PHNOM PENH: In Vichet was studying in the United States in 2006 when something clicked in his mind. He started to see the potential of e-commerce.
“I realised there that the textbooks were really expensive. So whenever I finished a term I sold the books on eBay,” he said. “I thought to myself that one day I will probably do something online to make money.”
Internet access in his home country of Cambodia was expensive at that time and out of reach of most people. Undeterred, Vichet became a fast adopter and began a clothing retail business on Facebook.
Turn the clock forward and now the 33-year-old is the chief executive of Khmerload, the website dubbed “Cambodia’s Buzzfeed”, a combination of entertainment, fashion, sport and music offerings.
"Mark Zuckerberg has two arms, two legs, just the same as we are. I believe Cambodian people can do something great," he said.
With a strategy of serving audiences in their native languages rather than English, Khmerload and its Myanmar offshoot now earn nearly 60 million page views per month. That is aside from the one billion monthly social media impressions, Vichet claims.
Those numbers turned heads globally, and in March, Vichet’s company became the first start-up in Cambodia to receive funding from Silicon Valley – in the form of a US$200,000 investment by 500 Startups.
It is a start-up success story in a country that is fast starting to foster more entrepreneurial ventures. Despite the small market size – Cambodia only has a population of about 16 million people – and other challenges to raising funds here, these “disruptors” are starting to make inroads locally.
“Start-ups are born to solve problems and disrupt the traditional business industry. So we are disrupting traditional media; magazines are almost dead and TV channels too,” Vichet said.
New players are also shaking up the travel sector. Traditionally, unorganised and low-tech, bus services are the target of start-ups like Camboticket, which aims to resolve the challenge of booking tickets for transport around Cambodia.
Camboticket now acts as a centralised web-based node for bus, ferry and private taxi journeys through the country and across borders into Thailand, Vietnam and Laos, mostly targeted – for now – at tourists and expats. It has also provided back-end software support for transport operators and recently received US$100,000 in seed funding.
Still, co-founder Shivam Tripathi acknowledges the struggle to get to this point since the project’s inception in 2014, particularly in Cambodia where socio-economic and cultural factors means adoption can be slow.
“It took us six months just to convince six bus companies to go online. They did not want to put their prices online, they did not want to put their schedules online,” he said, adding that their bank application for access to an online payment portal was also denied because Camboticket had too few assets to be considered reliable.
“The bank came and saw just one employee walking with a computer. It was our early days and that’s how start-ups begin,” he said.
While Tripathi has ambitions to expand his company further, most do not get the chance.
Start-ups remain a risk. Most companies fail and only a very small minority, known in the sector as ‘unicorns’, make it big.
IT’S A SMALL WORLD AFTER ALL
One man who has closely watched the rise and demise of dozens of budding start-ups in Cambodia is Thul Rithy, the co-founder of co-working space-cum-tech incubator SmallWorld.
Housed in a villa away from the grind of Phnom Penh’s downtown, SmallWorld is a basic operation mainly focused on e-commerce and fin-tech start-ups. Rithy says its sparse setup, in contrast to other hip and comfortable spaces available to tech entrepreneurs, is by design.
“This place has less comfort and is more focused on developing ideas,” he said. “I don’t want to spend money on nice stuff. I want to keep it basic so people have a sense of originality.”
SmallWorld opened its door back in 2011, at the genesis of the concept of start-ups in Cambodia. Since then, about 60 companies have used the space. Even with financial support, the failure rate has been high.
“I don’t even remember the names of some of them,” Rithy admits. “If we invest in 20, maybe two are doing ok. If we invest in 100, maybe one will do great.
“I’m proud of start-ups in Cambodia because most of them have had to survive from their own volition and invention. If they can’t, they fail.”
Ten teams are currently working on site trying to be the exception. There is a complete range of skills and concepts, from Cup Monster, a company designing coffee cups for the country’s array of new cafés to Rielchain, an operation specialising in blockchains, the technology behind digital currencies like Bitcoin,
Its founder is Lov Hong Thakvika, a 17-year-old who began his working career as a software engineer aged just 13. He says he enjoys “ethical hacking” and argues that the conventional education is doing little to advance his skills compared to the SmallWorld ecosystem.
“I think it’s a community that allows you to do your own thing, to be a bit independent. We also collaborate,” he said, explaining that his long-term project is aimed at helping Cambodians with voting and digital banking systems and medical solutions.
Taking the next step to a viable, commercial product will take patience, perseverance and luck.
“The key is know who you are, know what you want to do and do it a little different to the others,” Rithy said.
YOUTH OF A NATION
Doing something unique can be what catches the critical eye. The ability to regionally scale and cross international borders is a key indicator of commercial viability and a magnet for overseas venture capitalists.
To date, however, Cambodia has remained a difficult place to raise capital. It is often overlooked for more advanced markets like Thailand, or other frontier markets seen to have more potential such as Myanmar.
"The most successful companies are those that can successfully bridge the geographic, cultural, and legal gaps between countries,” said Justin Hall, principal at Singapore-based early stage venture capital fund Golden Gate Ventures.
While they have invested widely throughout the region, no Cambodian company has captured their attention, or dollars.
“What really intrigues us are the companies that are solving problems unique to Southeast Asia.”
New ideas are being born to try and meet that criteria – like Guide Insider, an app set to be launched in 2018 connecting tourists to tour guides.
“The market size is incredibly attractive and since most of the tourism industry is ‘old-school’, there is a need for innovative technology solutions,” said its founder Sokna Ly.
They are set to take advantage of the meteoric rise of smart phone use to power their project, a strategy ideal for a young market like Cambodia.
The recent World Economic Forum in Phnom Penh focused heavily on the role of young people in driving the region forward. Youth were challenged to embrace technology to boost innovation in their communities and throughout the region.
With half the population under 30, there is a “positive energy” coming from the start-up environment, according to Soreasmey Ke Bin, the managing director of consulting and advisory firm Confluences Asia, which has five start-ups within its portfolio.
“Cambodia is a good test market. It's not a big and crowded market where it will take you millions to test your products or services,” he said.
“Being successful in Cambodia means you can be successful anywhere in the area, as I think our market is very representative – in its qualities and its flaws – of a fast-developing market.”
With youth comes inexperience thoughvand the country suffers from the lack of a highly trained workforce. It means for the likes of Khmerload, new staff are hard to find. Those they find might be enthusiastic but are also “raw”.
“Top talent want to join big companies, they don’t like the uncertainties related to start-ups. It’s almost impossible,” he said.
“Only crazy guys join start-ups.”
For Rithy though, these shortcomings associated with the early stages of Cambodia’s start-up development do not mean nascent companies here will be unable to make an impact on the region.
“ I want to show Cambodians, the young people, if you really like what you do you have to commit 100 per cent, non-stop until we get to our destination,” he said.
Mid-sentence he pauses and reaches for something under his t-shirt. “Something is on my shoulder, oh it’s an ant,” he says laughing.
“Sometimes, something is so small that it makes a big impact on people’s lives, like the ant. We can be like that.”