This Week in Asia: Is the AI Bubble About to Pop? with Daniel Cerventus and Michael Smith Jr
By popular demand, Michael Smith Jr., co-host of The Generalist podcast, and Daniel Cerventus Lim, semi-retired entrepreneur and community builder in Malaysia, return for another candid deep-dive into Southeast Asia and India tech landscape. Fresh off India's record-breaking IPO wave that's drawing regional companies like Pine Labs to redomicile, they dissect what this exit boom means for a Southeast Asian ecosystem still struggling with venture returns. Michael delivers his characteristically unflinching take on why "the year of [insert country]" never materializes beyond Singapore and Indonesia, while making the provocative case that most VCs fundamentally misunderstand B2B distribution strategy—specifically how hyperscaler marketplaces like AWS and Microsoft provide the GTM playbook that separates successful exits from perennial fundraising. Daniel shares emerging insights from the SME acquisition space, revealing the stark reality that traditional businesses are "seeing black" while venture-backed startups continue "seeing red." Together, they debate whether we're witnessing an AI infrastructure bubble that will pop or simply taper, examine why Southeast Asia leads globally in AI adoption despite the disconnect with venture outcomes, and question the fragility of cloud infrastructure after recent AWS and CloudFlare outages. The conversation culminates in a sobering assessment: the region has achieved a remarkable $300 billion digital economy milestone, but the path forward may require accepting longer timelines, smaller profitable exits over unicorn dreams, and modernizing traditional businesses rather than building the next ByteDance.
"If you don't think we're gonna get there, then you should all get outta tech because we're gonna get there. And if you're gonna get there, we barely have the horsepower to do the Google Docs that we have today, let alone the world I just described." - Michael Smith Jr
On AI Assistance - “If you can get 90% of the stuff done, I just need to say yes or no. And that is like my [ideal state]." - Daniel Cerventus
"I try to keep myself sane by saying that I still have a little bit of control, human part that gives AI context. But I know that what you're saying is a reality." - Bernard Leong On AI Context and Control
Profile:
- Michael Smith Jr., Cloud Evangelist, Oracle and Co-host, The Generalists Podcast (LinkedIn)
- Daniel Cerventus Lim, Daniel Cerventus Lim, semi-retired entrepreneur, Community Builder in Malaysia and TEDxKL founder. (LinkedIn, Facebook)
Here is the edited transcript of our conversation:
Bernard Leong: Welcome to the Analyse Podcast. I have two of my very favorite guests, and I think this is some feedback I've been requested to get them back on the show just to have a lot of quick talk.
Michael Smith Jr: Can I call it "This Week in Asia"? You still get to call it Analyse Asia?
Bernard Leong: No, I can call it "This Week in Asia" if it suits both of you.
Michael Smith Jr: In Asia, my presence.
Daniel Cerventus: I'm kidding.
Michael Smith Jr: Sometime around This Week in Asia.
Daniel Cerventus: They're shilling for TEDx?
Bernard Leong: Yes, I am. Welcome back, Daniel. Welcome back. First I need you to introduce my two commentators.
Michael Smith Jr: So Daniel, please introduce yourself. Nice TEDx KL T-shirt, by the way.
Daniel Cerventus: Back in action after a long retirement of a lot of stuff, including TEDx KL. So, TEDx KL just came back. We hosted one 15—it was a couple days back actually. Which is quite fun. But technically now from Acquired Street and also from the Next Up Asia, which is the entrepreneur community that I run.
Michael Smith Jr: So technically not retired?
Daniel Cerventus: Technically, no longer retired, unfortunately.
Bernard Leong: Of course I have Smitty. You know, you've been running a lot of shows lately with the Generalist. You've got an education series on top topics. Where are you going with Raz?
Michael Smith Jr: We're branching out. No, we just keep experimenting, to be honest with you.
Bernard Leong: I enjoy coming on your show just to have a quick talk about AI.
Michael Smith Jr: That was fun. Thanks for doing it.
Daniel Cerventus: It's such a general thing.
Michael Smith Jr: Look, it's an umbrella moniker.
Bernard Leong: Do you want to talk about your live show recently?
Michael Smith Jr: The live show that we did? It went pretty good. I mean, it's another experiment. I'm pretty transparent about all this stuff. We're experimenting and finding things that work. So we tried to sell tickets. We sold out. It wasn't like a big venue, but it was fun. Now I'm trying to figure out if there's a bigger venue where we can still do something but still have the camera set up.
