Even though there are many paths to startup success, innovation stands out as vital to business growth, profitability, and the ability to compete in the market. Ultimately, startups need to innovate to survive; it does not have to be a new product; it can just be an improvement on an already established design. For example, smartphone companies release new phone models yearly, attempting to improve through customer feedback and complaints.
Southeast Asia is home to many startups, some of which have grown to become unicorns—companies valued at over USD 1 billion. Some of its top tech unicorns include Ninja Van, Shopee, Grab and GoTo (Gojek and Tokopedia).
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According to Singapore’s Economic Development Board (EDB), the Association of Southeast Asian Nations (ASEAN) did not get a new tech unicorn in the first quarter (Q1) of 2023. Startups received USD 1.1 billion, representing a 69% drop in funding from last year and 42% lower than in the fourth quarter (Q4) of 2022. Even so, data insights firm Tracxn noted that there was optimism in the region for long-term growth due to untapped opportunities, a large consumer base, and a young, tech-savvy population.
Benefits of and challenges to innovating
Startup culture involves long hours, collaborative work, resourcefulness, perseverance, constant learning, and cost-saving. Most importantly, the main focus is always on the product or service and the vision for the company that revolves around the product/service. As such, innovation becomes essential for founders and their employees. It helps to solve societal problems, keep workers motivated, stir creativity, challenge everyone at the company to be productive, and get an edge over the market and its competition.
However, there are challenges to developing or improving products. These include budgetary and funding issues, economic factors, failure to understand the target market, and having a startup culture that is hostile to product and service development.
What role do leaders play in fostering innovation?
Leaders set the tone for their employees by designing a work culture conducive to product development. With the challenging global economic situation, many investors are focussing their consideration on companies applying ESG (environmental, social, governance)policies. They no longer invest in startups where the leadership team does not appear competent and manages their workers well.
Also, leaders must invest in or adopt new technologies quickly to keep up with the market. These tools help to innovate sustainably and guarantee long-term solutions for the company. They may also help save money and protect the environment if resources are appropriately deployed without any wastage or misuse.
To ensure workers can develop novel products seamlessly, leaders must encourage risk-taking, removing the possibility of punishment when a failure occurs. They must enable people to be comfortable being creative, brainstorm ideas, and enhance collaboration to get the best results. Innovating must be aligned with the startup’s vision and values to maintain employee culture and belief in their work.
Furthermore, there must be a climate of productivity and results, with set deadlines. For example, many startups in Southeast Asia are run by those who invented the product or service they are providing, giving them credibility among their employees. Thus, they can inspire their workers to do well and offer additional training and upskilling on the latest technologies.
Applying design thinking to startups
Finally, leaders should employ a technique known as design thinking. It is about developers collaborating with the end user to design an excellent product. They can listen to customer feedback, conduct surveys, and test the products to see how they feel.
It is also essential for startups to have workspaces that foster creativity. They can break up the monotony by adapting modern office designs, changing colours, enabling more natural light, providing lounges and relaxation areas, or using customised, inspiring artwork. These things can set the mood and prevent the feeling of crowded spaces that may stifle creativity.
Startups must speak with employees individually to know their concerns and whether they have external challenges affecting their work. Many Asia-Pacific (APAC) employees have been focusing on jobs that provide mental health support. Companies can include rooftop garden terraces where employees can connect with nature briefly to clear their heads and return to work.
Naturally, employees want to express themselves and deliver the results a company is looking for. The leadership team’s job is to foster a culture of innovation, provide employees with the necessary resources, and design workspaces conducive to productive work. Constant innovation is vital to startup success, and Southeast Asian companies should continue investing to deliver the intended outcomes.
Incorporating new technologies, such as artificial intelligence, enables Southeast Asian countries to share ideas and compete with each other, thereby boosting innovation further. Thus, ASEAN will be able to compete with other emerging regions like Africa and the Middle East.