | • Government should regulate caregiver services, register service centers, and emulate standards from other countries • Private sector involvement through CSR projects can support Thailand as a hub for elderly care information • Universities should engage in impactful research collaborations beyond statistical studies for genuine planning and development • Government should study Singapore's successful innovation ecosystem and consider registering Thai IDEs there for a supportive business environment • Streamline legal and business processes, with state funding for IDEs focusing on viable projects over fragmented initiatives • Universities should collaborate on research projects aligned with both private and governmental initiatives to avoid redundancy and ensure comprehensive impact • Foster private–public partnerships for innovation projects, encouraging collaboration with universities instead of expensive foreign consultations • Address Thailand's challenges by researching impactful areas for the economy and encouraging real investment • Establish independent units with ethical leadership to oversee and drive innovation projects, akin to publicly traded companies • Encourage skilled individuals, both Thai and foreign, to return and contribute to innovation, seeking expertise in various fields for mentoring success • Recognize successful business leaders with diverse educational backgrounds and consider them as centers for collaboration to drive innovation in Thailand | • Government Regulation • Private Sector CSR Involvement • University Research Collaboration • Successful Innovation Ecosystem • Streamlining Legal and Business Processes • Collaboration and Avoiding Redundancy • Private–Public Partnerships for Innovation • Addressing Challenges through Research • Independent Units for Innovation • Encouraging Skilled Individuals • Diverse Educational Backgrounds |
15 | Co-Founder | Health Tech | • Legal challenges in healthcare involve customer unfamiliarity with new products, particularly when inquiring about their legal status • Registering new substances in Thailand is a lengthy process, requiring submissions in the United States and Europe before approval in Thailand • Universities should recognize the positive impact of IDEs, generating published works and attracting individuals interested in innovative business ventures | • Healthcare Legal Challenges • Lengthy Registration Process • University Recognition |
16 | CEO, Co-Founder | Health Tech | • Encourage tax-deductible donations to IDEs affiliated with universities (Cloud Funding), acknowledging the challenge of navigating associated processes • IDEs struggle to hire foreign talent due to stringent visa requirements, including impractical 2 million baht registered capital per foreign employee and restrictions through the Board of Investment (BOI) • Tech Fund disbursement processes involve post-completion payments, creating challenges in income statement management with upfront expenses and delayed income • Contract inflexibility during the innovation phase hinders adaptability to market changes. Call for more flexible, feasible contracts reflecting the dynamic nature of IDEs | • Tax-Deductible Donations • Hiring Challenges • Tech Fund Disbursement • Contract Inflexibility |
17 | CEO & Co-Founder | InsurTech | • Government struggles to implement Employee Stock Option Plans for limited companies, hindering share transfers to employees, especially in public companies • Stock use as loans is prohibited, preventing debt-to-equity conversion and preferential share holding by investors • Innovation business funding prioritizes quantity over quality, signalling a need for a shift towards quality-focused funding • Appointing fund managers for state funding oversight and scrutiny by the Office of the Auditor General are essential for recognizing genuine context and risks • Government structure leads to project abandonment, requiring comprehensive support for unicorn startups and a holistic investment ecosystem • Private sector in Thailand favors foreign technologies; encouraging foreign innovation businesses is crucial, with government involvement in investment • Shifting the ecosystem mindset, canceling non-government tasks, and addressing legal complexities, such as FinTech regulations, are crucial for success • Universities should open incubation opportunities to diverse participants, not limiting support to their students or alumni | • Employee Stock Option Plans (ESOP) • Stock Use Restrictions • Funding Prioritization Issues • Oversight and Scrutiny • Government Structure Challenges • Private Sector Preferences • Ecosystem Mindset Shift • University Involvement |
18 | Co-Founder | PropTech | • Major companies in Thailand's IDE sector are expected to enhance existing IDEs, posing a challenge for smaller entrepreneurs facing competition from internally developed technologies • Current challenges include a shortage of tech talent, leading to intense competition for skilled professionals • The impact of the COVID-19 pandemic has forced some IDEs to downsize or pivot for survival, hindering business expansions and foreign investor assessments • In 2023, investment trends favor E-commerce, Fintech, and data-driven businesses, while Deep Tech IDEs face challenges due to complexity and patent-related issues • Despite challenges, the key factor for Thai IDEs is the importance of support, including mentors and advisory units, crucial for resilience and growth • The absence of new investors and limited support suggests a stagnant innovation environment, but established businesses in E-commerce continue to attract investment | • Tech Talent Shortage • COVID-19 Impact • Deep Tech IDEs challenges • Key Factor Support • Investor Environment |
19 | CEO & Co-Founder | PropTech | • Local businesses in Thailand lack the skills and experience compared to foreign counterparts, despite the emphasis on experience by entrepreneurs • Government initiatives to establish innovation ecosystems have not effectively conveyed the innovation business loop to many local businesses • Legal flexibility, as seen in Indonesia, could benefit private businesses in Thailand • Angel investors lack clear incentives and understanding of the innovation business loop • VC investors hesitate toward Thai IDEs due to perceived lower growth opportunities and higher risks • Corporate Venture Capital (CVC) invests in IDEs but often acquires technology or talent without contributing to further development • Thailand's openness to trade and investment may disadvantage local IDEs • The government should define a focused sector, supporting areas like Food & Agriculture, Health, and Sustainable Energy • VC fund managers must understand both investment and the university's diverse fields • University holding companies should have a clear objective for promoting innovation businesses and avoid involving academic personnel in business management • Explicit regulations for holding companies are essential for confident and legally compliant decision-making, considering current legal risks in universities | • Skills and Experience • Ineffective Innovation Ecosystem Communication • Legal Flexibility • Angel Investors • VC Investor Hesitation • CVC Acquisition Challenges • Trade and Investment Environment • Government Sector Focus • VC Fund Manager Knowledge • University Holding Companies • Regulatory Framework |
20 | CEO & Co-Founder | Tech | • Research funding system hinders focus by frequently shifting topics, leading to insufficient support • Public sector research pricing avoids initial losses, limiting competitiveness and discouraging risk-taking in the Valley of Death • Domestic focus of IDEs without advanced technology restricts global growth • Insufficient support for matching researchers with businesses • Public sector's researcher development system lacks an entrepreneurial mindset • Utilizing Key Performance Indicators (KPIs) in research | • Research Funding System • Public Sector Research Pricing • Domestic Focus of IDEs • Insufficient Support for Collaboration • Researcher Development System • Utilization of KPIs (success measurement) |
21 | CEO & Co-Founder | Tech | • Government's inadequate IDE support forces businesses to prioritize SMEs for survival • Universities should nurture entrepreneurship from students' academic years, preparing them for seamless business startups • Thailand should offer more activities for IDEs to enhance skills and foster collaboration for efficient future teams • Companies eschew seeking investment to maintain control, opting for slower growth aligned with their vision • Our company relies on technology for streamlined operations, minimizing workforce needs and optimizing costs | • Government Support • University Entrepreneurship • IDEs Skill Enhancement • Avoidance of Investment • Technology-Reliant Operations |
22 | CEO, Co-Founder | Tech | • Challenges include difficulties in patent protection due to the ease of copying work with slight code modifications • Other obstacles involve tax complexity, personnel matters, limited access to funding, and the dominance of large Thai companies hindering innovative businesses • Obtaining funding from Tech Funds is slow and involves manual processes • Suggested improvements include digitalization with a centralized database for easy information retrieval and streamlined business operations | • Patent Protection Challenges • Support Challenges • Slow Funding Processes |