Bernard Leong: You give me a lot of inspiration. I'm thinking of doing a live show in January [now postponed to March].
Michael Smith Jr: I've seen a few people now who are close to us doing it, so it's okay. I like being a trailblazer.
Bernard Leong: Good. So I'm thinking we got a lot of topics to talk about today.
Michael Smith Jr: I don't know where to start.
Bernard Leong: Let's talk about record India IPOs. This is something I really don't know much about. There's fintech and startups. Maybe you can educate me about India.
Michael Smith Jr: Well, like look at Pine Labs and a bunch of them. If you notice, there's been the redomiciling of some companies out of Singapore, which has been a net loss to Singapore. I think it's largely, you know, even if they're not saying it, it's because they can't go public here. But if you're going to go public in India, you have to be an India company. A lot of them were top-coded here for obvious reasons. They've got to move that stuff. I think a lot of this stuff is even more coming if you ask me. Now, some of this is because of the markets—the Indian market's hot. Now, whether that stays could change a lot, but I think you strike while the iron's hot. I think there's more coming. I've heard that there are two or three other ones that are public, not secrets or anything. So more are coming. These have done well, and there's some pretty big exit numbers with these. India's a big market. From my perspective, you've always had the American market, which we all know is where the big ones are. There's the European market with the London Stock Exchange, which is supposedly going to get Revolut, Monzo—you have this weird FinTech global thing. Then you have India and China, and not Southeast Asia.
Bernard Leong: Sorry to hear that about Southeast Asia.
Michael Smith Jr: No, but I think it's just calling it the facts. Now this India thing's really kicking along.
Bernard Leong: I just want to give some numbers. So I think Groww was something like 750 million. Pine Labs was 440 million.
Michael Smith Jr: Which, by the way, that's just so people know, Pine Labs is providing a pretty big Southeast Asia exit because that's Fave. Fave and all that stuff under it is inside of that. There are pictures of all of them at the listing, and that's their exit. So that's pretty good for Southeast Asia. But I thought it was kind of funny that the big thing in Southeast Asia is getting its exit through India.
Bernard Leong: Then you have Lenskart, I think something like raising $821 million for the IPO. Then there's this thing called PhysicsWallah, which is India's first ad tech unicorn, raised about 392 million. So I recall there was a few years ago a kind of disgraced unicorn called Byju.
Michael Smith Jr: That's just insane, right? The money lost there. You guys still trying, right?
Bernard Leong: Right. So I think with all this, what does it tell me now? Is it that everybody's going to switch gears to go to India?
Michael Smith Jr: Well, I don't think you can switch gears if you're not an India company. Let's be clear, these are all Indian companies. So I don't think there's any gear switching, but I think there's top-co switching for these things. There's a few of these. I think some have made press about switching. There's a couple in the Jungle portfolio, like Moglix—the furniture one where they're regional Asia businesses that chose Singapore top-co, but they have a large India business, and they're, as I understand it, redomiciling to eventually go public in India.
Bernard Leong: You were involved in Moglix, right?
Michael Smith Jr: Well, Wavemaker was early on.
Bernard Leong: How did it become such a big regional powerhouse now?
Michael Smith Jr: I don't think they are actually. I'm sure the founder's going to WhatsApp me and tell me I'm wrong, but I think it's mostly India. But I think, again, it was the top-co game. Not no shade to that—because you could raise more capital here, you have different tax structures. Remember, the taxes in India are higher. So I think if you're a Singapore domiciled thing and you're not going to go public in the NASDAQ, and we should probably talk about Hong Kong getting a little bit of stuff—you're probably not going to go to Hong Kong. If you have an India business, you're going to take advantage of India. But to do that, you're going to have to redomicile.
Bernard Leong: Right. But would there be any tax implications for these companies?
Michael Smith Jr: Look, I can't speak out of things that I don't know. There are tax implications when you make these moves. But I think the math is they can exit or they can go public.
Daniel Cerventus: I think there's just essentially a bit of a high tide in terms of how it's definitely good for the Indian market, basically.
Michael Smith Jr: But I think if the markets—if we juxtapose this over, the markets are hot now. Like the last four days, I'm sure all of these—
Daniel Cerventus: Which is the other weird point. We all see red right now.
