Southeast Asia has had a remarkable decade. Unicorns were minted, global funds poured in, and entire industries leapt from offline to online in just a few years. Yet behind the success stories sits a quieter reality: a long list of shutdowns, scandals, and stalled ventures.
Globally, an estimated 90 percent of startups fail, and Southeast Asia is no exception. What is different here is why they fail. The common narrative blames funding cycles—easy money fuels growth, winters trigger collapses—but our recent whitepaper on corporate venture performance suggests something more structural. After interviewing venture leaders and analysing failures across both corporate and VC-backed ecosystems, one pattern became clear: many ventures are fragile long before capital dries up.
Whether backed by corporates or venture capital, startups across Southeast Asia tend to fall into the same traps: unclear problem selection, weak governance, shallow founder experience, and limited adaptability to shocks. These are design issues, not macroeconomic fate. Until the region addresses them, the next boom will likely produce the same busts.
Chasing problems that don’t really hurt
The most common reason startups fail remains the simplest: customers do not feel enough pain to pay for the solution.
In both corporate and independent ventures, early validation is often superficial. Teams conduct a handful of interviews or run a small proof of concept, then declare the idea “validated.” But polite interest and willingness to pay are very different signals. As a result, startups launch products that sound promising but lack urgency for customers.
Southeast Asia’s hype cycles reinforce this. In recent years, themes like blockchain, Web3, and now generative AI have pushed teams toward technology-led ideas rather than problem-led ones. Many of these ventures attract early attention but struggle to generate revenue because the underlying customer pain is weak or poorly defined. When the hype recedes, so does the business.
The region doesn’t lack creativity or ambition—what it lacks is a disciplined approach to identifying problems worth solving. Ideas need to survive deeper scrutiny before they become companies.
Governance gaps, not just funding gaps
When a startup collapses, it is common to attribute the failure to funding difficulties. But running out of money is often a symptom of deeper governance issues.
In corporate ventures, governance challenges are especially visible. Decision cycles move slowly, approvals take months, and ventures lose valuable momentum. One venture leader waited half a year for already-approved funding to be released. By startup standards, that is an eternity.
Independent startups suffer their own governance weaknesses. Several of the region’s most high-profile failures in agritech, fintech, and aquaculture did not fall apart solely because markets tightened—they fell apart because oversight was weak, reporting discipline was inconsistent, or rapid expansion masked underlying fragility.
Good governance is not bureaucracy. At its best, it prevents misalignment, protects cash, and gives ventures the structure to respond quickly when assumptions break. In Southeast Asia, governance lapses have quietly contributed to far more failures than funding winters.
Founder quality and incentives: The quiet crisis
Southeast Asia’s founder pipeline is still young. There are fewer repeat founders and fewer operators who have experienced both the highs and lows of venture building. This inexperience shows up in both VC-backed and corporate contexts.
Independent startups often scale faster than their leadership capability. When valuations jump quickly, founders face pressure to expand aggressively even when fundamentals are not ready. Without strong guardrails, decisions made in optimism become liabilities when conditions shift.
Corporate ventures face a different challenge: leaders are often internal managers rather than entrepreneurs. They may understand the industry but not the realities of zero-to-one execution—living with ambiguity, pivoting rapidly, making uncomfortable trade-offs, and taking full accountability for outcomes. Without autonomy or meaningful ownership, their ability to move with entrepreneurial urgency is limited.
Across both environments, the issue is not motivation. It is structure. Ventures falter when leaders lack the experience, incentives, or authority to steer through uncertainty. They perform far better when founders hold real ownership, have clear decision rights, and receive early guidance that strengthens their judgment. Ownership and support together create founders who can sustain momentum beyond the first cycle of enthusiasm.
Adaptability when assumptions break
Even well-designed ventures face volatility: commodity swings, regulatory shifts, geopolitical events, and rapid changes in customer behaviour. Many startups fail not because their early model was flawed, but because they could not adapt when external conditions changed.
We have seen this repeatedly in industries like agriculture and logistics, where early success can mask economic fragility. When input costs spike or prices collapse, unit economics deteriorate quickly. Ventures that grew rapidly under favourable conditions suddenly find their models unsustainable. Attempts to pivot often come too late or require capital the venture no longer has.
Adaptability is not just about the ability to pivot. It is about designing ventures with realistic buffers, diversified revenue pathways, and the humility to test assumptions continuously. Startups become brittle when they rely on a narrow set of conditions to succeed. They become resilient when they plan for the possibility that those conditions will change.
The way forward
If Southeast Asia wants the next generation of ventures to be more durable than the last, it must focus on strengthening foundations rather than chasing cycles.
A more rigorous approach to problem discovery is essential. Ventures should spend more time pressure-testing the value of solving a problem and securing early revenue signals before building full products. When teams push harder on customer truth early on, weak ideas disappear quickly—and strong ones gain conviction.
Capital deployment also needs more discipline. Funding tied to clear milestones encourages experimentation without over-committing resources too early. This approach gives ventures freedom to learn while avoiding the trap of scaling prematurely.
Supporting founders more intentionally will also matter. Southeast Asia cannot shortcut its way to a deep bench of second-time founders, but it can create structures that help first-time founders grow faster. Meaningful ownership, clear authority, and access to experienced advisors give founders the room to develop judgment while keeping incentives aligned with long-term success.
Finally, resilience must be baked into venture design. Markets will shift, costs will move, and assumptions will be challenged. Ventures that routinely stress-test their models, stay close to customers, and maintain operational flexibility respond more quickly when disruptions arrive.
Southeast Asia has already shown it can produce breakthrough companies. The next challenge is producing companies that endure. By improving how ventures are designed, governed, and led, the region can build an innovation ecosystem that isn’t defined by cycles—but by resilience.
Ziv Ragowsky is the Founding Partner of Wright Partners, a venture builder based in Singapore and Indonesia. He works with corporates to design and launch new ventures that turn strategic ambition into actionable growth.
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