Lao Startup ecosystems survey2016

Supported by

2Objectives

• To understand the current situation of the startup ecosystems in Laos

• To give initial guidance to those who would like to be startups

• To identify how to build better startup ecosystems in Laos through actions from relevant counterparties

• To compare and learn some best practices from other countries who have been building better startups ecosystems

✅

3deliverables Baseline Assessment for Lao Startup Eco-system Roadmap for the development of the Lao Startup

Community Position Paper to the Government

4METHODOLOGIES

1. Domestic Assessment - Interview/Discussion with the list of interviewees in 3 provinces that has high potential to build startup ecosystems:1. Vientiane Capital2. Luang Prabang and 3. Champasak

2. International Best Practice – Research for best practices of other countries in the region such as Thailand and Vietnam.

3. Benchmark the domestic practice to international best practice and determine the suggested recommendations for the further development of startup in Lao PDR.

5 List of Interviewees1. Existing Startups: (Interview 10 groups)

2. Key Community Builder - TOHLAO, STELLA, LIBIC and Lao IT Dev (GDG)

3. Relevant governmental authorities – DOSMEP, Tax Department, MOST

4. Chamber of Commerce and Business Association

• Lao National Chamber of Commerce and Industry • ICT Association• Tourism Association

5. Potential investors

• Individual angel investors (Individuals) – 15

people• VCs (In Laos, Thailand and Vietnam) target to

interview - 3 VCs• Potential Corporate Venture Capital (CVC) – 10

companies

6. Banks/ Financial institution – target to interview 10 banks

7. Educational institutions (universities and colleges)

8. Media (5 medias)

6FINDINGS

71. Different understanding of startups, mix and unclear concepts of startups & SMEsCOMMUNITY BUILDERS

All community builders understand startups in same way Start new innovative venture to solve problems and usually try to engage in

technology It is repeatable and scalable for them SMEs are those businesses that usually exist in the market and difficult to scale.

8 1. Different understanding of startups, mix and unclear concepts of startups & SMEs (Continue)

Potential Local Investors

(Future Angel Investors)• Have different understanding

of startups

• Some think that they are same as SMEs

• Some think that startups are not businesses, they are only ideas and usually will not be registered.

9 1. Different understanding of startups, mix and unclear concepts of startups & SMEs

Government Authorities- DOSMEP & MOST works closely with

community builders and startups, therefore, their understanding of startups are similar to community builders (innovative ideas to solve problems, can be scalable and repeatable).

- Tax department considers startups that have been registered the same way as SMEs

10 1. Different understanding of startups, mix and unclear concepts of startups & SMEs

Lao National Chamber of Commerce and Industry & ICT Commerce Association- Work closely with community builders and

startups, therefore, their understanding of startups are similar to community builders (innovative ideas to solve problems, can be scalable and repeatable).

- However, some still mix the concepts of startups and SMEs.

11 1. Different understanding of startups, mix and unclear concepts of startups & SMEs

Educational Institutions• Different understanding

- Startups is a group of people who have different backgrounds getting together to brainstorm and create their business.

- Startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.

• However, some still mix the concepts of startups and SMEs

- Startups and SMEs are similar- SMEs sell existing products to known customers in known

markets while startups are searching for new products and new markets.

12 1. Different understanding of startups, mix and unclear concepts of startups & SMEs

Banks in Laos- Startups come with ideas only, no assets,

no collaterals and startups are not targeted customers of any bank in Laos.

- SMEs are small businesses that have been existing the market and there are potential opportunities for bank to finance.

LAK

13 2. Minimal activities and initiatives taken to support Lao Startups• Currently on those activities that

have been done by community builders such as Startup Weekend, Mekong’s Next Top Mentor, Startup Boom Camp, GDG, DIY and other workshops and seminars.

• Colleges and universities only teach 1 or 2 subjects related to entrepreneurship and none has directly focused on startups.

