BUILDING A STARTUP ECOSYSTEM - TRANSCRIPT
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David Madden: Someone had said that there'd be a packed tech hub having a really powerful event on the role of AI in Myanmar's development a few years ago, I mean, they probably would've laughed harder than they did at my hackathon idea.
Silicon Valley likes to say that it's making the world a better place, but that's mostly bullshit. The problems that most famous tech companies are solving aren't real problems. But in other parts of the world, developing countries, there are entrepreneurs who are building things that are actually changing people's lives, in very practical ways. That's what this podcast is about.
I'm David Madden, welcome to the Revolution of Necessity. On this podcast, we share the stories of tech entrepreneurs in developing countries, these are people who are innovating in places where technology could genuinely make the world a better place.
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On today's episode, how do you create a startup ecosystem, from scratch? Some of you might know, this is a question that I’ve been working on. Four years ago I created Phandeeyar, a tech hub, to accelerate the development of Myanmar's tech ecosystem. The idea was to bring together all the different people and groups that you need to do interesting things with technology: developers, entrepreneurs, investors, policy people and much more. It wasn't long ago that working in tech in Myanmar was pretty lonely. The country was almost completely disconnected. But Myanmar's ecosystem has come a long way, there’s a really thriving scene now.
So today, we're going to do something a little different. We're going to spin the mics around and I'm going to be sitting in the guest chair, answering the questions. Asking the questions is an old friend of mine from Myanmar, Thin Lei Win.
Hey Thin! I'm really excited to have you here Thin.
Thin Lei Win: Me too, I think it's going to be really fun reminiscing about those days.
David Madden: So Thin is much better qualified to do this than I am. She’s a journalist with the Thomson Reuters Foundation. And Myanmar is her country, she was born and raised there. And she was in Myanmar when Phandeeyar was just starting. Thin do you remember when we first met?
Thin Lei Win: I do, I came home after being away for 17 years, in 2015, to set up a bilingual news agency. And of course, while looking for a permanent office space we needed a temporary office space and Phandeeyar had just recently opened and we became your first paying customers I think and that was how we met.
David Madden: So Thin maybe give the listeners some background on Myanmar.
Thin Lei Win: Well, so here is a country, Myanmar, formerly known as Burma, you know that has been under a military dictatorship for half a century and during that time people were very much restricted in where they can go, what they can say, what they can write and, in some cases, even who they can speak to. And then of course, suddenly, the military backed government, decided to open the country politically and economically, so imagine a country that has been in the dark for so long and overnight, mobile phones, social media, became available, accessible to anybody.
David Madden: So it's a really historic period of transition these last five, six, seven, eight years in Myanmar's history, right?
Thin Lei Win: It was, and many people, observers, analysts, experts, journalists, looked at this opening up and said the country is never going back to what it was before and Phandeeyar, of course, is part of that evolution. So now, it's my turn to ask the questions to you David. Maybe perhaps…
David Madden: Fire away Thin.
Thin Lei Win: Maybe perhaps we can start off with, how did you actually come to be in Myanmar?
David Madden: I kind of ended up in Myanmar a little bit by accident. My wife was born in Myanmar, she's not Burmese, but her father had worked for the UN and was posted to Myanmar. And then, when the country began to open up after these 2010 elections, my wife basically got her dream job, she got a chance to go back to, to Myanmar and Myanmar is a country, is, is an incredible country and it’s an easy place to fall in love with. So when my wife got this dream job, we said yes.
Thin Lei Win: But your background has been in tech, right? Can you tell us a bit more about what you were doing before Myanmar?
David Madden: Yeah, so I basically have spent pretty much all my professional life working in technology and more particularly, in, in startups. I got involved, way back in the dot com days, at, at the late 90s, I ran business development for the Australian version of Amazon and, and then I moved to the US and I co-founded a number of organizations that operated kind of in the intersection of technology and social impact, an organization called GetUp.org in Australia, another one that's headquartered in New York but it’s really a global organization called Avaaz.org, and yeah, a digital strategy agency called Purpose. And, and by the sort of late 2000s, the New York startup scene has, has really come back alive. There's tons of interesting companies, you know, Foursquare and Etsy, and really really interesting stuff happening in the NY scene and I actually worked for a number of, for NY startups in, in that period before, before Andrea, my wife, got this job in Myanmar. Yes, so my whole background was in, was in tech and, and startups and really really intrigued of what was going to happen in this country that when I visited in 2008, you could barely make a Skype call.
