Up until a few years ago, Southeast Asia was a largely untapped market for foreign tech entrepreneurs. What was once uncharted territory has transformed into a highly sought-after destination for many companies seeking global expansion, and for good reason too. 

With a burgeoning tech industry and a digital economy expected to triple in size by 2025, Southeast Asia is attracting significant international attention.

E-commerce giant Amazon pushed its way into the region after launching its Prime Now service in Singapore in 2017, while Google recently revealed plans to expand its cloud services throughout the Asia Pacific region. 

When it comes to crossing international borders, businesses need to understand the culture and regulations of their new environment, says Sebastian Mueller, MING Labs’ Singapore-based COO. And this is where design thinking comes in.

By placing emphasis on empathizing with the user, design thinking can help startups develop products that are both culturally relevant and valuable to the local community. 

Founded in 2011, MING Labs has offices in Shanghai, Berlin, Munich, New York and Singapore and has worked with well-known global brands such as Lufthansa, Siemens and BMW. We chatted to Sebastian find out how design thinking can help companies strategize their expansion to Southeast Asia.

What are the main ideas behind design thinking?

Design thinking is a human-centered approach to innovation that draws from the designer's toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success. It is a toolkit that includes many different methodologies which aid human-centric problem-solving.

In the first steps – empathy and ideation – the design thinking method asks you to really understand the customer and define the problem from their perspective instead of just assuming what the problem is. That is very powerful. 

By defining the problem correctly, that then allows novel solutions to spring forth through the ideation stage. The ideas that come from that then need to be prototyped and tested in iterative cycles until the customer’s problem is solved.

What are the typical challenges faced by startups when entering a new market?

As an outsider, the first hurdle you usually have to jump over is understanding the cultural differences.

For example, in terms of its standards and processes, the market in Singapore is not representative at all of the rest of Southeast Asia and is more similar to the West. The Chinese market, however, is quite unique and is likely to be completely different to markets in Europe or the US. 

[ Read also: Expanding to Singapore: what startups need to know]

Expanding into a new market is about having an explorer’s mindset. It’s about testing, asking questions and discovering new problems that need to be solved. These are methods that come from the design-thinking toolkit. 

Each ecosystem will have different regulations, laws and user needs, so it’s important to be aware of these before you start your business operations. 

How can the methods of design thinking help startups adjust their products or services to their new cultural context?

When entering a new market that is different from your home market, it’s safe to assume that you have lost product-market fit. It’s likely that the current iteration of your product or service will need to be adapted or redesigned to suit the demands of your new environment. 

[ Read also: ‘A safe testing ground’: What it’s like pitching a Nordic startup in Singapore ]

Design thinking emphasizes understanding the consumer; what their needs, motivations, pain points and constraints are. This can help companies identify what problems local consumers are facing and adapt their products to suit their needs and preferences.

Instead of working from assumptions, I would suggest going out into your local ecosystem and talking to real people. This will help you identify and define which aspects of your product resonate with the consumer and which aspects you will need to adjust.

It’s also important to continually test your product with local users. If something doesn’t work, build a new version and test it again. 

Can you give me an example of MING Labs adapting to a different market?

Last year, MING Labs ran a project for one of the largest telecommunication companies in Indonesia. Before offering them any solutions, we decided to travel to the country.

Over the space of three weeks, we traveled to six cities in Indonesia; some were rural and some were more urban. We tried to understand how the people there live, what is important to them, what daily things they struggle with, and also what their boundary conditions are (i.e. what kind of devices they use and whether they have a stable internet connection or not.) 

We found that in some parts of Indonesia there is no 3G or 4G coverage available. So, our question became, “If we want to reach consumers in Indonesia with a digital solution that requires internet access, how can we do that?”

Actually going out and experiencing the local environment is crucial to developing a deep understanding of the problems around you. We observed many things in Indonesia that we may have missed if we tried to understand the complexities of the country from our office in Singapore.

In China, our client is seen as a luxury brand so we aimed to create a premium service for their customers. Instead of creating a car-sharing platform like the ones that are active in Germany, we created a high-class chauffeur service, where each driver is employed by the company to ensure full quality control. 

[ Read also: 10 Singapore startups you should know about ]

We launched our offering in Chengdu in 2018 and received good feedback from local consumers based on the customizations we had made to suit the local consumer. This is a really good example of how being user-focused is essential when scaling your offerings globally.

What general tips can you give to startups seeking to expand into Southeast Asia?

It’s important to find the right landing pad for your company and establish local networks. Speak to locals and spend time on the ground finding out about your new ecosystem. 

This is especially important when looking to expand into the ecosystems of Indonesia, Vietnam or China, for example. The markets are less accessible than the market in Singapore because of language barriers and other complex processes that make the countries more difficult to navigate. 

[ Read also: Singapore: Southeast Asia’s new entrepreneurial destination ]

Singapore is usually the preferred gateway for companies wanting to scale into Southeast Asia, as the ecosystem is quite business-friendly and open to foreign entrepreneurship. There are also a number of accelerators, incubator programs and coworking initiatives to help startups get plugged in to the local network.

Main photo: Jacob Peters Lehm / Unsplash