A fair assumption is that the more number of startups are being created, the more number of startups will fail. The reality remains that the success rate of startups is very low, with many struggling to make it past the 4-year mark. By analysing the birth and death rates of startups in Malaysia, we can begin to understand the lifecycles within the ecosystem and how they affect each other. It also gives us some perspective regarding the health of the ecosystem and how we can continue to support its growth.
Our panel predicts that more Malaysian startups will shut down this year. From the different groups, the investors agreed unanimously while the entrepreneurs were the least convinced of the group.
Some highlights from the discussion of this question:
Dato’ Dan E Khoo
President at MDEC Americas
“There is no indication of anything cataclysmic to warrant a belief that 2017 will result in more startup shut-downs than the prior year. While the changing global environment with the stronger US dollar and Brexit may bring more uncertainty, the cost of doing business in Malaysia is relatively low and strapping local startups can hunker down like cockroaches.”
Global Business Marketing at Facebook
“Tightening VC funds, political and economic uncertainties and generally poor business models will cause more startups to shut down in 2017.”
Co-founder/CEO at Catcha Group
“It’s only natural. Some will be high profile, but the majority will quietly disappear and close their operations. Nobody ever said building a disruptive business was easy. The good news is that everyone involved in a startup that didn’t make it will have learnt incredibly valuable lessons that will make their next venture significantly more likely to make it!”