The startup community tends to revolve around developed economies. And that makes sense. In those environments, it’s easier to start businesses, find funding, and get products to market. And many entrepreneurs ignore emerging markets, either because they don’t know enough about them or believe them to be too risky.

The startup community tends to revolve around developed economies. And that makes sense. In those environments, it’s easier to start businesses, find funding, and get products to market. And many entrepreneurs ignore emerging markets, either because they don’t know enough about them or believe them to be too risky.

But entrepreneurs shouldn’t ignore emerging markets. There’s been a sharp increase in VC activity in those places, reflecting the scale of opportunities. They should, however, do their homework to find out how to operate and thrive in emerging markets before jumping into one. And that’s where David Yong comes in.

Yong is an accredited Singaporean attorney and entrepreneur that serves as the CEO of Evergreen Assets Management, a holding company in the Southeast Asian region. He began his entrepreneurial journey as a child at his father’s side, watching him build the family timber business in Myanmar. That experience and his journey taught him some valuable lessons about what it takes to succeed in emerging markets.

Here’s a look at Yong’s journey that could benefit entrepreneurs.

A Ground-Floor Opportunity

Back in 1990, political upheaval kept western investors away from Myanmar and left a vacuum in the nation’s economy. It was in that vacuum that Yong Ing Fatt founded Evergreen Teak Trading, with 10-year-old David at his side. He had accurately surmised that there was a massive international demand for Burmese teak — a demand he would lead to a financial windfall and make him a multi-millionaire.

All the while, David learned from his father, watching him navigate uncharted economic waters to create a thriving business. It didn’t take long for him to recognize a few truisms about what it takes to operate a business in an emerging market like Myanmar. The first was how vital it is to have a working understanding of applicable local laws and to build relationships with the authorities wherever possible.

David says, “Running a business is not that simple. There are many legalities involved, especially with contracts and the many licenses to apply for. We also have to liaise with the authorities often.” So he set out to get legal training, which resulted in him becoming a full-fledged lawyer by the age of 27. He then started a legal firm called YSL Legal LLP to provide the needed counsel to his family’s businesses.

Branching Out Into Parallel Markets

But David wasn’t content to practice law and help run the family business. He had a bigger vision in mind. What he wanted was to find a way to expand the company’s interests beyond raw materials. And that vision took on a new urgency when the government in Myanmar slapped export restrictions on those very raw materials in 2014. That’s when he took the reins of the family business.

His solution was to launch wood processing and furniture plants within Myanmar, under the name Burma Teak Asia. Of the effort, he said, “Our company used to do only wood barrel and raw materials, and when I took over I bought two furniture factories in Burma and we made our furniture.” The move helped the company survive the export ban, and even created a tenfold return on the initial investment of $500,000 within a single year.

For David, the success of Burma Teak Asia was a confirmation of everything he’d learned about doing business in a market like Myanmar. His takeaway from the episode was that it pays to diversify one’s business interests as a hedge against shifting economic or political conditions. That way, it’s easier to stay nimble and survive no matter what happens. And it was a lesson that informed David’s next moves.

Regional Growth and Innovation is Key

After overcoming the export ban, it soon became clear to David that expanding beyond Myanmar’s borders had to be a top priority. It was necessary, in his mind, to build a wider financial base that couldn’t be held captive to the political whims of the moment in a single country. So he expanded Burma Teak Asia’s furniture brand into other nations in the region.

But that wasn’t David’s last move. The multi-hyphenate has pushed boundaries with a multi-diversified portfolio of investments, including non-bank alternative sources of loans and investments in multiple countries and sectors. For example, he set up a microfinance operation in Cambodia, to invest in promising entrepreneurs there. The fund is one of the few in the nation with a Financial Institute license from the National Bank of Cambodia, which it received in March 2020. That means it can lend straight to small businesses and other enterprises there. And David plans to seek similar licensure in Vietnam in the coming months, too. That will expand Evergreen’s reach even more and further diversify its revenue streams at the same time. 

David has also seen the potential in the entertainment scene in Asia despite the current downturn in the entertainment business because of COVID-19. He has set up an entertainment agency to export K-pop content, artists, and idol groups from Korea to Southeast Asia where there is a huge demand for Korean entertainment.

Some Important Takeaways

David’s entrepreneurial journey in Myanmar and beyond gave him firsthand experience in how to navigate emerging markets and capitalize on the opportunities they provide. Along the way, he learned how critical it is to understand local legal and political conditions before making any serious attempt at launching a business. And because emerging markets don’t always remain stable as your business grows within them, it’s advisable not to put all of your eggs in one basket.

He also found that running multiple parallel lines of business, preferably spread across more than one nation, is the key to keeping a business viable amid shifting environments. And that’s a lesson that entrepreneurs should take to heart if they’re thinking about launching a startup in any emerging market. That way, they’ll have the best chance of capturing considerable market upside while protecting themselves from downside risk. It’s a strategy that takes hard work and isn’t for the faint of heart, but one that can be the key to startup success in markets that are just waiting for innovators to arrive.

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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