In the fast-paced world of tech, Southeast Asia’s startup scene has been faced with a lot of challenges and hurdles in the last couple of years. The number of flashy headlines and sky-high valuations has reduced as local startups are facing challenges as they attempt to scale their operations across this diverse and dynamic region.

From navigating regulatory hurdles to the fierce competition from global giants, startups continue to have limited success in global or even regional scaling. We need to find out why. We had a chance to get some insights from Colin Kleine, co-founder and Chief Strategy Officer of Scalerr, to peel back the layers of complexity to explore why expanding in Southeast Asia has been a challenge for so many brands.

Scalerr helps tech companies scale and grow their valuation through international expansion. They have worked with at least 250 startups to scale their businesses, with Colin providing management consultancy and executive recruitment services to maximize revenue, increase valuation and successfully navigate the unique complexities of each market.

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Before co-founding Scalerr, Colin held senior leadership positions at several tech companies such as Wix, Forter, Smartbear and Amazon Web Services. With deep expertise in product development, strategy, and business growth, Colin is a frequent speaker at industry conferences and events, where he shares his insights on the latest trends and best practices in technology.

What are the main issues that startups in Southeast Asia are facing when it comes to scaling up in the region?

Southeast Asia is a diverse region, with each country containing its own version of regulation, consumer habits, and geography. Hence, startups in Southeast Asia face a unique set of challenges when scaling up, especially when they don’t have the support needed to grow.

Companies need to find the right balance between scaling a business across multiple countries and simultaneously localizing it to meet the specific needs of each market. Although there is growing investor interest in Southeast Asia, there are fewer companies spending money and sales cycles are becoming longer due to a global economic downturn. Raising funds at this point can still be challenging, particularly for early-stage startups.

A start-up needs to focus on either hiring people or bringing on board advisors, with prior knowledge/playbooks on how to scale an early-stage company.

The hiring process should not be optimized for cultural fit, rather, it should be optimized for finding experts who know the playbook on how to scale through this stage.

While the big technology players are not hiring, the demand for tech talent in Southeast Asia remains strong. Why aren’t startups snapping up as much as they can?

Southeast Asia’s tech ecosystem has been on a growth trajectory, with startups and tech companies expanding their operations in the region. However, in the current environment, many startups have prioritized commercial talent (e.g. sales, partnerships and customer success) rather than tech talent.

With much of the highly paid tech talent made redundant by some big tech giants, they present an opportunity for startups to tap into a pool of prospective hires who are well-trained and eager to work. However, startups need to learn how to operate in a leaner manner; in a leaner capital environment, startups need to reduce their expenditure in order to have the capacity to hire fresh talent. As businesses focus on making revenue to survive and do whatever they can to keep their existing customers as well as grow them, it’s less of a priority for these businesses to hire tech talent as of now.

What is your opinion on the impact of AI across different industries? Is this a fad or a fundamental shift in technology across most industries?

AI has existed for well over 10 years, but it is only now that it’s become a mainstream talking point. Before AI, there was Robotic Process Automation and Natural Language Processing. Prior to that, there was Big Data, and even before that, there was Data Analytics technology. This tech has been in existence for a very long time, and it has continually improved year after year. It’s neither a fad nor a fundamental shift, but simply an evolution of data-driven decision-making.

I am highly supportive of Generative AI, a much newer technology that has exploded into the mainstream. Technology that makes people’s lives easier, that automates mundane processes for people and businesses, is a good thing in the long run.

In the next 12-24 months, how do you see the technology scene evolve in relation to the startup ecosystem?

In the coming years, we are expecting some major breakthroughs in emerging technologies such as artificial intelligence, with more start-ups embedding “generative AI” into their technology stack. Big tech companies such as Adobe, Salesforce, and IBM are expected to acquire a large number of these rapidly growing AI-based startups to anticipate future potential competitors.

Due to the advances in AI, there will also be a rise in a sector known as Deep Tech. Investors, governments and organizations are increasingly interested in supporting deep-tech startups due to their potential to drive technological progress, address global challenges, and create substantial economic and societal impact. We are also expecting a sizeable shift in the powerbase of technology and the continued rise of APAC

What’s next for Scalerr?

At Scalerr, we are focused on serving high-growth technology startups and scaleups. With clients in various industries across technology, healthcare, finance, and e-commerce, we aim to work closely with clients – existing and new to facilitate seamless international expansion by navigating regulatory complexities, identifying high-potential markets, and forging strategic partnerships. We are looking forward to helping our clients with accessing venture capital and government grants, building new revenue streams via channel partnerships, and creating a GTM growth plan that could help provide rapid returns, minimize cash burn and maximize their likelihood of success when scaling their startup. Our experienced technology professionals are dedicated to unlocking the full potential of each startup by combining their deep industry expertise, innovative thinking, and proven track record in driving growth and innovation. Our ultimate goal is to help take more APAC startups to a unicorn status.