How Great Founders Win: Insights from 200 Founder Interviews in Southeast Asia

28 May 2020 / By Brian Ma

Iterative is an operator-led accelerator modeled after YC. We invest US$150K into promising early-stage startups, then rigorously help founders navigate early-stage startup challenges in a 3-month program to facilitate their raising a Seed / Series A round comfortably. Investing in all of Southeast Asia (Singapore, Indonesia, Vietnam, Philippines, etc.), we’re particularly fond of Fintech, SaaS, marketplaces, AI, healthcare, and consumer.

In March, I wrote a post about why Southeast Asia is the next big opportunity and how we think the biggest thing lacking right now in the region is a network of strong operators that have done it before for founders to tap into.

Since then, my partners and I had the privilege of talking to over 200 founders in Southeast Asia to select 9 for our Summer 2020 accelerator batch. We’ve been impressed by the quality of founders in the region and wanted to share what we’ve learned in the process. Whether you’re a current or future founder, our hope is insights like this will help you better play the startup game – to prepare for what investors look for in founders when making an investment.

Attributes of Great Founders

Defining the “quality” of founders was an iterative (pun intended) process. After sifting through all our call notes, I’ve highlighted what some of the most important yet non-intuitive reasons why we choose some founders over others.

1) Great Founders know their most important numbers

Every business is driven by only a couple of key numbers. Good founders know their growth rates, conversions rates, 30 60 90-day retentions, default or origination rates (for Fintech), average loan size, revenue growth, cogs, etc. You get the point. Great founders know which numbers actually matter the most, along with their strategy to rapidly improving them.

If you’re a consumer app, a very typical example of this in the early stages is trying to prioritize whether you spend your efforts on acquisition, activation, retention, or revenue. They’re all important, but which one do you choose first and why, or should you tackle some in parallel? That all depends again on your product, benchmarks, and actual numbers. If you’re a mental health app, your biggest challenge might be a “leaky bucket” because of a lack of content – users are leaving after they consume your catalog so you might want to work on that first. If you’re a “uber for cleaners” marketplace – maybe <10% repeat usage is ok (most cleanings are ad hoc deep cleans), so your efforts may be better spent on increasing spend, decreasing Customer Acquisition Cost, and monitoring pay back periods.

Great founders know their numbers, can articulate which ones matter, and have an opinion on where the biggest opportunities are.

2) Great Founders are realistically ambitious.

Being ambitious is easy. Being realistically ambitious is much harder. This typically looks like the ability to plot a reasonable path to a $1B valuation company through (1) deeply understanding the ‘real’ size of their markets; (2) having a very clear strategy for distribution; and (3) having some critical insight about what makes their business defensible from future competitors.

Good and great founders will both have done their Total Addressable Market (“TAM”) research, but great founder’s world domination plans are realistic. Let’s say you’re a B2B expense management platform, and you realize your total market size in Singapore is ~$20M. Crap, VC’s won’t like that. A good founder would probably think let me tell them now that I have credit card transactions of these corporations, I can easily expand to doing their accounting, maybe even lending against their inventory, or being their bank. A great founder would have considered all those paths, explored them, and crossed out all except the closest adjacencies. Plenty of companies are singularly focused on being neobanks, accounting backends, or even direct SME lenders. What is your specific insight that gets you to be a better fit than them? Any or none of these could be the right direction. Maybe you should just land grab into other regions with your same product.

Great founders deeply understand the core value of their business and how to expand systematically rather than haphazardly. They are realistically ambitious.

3) Great Founders know what makes their markets defensible.

The one insight that got clearer to me over time is to be a Southeast Asian company, you really need to understand why you’re particularly suited and differentiated for this market. You can’t just be an Airtable clone, or an Airbnb clone, Redfin clone, or a Quickbooks clone unless you had some reason of why those large companies can’t just do the same thing and crush you. (Yes, we ran into all of these).

Specific examples of good reasons would be “all Singaporean companies require this specific audit” that QuickBooks doesn’t cover, or “it turns out 75% of the Singaporean market is HDB’s (government housing), which works very differently than traditional housing market trades”. My partner Hsu Ken likes to say “Turns out the Instagram of Southeast Asia is just Instagram, but the Uber of Southeast Asia is Grab.”

Great founders understand specific insights they have into their markets and use those to build moats around their businesses.

Stay one step ahead.

If you’re already working on a startup, or are thinking about making your own entrepreneurial jump, hopefully this article helps you a bit think through what to focus on or traps to avoid. While I was impressed by a more significant number of founders than I had expected, it’s sometimes instructive to look at why we passed on some great founders with creative ideas. Next month, I will provide further insights on this topic. Stay tuned.

We’ll also be following up with an announcement about our batch companies soon. If you’re interested in following us on our journey, please subscribe to our blog here. Just scroll down to the bottom to subscribe.


About Brian Ma

Brian Ma is a three-time founder turned investor. He’s now Managing Partner at Iterative, which invests in early-stage companies and runs an accelerator focused on Southeast Asia. Iterative’s mission is to fund and build the next unicorns in Southeast Asia. Brian was previously founder at Divvy Homes (backed by a16z, GIC, Caffeinated Capital and Max Levchin), Weaved (YC S14 acquired), and Decide (Series C Company acquired by eBay).

Brian has been trying to convince his wife to move to Singapore so if you have tips on where to live (and most importantly, eat cheap delicious food), you should reach out.