Beyond

the Age of
Innocence
Can Southeast Asian
start-ups build world-class
organisations?

Jointly Prepared by:

6:30 Partners
Eric Salmon & Partners
Yale-NUS Consulting Group
––
May 2017
Contents
Prologue: An Ecosystem In Transition 4

A Tale Of Two Trajectories 7

Growing The Executive Team 10

From doers to managers 11
From generalists to experts 13
From local to global 16
Knowing what great looks like 19
There’s no one solution 19
The evergrowing CEO 21
From experts to innovators 22

Staff Management Strategies 24

Two schools of thought 25
Controlling in the beginning... 25
… Empowering later 27
Management-staff communication 29
Employee motivation
29
Performance monitoring and evaluation 30

Hiring 31
A difficult environment in which to hire 32
From hiring to hiring smart 33
Hiring fast vs. slow 33
Upgrading the interview process 34
Assessing cultural fit 35
Empowering staff 35
Finding the right channels 36
Improving the CEO's sales pitch 36

When And How To Fire... 38

Firing executives 39
Firing staff 40

Fostering Company Culture 42

Why is culture important? 43
Who drives culture? 44
Explicit or implicit? 45
Scaling culture 45
Challenges specific to Southeast Asia 46

Concluding Thoughts 48

Acknowledgements 50

3
Prologue: An
Ecosystem in
Transition

+
This report aims to support
current and future start-ups'
CEOs by sharing insights,
successes and mistakes drawn
from Southeast Asia’s pioneer
generation.
S outheast Asia is currently at a crucial
juncture in its development as a
start-up ecosystem. Having received more
achieve both high morale and high
performance? If I focus too much on
one of these, will it be at the expense
than USD 3.4 billion in venture capital of the other? For example, if I assess
and growth equity in 20161, many start- staff rigorously based on hitting their
ups are transforming from two-person KPIs, will that create an environment
projects into substantial businesses. With that attracts the best young people?
this shift come new and increasingly And if I don’t, will they perform?
complex demands on the founding team.
• What kind of culture best promotes my
For instance, potential pitfalls arise as staff
vision? Should I try to duplicate what I
size doubles in a matter of months, older
find most convincing in Silicon Valley, or
more experienced executives are brought
might that not work here in Southeast
in, and operations are expanded from the
Asia?
home base into multiple countries.
These are just a few of the questions
Confronted with all the burdens and
and dilemmas that start-ups in Southeast
responsibilities of managing people and
Asia face today. In Silicon Valley, multiple
shaping an organisation, it is not unusual
generations of businesses have wrestled
for a founder to question whether they are
with these challenges over many years—
fully prepared to be an effective CEO at all
but in Southeast Asia, the reservoir of
stages along the way. And even the most
experiential knowledge is far more limited,
confident amongst them are still faced with
and it’s unclear what aspects of the Silicon
some tough dilemmas. Here are some of
Valley model (to the extent that there even
the issues that many Southeast Asian tech
is a single model) translates to this region.
CEOs are grappling with:
In a sense, one can say that the ecosystem
• Who and where are the executives I
is undergoing “puberty”—the process of
need to hire to reach my goals? Do I
coping with the new responsibilities of
invest in highly experienced foreigners,
developing effective leadership and smart
or go for nationals who understand
management systems.
the local context but have far less
experience? And if I look overseas, Our hope is that this report may alleviate
am I better off targeting Americans? some of these growing pains by sharing
Asians? Europeans? the insights of the pioneer generation to
enable tomorrow’s CEOs to learn from
• How can I manage my staff to
today’s successes and mistakes. It would

1 Digital Media Partners

5
be a shame if future start-ups have to
repeat the same trials and tribulations as
their predecessors.
With that goal in mind, we interviewed
a total of six venture capitalists (VCs)
and 32 CEOs or founders during the last
months of 2016. The start-ups they lead
have received funding in excess of USD 3
billion2. Twelve of these interviewees led
late-stage start-ups with a global reach,
while 11 operated mostly within the region
and two focused on their domestic market.
This report focuses on the five key
transitions that CEOs must successfully
navigate to guide their start-ups into
world-class organisations. Where possible,
we try to point out best practices where
these have emerged.
In Chapter One, we identify the two basic
mindsets that shape how CEOs in the
region approach growth, which we call
‘Hyper-growth’ and ‘Controlled Growth’.
We explore how these two perspectives
shape the challenges of each transition
and the approaches that CEOs’ take to
managing them.
2 CrunchBase, TechInAsia
6
Chapter Two looks at the challenge of
building an executive team, and how the
role of the executives including the CEO
changes over time.
Chapter Three focuses on building
effective management systems and how
the leadership and management model
must evolve through different phases of
growth.
Chapter Four addresses who to hire and
how best to hire them, and Chapter Five
looks at the mirror-image challenges of
knowing when and how to let staff go.
Chapter Six looks at organizational culture,
and how it can be shaped to support the
growth of the enterprise.
Each chapter includes some battle-tested
strategies that can hopefully educate,
inspire and influence. As always, your
company will need to find its own solutions.
Disclaimer: Everything in this report applies equally
to all people, regardless of gender. When we refer to
individuals, we have chosen to use ‘he’ to avoid the
rather cumbersome ‘he or she’.
01
A Tale of Two
Trajectories

+
A Tale of Two
Trajectories
identifies the
two basic
mindsets that
shape how
CEOs in the
region approach
growth.
W hy are Southeast Asian start-
ups today moving beyond the
age of innocence? Like a child dreaming
of being an astronaut or prime minister,
the local ecosystem started out with no
boundaries to its dreams about the future.
As the child matures, so do its ambitions:
it aligns them with where it sees its own
strengths and weaknesses, and where it
believes it can succeed.
“
You expect emerging markets
to grow up and become mature
markets. But they don’t: they
become better than the mature
markets, in every single aspect.
They become the future of the
world. We need to be solving
problems that are unique to
emerging markets, not just
resolving mature market issues.
These markets will grow up to be
more solid and vibrant that any
‘mature’ one.
The Southeast Asian start-up ecosystem
finds itself in just that phase of maturing
ambitions today. Founders have celebrated
their first successes, but many have also
licked their first wounds in the past years.
They have become acutely aware of the
great possibilities that their respective
market spaces offer, but are also aware
of the limits imposed by competition,
time, talent and money. As a result, they
8
are recasting their ambitions: some are
becoming much more ambitious than
they started out, others are reining in their
ambitions. But most understand better
what they can realistically achieve, both in
Southeast Asia and more globally. In the
age beyond innocence, it’s no longer the
time for play—it’s time to make serious
plans and execute on these matured
ambitions.
Start-ups’ ambitions have matured
differently. Through our interviews we
have identified two broad clusters of
companies: those going for massive,
accelerated growth, who boldly set their
sights on becoming truly world class, and
those who are building more gradually
and reliably, market by market, waiting
for the right moment to push the pedal
to the metal. We call these two clusters
“Hyper-Growth” and “Controlled Growth”
respectively.
Why have founders and CEOs adopted
one or another of these growth outlooks?
It comes down to the founding team’s
mindset, the nature of the market the start-
up wants to conquer, the degree to which
its product or service is groundbreaking,
and its early experiences with expanding.
Often, when things haven’t gone as
planned early on, CEOs have adopted a
more cautious approach to expansion.
Others were emboldened by early
successes. But our observation is that
the mindset of the founding team is the
single biggest driver: some founders will
never be happy with anything less than a
global footprint and a true world-beating
offering; others are happy to ‘fill in’ niches
that have been successful elsewhere and
have not yet been exploited in Southeast
Asia.
Why do these differing approaches
matter? In the course of our research, we
have identified a number of challenging
transitions that virtually all companies
face as they grow. Depending on the
growth outlook they adopt, start-ups will
have to make very different decisions with
different tradeoffs when it comes to these
transitions.
For example: no CEO wants to fire or
demote a staff member who joined early
on and has been a loyal contributor. In
controlled growth mode, the chances are
higher that the company will be able to
keep early joiners, who are inevitably not
the best people attainable, without overly
compromising the success of the company.
9
Whereas a hyper-growth company has no
choice but to move average performers out
of the way to make space for superstars.
This in turn will drive many other decisions
about how to hire, how to evaluate, and
ultimately what the culture of the company
will be.
Indeed, their approach to many people-
related transitions will differ strongly. The
cumulative impact of all these transitions
determines the ultimate shape, quality and
character of the company’s organization.
We will not be arguing that one approach
is intrinsically better than other. The
best approach is the one that suits
company’s market, its unique offering,
and the character of its leaders. Instead,
our aim is to identify the challenges that
come with each model, and offer some
wisdom gleaned from the CEOs we have
interviewed. We hope that these insights
will help CEOs successfully navigate
whichever path they have chosen, so that
they can realize their maturing ambitions.
02
Growing the
Executive Team

