From entrepreneur to angel: Douglas Khoo’s journey: Page 2 of 2

 
Mentoring and building talent
 
Having been an entrepreneur for some time, the transition to becoming a mentor as well as an angel investor has been a fun, and in its own way, fulfilling journey for Khoo.
 
“Having gone through the tough journey of being an entrepreneur in China, there’s so much I’ve learnt along the way, and it’s great to be able to give back to startups,” he said.
 
He said he works with two groups of startups, with the first obviously being his own investee companies.
 
The second group he works with are through entities like the Founder Institute, which has chapters in Malaysia and Singapore where he serves as mentor.
 
“I am also taking on startups or teams that I think are interesting or may need mentoring help – I don’t take equity in them, I just spend time having coffee with them when I’m back in Malaysia or Singapore, just to give back to the industry,” he said.
 
It was also with this intention of giving back to the community that Khoo started The Coding Shophouse, which teaches young people to code, in the northern Malaysian state of Penang.
 
“I felt a need to pay it forward given that I had been so fortunate, and because I came from a poor family and didn’t have an education, I thought if someone had given gave me an opportunity early on, why can’t I give opportunities to other people?” he said in his Echelon talk.
 
“The joy that I get seeing the students in the three intakes that we have had so far – about 40 odd students have graduated – it’s a nice feeling to see them coming out and either getting jobs or launching their own startups,” he said.
 
This desire to give back to the less fortunate is also one of the reasons why the long-term objective is to have The Coding Shophouse in smaller cities.
 
The other reason? “What we see is a brain-drain – if you really want to work as a developer, more often than not, you might actually have to migrate to big cities, which is taking away a lot of resources from the smaller cities.
 
“Why can’t Penang be the tech development office for the whole of Asia, where Indonesian companies can outsource their work to Penang or Kuantan or Ipoh?” he added.
 
While The Coding Shophouse might not have produced any notable alumni at this early stage, Khoo hopes that in the next 10 years, “all of them will be a force to be reckoned with.”
 
Growing a talent pool of developers takes time and Khoo sees Malaysia moving in the right direction.
 
“I think we are starting to gather momentum, not just with The Coding Shophouse but with all the other initiatives that are being carried out in Malaysia, whether by MaGIC, Cradle, MDeC or Khazanah,” he said, referring to a bevy of government-linked companies or GLCs.
 
“We’ll probably see tangible results in the next four to five years … when hopefully Malaysia will be on the map, whether as a development powerhouse or a place to do a startup because the ecosystem is vast and conducive,” he added.
 
Startups and opportunities
 
As for the kinds of startups Khoo might be interested in investing in, it boils down to him being able to understand what that company is doing.
 
“For me, I see startups in two categories – the first category is trying to provide a solution to a problem, making the process much more efficient,” he said.
 
“The second is on trends, things I can’t put a finger on or see why anyone would want to develop an app like that for the market, except for the youth who are able to capitalise on that market.
 
“For the first one, I can calculate the business potential of making a process efficient. But if someone came up to me and said they have a new app that takes a photograph and pulls 14 characters and disappears in 10 seconds, I don’t know how they are going to make money, so I don’t invest in those companies,” he added.
 
Khoo said his reluctance to invest in such startups stems from his lack of understanding of the markets these companies can tap into, which means he would not be able to contribute much.
 
“I don’t know anything about that market and I may not be able to be effective as a mentor in that kind of thing – I may be able to tell them how run the company in terms of HR (human resources) and fundraising, but in terms of product development I cannot give any input.
 
“Whereas If I see a company making a process efficient, I can see the value that’s being created, and that’s where I look at it, focus, and invest on,” he added.
 
While South-East Asia is awash in business-to-consumer (B2C) or consumer-to-consumer (C2C) startups, Khoo believes there is huge opportunity in the business-to-business (B2B) space, which the region has largely ignored.
 
“I think B2B is definitely a huge market opportunity. In B2C, one of the things I look at when startups show me their business plans or financials, I see 50% or more than 50% of what they raised is going into marketing, and I think it’s such a big waste,” he said.
 
“Who are you making rich? You are making people like Google and Facebook rich, because that’s where the money is going to.
 
“The reason why they’re doing it is because on the B2C side it’s so competitive, you have to be able to shout louder and longer to be heard, and everyone is going for the same consumer,” he added.
 
But B2B provides stability once a startup gets it right, Khoo argued.
 
“While it is not sexy or does not grab the headlines, and takes a long process, once you get it right, it is going to be recurring revenue that you’ll get back, and it is huge.
 
“Perhaps it’s not sexy, so young entrepreneurs don’t want to get into it, and it might not attract the same type of fantastic valuations the B2C companies get.
 
“And also, I think with B2B you need to have some category experience as well, and as a young entrepreneur you may not have the working experience, you might not be able to see where the opportunities are.
 
Which is why in B2B, “you tend to see more entrepreneurs with more working experience, who see a huge deficit in the way things are being done,” he added.
 
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Malaysia’s startup ecosystem: It’s not always about KL
 
Building an ecosystem: The pieces are here already
 
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