143. Low Level of Awareness of Startups

• Lack of information and promotion of Lao Startups

• Low motivation of people when talking about startups

• No medias that focus on promoting startups

154. Uncompleted stakeholders in the Lao Startup Ecosystems

16 4. Uncompleted stakeholders in the Lao Startup Ecosystems

17 4. Uncompleted stakeholders in the Lao Startup Ecosystems

185. Low capability of Lao Startups

• Mentorship support is still limited

• Not enough Coworking spaces and incubators

• Lack of international exposure (most ideas are duplicating from foreigners)

• Weak English skills (limitation to pitch to foreign angels / VCs)

• Low ambition to succeed

196. Limitations of Access to Finance

• No angel investors in Laos• No formal VCs to look into

startups• Banks in Laos do not

finance startups

20 7. No laws and regulations for Lao Startups Promotions

• Laws and regulations only available for SMEs

• No incentives for Startups (i.e. tax, cost of registration, subsidies, etc.)

• Difficult for foreign investors to join or to invest in Startups in Laos (only subjected to investment law high registered capital of USD125K)

21 8. Limitations on infrastructure to support Lao startups

• Slow speed of internet yet expensive

• No payment systems available to support e-commerce or payment transactions

• High costs of logistics

22recommendations

23Promoting Startups to all stakeholders through medias

• Raise people’s awareness about startups and entrepreneurship by means of communications and education• Via television channel• Social Media• Official media channels• Promote startups showcase• Give information about

startups communities

24 Capacity Development & Mentoring Program for Startups• Mentoring / coaching sessions and training for business incubators

and accelerators

• Inviting professionals and experts to give talks

• Provide capability development services

25More startups community infrastructure

• Infrastructure for communities and startups, internet services, etc.

• Provide services for startups

• Co-working spaces for innovative startups

• Meet-up and networking spaces for entrepreneurs, investors, incubators, accelerators, etc.

• Space for events, mentoring and coaching sessions

• Advanced machinery tools (3D printers, etc.)

• Lab / science services

• Technical resources (Books, etc.)

26 Frequent networking events for Startups throughout the country and region • National annual networking event

for startups community (Startup Fest)

• Chance for connecting investors

• Startups, experience sharing, mentor/coaching sessions, government institutions contribute partly to organize events, providing funds, Human Resources, etc.

27 Incentives for Startups and creating laws / regulations that support startups• Involve startups / young

business people to join in when drafting the laws and regulations

• Encourage more talks between the government and startups (through LNCCI)

• Develop official documents and policies related to innovative startup ecosystems

28Support to create completed elements for the Lao Startups ecosystems

29Other important recommendations• Encourage CVCs to invest in Startups

• To include curriculum on Startups to the educational systems

• Payment gateway that facilitates the business operations of startups

• Provide small grants for Startups to launch the venture

• Establish Local Angel Investors Network

30 Some acronyms you should know…

Acronyms

What is stands for? What is it?

TOHLAO TOH-LAO Coworking Space A Coworking space that is located in city center of Vientiane aiming to build entrepreneurs and startups community in Laos.

STELLA STELLA is a Latin word for Constellation. 

STELLA is the platform for youths to collaborate and create positive change and providing space for young people.https://launchthestella.wordpress.com/

GDG Google Developers Group Vientiane

Google Developer Group (shorten as GDG) Vientiane is a community where geeks contribute, share and learn from each other with products and resources from Google.

31Some acronyms you should know…

Acronyms What is stands for?

What is it?

LIBIC Lao IT Business Incubation Center

Laos IT Business Incubation Center (LIBIC) is one of main activities of the Project on Human Resource Development in IT Service Industry at the Department of Computer Engineering and Information Technology, the Faculty of Engineering, National University Of Laos that supported by JICA (ITSD).

Tigers@Mekong

Tigers@Mekong TIGERS@Mekong, initiated by @GPIAtState. Strengthening innovation ecosystems & connecting tech entrepreneurs in Cambodia, Laos, Myanmar, Thailand, & Vietnam

32 SUPPORTS