+
Growing the Executive
Team looks at the
challenge of building
an executive team, and
how the role of the
executives including
the CEO changes over
time.
S tart-up CEOs are understandably
obsessed with their revenue
growth. But in addition to revenues, there
is another aspect of growth that CEOs
should be equally obsessed with—but
all too often are not. This is the growth
in their senior leadership team. Although
not common, start-ups in Silicon Valley will
sometimes have fully-formed leadership
teams at launch—teams with the depth
of experience and range of skills needed
to see that company all the way through
to its ultimate ambitions. But in Southeast
Asia, this is unheard of. Most companies
have two or three hyper-talented but
inexperienced founders at the outset, and
lack both the confidence and the resources
to hire proven senior leadership for at least
the first two or three years.
As a result, complacency or inertia may set
in. Founders may think: we have come this
far with our founding team, so why can’t
we continue as we are? These founders
are likely in for a shock. They have failed
to realize a fundamental law of growth: a
company cannot sustainably grow faster
than the quality and depth of its leadership.
An important corollary to this law is that,
for growth to continue without disruption,
a company must at all times strive to have
the leadership team that it will need in
12 to 24 months—which is unlikely to the
exact same team that it needs to operate
today’s business.
These rules come with some heavy
11
implications: every company will at some
point outgrow some of its founders,
unless they themselves undergo several
profound transformations. Similarly with
senior hires. In this chapter, we look at the
challenges start-ups face as they seek to
grow a senior team that can successfully
lead them at every stage, and the difficult
transitions they face along the way.
From doers to managers
Before we talk about how executive teams
evolve, it’s important to first consider how
most Southeast Asian companies start.
Let’s look at the founders themselves. Our
interviews revealed that most founders in
the region ups fit one of two “moulds.”
The first is typified by a local, aged 25–28
years old. They have typically attended a
top local university such as NUS, or one of
the better American universities. They have
anywhere from zero to four years of work
experience, and typically no experience in
management roles.
These founders compensate for their
youth and inexperience with their
ferocious ambition, intelligence, and work
ethic. They are bursting with ideas and are
willing to take personal risk. Also, they are
fast learners: in addition to their excellent
formal education, they are typically
voracious readers about how to run and
scale a technology start-up. However,
this can never fully compensate for their
lack of experience: most founders never
worked for a really well-run company, and
therefore lack any real-life experience of
having seen “what great looks like,” much
less in creating and overseeing it.
The second group is typified by a somewhat
older expatriate, aged 30–38, who has
ten or more years of work experience and
often an MBA. They generally have some
experience of managing teams, although
not necessarily in the same industry or
region as their start-up.
Both groups reported difficulties coping
with the changing nature of their
managerial and leadership roles as staff
numbers increased. One reason is inertia:
nearly all founders start out as doers, not
managers, since there isn’t anyone else
to do the work. They feel good and safe
because they have their hands directly on
everything happening in their company.
This stage of growth is actually very
comfortable for both leader and staff
member. During this stage, founders see
no reason to hire much more senior people,
whom they typically view as unaffordable,
and such senior people would demand a
level of autonomy that the founders are
not yet prepared to give. But soon this
model becomes a massive constraint on
growth.
First, founders become overstretched.
Being involved in all aspect of the work,
they soon become bottlenecks for the
12
teams beneath them if they are not willing to
truly delegate. Second, by participating in
everything, they inadvertently disempower
team members who are all too willing to
defer to a founder, but who themselves get
overly accustomed to acting as followers,
waiting for the founders to make a decision
rather than driving things on their own.
For all these reasons, the first transition
a founder must make is from doer to
manager.
The most successful founders are able
to transition consciously and smoothly,
letting go of their doer role at the right
moment. They recognise the need to begin
delegating, coaching and supervising
staff, rather than micromanaging each
employee and every aspect of the
company’s operations. Some noted how
their transition empowered other team
members, as in the case of this CEO:
“ All start-up CEOs are
understandably obsessed with
their revenue growth. But in
addition to revenues, there
is another aspect of growth
that CEOs should be equally
obsessed with—but all too often
are not. This is the growth in
their senior leadership team.
Although not common, start-ups
in Silicon Valley will sometimes
have fully-formed leadership
teams at launch—teams with
the depth of experience and
range of skills needed to see that
company all the way through
to its ultimate ambitions. But in
Southeast Asia, this is unheard
of. Most companies have two
or three hyper-talented but
inexperienced founders at
the outset, and lack both the
confidence and the resources
to hire proven senior leadership
for at least the first two or three
years.
But for the “empowerment” transition to
be successful, you need to have some staff
members who are capable of operating
with this level of autonomy. Too often the
initial wave of hires lack the experience
and maturity to take on this responsibility
—and they have been badly trained,
because they’re too accustomed to having
a founder tell them what to do at every
turn. This is why it’s essential for founders
to hire a more experienced and capable
cadre of team leaders before they embark
on the transition from Doers to Managers.
When do founders need to make this
pivot? Most founders answered that the
transition is appropriate necessary when
staff numbers exceed 20, and certainly by
the time they reached 30. Some founders
hung on to their traditional leadership
mode much longer, waiting until staff
13
numbers reached 50 or more, but this delay
in shift took a heavy toll on the company.
Many founders said that they struggled
with the adjustments to their own
behaviour that was required to make
this transition successfully, as it exposes
their inexperience as managers. At this
stage, struggling founders need access to
people who can give them feedback on
how they are doing and make constructive
suggestions. This can either be an informal
mentor or a professional coach.
Even though some CEOs feel uneasy
about having less control and doing less
“real work” themselves, they will ultimately
get much more done. With effective
delegation and intelligent management of
employees, they can focus on planning and
shaping the next phase of their company’s
growth.
From generalists to experts
Quite a number of our interviewees
described how their early management
hires were super bright and hardworking
generalists, often drawn from top
consulting firms or banks. These hires
typically don’t know much about the start-
up’s industry or the function they are being
asked to manage, but CEOs hire them for
their brainpower, work ethic and ability to
work in a structured way.

Even though many late-stage start-ups
may still rely on these generalists, and
even though many of them do evolve
into specialists over time, some CEOs felt
strongly that they needed specialists who
had “been there and done that” to help
them scale their operations.
What helps a CEO know when to transition
from generalists to specialists? We have
identified three important considerations:
1. The nature of the role: Generalists are
suitable for roles such as marketing
because “the nature of marketing is
changing so quickly”. It might make
little sense to bring in a professional
with a decade of experience who could
be wedded to outdated techniques.
On the other, interviewees indicated
that CTOs and sales directors require
a depth of experience that far exceed
that of the brightest generalist.
2. The company’s stage of development:
Many of our interviewees preferred to
hire generalists in the early days, in
part because they are easy to hire and
typically sourced through the founders’
personal networks. Also, generalists are
willing and able to get going quickly
when “thrown in at the deep end,”
and are good at shifting tasks quickly
as the company evolves. However, as
operations become more complex and
sophisticated, the situation changes.
As one CEO commented:
14
“
When I first started, I valued
generalists a lot more because
we didn’t have the resources
to have dedicated personnel to
drive things. But no matter how
talented an individual is, if you
have not done something for
many years, you’re not going to
be as good as someone who has.
3. Financial resources: Senior specialists
usually can and will demand higher
salaries than mid-level generalists.
While salary costs are a major issue
for start-ups all over the world, this
concern may be even more salient in
Singapore due to high costs of living.
The generalists are normally younger,
mainly focused on developing their
careers, and thus may be willing to
accept significantly lower pay. In
contrast, specialists are typically in their
30s or 40s, thus more likely to have
families, and as a consequence less
willing or able to take too big a pay cut,
even if the equity and opportunity for
growth is attractive.
Another factor influencing this tendency
is the profile of the founders themselves.
In Southeast Asia, the vast majority are
themselves generalists, if only by virtue
of the fact that they are so young. That’s
quite different from Silicon Valley, where
it’s not uncommon for the founding team

