Had a chat with a founder lately where I again heard this phrase “Singapore is too small a market.”
Have heard this phrase many times before and investors and founders both love to say it and then push for overseas expansion.
It always makes me feel slightly uncomfortable because while from a gdp point of view, Singapore is indeed small relative to USA or China or Europe, it’s still the 2nd largest absolute GDP in ASEAN. SG is second only to Indonesia whose population is 50X of ours but is just 3 times as large by GDP.
I also feel uncomfortable because I know the P&L of many successful entrepreneurs who are worth 9,10 digits. A great number of them have an overseas story of course but sg can still be easily 30-80% of their revenue.
The main concern I have is that if founders at earlier stages start with this statement in mind when their first market is SG, they may subconsciously be giving themselves a wrong strategic focus or worst still, a wrong mindset with regards to sg or asean sales.
Things are nuanced as usual. For some businesses, their market is global from day 1. Eg.micro enterprise or consumer saas software subscriptions, developer community tools/software, Amazon/ecommerce sellers targeting USA or Europe etc.
The issue is I feel the majority of startups don’t fall into this category. For this majority, founders are probably are better off with the mindset that SG is not too small and there is a lot for me to achieve here. To me, founders should only start saying and acting on “sg market is too small” frame of mind when their startup has a decent traction in SG.
Eg for job portals space, maybe at least >5m usd revenue and profitable before it’s useful to think that SG is too small.
That’s why we have been advising most of our companies to prove they have a decent home market business first before talking about overseas. This strategy is now paying off as a handful of our startups have some scale in home market and now can indeed feel sg alone is too small since they need to continue growing past that 5-10m revenue and 1-2m profit.
So here’s some food for thought. Often common wisdom frequently get repeated because there is some good truth to it. But the interpretation and right timing of when the common wisdom applies can make a huge difference in the outcome of a startup.
