Challenges faced by nation’s entrepreneurs
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Global statistics indicate that only one out of four startups succeed and around 20 percent of businesses don’t make it past the first year.
Although these startling figures don’t hold much promise for aspiring entrepreneurs, many still take the leap in the hope of succeeding in the future.
A Statistic Brain study also found that incompetence is the most common reason why startups fail. This rings especially true for startup founders and entrepreneurs who lack experience, skills and resources.
Although plagued with many challenges, including its relatively small population and economy, Cambodia has a promising startup landscape but has yet to prove its prominence in the startup and entrepreneurial scene.
Moreover, The Kingdom doesn’t have a huge local market. But with many forging their path towards a career as an entrepreneur, Cambodia’s startup scene is leaning towards a more diverse and digitally focused entrepreneurship, particularly in the tech industry.
Thanks in part to the support of the private sector, nonprofit organisations and the government, numerous tech startups have been launched in Cambodia and many have survived their critical first years.
Giant corporations and companies are taking notice of the steady growth of Cambodia’s tech-startups, and some are making investments.
However, according to Cambodia StartUp Advisers’ Director David Haskel, entrepreneurs and startup founders in The Kingdom need to take the law seriously to avoid tax, intellectual property, and other legal issues and mishaps in the future.
Knowing and abiding by the law and legal practices is crucial for any startup that wants to make it past the critical years and contribute to Cambodia’s overall digital economy and entrepreneurial ecosystem.
Many have failed to achieve their business goals. But here are a few tech startups from different sectors in Cambodia that have managed to stay afloat and find success.
BookMeBus
The co-founder of BookMeBus is no stranger to the hassles of commuting in Cambodia. In fact, in a Tharum interview, he revealed that the concept behind the startup stemmed from his frustration when he couldn’t find a bus seat in Phnom Penh to get to his hometown.
So the launch of this online ticket booking site in Cambodia started when founder Langda Chea thought of a way to reduce the inconvenience of transport booking and roaming around Cambodia by bus — by providing commuters the stress-free option of booking a bus ticket online with just a few clicks. Additionally, BookMeBus also provides ferry and taxi bookings for trips around Laos, Vietnam, and Thailand.
DirexPlay
DirexPlay’s founders have thought of a way to promote Khmer culture by incorporating Cambodian landmarks and Khmer mythology into their interactive games. The artistic brains behind the company consist of siblings Piseth, Rothana and Visal Chhourm, as well as the environment and design artist, Malis Roeun.
Since its 2013 launch, the gaming company has released six games, including the popular Sok and Sao’s Adventure.
This tech startup has since achieved numerous business milestones and even bagged the Cambodia Information and Communications Technology Awards in 2017. In the same year, the company released Jailbreak, the first-ever mobile game for a Cambodian blockbuster film.
Khmer 24
Khmer 24, the largest eCommerce business in Cambodia, provides a hassle-free online buying and selling experience via mobile application. In addition, users can also post online classified advertisements on the platform.
Cambodian consumers have long welcomed online shopping into their lifestyles. And since its launch in 2009, the mobile app has helped buyers and sellers make seamless transactions, offering a wide range of products to suit each need. Products ranging from computers, to furniture, food, clothing, sporting goods and more can be found on Khmer 24.
The user-friendly mobile app makes it easy for buyers and sellers to communicate via messaging or calling and expand their market with a function that enables app users to post the product on social media platforms.
Osja Studio
As the first game development company in Cambodia, Osja Studio has launched numerous game titles and given careers to inexperienced yet talented game developers since its establishment in 2011. With the help of creative friends, the director and co-founder, Ear Uy, released game titles that promote Cambodian industry and culture.
Joonaak Delivery
Joonaak Delivery has been handling the last-mile distribution needs of more than 200 businesses since March 2014. The first local last-mile delivery service provider’s Chief Executive Officer (CEO) and Co-founder Soliya Kong has made it his mission to provide reliable logistical solutions for small and medium enterprises (SMEs), embassies, online sellers and self-employed workers.