members to be in their 40s, with deep
industry and/or functional expertise. While
this may well be an argument for Southeast
Asian CEOs to accelerate the hiring of
specialists (to compensate for their own
lack of deep expertise), in practice it seems
that they prefer to hire in their own image,
at least in the early days.
And of course this strategy has worked to
a considerable degree, as evidenced by
the number of successful start-ups in the
region. We have been impressed by the
speed at which regional entrepreneurs have
developed expertise in their industries.
But in the long run these “quick studies”
can rarely match up to the capabilities of
a true world-class expert. This gap shows
up particularly acutely in B2B industries,
where long-standing relationships with
other industry players is invaluable, and
cannot be replaced just through “raw
smarts and hard work.”
As budgets grow and complexity increases,
the ability of the smart generalist to manage
and lead effectively typically diminishes.
Two CEOs commented:
“
If you want to grow your
company to five times its current
size in the next few years, you
have to find people who have
experience growing a company
at that rate. They will be
comfortable with the speed.
15
“
While I highly value people
who grew up in the company
and share the values and the
vision of the company, we
need different kinds of people
at different times. Now I am
bringing in senior people with
more experience.
The challenge for many CEOs is that
their generalist senior execs, who have
performed adequately enough in the early
days, are long-standing and much valued
members of the core team—perhaps
even co-founders. How can a CEO move
someone like this aside to make way for
an expert without being perceived as (and
perhaps feeling) ruthless and disloyal?
The answer is in laying the groundwork. The
best CEOs see the need for this transition
far in advance, and mentally prepare all their
executives—including their co-founders—
for the need to make this transition when
the time is right. These CEOs are always
looking at least two years out, anticipating
what types of shifts in the composition
and roles of the leadership team will be
needed, and ensuring that current leaders
understand these future shifts and do not
become wedded in their minds or egos to
their current role. One important aspect
of this is for the CEO to role model this
himself: by clearly delegating some aspect
of his job that he used to lead directly to
a more experienced specialist, and then
leaving that specialist to get on with it.
Most CEOs eventually and inevitably make
this transition, but many report making it
too late. As scale and complexity increase,
it’s tremendously important for the CEO
to have the necessary foresight to bring in
the expertise and experience they require.
They must act decisively, even when their
current team may feel uncomfortable
about how the new hires will affect their
own roles.
Or, as one CEO memorably said:
”
Hire as senior as you can, as
soon as you can.
From local to global
It’s no secret that talent pools for many
key functions are terribly thin in Southeast
Asia. So the transition from generalists to
experts typically brings with it another,
equally daunting challenge: the need to
hire from around the world, not just locally.
In the early stages, start-ups typically
do most of their hiring through personal
networks. This has many advantages: it’s
fast; it’s inexpensive (no pesky headhunters’
fees to pay), and it feels “reliable,” in the
sense that typically a trusted employee is
vouching for the potential new hire, whom
they knew in the past. And generally it
16
works well enough for hiring the bright,
energetic generalists that are so important
in the early phases of growth.
But then it comes time to hire specialists
and experts, and the world looks different.
Many companies that continue to hire
predominantly through their networks,
as it has worked in the past and they
are distrustful of the value that recruiters
can add. But too often these companies
discover, sometime down the road, that
the “expert” they hired locally failed to
deliver the quality and speed of scaling
that they had hoped for. At this point they
have even more difficult decisions—should
they fire the person and try to get someone
better? Or should they stick with them and
try to coach them to reach the level they
need? Both options are imperfect, and
meanwhile the clock is very much ticking,
and precious time is being lost.
To avoid this unpleasant dilemma, the best
CEOs are taking the plunge to tap the global
talent pool early on. There is no doubt that
this requires a lot of confidence—not least
because the salary expectations are likely
to be out of line with the salaries of other
executives already on the team. So this
brings a whole host of difficulties.
Our research indicates that many local
CEOs waited far too long to tap the global
talent pool because they were reluctant
to pay up - even when they had plenty of
capital. Many of the VCs we interviewed
made the point strongly that they would
have preferred their CEOs to spend more
money to get the very best people, as
opposed to taking the best local people
that their personal networks could reach,
but that the CEOs themselves were the
ones putting the brakes on spending.
There are many reasons for this reluctance
to tap the global talent pool:
• First and most important in our view is
the fact that the CEOs have never seen
what “great” truly looks like, so they find
it difficult to conceptualize how exactly
this imagined expert from abroad will
prove to be so much better than his
local, much cheaper counterpart.
• Second is the fact already indicated
that it creates a dislocation between
what the new expert earns and what
the existing leaders earn
• Third is that they (correctly) perceive
there to be “fit” risks when bringing
experts from abroad:
»» Will they understand the local market
requirements?
»» Will they fit in culturally with the rest
of the team, all of whom are local?
»» Will they “roll up their sleeves” or
will they expect to have a large staff
of people to do everything for them?
• Fourth, some younger CEOs may need
to overcome a mental hurdle when hiring
17
executives much older than they are
themselves. In a culture where respect
for elders is critical, young executives
may feel uncomfortable managing and
leading someone significantly older.
This is one CEO’s experience: “At
different points in time, I have tried to
strengthen the management team by
recruiting somebody much older—and
I’ve consistently failed.”
It’s also the case that is has become
difficult to acquire work permits for
foreign executives, at least in Singapore.
One VC explained:
“
Singapore is feeling a little
bit of the paranoia with so
many foreigners coming in,
and getting work permits and
employment passes is more
difficult than it used to be…
We have had work passes not
being approved for talented
people whom we needed, and
where it would be difficult to
find a similarly talented person
in the local market. But you
have to try.
Faced with all these risks and
uncertainties, it is tempting to fall back
on the trusted old method of hiring
someone local, often via their personal
network, who seems to have the right
skills and fits easily into the current
culture and compensation structure.
The willingness to take a modest salary
seems to be a big driver for many CEOS.
As one CEO said:
“
If people come here asking
for equal to or more than what
they were paid in their previous
job, we say ‘no’ to them. It’s
not that we cannot afford
them. It is that we do not know
if they are joining due to a lack
of downside, or because they
truly believe in your company.
I’m looking for someone who
wants to be invested in the
company. Not someone who’s
just there for paycheck… If
they are willing to exchange
their cash for equity, then that
is one indicator of them truly
believing in you.
But it’s much easier for a local to take
a risk on their salary: if it doesn’t work
out he can just find another job. For
an expatriate who may be bringing
a family to a whole new region, they
need a reasonable level of assurance
that they will live comfortably, and they
are therefore understandably less able
and willing to take the big salary cut
that many CEOs see as a testament to
their faith in and commitment to the
company.
18
In short, it is one thing to reject a
candidate because they’re just in it for
the money, and another to be blind to
their personal situation and financial
needs. As one VC pointed out:
“
People need a living wage.
It’s easy for founders to adopt
an idealised conception of their
candidate’s’ motivation and
forget about the latter’s real
needs.
Sometimes this process is easier for a
CEO who is not a founder, as they have
fewer loyalties to the old team. One
professional CEO (who was not a founder)
replaced the entire management team
with more senior people when he joined
the company and had no regrets at all:
“ We needed to bring in
people who have done it
before, seen it before, smelt
it, felt it and so can help to
build and grow the team. With
a young team like we had, it
wasn’t just that they didn’t
know their function intimately,
that they didn’t know how to
scale the function. That was a
key aspect. But they also didn’t
know how to manage.
Knowing what great looks like
As previously mentioned, most local CEOs,
lacking experience, don’t know what to
look for in the first place. Never having
seen “what great looks like” makes it hard
to imagine how the international “crèmè
de la crèmè” are all that different from the
local best.
As one VC said:
“ CEOs don’t know what they
don’t know because they haven’t
had the exposure. You can’t
accelerate the 20 years into 5
years. It doesn’t happen. That’s
why you see people with white
hair who still have a job.
This is where the role of advisors comes in.
The company’s Board may have members
with many more years of experience who
can help the CEO to know when it’s worth
spending the extra to get a world-class
player and what such a person would
look like. And while it is true that many
recruitment firms are pure market makers,
connecting demand with supply without
much thought to quality, there is no doubt
that the best firms (almost all of which will
demand a retainer) are able to bring the
benefit of having met, interviewed and
benchmarked hundreds or even thousands
of executives in a given field to bear on the
challenges that the company faces to find
19
the very best person.
We believe that too many CEOs in the
region have settled for executives who
are more accessible, with the hope that
“this executive is probably just as good,
but costs half as much and already lives in
Asia”. Our belief is that “just as good” isn’t
good enough to get the most ambitious
start-ups to where they want to go.
Despite all of the obstacles, CEOs should
not shy away from hiring the very best
executives available globally, even if it
means paying the extra dollar. Given the
limited talent pool at home, they should
recruit and learn from experienced
foreigners, or they risk losing out when
they attempt to compete internationally
against the world’s best and brightest. A
‘great’ leadership team in Southeast Asia is
likely to be at best ‘good’ when compared
to the best out there worldwide. For CEOs
to bring in world-class people, they have
to take the time to expose and educate
themselves as to what world class really
looks like, and what impact it can have.
There’s no one solution
As mentioned, the majority of our
interviewees favour hiring bright 25- to
30-year-olds with a bit of management
experience. And the fact is, many of
them have achieved excellent results.
Even though such young managers may
not be ready on day one, they may grow
into the role quickly enough. Those who
are passionate, extremely adaptive,
and ready to roll up their sleeves may
prove themselves to be highly capable
executives. So no one solution fits all
situations.
However, it is notable that most of the
CEOs who advocated this approach were
themselves very young. This might point
to the limits of their experience, their blind
spot. It’s crucial that a CEO has ample
access to more experienced advisors who
can help them make these difficult trade-
offs. Another key test that advisors should
be considering is whether the CEO brings
in people smarter than himself.
We’ve argued that overseas executives
with deep experience can add the extra
expertise and leadership skills needed to
take a start-up to the next level. However,
we’ve also heard that it isn’t all smooth
sailing.
If the nature of the start-up is essentially
local, hiring foreigners might not help
because they lack a good grasp of local
markets. As one local CEO put it, “If it’s
a role that requires local understanding
and networks, foreign talent may not work
out.”
Further, executives who are used to working
for bigger companies, even if they are tech
“start-ups” like Google or Amazon, can
struggle to adjust to smaller organisations.
Some CEOs felt that the specialists they
20
had poached from larger companies had
been too pampered and weren’t prepared
for the grind and hustle of start-up life. The
sentiment was echoed by this CEO:
“ In an early-stage start-up,
executives wear a lot of hats, and
regardless of your title, you’re
a leader who needs to do a lot
of things beyond your title. In
more established companies,
if you have a particular title,
you basically only do that
thing. If you’ve become used
to the big company world, it’s
difficult for these people to
adjust because they don’t have
their administrative support
anymore…
Cultural differences may also represent
a challenge in assimilating global
executives. Foreign managers need to
adapt to local customs. For example, staff
bonding rituals based on eating at hawker
centres and going to karaoke bars may
be uncomfortable for a foreign executive.
Sometimes this disruption might outweigh
foreigners’ contribution to technical
and business expertise. It’s critical that
CEOs know how to extract value from
experienced executives and integrate
them into the local company culture.
The evergrowing CEO
“ A company cannot grow
faster than the growth rate in it’s
leader’s mindset
We started this section by stating that the
best CEOs should be as focused on the
growth in their executive team as they are
on the growth in revenues. But what about
their own growth? Or, put differently, what
distinguishes a good CEO from a great
one, and how can a CEO remain great
as his company evolves through different
phases?
One key test: is the CEO able to anticipate
each of the necessary transitions and take
action well in advance, long before they
develop into a crisis? Or does he rush
blindly ahead, obsessed with revenues
and returns, only to crash full speed into a
wall and then pick up the pieces?
Self-awareness is also a key predictor of
future growth in a CEO. This requires a
move away from the “rah-rah” cheerleading
role that most start-up CEOs adopt to get
things off the ground, and towards a deeply
honest and rigorous reflection, both about
themselves and about their company. As
one VC said:
“ Would you rather have a CEO
who missed the budget by 20%,
21
but knows exactly why it was
missed? Or a CEO who actually
makes the budget but isn’t
clear on why it happened? Self-
awareness, that’s key.
We spoke to a CEO who is trying his best
to be an “Evergrowing CEO:”
“
I am always talking to other
entrepreneurs to identify blind
spots and to get ready for future
challenges. I figure out what I
don’t know by talking to other
entrepreneurs, by reading a lot
of books, and by talking to my
investors. Investors have been
value-added in my case. I never
found one super angel investor
or mentor, but I talk to lots of
people and I learn different
things from each of them.
His observations raise a key point: it’s
difficult for a CEO to know what they don’t
know. Even the best of them have blind
spots. One way to systematically identify
potential pitfalls in advance is by using
experts, mentors and coaches. Experts
and mentors can point out the external
pitfalls. But typically it takes a coach to
help identify the internal pitfalls: the
patterns of thinking and behaviours, the
mental models that may ultimately create
these blind spots or give rise to new ones.
When we asked one VC how many of his
portfolio companies have a CEO who can
achieve the company’s five-year goals, he
responded: “All of them, except one, will
need some form of coaching to help them
reach their goals.” As he explained:
“
A lot of people are afraid of
coaching, because they think it
points to their inadequacies and
failings. But if you look at the
biggest Silicon Valley CEOs, they
would all tell you that they’ve
been coached. If you’re a CEO,
you’re… at the top and you’re
alone.
Coaching and mentoring are relevant in
every start-up ecosystem, but they are
especially valuable in Southeast Asia.
First, because the ecosystem is in its
first generation, so local founders are
particularly young and inexperienced,
and their investors and board members
are typically also far less experienced than
would be the case in the Valley. As one
VC said:
“
I think executive mentoring
should be part of… any kind
of start-up because you have
a bunch of young people,
especially so in Southeast Asia.
In America, if an executive has
already been working at Oracle
22
for eight years and then goes to
a start-up… that guy’s now 35
and he’s been an executive since
he’s 27. If you’re a start-up exec
in Southeast Asia, you probably
haven’t had that. If you’ve only
been out of school for two or
three years, there’s no way you
have the operational and people
management experience under
your belt. Silicon Valley is further
along in this regard.
From experts to innovators
However, even the most competent
leaders and experts aren’t enough at a
certain point of a start-up’s growth. The
journey of start-ups is far from linear, and
the longer they live, the more likely it is
that they find themselves on the other
end of disruption. Many companies run
out of steam when the initial innovation
which kicked it all off is no longer sufficient
to drive rapid growth. At this point the
company must start another cycle of
innovation. One would think that all start-
ups excel at innovating, but in fact many
of them become so singularly focused on
executing on the original innovation that
very little capacity for innovation gets built
in the organisation.
Managerial and functional competence
focused on execution is not enough at
this point. A start-up will survive only if
the executive team is able to thoroughly
investigate the company’s situation and
make hard decisions to revive innovation.
This often requires difficult decisions:
cost cutting may be involved to free up
resources to invest in the new direction.
At this point it’s crucial that the company’s
leadership team has a true strategic
capability. It no longer needs just experts
and managers, it needs strategists, deep
thinkers and innovators. As one CEO
shared:
“ The executive team can’t
only be in the details—strategic
thinkers are necessary.
Again, if a CEO starts to build this
capability when the company’s growth has
stalled, that’s too late: it may take 18 to
23
24 months to get the company moving
again—and it’s a lot harder to attract these
innovators when the company has lost its
way. It’s crucial that the CEO can anticipate
this phase and start recruiting a few senior
change-makers before growth stalls.
The success of the company will depend
heavily on how well it anticipates and
navigates these critical transitions:
Founders shifting from being doers to
becoming managers, generalists giving
way to experts, and experts making way
for strategists and innovators. One CEO
shared a simple but powerful rule of thumb
with us for how to accomplish this:
“
Always hire two years ahead
of the curve.
03
Staff
Management
Strategies

