Taking a chance and investing in entrepreneurs can sometimes be a risk but Frontier Digital Ventures’ CEO Shaun Di Gregorio has risen to the challenge and shared his story with attendees at the PPW Bangkok conference.
Since its inception almost three years ago the Kuala Lumpur-based FDV has been investing in entrepreneurs who run car, real estate and general classfieds portals in emerging markets. Di Gregorio says the successful company identified a gap in the market and sought to help entrepreneurs to get ahead.
The types of candidates that are interesting to Di Gregorio are locally born foreign-educated entrepreneurs who have worked overseas and been impressed by a portal such as Rightmove or Zoopla and sought to operate a similar model on their home turf.
Although FDV is dedicated to backing entrepreneurs, Di Gregorio is quick to emphasis that the company isn’t interested in purchasing the business; they exist to help run the operation.
“We try to be helpful rather than predatory and we make sure we’re aligned with people we partner with,”he says. “We are not a VC; we don’t invest other people’s money. We invest our own money into your business.”
Di Gregorio shared some of the key lessons he had learned through working solely in emerging markets.
You can try new things without fear
You can pretty much do what you want and you have to be a bit brave to do it, you’re not bound by history as there wasn’t much there before you.
Businesses can do things that you wouldn’t normally do in a highly regulated market. This encourages entrepreneurs to act without fear.
Growth rates are amazing
These markets are growing consistently at about 10 per cent; I would rather be in a frontier market than a developed one right now.
Online transactions are already happening:
They have been happening for a while. They’re happening more in frontier markets. In markets that aren’t as regulated you can try more things and you can act without fear. We’re now seeing it in five of the portals we interact with. There are some common themes such as: how do we collect money and get paid? Do I have to be licensed?
Mobile only, not mobile first
A lot of our partners code and design for mobile and it’s life as you know it, but smart phones have been a massive game changer and have revolotionised the way people consume. Without mobile our business wouldn’t work that well.
You are the market
If you can build a good position early on, you are the market. You can create and define it and create the ecosystem.
If you have a brand that consumers trust, then you trade in trust.