Before the business was established, the entrepreneur joined a contest called Startup Weekend and was awarded second prize. With a goal to develop logistical systems through the use of technology, Joonaak Delivery was launched to provide solutions for local businesses, eCommerce and individual clients who need efficient package delivery services.
Morakot Technology
Morakot Technology’s Co-founder and CEO Khuon Sophorth, has established this financial technology startup in the hope of providing reliable solutions to the increasing fraudulent activities and human errors in the banking industry in Cambodia. It was founded in 2014 with the ultimate goal to expand globally and is set to open branches in the Philippines and Laos.
Critical Challenges
The kingdom’s startup landscape, particularly the tech industry, has experienced major growth over the years. But research suggests that Cambodia has yet to prove itself among the major players in the regional startup scene.
The reason why it’s still considered “young”may be because of one of the following factors.
Lack of investors
One of the primary challenges that aspiring entrepreneurs and startup founders continue to face is a lack of funding for their business activities. Although several startups are finding means to bootstrap their business activities by taking part in local and regional investors’ events, many are still finding it hard to attract investors.
Some investors are still sceptical about funding the tech scene in the Kingdom. But as Shivam Tripathi, the managing director of Obor Capital, once stated, “Few companies are looking to actively invest in Cambodia and there are not many dedicated funds. But investors will come when you show them there is an opportunity for growth.”
Entrepreneurs should also avoid building and launching products that are not suitable for the the Kingdom’s small market. Developing a product or service that matches consumers needs opens more opportunities for investors to take notice of the new venture and make an investment.
Little technical talent
There’s growing digital awareness and usage in the Kingdom, but not enough upskilling or training for the young talented people who want to venture into the tech industry. Recruiting talented people with required technical skills is also still a challenge for startups in Cambodia.
According to a tech startup report by Geeks in Cambodia, more than 80 percent of startup founders believe that the availability of highly skilled engineers and access to corporate business partnerships are crucial to achieving business growth and success.
Although the Cambodian government and incubators such as the Impact Hub are working to enhance the progress of the tech startup industry through programmess, Cambodia still has a long way to go in terms of providing training programmess for would-be experts that can advance on a regional or global scale.
Not enough mentors
It can’t be stressed enough that the right mentoring is crucial to boost the success rate of inexperienced entrepreneurs and startup founders.
Cambodia has a very promising entrepreneurial landscape, but a country with a small population and only a few marketing opportunities doesn’t have as many successful tech founders as other countries with a more vibrant startup scene. This makes it hard for business newbies and aspiring entrepreneurs to find mentors who will guide them through the process and help them make informed business decisions or even recover from setbacks.
Uncertainty over policies
Newbies and aspiring tech entrepreneurs are faced with challenges in terms of coordinating with governmental policies and procedures, which, in some cases, are still unclear about the incentives for startups and investors both in the Kingdom and overseas.
Based on a Cambodian tech startup report, the tech startup community needs the help of the government in promoting them to overseas investors to ensure further growth of the community. Ideally, the much-needed support should come in various forms, which include facilities, support services, and nonprofit, incubator-style and regional network programmes for aspiring entrepreneurs, among many others.
Is Cambodia Next Big Thing?
Based on the Global Startups Ecosystem Report, the top four fastest-growing tech startups are in robotics and advanced manufacturing (189.4% growth rate), Agtech and new food industries (171.4%), Blockchain technology (162.6%), and artificial intelligence (77.5%).
Meanwhile, in the Kingdom, entrepreneurs and startup founders are seeking to diversify, innovate and increase the growth of their digital economy. With help from nonprofit organisations, private sectors, overseas investors and the government, Cambodia’s startup ecosystem will be on its way to taking its first crucial steps towards a digital revolution.
By Andriana Moskovska of SmallBizGenius, a Prague-based thinktank for entrepreneurs https://www.smallbizgenius.net