Thin Lei Win: What was it like suddenly to be in a place that was almost completely disconnected from the rest of the world?
David Madden: You know, even though I had spent time in Myanmar in 2008, I don't think I’d fully wrapped my head around just what it meant to be, to be disconnected. To give you a sense, if you wanted to watch a Youtube video, I mean, that was almost impossible in, in, in 2012…
Thin Lei Win: Forget about it.
David Madden: Yeah, I mean, you could, you could maybe load it up and come back in half an hour and, and a 2 or 3 minute video might have loaded, and it was, it was quite frustrating actually.
Thin Lei Win: But that didn't last very long though, did it? Can you explain perhaps maybe in a little bit more detail, you know, what was going on?
David Madden: So part of the reason why Gmail doesn't load and you can't watch a Youtube video is that there's only one telecoms provider in Myanmar at this time, and this is the state owned monopoly. So when I bought my first sim card, that cost 250$, and it wasn't that I got ripped off, that was just the price. And so when I arrived in Myanmar in the middle of 2012, the government was looking for some consultants to help them run this liberalization process, and it's one of the really positive things that happened in, in that period, was they ran a really good process for opening up this telecommunications market. They had almost every major telco in the world wanting to, wanting to have a piece of the Myanmar market, because there's, the end result was that they, they gave the licenses to two highly reputable international telecoms companies and they launched selling sim cards for $1.50, the price of sim cards has fallen a little bit in this time, but this is obviously dramatic, because even in a very poor country like Myanmar, $1.50 is, is affordable.
Thin Lei Win: If I remember correctly though, when you organized Myanmar's first-ever hackathon, that was in 2014 and that was before any of the new telecoms towers went up. What were you thinking trying to organize a hackathon when you couldn't even really load a Gmail page?
David Madden: To me the fact that Myanmar was going to get connected was, was really interesting but, what I was more interested in, was how could that connectivity be used to actually improve the country. There's this idea of a, of a digital leapfrog, which basically means that you can use technology to kind of jump ahead and this is sort of what happened with connectivity in Myanmar. You know, most people didn't have a landline in Myanmar. When I walked around the streets you would see all these little tables with phones, these little sort of phone booths, where people would go and pay some money to make a phone call, and that was because people didn't have phone lines in their houses, but now people sort of skip these sort of fixed line services and go straight to smart phones, actually. And so, the idea was, what else could you do, with this connectivity? how might you be able to use digital tools and digital services to accelerate, change and development in, in the country? And I really felt that, that the people who were in the best position to do this were the local techies.
Thin Lei Win: How did you then go about organizing it? I mean, how do you organize a hackathon in a place like Myanmar?
David Madden: The most important thing was to try to get the word out to the community. The community didn't really have a central place where it got together. There was no sort of, you know, central space, there wasn't sort of one particular place, where you could find them online either. And I was quite lucky because one of these new telco companies was very bullish about the country and they were planning to roll out a 3G network. So this company Ooredoo, they were really interested in this idea and so they kind of became partners in the hackathon, which was important because I needed a space, I needed a place to hold this hackathon, and of course I needed connectivity and that of course was extremely hard for anyone to get. Ooredoo of course, being a telecoms company, that was one thing they, they did definitely have. It was important for me that it wasn't just a bunch of techies doing techie things. What I was really interested in was how technology could be used to improve the country and so one of the things I wanted to test was, how interested were the community of civil society groups and, and local organizations, how interested in that were they in embracing this connectivity revolution? And so for the hackathon I wanted to source problems from these groups. And some really interesting problems ranging from, you know, how could technology be used to help, help women plan their pregnancies to, you know, how could technology be used to help farmers?
Thin Lei Win: And how did it then go, I mean, what was the response?
