The Dichotomy of Startup Ecosystems: Potential Talent vs. Opportunities

Editors Note: Chiraag Kala is an international student from Thailand and is an upcoming sophomore at UC Berkeley. Chiraag is also the Social Media and Marketing Intern at 3 Day Startup. We are excited to share his perspective with you!

As an international student from Thailand currently studying at UC Berkeley in the Bay Area, I couldn’t help but draw some parallels regarding the startup ecosystem in these two regions. Although Thailand is the tourist hub of Southeast Asia with over 20 million tourist visits annually, the startup ecosystem–largely driven by Bangkok–is fairly nascent. On the other hand, Silicon Valley is largely saturated with some of the world’s largest technology companies as well as thousands of small startups. This post will address an inverse situation in each of these ecosystems. In Silicon Valley, there is an enormous amount of talented entrepreneurs chasing opportunities in a saturated market. In Thailand, the market is currently unsaturated, but there is not enough entrepreneurial talent capitalizing on such opportunities.

The potential is ripe for new startup opportunities in Thailand. According to the World Bank, the Thai economy is growing rapidly at an average rate of 5 percent per year. It is also perceived as a hub for accessing other neighboring countries such as Laos, Cambodia, and Myanmar, which also have a high potential for growth. Several startups have experienced huge booms in the first few years of operating in Bangkok and are now well established. A recent success story includes Ensogo, a Thai daily deals site founded in 2009, which soon expanded its operations to the Philippines and Indonesia. By 2011 Ensogo was acquired by Living Social. Despite such successes, local attitudes still restrict the encouragement of entrepreneurship and the development of new ideas in Thailand. It is somewhat embedded in the current belief system that it’s unfitting to stand out and that compliance is key. This leads to a lack of general creativity and a conformist mentality, where new ideas aren’t always supported. Many new graduates are often expected to get a big corporate job or join their family businesses. This is predominantly why there isn’t enough talent to match the potential growth in this relatively unsaturated market.

Silicon Valley on the other hand is an extremely saturated market, meaning that opportunities are limited for the amount of talent in this ecosystem. While there are many college graduates with great startup ideas, there aren’t enough opportunities for them due to the competing level of saturation in this region. Furthermore, it is becoming increasingly difficult for graduates to successfully start companies, and the startup failure rate has increased from around 50 percent to about 70 percent in the recent years as well. All of this suggests that the Bay Area has a surplus of promising talent but fewer opportunities to utilize such talent due to the limited space in the current market.

Perhaps young entrepreneurs should consider moving to other startup ecosystems besides Silicon Valley that still have largely untapped markets. Ecosystems such as Southeast Asia have promising potential and students should consider checking out growing startup scenes outside of their region. Local attitudes in Thailand also need to shift to encourage entrepreneurial capabilities in the current generation whenever possible. Unquestionably, startup ecosystems will become more connected as the world becomes more connected. As a participant in both of these ecosystems, it’s going to be exciting to watch these two regions grow and change.

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