+
Staff Management
Strategies focuses
on building effective
management systems
and how the leadership
and management
model must evolve
through different
phases of growth.
I t’s clear that there is no one perfect
management model. Our interviews
one CEO describing his philosophy:

revealed that most companies

adopted one of two broad models. Each
have
of these has unique advantages and
challenges, and each requires a different
set of strategies to succeed.
In this chapter, we present the two models
and explore how they function at different
stages of a start-up’s development. We
also share some strategies that CEOs
have shared with us to get the most out of
each model and mitigate its shortcomings.
Two schools of thought
The two main management models
can be summarised as 'Control' and
'Empowerment'.
In the control model, a few people at the
top run the show. They decide both what
to do and how to do it, and they take
ownership for virtually all of the outcomes.
We interviewed many CEOs who use this
model and find it effective.
In the empowerment model, senior
executives still set the direction and broadly
determine what needs to be achieved, but
mid-level managers and staff generally are
given more autonomy to decide how to
accomplish these goals.
Decision-making is typically different in
these two models. In the control model, the
senior team makes all the key calls. Here is
“ A company is greater than
the sum of the parts, but the
voting system is also detrimental
in building the employees’ trust
in the leader… Democracy is
not always the best way to run
everything.
The empowerment model is typically more
consultative: employees are encouraged
to participate in discussions about the
company’s direction. This clearly takes
time; however, several CEOs pointed out
that such a consultative process yields
better results because it addresses the
concerns of all stakeholders.
Each model has its strengths and
weaknesses. Is one better than the
other? The answer depends on the
stage of development of the company.
Controlling in the beginning...
It is perhaps inevitable that founders tend
to default to the control model in the very
early stages of their company. After all,
there is no one around to empower—or
if there is, they’re likely to be very junior
staff. Every minute of the founders’ time
is consumed with ‘doing:’ putting put
together a presentation for investors,
building the website, finding an office.
The control model makes sense when