David Madden: Well, it was amazing, actually. It turned out that the pent up demand wasn't just amongst the Myanmar consumer for data and, and connectivity; there was this community of young developers and designers who were really interested in putting their skills to work. And with a couple of weeks to go we had over 100 applications, and some of the folks that I was working with just couldn’t, couldn't’ believe we actually had this many people. So then the question became, what can they do? To build things that are going to be useful you need a certain skill level. And so the hackathon was interesting to me partly because it would be a chance to see what’s the community capable of? Where are the strengths and, and weaknesses of what the community is capable at this point?
When the hackathon actually came around not everyone showed up, obviously.
Thin Lei Win: Yeah.
David Madden: I remember, I remember being very nervous. 48h hackathon, it began at 6pm on a Friday night and I just remember that, that Friday afternoon wondering like...
Thin Lei Win: What if nobody turned up?
David Madden: What if nobody turns up? But there was a great turnout. I think we ended up with, I think 76 in the end which was a, a really solid number. I had managed to source about 8 problems from a handful of local community groups. So what I was interested in was, could you create this collaborative environment where developers and designers were working with people who understood important problems and issues in Myanmar and were working together to come up with interesting solutions. One of the most memorable parts of the hackathon for me was, Saturday night, the hackathon had been going for about 30 hours at this point, and of course, Saturday night was the, the final night, and firstly it was really exciting to see that almost all the participants were still there sort of midnight on Saturday, so they had that hacker thing going. We actually got a sponsorship from Red Bull, so I the, the, the hackers were, I mean, they were drinking Red Bull like it was water! And I remember this young doctor, so there was a young doctor from this, the NGO that had submitted this problem around helping women plan their pregnancies, and he had said goodbye to me earlier in the day, I think he had a wedding or some family commitment, and he had said “I'll see you later” and then, at about midnight, as we were rolling in our next pallet of Red Bull, I see this young doctor coming back into the hack space and he says “Hello” and then he proceeds to sit down with each of the teams that are working on this problem that he's helped craft for them, and I just remember thinking in that moment like “Well, there's definitely something here”. That was really the birth of Phandeeyar because I thought “We need to take this, this energy, and this excitement, and this enthusiasm and give it a home, a permanent home”
Thin Lei Win: David was inspired by how community tech hubs in Africa were developing local tech ecosystems. Places like iHub in Nairobi and CcHub in Lagos. But getting a space in Yangon in 2014, is easier said than done.
David Madden: One of the crazy things about this transition period in Myanmar was property prices were just out of control. I mean you remember this Thin, right? because you, you had to try and find an office.
Thin Lei Win: Yes, with a limited budget.
David Madden: Yeah, no it was crazy because they just, I mean, in general in Myanmar, there had not been much investment, period. Investment in infrastructure, investment in education or health services, just, just decades of chronic underinvestment. In downtown Yangon, or frankly anywhere in Yangon, there just wasn't that much commercial property, and so the small amounts of commercial property that there were, was costing more than it would in Singapore, or in, in Manhattan, so…
Thin Lei Win: Without any of the infrastructure that you would expect.
David Madden: That’s right. So the first thing was to, was to get a space, but that it was, that was kind of daunting.
Thin Lei Win: Getting a space and building a team also requires money.
David Madden: I met Stephen king who's a partner at Omidyar Network and Omidyar Network has been a big supporter of ecosystem builders, these tech hubs in, in Africa. And so I put a proposal to them, after the hackathon to create a physical space.
Thin Lei Win: With a lot of determination and a little bit of luck, David gets seed funding from the Omidyar Network, the Open Society Foundations and Eric Schmidt’s Foundation. He also finds a great space with incredible views, right in the middle of downtown but there’s lots of other challenges: the building leaks, the power goes out and the internet - oh the internet...
David Madden: At the time it was extremely, and not just expensive, but extremely hard to get fixed line internet.
Thin Lei Win: But you came up with a solution?
David Madden: Well, we came up with a hack and I remember you and your team - you were our first ever coworkers - and I remember our hack for you was that we went down to the local computer store so we got those little wifi hotspots and we bought a couple of these things, they weren't that great, I mean they were the best we could get, and then we bought a few sim cards and sort of popped them down on your cheap plastic table and said “Here Thin, connect to these”.
