The step zero problem of the startup ecosystem

Over the last ten years, Southeast Asia has refined its infrastructure for startups, with Singapore and Vietnam emerging as regional hubs. The tech startup ecosystem in the region was valued at US$454 billion in the first half of 2024, a substantial increase from five years prior, and has produced 55 unicorns. The ecosystem now boasts an abundance of support for entrepreneurs, including accelerators, grants, incubators, venture funds, and startup programs.

Despite this, many resources cater to entrepreneurs who already possess a business plan or team. This disparity highlights the "step zero" problem – the stage before a startup exists, when an individual is still figuring out what they want to build. Most startup infrastructure is designed for those with a clear vision and a working product, team, or traction, leaving those just beginning their journey underserved.

This gap is exacerbated by the tendency of funding and resources to favor ideas with the greatest potential for return on investment, leaving those with only an idea and no concrete plan unsupported. Consequently, many aspiring founders abandon opportunities, applications, and competitions without selection or feedback on how to improve.

This hesitation is a significant barrier, as evidenced by the Global Entrepreneurship Monitor's 2024 data, which found that 49% of those who saw business opportunities feared failure, a rise from 44% in 2019. The "step zero" problem is thus not a funding issue but an access issue. Many entrepreneurs still rely heavily on self-financing and personal networks, with only 19.3% utilizing incubators or accelerators, according to a 2024 UNDP Youth Co:Lab study.

The prevailing notion is that the "step zero" market segment is the least profitable, leading investors to focus on those who already have something to show. However, this group requires assistance in understanding the ecosystem before committing to it. The first step in starting anything is often the most challenging, as individuals often do not know what they do not know.

While searching for "how to start a business" may offer some guidance, it assumes prior knowledge of relevant questions. Even if a search provides a guide, individuals may lack awareness of the evolving industry landscape, common challenges, the journeys of other founders, or potential allies. Exposure to the ecosystem is crucial for these aspiring entrepreneurs.

Therefore, there is a growing need for better and more accessible infrastructure to facilitate exploration at the "step zero" stage. The solution may not be additional accelerators but rather creating more inclusive and supportive environments for those just beginning their entrepreneurial journey. This inclusive approach aims to ensure that who you know and what you have do not dictate your potential.