Michael Smith Jr: If the market pops, which I don't believe is going to happen—I think we're just in a correction—India or anybody else probably isn't safe from that. But if you look at the money being made from these people going public, it's worth it to them individually. So I think it's a global macro kind of thing. Strike while the iron's hot. Will it stay hot? I don't know.
Daniel Cerventus: So like one of the investors for Pine Labs is actually PayPal, basically. So they're riding along for this IPO.
Bernard Leong: So I think this time around when we talk about the last time we were complaining that there were no exits, and now this time we start out with tons of exits.
Daniel Cerventus: No, but we'll still be correct. Like we talk about there's no exits in Southeast Asia, basically.
Michael Smith Jr: I think it's still a fair statement.
Bernard Leong: I think it's—but I also saw some other exits coming out from Hong Kong.
Michael Smith Jr: I don't know anything about the NYG.
Daniel Cerventus: It's not the NYG one, it's the SAY, basically.
Bernard Leong: Correct.
Daniel Cerventus: So SAY is basically an influencer marketing agency in the model of NYG. NYG is pretty much started by Ray. Ray's an old friend, and they got acquired, basically.
Michael Smith Jr: Publicis.
Daniel Cerventus: Publicis.
Michael Smith Jr: But these guys—what they started and what they became is very different. They turned into Hepmil Media. I don't know if that's the correct pronunciation. They have properties in a lot of the countries. They have a Filipino Gag, Thai Gag, and then they started doing influencer-driven through their machinery branding for businesses, which is why Publicis is buying this. So I think what they've started out as and what they've become are very different things, but it's the same founders. They've been at this for what, eight or nine years or longer? So I think it's interesting to see a media thing. I think it's interesting to see what they kind of pivoted to. From what everybody thinks, it's a fairly good exit. You have a few people bragging about 20X angel returns and stuff, which—I'd be happy with a 20X return in some of my angel deals. I'd probably leak the news and brag about it too. So I think that's what's happening here. Now, the final numbers, I don't know if anybody actually—somebody knows, but they haven't really come out.
Daniel Cerventus: I do have another exit that I haven't actually put in the notes, basically. So Foodie Media, which actually runs a whole bunch of Instagram pages like KL Foodie, Penang Foodie and stuff—they're going IPO.
Michael Smith Jr: On the Malaysia stock exchange, which has been on fire.
Daniel Cerventus: Especially food-related stuff for some strange reason.
Michael Smith Jr: Why is that?
Daniel Cerventus: I have no idea. Really? No idea. Because it started with Oriental Coffee and a whole bunch of it, and then it's just—
Michael Smith Jr: But I see this as like there's momentum in the Malaysian stock market. I don't think you have to be profitable. They are, probably. You have to go proper. Do you have to be? You have to be. Okay. I'm sure there's various ways to manipulate the books, depending which one. But what I'm saying is, if I'm one of these entities and I have enough of the rails to go public, and then you go and look at them—I'm Malaysian and the Malaysian stock market's on fire—why wouldn't you do it?
Bernard Leong: Well, I think it's a good thing right now. You see exits there, but then I was also looking through, and then I see Daniel just popping up something that I thought was really quite strange, which is actually coming from South China Morning Post, which is Malaysia's venture capital having a deep freeze. So you have a lot of exits, but then you don't want to have venture capital.
Daniel Cerventus: Which is always a weird part about Malaysia. Like Malaysia is always a land of contradiction. There is definitely a lot of people who constantly want to raise, but there's not much money.
Michael Smith Jr: But who's doing the freeze? Like Malaysian VCs? Because there's not—let's be fair, there's not a lot of Malaysian VCs anyway.
Daniel Cerventus: There's not a lot of VCs in the Malaysia startup ecosystem.
Michael Smith Jr: VCs in the Malaysia startups. Although that being said, recently—not recently, but a year ago—Khazanah, which is our sovereign fund, merged with this thing called MAVCAP, which is our Malaysia VC arm, to form this thing called J1 Capital. J1 Capital is supposed to be the fund of funds that is actually managing—they are investing in a bunch of new VCs.
Michael Smith Jr: Which will all take time.
Daniel Cerventus: Will all take time to mobilize.
Michael Smith Jr: So in a couple years we could check in on this and see if it's changed.
Daniel Cerventus: But at this point in time, I think it's not a good time to raise in Malaysia, especially building a startup.
