Observations on the Tech Startup Ecosystems in the US, Southeast Asia, and Japan

Having worked in unicorn startups in the US and Vietnam and various other startups across these regions, including Japan, I’ve witnessed firsthand how each region’s unique approach shapes its tech industry. These differences go beyond funding sources or market strategy—they reflect broader cultural and economic factors that influence how startups operate, grow, and define success.

1. Funding: From Big Bucks to Bootstrap

In the US, there’s an undeniable allure around innovative ideas. Working at a unicorn startup there, I saw how companies could raise millions based solely on a compelling vision or disruptive concept. The potential often draws investors in the US for high returns and market-changing ideas. However, writing this in 2024, I can say there’s been a notable shift over the past few years toward sustainable, profitable business models. It’s not enough to have a big idea; investors want to see a clear path to profitability, making the need for a well-defined revenue model more critical than ever.

Southeast Asia takes a more measured approach. Many startups here bootstrap initially, focusing on proving their viability before seeking external investment. When I worked in Southeast Asia back in 2014, the speed of operations was often compensated by the low labor cost. This meant that startups could employ a larger workforce to accelerate expansion while keeping expenses manageable. Today, while venture capital has become more accessible in the region, there’s still an emphasis on steady growth and proving the business model’s resilience locally before expanding. According to a report from the Economic Development Board of Singapore, venture capital investment in Southeast Asia hit a record US$20.4 billion in 2021, showing the region’s increasing appeal to investors as the ecosystem matures.

In Japan, I’ve noticed that partnerships with established corporations often back startups. The funding is moderate and rarely matches the scale of the US, but it comes with unique advantages. Japanese startups can leverage the stability and resources of these corporate partnerships, which can be a great asset when navigating Japan’s conservative investment landscape. According to a recent interview by JETRO, partnerships with large corporations are a significant factor in sustaining Japanese startups in their early stages, even as overall funding remains conservative compared to the US and Europe.

2. Execution: The Power of Senior Talent vs. Business-Driven Approach

One of the most significant contrasts I’ve seen is how teams are structured and execute their ideas. In the US, startups usually prioritize senior talent right from the start. The approach is heavily tech-driven, with a strong focus on innovation, cutting-edge design, and product differentiation. Execution here often centers around building a team with highly experienced individuals who specialize in specific verticals, whether that’s AI, design, or software engineering.

In Southeast Asia and Japan, the structure feels different. Startups often place a greater emphasis on business development, partnerships, and market penetration rather than solely focusing on tech innovation. In these regions, execution tends to be more business-driven, with technology often serving as a support mechanism rather than the primary driver. In Japan, in particular, execution is closely tied to partnerships with established corporations, which gives startups a strong business foundation, even if it sometimes slows down the pace of innovation.

3. Technology and Product Development: Innovation vs. Practicality

The US startup ecosystem is known for its relentless focus on innovation. Startups here aren’t afraid to push boundaries, experiment, and even risk failure to create something truly groundbreaking. Product development is often driven by a desire to disrupt the market and capture a global audience. In my experience, there’s a strong emphasis on scalability and creating products that are both technically advanced and user-friendly.

In Southeast Asia and Japan, product development tends to lean toward practicality and adapting to local needs. Startups in these regions are often more focused on meeting existing demand and building products that solve immediate problems for specific markets. While the pace of technological innovation may be slower, this approach ensures that products have a strong market fit, especially in regions where customer needs can vary significantly.

4. Market Expansion: Growth at Different Speeds

One of the most noticeable differences is in how these startups approach market expansion. In the US, the focus is on rapid growth and scaling. Once a product gains traction, the goal is usually to expand nationally, if not globally, as quickly as possible. US startups often set ambitious targets for market dominance and aim to capture a significant share within a short timeframe.

In Southeast Asia and Japan, the approach is much more cautious. Many startups in Southeast Asia begin by focusing on local markets, gradually expanding as they solidify their business model and build a steady customer base. Japanese startups often grow with the support of corporate partners, who help them access new markets with a measured, strategic approach. Expansion here isn’t necessarily about speed but rather about ensuring stability and long-term sustainability.

Conclusion

Reflecting on my experiences in these three regions, it’s clear that each ecosystem has its own strengths and challenges. The US excels in fostering innovation and taking risks, Southeast Asia builds resilient businesses that emphasize sustainability, and Japan provides stability through partnerships with established corporations. These differences not only shape the startups themselves but also contribute to the unique business landscapes in each region.

For anyone navigating these ecosystems, understanding these distinctions is crucial. Each region offers valuable lessons, whether it’s the bold ambition of the US, the grounded approach of Southeast Asia, or the strategic collaborations in Japan. And ultimately, these regional differences are what make the global tech landscape so dynamic and diverse.