Why many start-ups fail

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PETALING JAYA: A player in start-up ventures has advised would-be participants in the field to carry out intense research and planning before embarking on business.

Most ventures get tripped up because the originators think it is enough to rely on available market research, according to ST Chua, an entrepreneur-in-residence at Sunway Ventures Sdn Bhd.

“Start-ups have to see themselves in the big picture,” he said in an interview with FMT. “A start-up such as a car battery replacement business, for example, would not go far. You would not make much money out of it.”

He said start-up founders must open themselves to a variety of new ideas instead of sticking stubbornly to the one that inspired them to go into business in the first place.

“Most start-ups nowadays are made up of youngsters who are eager to start something new,” he said. “Unfortunately, they also have big egos and do not want to listen to new ideas apart from their own.”

He gave a tip to those looking for investors. “Venture capitalists are sharks,” he said, “and they will push you for returns on their investment.

“If they think the start-up will not work, they will not invest in it.

“They’ll also want to know if the start-up can be a stand-alone business when the economy suddenly crashes.”

Chua said many new businesses revolved around e-commerce.

Last year, statistics portal Statista estimated that total revenue for the Malaysian e-commerce market would hit US$894 million (RM3.8 billion) and the annual growth rate was expected to be 23.7% in the next five years.

Chua said Sunway Ventures would be focusing on start-ups that could cater to logistics to complement the e-commerce industry.

The company is working towards forming a partnership with Sunway iLabs in a programme to encourage development of the start-up ecosystem in Malaysia.

Meanwhile, PopBox, an Indonesian-based start-up under Sunway Ventures, has urged other start-up founders to listen to other people’s opinions for the good of their businesses. “You cannot ever be egoistic,” said Michael Lee, who heads PopBox’s Malaysian operations.

PopBox is an automated parcel-locker service that allows customers to send, receive and return parcels safely and conveniently. It set up its Malaysian operations last year and deployed 15 lockers last October. It aims to deploy 100 in the Klang Valley by the end of the year.