Michael Smith Jr: But I think there's always this—you know, I'll get slammed for this and go ahead, slam me everybody—like every year we read about the non-Singapore Southeast ASEAN companies. This is the year, the stars are aligned, and it's the Philippines in one year. It's Thailand in one year. It's never Cambodia. It's Vietnam. If we add this record up over a macro many years, one, it never materialized to be fair. They're all in the same boat that they've been in. Sure, you could be doing your startup in these places and you're excited about your startup and I get it, but the action was always Singapore and Indonesia. Now Indonesia's taking a huge hit. I don't think it's going to easily bounce back, in my opinion. We'll see. Singapore keeps chugging along because it's the capital for all this stuff. But the year of whatever is never actually the year of whatever. It won't be next year or the year of whatever either. That's my take.
Daniel Cerventus: It is always going to be the right vintage for a startup. No.
Michael Smith Jr: Or the funds in these places.
Bernard Leong: Well, all the funds now have to report their DPI, and I don't think the DPI is there. So maybe—
Michael Smith Jr: Well, they don't—where do they report them to? Their LPs.
Bernard Leong: To the LPs, right?
Michael Smith Jr: Nowhere else.
Bernard Leong: I mean, the secondary markets are not really moving either. So I think one interesting thing—there's also the regional markets. In the last couple days, there's some correction going on.
Michael Smith Jr: The correction feels global.
Bernard Leong: Totally.
Michael Smith Jr: I haven't checked the European markets.
Bernard Leong: So I think the cryptocurrencies were the first indicator, then followed by the tech stocks because there was a lot of talk about the AI bubble and all that. Is the bubble popping? I don't know. What's your feeling?
Michael Smith Jr: The other thing people forget—remember with Trump's nuttiness or whatever you want to call it—there's been no US data for a month and a half after the shutdown. So people are flying blind with macro data. Usually America's the gold standard for macro data, and there's been none. It just starts to—supposedly tomorrow's going to be the big day. So we're recording this on November 19th. The big day tomorrow is data, first bits of data that haven't been collected in a while coming out that could be good or bad. NVIDIA, you know—
Bernard Leong: But essentially a bit—
Michael Smith Jr: We don't know if NVIDIA's going to see their shadow or not when they come out.
Bernard Leong: There's also some time lag.
Michael Smith Jr: But I just think that there's been no data, now they're going to get data. There is a lag to it. Then so I—you see a bunch of things happening. So I put in there, you see the S&P moving average, which is a big deal, is now finally hitting lows that are months and months long. The Fed is no longer voting in unison on rate costs—interest rate things—which is a new thing. Tariffs are all over the map, and he's starting to give some of them back. Because the Republicans lost a bunch of votes, you see Trump changing his stance on how he's treating these things. It's all compounding together that it's creating what I think in the market is just uncertainty. When you start to see the selloffs and uncertainty—honestly, you should never feel bad about, in my opinion, selling any of these things over the last couple weeks, knowing that you've been up double-digit percentages for a long time. May not be a bad idea.
Daniel Cerventus: But the reality is like, I know—at least you and I, or Bernard, we don't think there's a bubble or anything, but—
Michael Smith Jr: I do think there's a bubble.
Daniel Cerventus: Do you think it will pop?
Michael Smith Jr: Well see, I think this is where you get into like a debate around there's always bubbles. Bubbles create an amazing amount of forward momentum and rational exuberance and confidence and build out whatever you're building out. It was train tracks in one thing. It was fiber optics in another build-out. It was the internet in another build-out. We're building out AI. They had this infrastructure. It probably is a bubble. Bubbles actually have always been with us in every big thing. The question is, does it pop? Does it fizzle? Does it taper?
Bernard Leong: It feels to me that when we talk about bubble these days, there's a very quick correction that comes immediately. Remember in 2012 during the Euro crisis, there was a bubble about all these companies. Then actually the correction happened. But then after that, from 2012 all the way to 2018, everything starts to grow again. Because that market correction just has to happen in order to stop the bubble from growing bigger.
Michael Smith Jr: But it's been doing that now for a good 10 years plus. Maybe you do need a correction, and the question is, is it a big correction?