25
the number of key tasks to be performed
is relatively few, such that each task can
easily be allocated to a member of the
founding team. By taking direct charge,
the founders can drive performance and
minimise (in their minds at least) execution
risks and co-ordination costs.
The empowerment model is difficult to
implement in the early stages of a start-up.
Areas of responsibility are not well-defined
and the tasks are constantly changing.
Precious time may be lost without the
clarity of a control approach. The principal
benefit of the control model at this stage
is that it is simple, highly flexible, and time
efficient.
However, as the company expands, the
limitations of the control model can
materialize relatively quickly. First, the
founders inevitably encounter technical
or commercial problems that they can’t
solve on their own. Second, they are likely
to become bottlenecks as the number of
tasks and teams they oversee increases.
Third, the founders might soon find they
are so busy “running the company” that
they have no time left to “hang out” with
their ever-growing staff, resulting in low
morale and a dilution of the culture.
Several investors we spoke with felt that the
limits of the control model were felt faster
in Southeast Asia than elsewhere. This is
in part because most local entrepreneurs
are tempted to expand internationally
26
at a much earlier stage than would be
the case in America, where the domestic
market is huge. But this expansion brings
with it the complexities of dealing with
multiple countries, languages, cultures
and government regulations. The only way
to cope with this is to rely more heavily
on executives with local expertise, and to
empower them to a significant degree. As
one CEO said, “The control model became
more difficult after we expanded across
Southeast Asia because I couldn’t be in all
our locations at once. Micro-management
was just no longer feasible.”
For CEOs who still want to run a control
leadership model as their company
expands, there are two strategies they can
adopt to mitigate its limitations. First, they
need to make sure they keep getting input
from advisors, coaches, and mentors, as
well as their own staff, to reduce the risk of
being caught out by their own blind spots
and biases.
Second, many companies have found it is
essential to hire a professional COO whose
job it is to oversee and direct most all of the
day-to-day task execution. A dedicated
COO has much greater capacity to do this
than a CEO, whose time is inevitably drawn
into fundraising, board meetings, external
relations, and other ‘non-core’ activities.
It also has the benefit of freeing up the
CEO and perhaps other founders to spend
more time on strategy, recruiting, culture,
innovation, etc. As one CEO observed:
“
I think a lot of CEOs at some
point discover that they don’t
really want to do that day-to-day
stuff. They’ve done it, they’ve
built it. Now they just need
someone to manage it, because
there’s other stuff to do. I focus
on the “what” and leave the
“how” to my COO.
Contrast that with this CEO’s description
of his very explicit empowerment model
“ The executive team needs
to set the direction. Staff can
give input into the process,
absolutely. But the executive
team will set the direction. But
then we create a lot of space
on autonomy of the how. This is
what we want to achieve, these
are the measures of success.
How do we get from here to
there? You create some spaces
so that your team can breathe.
… Empowering later
The shift to the empowerment model has
many fairly obvious benefits:
• It helps to attract more senior people,
who typically expect more autonomy
than a control model allows
27
• It generates greater sense of
involvement and ownership amongst
staff.
• It facilitates localization of the business.
• It leverages the time of senior
management.
• It facilitates the flow of ideas from junior
staff. As one VC commented, “When
you have tight control in a start-up,
people will not share new ideas and
challenge old ones.”
• It accelerates the development of
junior and mid-level staff so that they
are better prepared to take on larger
management roles in the future.
With so many compelling advantages,
why do so many local start-ups resist this
transition? There are several reasons. First,
it requires courage on the part of the
founders. After two or three years of being
on top of every detail and every project, it
can be deeply scary to let go. As one CEO
said:
“ Push the ability to make
decisions all the way down where
the problem is spotted. Escalate
decisions. Give people the ability
to make decisions. Let them take
risks and fail. Fail fast. Let them
learn from their mistakes.
But for most first-time CEOs, the idea
of giving people so much rope that you
know there will be some failures is deeply
counter-intuitive, particularly when their
companies are small and every dropped
ball feels like it could be life threatening.
Second, a successful shift to empowerment
requires having a layer of mid-level staff who
are mature enough to take responsibility
for their area of empowerment, manage
expectations, and deliver on their
commitments. Many start-ups get going
by hiring very junior staff who lack that
maturity and experience. So their first
experience of empowerment often ends in
disaster, with junior staff failing to deliver
on their commitments, leaving founders
thinking “we were right to hold the reigns
tight—we need to go back to a control
model.”
Third, empowerment requires an effective
measurement system that provides reliable
and timely feedback to all stakeholders
on how a given manager’s progress
matches up to expectations. Many young
companies lack these measurement and
feedback mechanisms. This makes it
impossible to hold anyone accountable in
a fair and objective way.
Fourth, empowerment requires that senior
managers learn how to provide effective
coaching without falling back into their old
habit of telling subordinates what to do.
It takes time and effort to discipine your
instinct.
28
Fifth, empowerment requires that senior
managers have the courage to provide
honest and tough feedback, which they
often find much harder than simply
stepping in and taking over when things
aren’t going well, as they were accustomed
to doing in the control model.
Finally, while employees usually say they
want to be empowered, they can’t always
deal with the consequences. As one CEO
said:
“ Autonomy is scary for a lot
of people. This is not unique
to Southeast Asia, by the way.
You can see this even in the US,
where they think autonomy is
great. Most people still prefer
that someone above tells them
what to do.
Ultimately, 80% of CEOs we interviewed
felt that they have moved towards a culture
of empowerment over time. CEOs can
tailor the empowerment approach to some
degree to accommodate the maturity and
capability of their team. Empowerment
doesn’t have to be absolute—it can be
introduced gradually, and the degree of
empowerment can vary across managers.
For CEOs who are starting to shift to an
empowerment model, it’s crucial to start
by understanding and evaluating honestly
the people who are to be empowered.
Some might quickly thrive with increased
autonomy; others may need coaching and
support, and still others won’t be able to
rise to the occasion.
Management-staff
communication
Open communication between
management and staff also surfaced as
a recurrent theme. CEOs agreed that it’s
important to create plenty of informal
conversations and feedback across all levels
of the company. Such open communication
is seen as key to fostering company
trust and a sense of ownership among
employees. Several CEOs mentioned that
frequent town halls reinforce this culture
of open communication. These sessions
enable the CEOs to get a sense of the
morale and climate amongst staff and
helped staff to understand the direction
the company was taking.
But more advanced communication skills
are needed when there are conflicts to be
resolved. As one CEO advised, “You can
bridge gaps by force or by communication;
the latter is the way to go.” But not all young
executives have the skills to resolve conflicts
constructively through communications,
and some may default back to using
force. Learning the skills of conflict
resolution is an important part of every
executive’s professional development.
Employee motivation
Leaders devote considerable time, effort,
and energy to figuring out what motivates
employees. A number of our interviewees
felt that their staff, and in particular
their senior executives, were not driven
primarily by financial rewards, but more
by ‘emotional’ factors such as company
values and their own opportunities for
professional development.
But another CEO pointed out that
promotions are too often viewed as the
main way of measuring and recognizing
professional development, and that this
was too narrow and inflexible a view. There
has to be a much richer way for employees
(and their managers) to assess their own
professional development, and this in
turn requires companies to invest both
in systems to support this and in some
training and development for the managers
involved. Motivating employees, then,
is not as simple as showering employees
with money or promotions.
One CEO said that investing in better office
space and employee benefits helped to
make his employees feel valued. Similarly,
he has decided to invest in employee
coaching and training. Whatever specific
methods are employed, CEOs need to
consistently reinforce the message that
the wellbeing, happiness and professional
development of all of their staff is a top
priority for the company and for the CEO
personally.

29
Another CEO opted to demonstrate his
trust and motivate staff by allowing them
to take as many days off and to work from
home as much as they wanted. The CEO
noted that they “you need to trust people
for this to work, and for it not to be abused.”
Performance monitoring and
evaluation
Some CEOs felt it was crucial to base all
key staff management decisions on their
performance against objective KPIs. Other
CEOs put more emphasis on how well staff
members were aligned with the company’s
culture and values as well as their loyalty.
Again, neither approach is clearly better
than the other, but it is important to be
explicit and consistent about how staff
performance will be evaluated.
30
In evaluating the performance of talent,
one CEO pointed out that the process
must be simple and fast to provide efficient
feedback loops. In a fast-moving start-up,
annual performance reviews are not nearly
frequent enough to guide and motivate the
best staff or to help ‘catch’ those having
troubles before they fail. Some form of
continuous review and feedback is crucial.
CEOs had differing approaches to the
challenge of ensuring feedback was both
meaningful and perceived as helpful. One
CEO felt it was important to ‘drop one’s
pants’ and be completely transparent,
even at the risk of offending, in order
to build long-term trust. Others felt
that, particularly in the Asian context,
communicating feedback more gently was
more likely to produce a positive result.
04
Hiring

+
Hiring
addresses who
to hire and how
best to hire
them.
T he following quotes typify what we
heard in interview after interview:
“
Talent is by far the number
one priority for start-ups.
“
Money and capital is never a
big problem. Talent is.
“ Every start-up, every VC that
I talk to here, the top-of-mind
issue is how to get the right
talent in the right mix. It’s the
limiting factor.
A difficult environment in which
to hire
Talent is the most decisive asset of a
company, and start-ups must attract top
people to succeed. That’s equally true in
Silicon Valley, Israel, London and Southeast
Asia. But the local talent pools in these
places are very different—with Southeast
Asia generally the weakest by comparison.
Why is this? First and foremost, because
Southeast Asia’s digital start-up ecosystem
is still very much in its infancy, whereas more
mature markets have several generations of
predecessors, through which professionals
have gained invaluable experience. But
amongst the small number of Southeast
Asians who have been working in Silicon
32
Valley, only a handful have come back to
participate in the local scene.
Also, the best and brightest talents in
Southeast Asia are confronted with cultural
and family expectations that make start-up
careers less compelling. Joining a start-
up is still seen as far from a standard or
attractive career choice in most families,
and is generally considered too risky
amongst risk-averse Asian families.
Singaporeans in particular are
brought up to follow established career
often
trajectories in finance, law or medicine,
professions that are seen as guarantees of
job security and a good salary. To top it off,
Singapore’s government often creams off
much of the best talent for itself through
scholarships and bonds.
Second, Southeast Asia lacks people
with deep technical expertise. As one
interviewee offered: “In terms of R&D,
without foreign talent we are at best a 6….
When it comes to marketing and IT, without
foreign talent we are at best a 5. The reason
is that we are a hub for everything… we buy
and sell. We don’t create.” Another CEO
stated that “Our IT students are trained
to do two things: support and sales. They
are not trained to build. They did not go
to the elite institutions. They are not well-
suited for the creative expectations of
start-ups…” It was suggested that there
is a lack of prestige associated with an
engineering degree in local universities
which discourages the very best students.
This has forced Southeast Asian start-ups
to look abroad for their talents far more
than European or American companies
have had to do. However, this brings its
own challenges, as we explore below.
From hiring to hiring smart
Most CEOs spend a huge proportion of
their time on hiring, particularly at phases
of rapid growth. The quality of their hiring
determines not only the success of the
company in the short-term, but also shapes
the culture of the organisation in the long
term.
Many CEOs reported that becoming
better at hiring has been a major focus of
their professional growth, and that their
improvement has had a commensurately
big payoff.
Through our interviews we identified six
core elements to an effective approach to
hiring:
1. Hiring fast vs slow
2. Investing in the interview process
3. Assessing the ‘cultural fit’ of a
candidate
4. Empowering staff to drive recruitment
5. Finding the right recruitment channel
6. Improving the CEO’s sales pitch
33
Hiring fast vs. slow
During the very early stages of a start-up,
hiring is essentially a trial and error process,
as very often the company neither knows
exactly what the staff member will need to
do, nor what type of person is best suited
to do it. Thus, hiring fast makes sense.
Several CEOs said that even if they had
taken time to hire carefully, they would still
only get it right half the time. They felt it
worked better to move fast and sort it out
later:
“
With hiring, you know that
you’re not going to retain
everyone, so you see who’s a
good fit once they come on
board.
Another CEO put it even more bluntly:
“ Let’s just get people in the
door and maybe they’re great
and maybe they suck, but we’ll
figure it out.
As these quotes imply, a “hire fast” culture
necessarily implies a “fire fast” culture, and
this can have unintended consequences.
In an environment where staff are regularly
let go, it’s much more difficult to engender
the spirit of open communication and high
trust that CEOs regularly espouse (but
don’t always achieve). In addition, good
staff may feel demoralized or alienated if
their friends are fired, even if at the end of
they day they agree with the decision.
Other CEOs held the exact opposite
philosophy. Here are some of their
comments:
“
One of the biggest things
our advisors told us is don’t rush
hiring because no matter how
painful it is to take your time, it
will be more painful later when
you get the wrong person, and
they can screw things up, which
you have to clean up later.
“ I don’t think you get anywhere
by hiring fast. So, I would rather
err on the slow side.
Even the “hire fast” companies start to
become more careful in their hiring as the
company matures and they begin to make
very senior hires. Then it’s natural to take
more time to ensure that the hire has the
right experience and is a good cultural fit.
Overall we felt unable to conclude
that one approach was better than the
other, but we would caution companies
with a “hire fast” approach to be very
attuned to some of the second-order
effects of their “fire fast” decisions.
34
Upgrading the interview process
Typically early-stage start-ups have an
interview process that can generously be
described as haphazard, and this leaves
much to be desired. As one interviewee
said: “We have hired people on a single
meeting, no reference checks. I know that
because that’s how I was hired.”
More experienced CEOs emphasised
the need for the company to invest in a
rigorous and methodical interview process.
As one said, “there’s no better way to
spend money than on training people to
do a better job of interviewing.” Another
interviewee shared how he went about
improving recruiting process and reaped
the rewards for it:
“ I realised that people don’t
know how to interview. So I
created an interview guide with
the questions, why you would
ask those questions, reference
checks, a minimum of three
interviews in the company,
including one person who would
actually work with them, do a
cultural fit gut check. So we put
those in place to try and improve
our selection process. We’re
definitely getting much better
talent.