Thin Lei Win: They worked, I mean, they weren't perfect but when you're so used to not having any connection at all, that was still a step up, I’d say.
David Madden: Yeah I mean what was amazing was, the community's expectation at that point was not great. I mean it was very hard, I mean, if you were a little startup or even just a freelance developer you encountered this problem all the time so it wasn’t going to be that surprising the tech hub was going to have the problem as well. We did make it a huge priority to fix this, and, and I think it was maybe four or five, maybe even six months before we got a proper, a proper connection, but we did eventually get a connection. But the space was great, it was a space of our own, it was a space for the, for the community and we could begin to turn it into something.
Thin Lei Win: So you’ve now got that space, but what other ingredients did you need to actually turn that from a space into an actual hub for techies?
David Madden: As we moved into 2015 our strategy was to make it thriving, bustling place with just tons and tons of stuff going on. We weren’t really sure what was going to work, we were very clear about our mission: how would you use technology to accelerate change and development in, in Myanmar? but exactly how were we going to do that? And so in 2015 we, we just tested lots and lots of stuff. We would have meetups, we would have workshops, we would have evening seminars, we would do big events, hackathons and things, we were just trying to understand where the community was at, where the demand was and anytime that we could get either, you know, a local expert or a visiting expert or somebody who knew something, we would, we would try and bring them in. In that first year there was tons and tons of energy and so, you could kind of come to Phandeeyar really at any time of the day, day or night, any day of the week and there was something interesting going on.
Thin Lei Win: In that first year Phandeeyar holds over 100 events and thousands come through the space. A nine day startup competition has over 200 participants. And 37 teams compete in a two week hack challenge to build apps for Myanmar’s historic 2015 elections. The winning app is widely used around the country in the lead up to the vote.
David Madden: One of the sort of important ideas of Phandeeyar was that was a tech hub, and it was going to have tech as the cornerstone but it was explicitly not just for techies. It was actually a place for anyone who wanted to do interesting stuff with tech. And we were really taking some of those ideas from that first hackathon in 2014, where you had developers and designers coming together with civil society folks, and, and independent media, change agents, people who were like out there trying to change things in Myanmar, and we wanted them to feel that Phandeeyar could be their home as well, and so, we deliberately defined Phandeeyar's community quite broadly, so that anyone who was interested in technology could find a home or a workshop or something. And I think that was important because by having this broader definition of the community, we were able to create kind of a critical mass, that might otherwise have been a little harder if we'd been narrower in our sort of definition of like who we were trying to serve.
Thin Lei Win: 2015 Demonstrates the potential of Phandeeyar and in 2016 David doubles down.
Okay, so you’ve done the first year of Phandeeyar, it’s now 2016, that’s when Phandeeyar expanded like crazy, if remember correct, there was one day in February were I saw like the 15 new positions that you were looking to fill. Tell us a bit more about that whole trajectory.
David Madden: In 2015, sort of our first full year, we did a ton of experimenting, and I think that the biggest insight that we had as a team was that to help the community produce really strong products that would be genuinely valuable, we needed to be able to spend more time supporting the most promising and the most talented groups and startups in, in the community. Because 2015, we had run all these different sort of events, and mostly they were one offs. What we realized was, we needed to put in place a series of programs that would let us work really closely with folks and, and actually help them succeed.
Thin Lei Win: To be more strategic, as well.
David Madden: Yeah, that’s right, but to do what we thought needed to be done we really did need a proper chunk of money and so we put together a plan and took it to Omidyar Network and the plan had, a number of big strategic initiatives that we thought would have a real impact on the ecosystem. There was a plan for a whole data team that would run an, an open data platform and help the community learn how to work with data. There was a plan to take all the sort of interest in hardware hacking that we'd seen and create a MakerSpace, but the centerpiece of the strategic plan was to create a, a startup accelerator to actually invest in - time and money - in the most promising startups in, in the country.
Thin Lei Win: Can you just tell us a bit about what exactly is a startup accelerator?