Bernard Leong: I have a data point on this. So I went back to look at my notes. If you think about the dotcom bubble, it was 20% of the entire GDP of the US. Then you go to the railroads—
Michael Smith Jr: This current—
Bernard Leong: Did some estimation—about 10%. There is not a big portion of the GDP, right? So the current one is about 2%. That was a very good article that talks about the infrastructure, but I suspect it's not 2%. I suspect somewhere around 5 to 6% because there's a lot of hidden balance sheet now with all the data centers.
Michael Smith Jr: But I think that's what people are commenting about where it's getting rickety—which is, up until this point, and I won't mention any names because I work for some of them—it's been cash balance sheet funding. Now it's shifting into borrowing. So Amazon's borrowing, Google's borrowing, Microsoft has borrowed. They're all borrowing to do this. So now you get into, "Oh, wait a sec, why are they borrowing to do this? Is it—" You know, it's not a cash flow issue. So that's where I think—I'm not saying it's the catalyst, but now it's a new thing where people are saying, "Well, wait a sec, Google and Microsoft could have done this forever with cash, and now they're borrowing to do it. Is that because they wanted to be off their—" Like, so I think all this stuff's coming together. Again, it could all change tomorrow with NVIDIA saying, "Well, we just blew out our numbers again." It's—
Bernard Leong: Oh yeah.
Michael Smith Jr: It's—
Bernard Leong: But we don't know.
Michael Smith Jr: Which I actually think they will. So I think the party will keep going.
Daniel Cerventus: I mean, I know you can comment on it, but Oracle's deal with OpenAI—it's now worth $75 million.
Michael Smith Jr: I don't know how anybody has a calculation on that, to be honest with you. I saw that. I was like, okay, whatever.
Daniel Cerventus: I just look at it as a data point.
Michael Smith Jr: A lot of people are asking, "How do they come up with that number? Where is it?"
Bernard Leong: I think the much more fun part is that every time you mention OpenAI with someone, everything would just blow up. So if you think about what OpenAI did to AMD—it's like, "Hey, I'm going to make this announcement." You just went from a $31 billion company to now become $125 billion. But look at market cap of these companies.
Michael Smith Jr: There has never been a product to grow as fast as them, and it still appears that they're still growing as fast as they have been. Nothing's ever been that big. So you have to put them in some pantheon. I've had my own narrative on this, which not everybody agrees with. My narrative on this is we have yet to see over the last, say, five, 10 years—you know, I don't want to say a hyperscaler getting built—a new large global tech company that is now in the pantheon of a Google, a Microsoft. It hasn't been happening.
Daniel Cerventus: For the last 20 years, I think.
Michael Smith Jr: So that's not a Palantir, just to be clear.
Bernard Leong: By OpenAI, you don't consider them?
Michael Smith Jr: No, no. I'm saying they're not there yet. I'm saying they want to get there. That's the goal. That's why Jony Ive is there. That's why they're working on it. They want to get there. What I'm saying is it hasn't happened because there are gatekeepers. So again, I don't want to get into brand names. You can figure this out. There are gatekeepers, and the gatekeepers have the money, the consumer monopoly that they own, and then they also have the capital and they have the data centers. So to become one of these new things—if we say it's OpenAI, you could pretend it could be a threat, whatever—they also have to become as big as these other players in compute. To get there, you actually have to put in front a roadmap that's like, "I will become as big as these other players in compute." Because if you go just—a lot of people have done this math—just get away from model building and inference and just realize when you have a large consumer app, how much processing power you need, how much networking you need, how much data— I'm privy to some of these kinds of customers I've had at three hyperscalers. When you're a ByteDance, when you are whoever, and you think about when CloudFlare went down, when everything breaks—a large consumer app that might have like 10% of the world's population using it, let alone the model building, is going to need an extraordinary amount of compute.
Bernard Leong: But then you see in the last—
Michael Smith Jr: they don't own that. Their competitors own that compute.
Bernard Leong: You say that. So last two months—AWS outage. Yesterday, CloudFlare outage. What is happening?
Daniel Cerventus: I said the sharks will bite the cables the next round, but yeah, it's—
Michael Smith Jr: Cables are getting cut all the time, and that doesn't usually cause all the time.
Bernard Leong: You have an engineer who pushed the wrong code. Then you have this very nice meme saying you have only one job.
Michael Smith Jr: I think the only answer here is this stuff is very complicated stuff, and a lot of times it's made to seem like it's not. Then mistakes happen, probably by humans. Things break.
