A single $ of revenue from government procurement is often worth much much more than a single $ of investment by a VC fund. This is because startup valuation is a multiple of revenue and profit growth and revenue is proof of derisked product market fit, i.e. customers are willing to pay for it. Hence, government procurement can be a much larger lever of value creation for any startup ecosystem if deployed correctly. Unfortunately, this is not reflected in policies and is often missed out in strategy papers by consultants and policy makers. Even in a small country like Malaysia, the government spends billions annually on IT and tech procurement. In many cases, efficient and productive startups are also frequently crowded out by entrenched businesses and interests even if solutions from certain startups could be more nimble, more efficient or more friendly to tax payers. Government agencies should NOT be forced to buy local or from startups necessarily. However, they could be encouraged nonetheless to be supportive where possible. Hence, perhaps some extra + 10% weightage should be given to RFPs whenever local technology is used and negative weightage of -10% be given to straight through importations of foreign products. This partial skew could help spur a more robust local tech ecosystem.
'...but , we also humbly ask ministerial officials, please do your best to support the startups here, not by paying them money or grants, but if they could develop a very competitive product… why not just try to encourage the use of their product designs produced by startups in Malaysia?..' This sentiment was my main takeaway from the recent KL20 Summit. At this summit, Datuk Pua Khein Seng made a compelling case for the government to adopt more products from startups. Yet, despite Malaysia’s ambition to become a leading tech hub in the APAC region, we find ourselves at a pivotal moment where the government’s action—or lack thereof—could make or break our potential. Datuk Pua’s plea highlighted the crucial need for government backing to foster a thriving startup environment, one that could be a game-changer for our economy. The integration of startup innovations promises not just improved governmental operations but also a testament to a genuine commitment to technological progress and the entrepreneurial spirit. At Kapitani , our hope is to witness a new era of transparency within government entities, one that promotes partnerships which directly benefit our farmers and extends well beyond mere technology providers and traders. #bertanibinanegara #cukupdanterjamin #KL20 #Malaysia
Global oil & gas finder/ Family Fund investor
10moHv you heard of big makan, small makan, semua makan? Why we hv brain drain over a million to Singapore, the 4th richest nation in the world???