David Madden: So an accelerator basically is a way of providing support, both financial and sort of coaching and mentoring, to really promising startups. One of the most exciting things about the hackathons that we held in 2014 was that a bunch of people had, had hacked together and got really excited about it and then gone and created startups. There was a bunch of new startups that were created really out of the relationships that were formed at the hackathons. But we had seen several of those startups really kind of, after initially going quite well, sort of struggling through 2015, and, and we were running different initiatives to, to help them but it wasn't enough.
Thin Lei Win: Why were they facing problems? What was, what was the problem?
David Madden: Well, look, creating a startup is always hard, wherever you are. I think creating a startup in a developing country is like next level hard. This is, none of the bits and pieces that folks in Silicon Valley or, or in places like New York, have and just take for granted, often those things just don't exist in these early stage markets. Concretely, perhaps the hardest thing was actually getting a bit of money so that you could actually concentrate on building your product. And so we saw talented teams with some good product ideas, and maybe even versions of those products, they would have to take on agency style work, or they'd agree to build an app for someone, or to run this social media campaign for some other company because they just needed, they needed some money to survive. And so in these early stage ecosystems like we have in Yangon, there's not that network of angel investors and early stage investors who could provide that initial bit of funding that would let people concentrate on building out their product to really, really giving their startup a go. As we thought about it, the easiest way of addressing a lot of these challenges that startups were facing in Myanmar was to create an accelerator and the accelerator would give people that initial funding, 25,000$, give them a place to work which would be the coming to part of Phandeeyar, make it their home and then have a team at Phandeeyar that was actually coaching and working trying to pull together the best minds who could provide support to these, to these folks.
Thin Lei Win: Phandeeyar Accelerator launches in the middle of 2016. The team gets nearly 80 applications and the four most promising startups begin the intensive six month program in September.
David Madden: The Accelerator culminates in a “Demo Day”, which is really an investor event where the startups in the Accelerator present their businesses and they show where their businesses are at, how developed they are and what they need to go to the next level, and that was a great success. Two of those startups actually got a good amount of seed investment, you know, that was more than a year ago now, and, and both of those business are going, are going pretty strong. Cause startups are startups, right? So, could still fall over and nothing is certain in startup world but they're doing really well.
Thin Lei Win: In addition to the Accelerator, Phandeeyar rolls out a series of initiatives: coding classes, startup competitions and more to help develop the startup ecosystem, and in this way it creates a kind of roadmap for aspiring entrepreneurs.
Using technology for social impact is an integral part of Phandeeyar’s mission, so there are also lots of initiatives to help civil society groups, civic leaders and independent media integrate tech into their work.
Of course, all this expansion is not without its challenges.
David Madden: We had very ambitious plans. We had told Omidyar that we were going to do some pretty bold things. But to get all this stuff done we needed to massively expand the team and there was a moment I think in January or February of 2016 where I sat down and I think I wrote a dozen or more job descriptions and just posted all these job descriptions, but…. that was a challenge, honestly. We had a very particular idea of, of the sort of people an ecosystem builder like Phandeeyar needs. And for us, it was really important to have people that were, had a strong sense of community and then figuring out ways of being of service to the community was the most important thing. But as we rolled out these strategic initiatives it was also important that people brought real discrete skills to the table as we were going to run an accelerator, we needed a startup coach who had experience at starting startups and who really understood the lean startup methodology and could actually bring real wisdom to the, to the process, and so I spent a large chunk of 2016 hiring. I think any startup that's trying to scale rapidly, this is what the founder, the CEO, ends up doing, it’s, it’s really trying to, trying to build a team that can, that can execute the vision.
Thin Lei Win: Once you grow and expand, you still need to try and keep that Phandeeyar ethos, right?
David Madden: That was super important to us. So we spent a lot of time thinking about how we could scale culture and so we do a lot of things in 2016, and still to this day, that are designed to reinforce important values in the organization and a lot of this is around openness, transparency, and try to be radically transparent about the organization, what the organization was trying to achieve, how we were going. Those kinds of values are really important to having a collaborative community.
Thin Lei Win: Myanmar’s connectivity revolution is not all good. Facebook usage explodes and hate speech proliferates.