Daniel Cerventus: Definitely. But that's how fragile the internet is at this point in time because there's so much centralization.
Michael Smith Jr: I think it's always been fragile.
Bernard Leong: I agree with you.
Michael Smith Jr: I don't think it's because it's centralized. It's because it's getting bigger and maybe more concentrated, more complicated. But I don't think because the people centralize it don't want to go down. They take big hits when they go down. So it is concentrated, but I think it's always been—you know, not necessarily distributed. I always laugh at the crypto thing when they say it's distributed. They go down sometimes too.
Bernard Leong: No, they go down first. They're usually the leading—
Michael Smith Jr: They're sitting on centralized servers. Hello. So I don't know what the answer is. I use simple explanations when I try to—when I'm talking to say relatives, family—there's no way that we're sitting here today that you're in the world that we think we all might get to. Whether you want to call it Star Trek or Star Wars, whatever science fiction movie floats your boat—the one where it's one small device doing everything and it knows everything about you. When I get a phone call from Bernard and you're there, it'll immediately say, "Yeah, Bernard's calendar's this, Daniel's is that. I booked podcasts, and this thing in your chat—we've already started the document. The agents went out and verified." Was it 9 gig or 5 gig? If you don't think we're going to get there, then you should all get out of tech because we're going to get there. If you're going to get there, we barely have the horsepower to do the Google Docs that we have today, let alone the world I just described.
Bernard Leong: Please let all our audience know that we are using AI agents.
Michael Smith Jr: Hey, if you're not—it is us typing into WhatsApp. Come on, let's—
Bernard Leong: We are not typing into our WhatsApp. We have gotten more sophisticated in that.
Michael Smith Jr: But what I'm saying is, let's be honest about we're barely scratching the surface. You know, I have kids, and I use this example all the time. I'm sure, you know, maybe you figured out a way around this. You have your kids, and I always laugh about the amount of tooling that I don't have. When I think about it, everything I need to do things is actually here. By the way, iPhone—great phone. But it doesn't do anything on my behalf. So I'll give you an example. When I'm in the 1,800 parent-child website groups that you're in to manage our schools, when a form comes in, you're still filling out that damn form. Now, maybe you can pull it up in Apple Preview and it knows some of your text fields. Maybe between that and 1Password, it gets about 40% full. But you know, it doesn't remember that my kid's passport number is that, and the expiration dates. So I just laugh at people who think we have intelligence yet. We have a bunch of dumb stuff. It's just that there's more data and more things. But eventually, at some point, it's going to just do these things for me because I'll go, "I'll trust the data, I'll trust Apple, wherever your phone vendor is." Then it'll just like, "Hey Michael, the form came in WhatsApp. I've gone and filled it out. I just need you to sign it. Or do you want me to sign it for you?" If that's the world we're going to get to—
Daniel Cerventus: That's the dream.
Bernard Leong: Wait, but are you sure you want to give out all your context to the AI?
Daniel Cerventus: I think it's a bit too late, actually.
Michael Smith Jr: Well, the AI—because I'm going to—the AI is going to be on my phone. It doesn't need to go to the cloud to do things, I think. What's going to happen in these things. So yeah, if I don't—you trust your phone now with a bunch of stuff. What—why wouldn't you trust it to fill out a form for you?
Bernard Leong: I try to keep myself sane by saying that I still have a little bit of a control, human part that gives AI context. But I know that what you're saying is a reality.
Michael Smith Jr: But doing things for me that I get to check is a time saver. It's like I'll go and do other things with my time.
Daniel Cerventus: Exactly. Like I do agree because if you can get 90% of the stuff done, I just need to say yes or no.
Michael Smith Jr: Exactly.
Daniel Cerventus: That is my—
Michael Smith Jr: It will get complicated, and it will be—you know, like your health records and these other things. It'll help you live longer. But we're so far away from this. In my mind, we're at the rocks and scissors, stones era of AI, which just explains where it's going to go.
Bernard Leong: Why do some of these people who are the titans of tech decide that they want to start another company again? Like our former big boss, you know, Mr. Jeff [Bezos]?
Michael Smith Jr: This one kind of stuns me. We know he's been an investor in Blue Origin. There's that truck company. I'm sure he writes lots of checks. I mean, he's famous for being early in Google or something, I think.