Upgrading the interview process seems to
be a matter of continuous improvement:
it can always be better, and as the
company expands, the number of people
involved in interviewing new staff grows
exponentially—so the company must
keep investing in training its staff on how
to interview effectively, and must ensure
that interviews are conducted and the
results interpreted consistently across the
company.
Assessing cultural fit
Almost all of our interviewees agreed
that a hire has to fit with (or integrate
into) the company culture. This in turn
helps build and solidify the culture. Great
qualifications and a wealth of experience
are not enough. This is a critical imperative
for one CEO we interviewed:
“
I’ve always built teams of a
certain ilk. There are people that
I interviewed whom I think will
be phenomenal at growing a
company, and will be great, but
not with me, and not with the
team that I built.
Assessing the cultural fit of a potential
hire at the executive level is particularly
important—a senior leader who doesn’t
get along with the others can quickly derail
the entire company. But it’s also particularly
difficult to do, as one interviewee explains:
35
“
It’s about understanding what
the executive culture is, which
is not necessarily the culture of
the entire company, and it’s not
always obvious. For example,
someone who believes in a lot of
consultation may be a great fit
for the team they will lead. But it
drives me crazy and would also
drive the people whose vision is
aligned with mine crazy. So they
would ultimately not fit into the
team.
Very often, senior management teams who
have worked together for a long time fall
into a pattern of behaviour that defines the
leadership culture, but which they aren’t
even aware of—it’s been so much a part
of their daily existence for so long that it’s
simply like “the water they swim in.” But
for an outsider joining this group, these
norms and behaviours can be an unspoken
and somewhat impenetrable barrier to
fitting in if that fit doesn’t come naturally.
Empowering staff
How can you create a recruiting system that
continuously reinforces your culture? One
approach that some CEOs have adopted
is to empower people several levels below
them to drive the recruiting process.
“
around how to engage with those he
We empower the teams wanted to recruit:
to hire; so it’s not like every
hire goes through my door, or
even my head of HR. We have
“ It’s not necessarily that they
don’t exist. It’s that you have to
25-year-olds hiring 21-year-
go through a different channel
olds, and it’s actually working
and approach it differently. We
really well, because even more
started to get better with being
than me sometimes, they carry
able to hire and attract good
the company. They know what
Singaporeans because we now
they need, whereas me hiring
advertise where Singaporeans
someone four levels below me
look for work.
won’t work.

Other foreign CEOs said they found it

A candidate is more likely to fit into the
very hard to hire locals until they had
team when they have been chosen by the
hired the first few locals—after that they
people they’ll actually be working with.
could leverage their staff’s own networks,
resulting in more quality local hires.
Finding the right channels

Typically a start-up’s earliest hires come via Improving the CEO’s sales pitch
personal contacts. But personal networks
How do some start-ups attract top talent
rapidly reach their limits as the company
even when they can’t afford to pay top
scales, expands geographically and
salaries? The answer to that almost always
searches for more specialised skills. At this
lies in the ability of the CEO to make the
stage many companies turn to LinkedIn
pitch: to convince senior candidates of
as well as local recruiters to find suitable
the scale and importance of the mission,
employees. But several CEOs told us that
the potential value of their equity, and the
they only started to find the right type
scope they will have to make a big impact.
of staff when they tapped into the right
channels. While CEOs mostly focus on what they
can get out of a candidate, they do better
This is especially true for expatriate
when they understand that it’s a two-way
CEOs trying to recruit local staff. One
street. The candidates want to work with
such executive, who struggled to hire
teams, values, and problems that resonate
top talents, shared the following insights
with them as well. As a result, CEOs must

36
become not only masters of the sales
pitch, but also masters of discerning the
underlying motivations of candidates—
because it’s never just about the money.
Armed with deep insights, it’s easier to
make an offer the candidate won’t refuse.
For example, here’s one CEO talking about
how he brought on a superb CTO:

“ For him, it’s about working

on the most complex technical
problems that he can find. I said
we have exactly what you’re
looking for here. The work here
can get seriously complex and he
loves it.

Here’s another typical pitch that a CEO

used to bring on board his current
management team:

“ It’s gonna be painful. You’re

losing a third of your salary. But
you’re gonna have a phenomenal
ability to define your trajectory,
your future. And if we kill it,
you’re gonna make a lot of
money.

37
05
When and How
to Fire...

+
When and
How to Fire...
looks at the
mirror-image
challenges of
knowing when
and how to let
staff go.
U ndoubtedly, one of the toughest
challenges for a CEO is when he
concludes that a senior executive needs
to be let go. This challenge is multiplied
tenfold when the executive is a co-founder,
with the moral authority and significant
equity ownership that that typically brings.
Firing executives
Many CEOs try to sidestep these situations
to avoid the pain and fallout—particularly
when the executive is a co-founder. Most
CEOs are understandably reluctant to
remove a co-founder even when they are
holding the company back in important
ways. Firing a co-founder risks losing
other key employees who are loyal to that
founder. “You risk losing the co-founder’s
second layer of management, who are
close to him … so the guy who replaces
the founder often has to rebuild the entire
second line of leadership.”
One CEO kept an underperforming co-
founder involved because he believed
that this founder “was the heart of the
organisation.” Some try to support
weak co-founders by hiring a competent
manager to partner with them. One CEO
we interviewed tried to help a founder by
“recruiting somebody with expertise in
scaling an organisation” to work directly
with him. Such a strategy can on occasion
be effective, but it also creates a number
of problems. There are now two people
39
doing one job. Employees frequently
game the system by approaching whoever
will be more sympathetic to their point
of view. These costs typically eventually
outweigh the benefit of hiring a supporting
manager.
These moves typically only stave off the
inevitable, and rarely resolve the issue.
As the company grows, new stakeholders
including investors board members and
newly hired senior executives will demand
that the CEO deal with the issue. In the
end, it’s just a choice of when to deal with
the inevitable. Unsurprisingly, virtually
every interviewee who had been through
this unpleasant process felt that they
should have dealt with it earlier.
What CEOs must come to realise is that
the letting go of executives is a natural
part of an executive team’s evolution.
One CEO highlighted the importance
of responding swiftly to sustain a team’s
maximum performance: “We can’t play
the game of striking a middle ground and
giving second chances. We need the right
people in. We’re ready to move whenever
we need to remove an average performer.”
For senior executives who are not co-
founders, this is a painful decision but one
that typically resolves itself soon after the
decision is made. But with a co-founder
the stakes are much higher. For this reason,
CEOs typically look for a role that keeps
the co-founder in the company, but gets
them out of their executive capacity. This
typically works well as long as the founder
is happy with his new role. But the CEO
needs to ensure that the successor is given
sufficient autonomy and is not shadow-
managed by the co-founder.
Once again, the success of this critical
transition depends in large part on
how far in advance the CEO can see
it coming, so that he can help people
get comfortable with the options and
their implications over time. Typically a
mature and experienced CEO will have
the edge on a young first-timer in this
regard. As one VC said: “I want mature
CEOs, so that when they’re put in difficult
situations, they will do the right thing.”
Firing staff
To what extent should CEOs tolerate
underperforming employees? Many CEOs
feel uncomfortable firing underperformers.
They may feel that if an employee is
committed and works hard, what price
should he pay for not meeting his targets?
Others are happy to fire underperformers
at the drop of a hat.
The majority of the CEOs we interviewed
were in favour of tolerating a hard-working
underperformer. They claimed that letting
go of such employees could pose a
danger to the stability and morale of the
remaining staff and reflect negatively on the
company’s values, thereby undermining
40
the culture in the long term. Some CEOs
proposed a “second chance” process in
which they place the under-performing
employee in another role to give them a
new opportunity to prove themselves.
For the most result-driven CEOs, patience
runs thin that much more quickly. CEOs
embracing this philosophy defended it
as fair as long as it was properly set up
and explained. “Cold-hard numbers and
targets… are usually agreed upon with
the person upfront in the very first week
of them joining.” On this basis, failure to
meet targets provides a valid justification
for firing a staff member. Some CEOs
justify this by pointing out that start-ups
have scarce resources. “We can’t afford to
play the game of striking a middle ground
or giving second chances.”
In order to make the parting of ways
amicable, CEOs should make sure
in advance that there is clarity with
regard to the measures of success for
which candidates are accountable. One
interviewee offered an example:
“
We’re hiring VP of Sales now.
For me, that’s the best role,
because that’s about as metrics-
driven as possible. I need you
to hit x dollars, and if you don’t,
we’ll have to part ways.
Evidently, CEOs approach the challenge
of firing under-performing employees in
different ways. Some CEOs prefer to rip
off the band-aid quickly, while others take
it slow. Many, however, regard the process
as an important piece of a culture that is
grounded in honesty and transparency.
From this perspective, the unpleasant but
necessary deed can be seen as a healthy
act that serves the company’s overall
wellbeing. If employees also understand
this then that mitigates the risk a firing
undermining employee morale. In short,
a strong company culture supported by
open and transparent communication
provides a a solid foundation for even the
most difficult aspects of staff management.

