Cento Ventures' Dmitry Levit Identifies 3 Issues Startups Face When Expanding In SEA

Southeast Asia is home to more than 600 million people, six major religions, and more than 10 main languages
Cento Ventures' Dmitry Levit Identifies 3 Issues Startups Face When Expanding In SEA
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Entrepreneur Staff
Deputy Associate Editor, Asia Pacific
2 min read

Southeast Asia is an incredibly diverse geography, with more than at least 10 distinctive languages, dozens of ethnicities, and vastly varied cultural and societal norms, and entry into any specific market can often seem daunting for startups looking to expand beyond their domestic playground.

In a conversation with Entrepreneur, Dmitry Levit, co-founder of Cento Ventures, identifies three biggest problems a startup faces when expanding from one Southeast Asian market into another.

 

Basic Assumptions

“By far the biggest issue we’ve recognised with companies entering a new market is ‘basic assumptions’, which is where a company takes its business to a different country and expects it to function the same way as it did in the domestic market,” says Levit.

He references a famous Silicon Valley axiom “strong opinion loosely held”, and says that companies should come to a new market with a clear theory on what their product should do, and a strong idea of who they are serving. But these should be loosely held views.

“If the market reacts differently, the market should be heard, and the product should be adjusted, instead of just powering through,” he says.

 

Communication Barriers

Building teams that “effectively” function across multiple countries in Southeast Asia is difficult, and communication barrier is a big reason for that, says Levit.

“There are communication barriers, cultural barriers, and then there is the usual politics of large organization, multiplied by complexity of diversity, multiplied by pressure of operating in a new country, and all that quickly leads to chaos,” he adds.

Investors often advice companies that are looking to expand to a new country to study and understand the local culture, customs, and social relationships, as well as hire locally so that they help bridge those differences.

 

Know Your Region

 “A pretty big barrier to entry into Southeast Asian markets, that we hope will go away eventually, is what we call ‘investors who don’t know how different countries in Southeast Asia work’,” says Levit.

Those assumptions and business models based on those assumptions could push startups, that use those models, in the wrong direction, says Levit.

Again, extensive homework, and understanding the geography is important, as is founders' 'informed' right to push back on models they think won't work.

 

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