Bernard Leong: That's why he made his money, by the way.
Michael Smith Jr: One of it. I think he's made it a lot of ways, but I was kind of surprised to see he's doing something new. It's not quite sure what it is. People say it's physical world AI kind of things, which now is a thing because you have the Facebook guy—Yann LeCun—leaving to go do stuff. But the fact that he's being back into a CEO position, co-CEO, is interesting. Now I'm kind of curious what they're going to do. They've raised $6.2 billion actually before they've started.
Bernard Leong: I can see what he's trying to do because if you ask me today, based on all the large language models, we don't have a good enough vector database to put in real-world models. Real models like building information models—BIM for construction. Say manufacturing, you have Revit models. There's no generative AI components of those.
Michael Smith Jr: I don't even know if generative AI is even going to be the answer. But I think the notion of—I've dealt with some customers already that, you know, they're in manufacturing, large-scale manufacturing things, and they expose kind of workflow processes where you can go, "Okay, we can write code to automate." But it's a totally different thing of like, "Hey, we're going to have vision on the assembly line to figure out a problem, make a decision." Like to your point, the models can't really handle that. Now there are people—I'm sure Tesla and Omni have automated factories—but they're tech companies. So what I'm talking about—when you go to the non-tech companies and try to automate them—it's a completely different thing. So it sounds like he's getting into that. It's called Prometheus.
Daniel Cerventus: I think that's actually quite interesting, basically. The way how even Tesla—when you look at all those automation for everything's in place—this is real world. Everything is not in place. How can they process it?
Bernard Leong: But if you—if like me, if I use X AI [Grok] and Claude Max for things like engineering, sciences, computation, they're extremely good. I think the data that they use to do the large language model computation is extremely sophisticated. This is the problem that people don't realize. X AI, which Elon has, has actually got the SpaceX data and the Tesla data, and these are real stuff. Twitter. So when I see the type of engineering powers that came out from X AI for the reasoning models, I can see that it's actually using a lot of very high-level engineering data. I can see why Jeff is going into this space because I think that for robotics, you really need to get into this tertiary data now.
Michael Smith Jr: When you know whether or not NVIDIA blows out their numbers and whether you think a $5 trillion company becomes $6 trillion, I think when you hear Jensen speak about what we're doing today—it's literally like maybe step one or two to where you get to real-world models and vision, understanding, and robotics. We just have a long way to go. I think you could be scared about this and think there's bad things to happen from it, or you could sense that it's actually going to take a lot longer than you think, and there's a lot more learnings to come.
Bernard Leong: I usually think it's longer than I think. That's just my theory that it will take longer.
Michael Smith Jr: It should take longer. I mean, somebody was asking me—
Bernard Leong: A side note, but you know, you had these people like, "Oh, we're a year away from AGI," and they're like, "Oh, we're not."
Daniel Cerventus: No, but I mean, that's the sales talk. That's the sales.
Michael Smith Jr: But these are coming from companies like Anthropic and the tech saying this, selling what they're—because what they say actually scares people a lot of times.
Bernard Leong: No, but you know what's funny? Then they get reprimanded by their elders, saying, "Stop going with this AI talk." If you look at China, they're just building AI to make sure that they get their P&L [profit and loss] covered.
Michael Smith Jr: I'm—but this is in the nodes. But when you mention like, you have all these luminaries—I'm not saying I'm one of these people or should be ascertaining them, is what I'm trying to say. I'm a normal human being here. But I was surprised at—you know, David Marcus, who was the guy that did the crypto stuff at Meta. He's written this scathing thing about what a fraud Yann LeCun is and that he's moving out of this stuff because Zuckerberg's done with him and that he hasn't really—I'm not saying this is the thing, but I'm just like, I had stumbled across this.
Bernard Leong: I just think it's just a difference of point of view. To be fair to what Yann LeCun is saying, he's right.
Daniel Cerventus: David Marcus.
Michael Smith Jr: David Marcus, thank you. Well done. He feels that—he's moving into real-life models too, which—because a lot of people are like, that's the next thing. Vision and understanding and all this. I just think we have so far to go.
Daniel Cerventus: That is really far to go. But I mean, if you look at Exped, one of the Chinese car manufacturers—they have to prove, "Okay, this is a real robot," by actually doing an operation, cutting off the skin where you see some of the demos. What was the one?