41
06
Fostering
Company
Culture

+
Fostering Company
Culture looks at
organizational
culture, and how
it can be shaped
to support the
growth of the
enterprise.
T he term ‘culture’ in the context of
start-ups often conjures up images
of nap pods, pool tables, and well-stocked
pantries. However, it encompasses much
more than that. Culture is a company’s
identity, its norms and its working practices.
As one CEO said, “culture shapes
everything you do… it tells people what to
do when nobody’s looking”. In this section
we explore the challenges of shaping and
maintaining a healthy company culture
through different phases of growth.
Why is culture important?
Culture aids in retaining and attracting
talent. How do young, cash-strapped
start-ups get the smartest minds on board
and then prevent bigger companies from
poaching them? This is what one CEO
said:
“
Someone’s always going to
be able to pay more. How do
you stop them from taking your
best talent? Culture. They can
copy your business model, your
technology, and can offer you
more, but they can’t recreate
your culture. So it’s important
to create a unique environment
that people love and want to be
a part of. People are attracted
by our culture, our unity, and our
passion; so it makes it easier for
43
us to convince potential hires.
Through a culture that helps staff develop
a feeling of belonging to the organisation,
start-ups get more dedication from their
staff and also promote loyalty. “Things
like cookouts, barbecues and family days
not only lead to strong company values,
but also strong emotional attachments.”
Cultures that emphasise the importance
of job satisfaction are also productive.
For one CEO, the constant emphasis on
“opportunities for personal development
is what keeps the attrition rate low”.
A strong culture also helps employees
to understand and stay true to the vision
and goals of the company. As one CEO
explained, “You can only give so many
instructions per day, and people’s duties
go way beyond that. So most of the time,
they work based on the existing culture.”
Culture also plays an important role in
promoting growth. One CEO thinks
of his employees as “missionaries, not
mercenaries,” arguing that strongly
purpose-driven companies will always
outperform others. Another CEO makes a
similar connection:
“ We have a culture of
autonomy, growth, and trust.
We give people enough room
to make their decisions, and this
ends up in better performance.
In fact, one of the reasons why
we have grown as a start-up is
due to this.
Two-thirds of our interviewees highlighted
the importance of culture in helping the
company scale.
Who drives culture?
Culture naturally begins with the founders,
and is carried (or not) by the full leadership
team as the company expands. While this
may seem obvious, several CEOs stressed
the need to constantly remind their
leadership team members of their role in
shaping company culture.
CEOs and other executives, through
virtually all of their words and actions,
convey the company’s culture
employees, setting a model for other
aspiring leaders in the organisation. This is
how one CEO projects culture:
“
As a CEO, I lead by example. I
come to work at 7.30 and I leave
at 3.30 or 4. I just don’t care
about the amount of time you’re
in the office. It’s about the work
that you do. If you’re the type
of the person to want to beat
me in the office and stay until 1
am, I think it’s pointless because
I won’t see it. If it takes you 16
hours to do your job, I think
there’s fundamentally something
you’re not doing right. This has
created a culture where people
work efficiently and effectively.
Another CEO told us, “We have a culture
that emphasises four things: be responsible
to yourself, your family, your team, and
your company. These are more important
to me than KPIs.” This balanced approach
helped him to create a low-stress working
environment and has engendered a high
degree of loyalty.
Influence isn’t limited solely to the
founding team. One of the CEOs we spoke
to highlighted the positive impact a newly-
hired executive had on the company’s
cultue: “When she came in, she brought
a lot of organisation and professionalism
to
to the company, and that is now reflected
in our culture.” Through their experience,
executives who come on board at a later
stage can contribute to the existing culture
or even alter it.
However, the impact of bringing in
experienced executives from outside
can also be negative. One CEO
explained that he tried to strengthen
the team with an external hire, but that
there was a massive culture clash, and
eventually the executive had to leave.
44
Explicit or implicit?
Every company has an implicit culture,
but only a few CEOs invest the time and
energy to distill their culture into words
and make it explicit, hoping to carve out
a unique identity for their company. One
advocate of this approach went so far as
to say that “if employees cannot recite the
mission and the values, it’s a failure of the
leadership team”. Is there any tangible
benefit to openly and explicitly defining
the start-up’s culture?
Our view is that explicitly addressing
culture encourages people to assess how
well they are aligned with the company’s
values and norms, and to either abide
by these or self-select out. An explicit
company culture can also facilitate the
ironing out of conflicts between people. As
one CEO explained, “the reason behind
actively enforcing our culture is that some
people had very different cultural notions,
which unfortunately created a hostile
environment within the company.” He
was convinced that explicitly stating the
values and culture of the company could
help bridge the gaps between people
and make the company more tightly knit.
Scaling culture
Nearly half of the CEOs we spoke with
described their struggles with maintaining
and evolving their culture as their company
scaled. One CEO pointed out: “When you
45
are a small company, having barbeques,
sleeping in the office, spending time
together on the weekends is great and it
works. But when you are 500 people, it’s a
completely different set-up.”
Finding ways to shape the culture through
different stages of growth is key. For
some, it’s an organic process—one that
is stimulated by new hires, new office
spaces, new objectives, etc. For others,
it’s a process that requires a conscious
effort and an adjustment of expectations.
One young CEO told us, “We went from
being a bunch of guys walking around
in t-shirts, and running the whole show,
to wearing shirts and attempting to be
more professional.” This was the result
of a conscious effort on his part to pivot
towards a more formal culture in response
to the growing size of his company.
As companies expand into multiple
countries, the cultural differences across
these countries also plays a significant role
in shaping culture—or diluting it. Start-ups
operating in different countries, regardless
of whether they have a centralised or
decentralised organisational structure, find
it hard to maintain common values and
identities across the different countries.
“Cultural differences across countries is
one of my biggest problems.”
What are some strategies for addressing
this? One CEO told us that he combats
the issue by having people travel as much
as possible. While this seems to work,
not every company will find it feasible
or affordable. Another CEO said that he
“actively tried to drill the culture down in the
country managers.” However, he admitted
that this is only a partial solution: “You can
never completely bridge the cultural clash.
What is important is to educate people on
ethical standards and values. I think local
leadership is the key to success. Because
that is when you get the best decisions.”
As long as everyone knows the values of
the company, allowing regional leaders to
operate reasonably autonomously enables
them to balance local business and cultural
practices with those of the head office.
Such a decentralised leadership structure
allows country heads to act as a cultural
bridge between the head office and
regional staff—but it does require a very
skilful and culturally aware local leader.
Challenges specific to Southeast
Asia
Southeast Asia comprises 11 countries
with very different cultures and attitudes.
It is also multi-ethnic, with most countries
having a diverse local population. This can
lead to tensions, misunderstandings, and
inefficiencies. As one CEO said:
“ Frictions usually arise when we
have to work across countries.
Our Singapore execs operate in
a vastly different context from
46
our Indonesian, or Malaysian
ones. Getting alignment
between these different cultural
contexts is extremely difficult.
An American CEO explained that he
grossly underestimated the cultural
differences within Southeast Asia: “I had to
take the time to learn the local conditions
in these places, before I could do business
properly. Then I had to get my local staff to
do the same!” Even local executives need
to familiarise themselves with the nuances
of different cultural contexts and adapt to
them.
In addition, the cultures of Southeast Asia
also plays a large part in determining
the CEO’s behaviour. For example, one
CEO remarked that the Asian custom
of respecting elders has caused him to
maintain more distance from his young
employees than would have been his
natural instincts.
Further, Southeast Asian start-ups have
attracted a large Western expatriate
population. As already discussed, this can
introduce cultural difficulties. One CEO
told us, “We had a tough time with our
American hire. He couldn’t fit into our Asian
work-life cycle, and our hawker centre
outings, etc.” Issues such as adjusting to an
“Asian work-life cycle” may seem abstract,
but are a real challenge faced by many.
Another CEO stated: “Western attitudes
are difficult to adjust to, here in Asia. They
have different ideas regarding work-life
balance. Not that they work harder or less
hard. Just that there are differences.”
What this reveals is the importance of
the CEO in continuously sensing and
influencing the company culture and the
47
need for him to pay particular attention to
potential cultural ‘boundaries’. As a start-
up grows and expands geographically, it
must be able to modify its company culture
to respond to new influences and get the
best out of everyone.
07
Concluding
Thoughts