From its very beginning, Phandeeyar works with other local groups to try to protect digital rights, to improve digital literacy and to tackle hate speech. And David and the team repeatedly warn Facebook about the misuse of its platform.
The problems become particularly acute when the Myanmar military begins what they called a “clearance operation” in Rakhine state.
United Nations investigators later judge that Facebook played a “determining role” in what may have constituted genocide against the Rohingya people.
David Madden: I think that within significant parts of the tech community particularly in Silicon Valley, you seem to have sort of almost tech utopianism or sort of almost tech determinism. “Technology is inherently good, more technology is going to lead to more goods” I mean I've personally had never strived to that. It's very easy for technology to be misused, in a place like Myanmar where there are underlying unresolved social tensions. And a platform like Facebook can be used to exacerbate those and so, really from the very beginning of the Myanmar Facebook community there was hate speech, there was people using the platform to target, you know, ethnic and religious minorities in Myanmar. As the users of those platforms has grown, problems have gotten worse. Facebook has tens of millions of users in, in Myanmar and it has really become, it is the internet, like it’s the, you know, the newsfeed is, in a place like Myanmar, is literally the newsfeed and that can have really, really, really bad consequences.
For folks who are involved in ecosystem building, you can't put your head in the sand about these issues. It's cool to be building startups and doing that kind of work but you can't, kind of pretend that these other things aren't going to play out in the ecosystem as well, and so it's important I think to think through some of the policy and regulatory issues that are involved in a tech ecosystem. We've definitely been trying to do that at Phandeeyar, it hasn't always been easy and I think that will be one of the big challenges going forward.
Thin Lei Win: In the middle of 2017 David’s wife is posted back to the US. It’s a bittersweet moment: Phandeeyar and the ecosystem are in great shape, but it’s not easy to say goodbye.
David hands over the reins to Jes Kaliebe Petersen, who has been running Phandeeyar’s Accelerator.
David is still involved, just now as chair of the board.
Phandeeyar moves to an even bigger and better space. Of course, all the core programs continue, several are expanded and new initiatives are added.
A new chapter begins.
David Madden: It's come a long long way. I mean the other day Phandeeyar held this event on AI and there was a huge crowd. If someone had said that there'd be a packed tech hub having a really powerful event on the role of AI in Myanmar's development a few years ago, they probably would've laughed harder than they did at my hackathon idea.
Thin Lei Win: But actually you're right, this just reminded me of an event early last year where I moderated a panel discussion on a Sunday evening, a Sunday evening about big data in Myanmar and it was full of people who stayed until the end, had questions. I didn't think anybody was going to turn up on a Sunday evening to talk about big data in Myanmar, and I was wrong.
David Madden: Yeah, no, it's, it’s, it’s incredible. The community has grown enormously. We tried to create a kind of path by which somebody who wanted to start their own thing, their own tech company, there was a path by which that could actually be possible. And I think when you look at level of energy and the size of the community today, you get a sense of how much that's grown, and, and how much that sense of possibility is, is real. And that might be one of the, the main things that Phandeeyar has contributed actually. It's given a tremendous amount of visibility to these young, the young developers and these new startups, and that's really important, actually. Like if you want to grow an ecosystem then it's important that, that this is seen as, as a, as a really viable thing to do with your life.
Thin Lei Win: And with that David, thank you so much for your time, it’s been a pleasure.
David Madden: Thank you Thin. It’s great chatting with you and thinking back to those those crazy days when we had a big empty space with no internet!
And constant power cuts!!
David Madden: Thanks for listening to the Revolution of Necessity.
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Thin Lei Win: Now David, I know you’ve been asking all your guests this question, so of course I have to ask this to you: does Phandeeyar have an anthem?
David Madden: We had some traditional Myanmar music that we played for a while, but really it could be anything. One day I heard an old Aussie hip hop track, I’ve got no idea how that came to be playing. I even once heard a, a Christmas carol which is definitely pretty odd because Christmas isn’t very big in Myanmar and it definitely wasn’t Christmas. No, music was big but there wasn’t really a Phandeeyar anthem.
"Creating a startup is always hard. Creating a startup in a developing country is next level hard."