+
The success of
start-ups largely
depend on how
well CEOs navigate
transitions.
O ur research confirmed our initial
hypothesis that Southeast Asian
start-ups are at a crossroads. Companies
that in recent years have been pursuing
'Controlled Growth' strategies in relatively
uncompetitive markets are finding they
need to rapidly raise their games, as they
increasingly encounter competition from
international players and better-funded
local firms. Market pressures are forcing
these CEOs to focus on rapidly upgrading
their leadership teams and management
systems - a process that many have under-
invested in in the past.
Companies pursuing 'Hyper Growth'
strategies have always felt this pressure,
and are pushing harder than ever to build
world-class management teams that can
stay ahead of the company's growth curve.
49
In both cases, the challenge for CEOs is
to guide their companies through the
transitions we have outlined in this report.
This requires wisdom and foresight.
Transition too soon and you're stuck with
an expensive executive team that is top-
heavy for the job at hand. But the more
common mistake is to transition too late,
leaving companies with leadership teams
that can't move and grow as fast as they
need to.
The success of Southeast Asian start-ups
in the next phase of the ecosystem will
depend largely on how well CEOs can
manage these transitions, and how rapidly
they can 'grow themselves' to lead this
process.
Acknowledgements

The sponsors would like to

express their deep appreciation
to everyone who has
contributed to this study. 
Yale-NUS is an autonomous liberal arts college ––
founded jointly by Yale University and the National
More information is available at
University in Singapore. It admitted its first class
www.yale-nus.edu.sg/
of students in 2013, which is due to graduate in
May 2017. Students take courses in a variety of
subjects during their “common curriculum”,
ranging from philosophy to the physical sciences,
before they choose a topic to study in-depth. The
college seeks to innovate and redefine education
by integrating ideas and intellectual approaches
from all around the world, strategically taking
advantage of its location in Asia and drawing on
the traditions of its two parent institutions.

The Yale-NUS Consulting Group believes that the ––

skills, the approach, and the ideas of a consultant
are valuable in any career path; it kickstarts More information is available at
students’ path into business. Next to organising www.yalenusconsulting.com/
training workshops, the group harnesses Yale-NUS’
deep student talent pool, leveraging their unique
understanding of the desires and pressures faced
by young adults to bring real value to organisations
in Singapore and Southeast Asia. After training
40 students, the group has completed two
client projects and is currently undertaking four. 

51
About the
student team
Aaron Kurzak
Aaron co-founded YNCG and
is a member of Yale-NUS’
inaugural class, graduating in
2017. He oversaw the group’s
first six projects with clients in
Singapore and Hong Kong,
and previously worked in
government consulting and
renewable energy.
Bernie Chen
Bernie is the lead consultant on
this project and is part of the
YNCG’s business development
team. He has interned with
IBM in Hong Kong and has a
keen interest in consulting in
the Southeast Asia region. He
hopes to one day run his own
business.
Bosen Xia
Bosen has completed multiple
projects with the Yale-NUS
Consulting Group and is
pursuing a career in the start-
up sector. He is interested in
entrepreneurship, technology
and innovation.
Dhivesh Dadlani
Dhivesh has interned with
Lazada and is part of the
YNCG’s business development
team, where he actively seeks
to expand the YNCG’s clientele.
He is interested in economic
research and consulting.
52
Marissa Foo
Marissa has experience in
partnership-brokerage for
SMEs in developing regions
pertaining to business
strategies for sustainability. She
has a keen interest in emerging
financial and technological
trends.
Pogaru Saisrikar
Sai previously served as an
Instructor at Officer Cadet
School and is currently working
with SafeMotos in Rwanda.
He has interests in strategic
consulting and marketing, and
hopes to one day run his own
social enterprise in emerging
markets.
About the
sponsors
Rob Bier
Managing Partner, 6:30 Partner
Over the course of his career, Rob has
been a successful entrepreneur, venture
capital and private equity investor, and
strategy consultant. Today he is an
executive coach and mentor to several
of Southeast Asia’s leading high-growth
technology companies and start-ups.
T +65 9643 4200
E rob@6-30partners.com
Dimitri Tsamados
Partner, Eric Salmon & Partners
With over 20 years’ experience in
the technology sector as a search
professional based in Asia, Dimitri
has garnered extensive knowledge
of the region and its cultures. Dimitri
is actively involved in the world of
start-ups, utilizing his knowledge and
understanding of the industry and
region to help companies as a coach
and investor.
T +65 9875 7672
E dtsamados@ericsalmon.com
6:30 Partners is Singapore- ––
based Leadership Advisory
Firm offering Talent More information is available at
Management, Team Coaching www.6-30partners.com
and Individual Coaching
services to technology and
other high-growth companies
across Southeast Asia. It is
committed to helping its
clients move the dial on their
performance by helping their
individuals, teams and Boards
perform at their very best. We
facilitate this through executive
coaching, team development,
and strategy facilitation.
Eric Salmon & Partners is an ––
international executive search
firm active in the technology, More information is available at
digital, e-commerce, and www.ericsalmon.com
start-up sectors. The firm
helps its clients to identify,
attract and retain successful
executives and to develop
effective leadership
teams. With a unique global
footprint and a strong
presence in Asia, Eric Salmon
& Partners delivers diverse
missions globally. Some of the
most prestigious searches of
the past few years have carried
the discrete signature of Eric
Salmon & Partners.
53
The contributors
The Sponsors would like to express their deep appreciation to everyone who has contributed to this study. Our
interviewees, listed below, shared their time and thoughts with us generously.

Aung Kyaw Moe Kris Marszalek Shailesh Naik Roger Egan

Founder & Group CEO
 Co-founder & CEO 
 Founder & CEO
 Co-founder & CEO

2C2P
 Foris 
 MatchMove
 RedMart

www.2c2p.com www.foris.co www.matchmove.com www.redmart.com

Tim Norton Kelvin Teo Richard Koh Stephanie Nash

Founder & CEO
 Co-Founder
 Chief M-DAQer
 Chief People Officer

90 Seconds
 Funding Societies
 M-Daq
 RedMart

90seconds.com.sg www.fundingsocieties.com www.m-daq.com www.redmart.com

Charles Wong Romain Voog Peng T. Ong Michael Smith Jr.

Director, Head of Asia
 CEO
 Managing Director
 Partner

Aura Group
 Global Fashion Group
 Monk's Hill Ventures
 SeedPlus

www.auracapital.com.au www.global-fashion-group.com www.monkshill.com www.seedplus.com

Achmad Zaky Andre Hesselink Snehal Patel Andrew Khoo

Co-founder & CEO
 CEO
 Co-founder
 Co-founder & CEO

Bukalapak
 GoBear
 MyDoc
 Tessa Therapeutics

www.bukalapak.com
 www.gobear.com www.my-doc.com www.tessatherapeutics.com

Quek Siu Rui Mark Britt Lai Chang Wen Nathalie Benzing
Co-founder & CEO
 Co-founder & CEO
 Co-founder & CEO
 COO

Carousell
 iflix
 Ninja Logistics
 TradeGecko

sg.carousell.com www.iflix.com www.ninjavan.co www.tradegecko.com

Victor Lavrenko Georg Chmiel Sas Parmanand Eric Barbier

CEO
 Chairman
 Founder & CEO
 Founder & CEO

Coc Coc
 iCar Asia Limited
 One Animation
 TransferTo

www.coccoc.com www.icarasia.com www.oneanimation.com www.transfer-to.com

Fazal Bahardeen Amit Anand Jeremy Fichet Joel Bar-El

Founder & CEO
 Founding Partner
 CEO
 Co-founder & CEO

Crescentrating
 Jungle Ventures
 Orami
 Trax

www.crescentrating.com www.jungle-ventures.com www.orami.com www.traxretail.com

Dmitry Levit David Gowdey Joseph Phua Chua Kee Lock

Founder & General Partner
 Managing Partner
 Co-founder & CEO
 Group President & CEO

DMP
 Jungle Ventures
 Paktor
 Vertex Ventures

www.digitalmedia.vc www.jungle-ventures.com www.gopaktor.com www.vertexventures.com

Mark Suckling Tim Rath Jeffrey Tiong

Principal
 Co-founder & CPO
 Founder & CEO

DMP
 Lazada
 PatSnap

www.digitalmedia.vc www.lazada.com www.www.patsnap.com

Eddie Chau Alexis Horowitz-Burdick Hari Krishnan

Chairman
 Founder & CEO
 CEO

EC Frontier
 Luxola
 PropertyGuru

www.ecfrontier.com www.luxola.com www.propertyguru.com.sg

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David Chia Jun Weng

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