Michael Smith Jr: The one where they're controlling it through the eyes of it. It's like—
Daniel Cerventus: That one cracked me up. But you and I both know that we will get there. Like you will get to some sort of—
Michael Smith Jr: But it's going to be longer than we see.
Daniel Cerventus: It's going to be longer.
Michael Smith Jr: I don't even know if it's humanoid. It could be something more purpose-built. But at some point, there's like—I'm sure a robot can do the laundry at some point. Why would I bother?
Daniel Cerventus: I want to get there. Let's be clear. Get there.
Bernard Leong: I know you want to get there. I want to get back to here. So I think there were two things. I think NTT Group has just started a new Southeast Asia startup fund. It's called ESEAsia Ventures, targeting AI, IoT, smart cities.
Michael Smith Jr: I hope you're right on the name.
Bernard Leong: Japanese have a lot of corporate venture funds. We have seen Marubeni, we've seen KKR, all the different—
Michael Smith Jr: Track record, not great on a lot of these corporate ventures. So I don't know if this one—this one didn't feel like it's corporate ventures in focus. It's more like, "Hey, we're starting a fund." I mean, I thought it was cool. It's got a pretty heavy hitter in charge of it.
Daniel Cerventus: Well, that's the thing that I was quite confused—this is like something new for them in Southeast Asia, basically. For what we were looking in terms of the search market, basically—a lot of Japanese folks are actually looking in Southeast Asia because they are ASEAN population at the end of the day.
Michael Smith Jr: I think they're looking to acquire things, and they invest. I think they do well coming here versus, you know, they're not going to go into China. That's not what's happening there.
Bernard Leong: But then you also see China's success in our markets too. You look at BYD cars on the road now.
Michael Smith Jr: I mean, I think it's great to have another fund. I was just more curious—is it really corporate venturing? Is it NTT as the singular LP? I didn't dig enough to find that out. Well, I also wanted to talk about—there is a company, a B2B SaaS startup that listed in NASDAQ and Singapore. It's called AppPoint. AppPoint does a bunch of—so they're a large Microsoft partner. I think they're entirely a Microsoft stack. It's started by this guy, TJ. I think he's Taiwanese, stays here. They build a bunch of things on top of the Microsoft stack specific for the education sector—not ed tech, but the tooling inside education, government, a lot of security products.
Daniel Cerventus: More SI or—
Michael Smith Jr: With product. The thing I find interesting about it—I've been trying to get on my show, I haven't been able to do it. TJ, if you're listening, come on. They have a decent-size Asia market, but the thing I always kind of question people's strategy when you do a startup here is, "Oh, let me do a startup here and try to do the Singapore market and then I'm going to try to go here and here and here." But if you take big tech, they roll something out in America first and then generally Europe and then generally Asia. That's their pecking order because that's kind of how revenue works. What I like what AppPoint's done—it's not necessarily to a Taiwan and he might even say it's not exactly—it was almost America first for a lot of their stuff. Built a fairly sizable market there. I think all along they were still selling here, then went public in America. It's done quite well. They have a pretty good track record quarter, quarter of nice laddering growth. Then they've continued to expand in other markets, and then they've come to SGX to do a dual listing, dual listing as a tracking stock to the NASDAQ stock. I just think that—I saw them when they were at the SGX and they had their—no one talks about it. I'm kind of like, this is a Singapore success story and a pretty good model for—I think there's even talk of them doing a Japanese listing because they have a Japanese business as well.
Bernard Leong: That's right.
Michael Smith Jr: Yet no one talks about this from like, this is how it could be done, folks. It is the same thing I talk about—a lot of startups, they don't want to partner with the hyperscalers, using them as the—
Michael Smith Jr: that's what AppPoint is—100%. Like, it's actually Microsoft only.
Bernard Leong: I made this comment on Jeremy's podcast. When I started my company, I'm a partner to AWS, and some of my core AI startup founders were saying that that's dirty. I'm like, no, Databricks—you're just picking—
Michael Smith Jr: You're just picking a distribution method.
Bernard Leong: Correct. So Databricks, Snowflake, they're all built on AWS marketplace. What are you talking about? These are billion-dollar companies. I'm like, why aren't you—
Michael Smith Jr: They all do all the marketplaces once you get bigger. But which—
Bernard Leong: Is what the guy is doing. I've always talked to VCs and a few B2B startups because when you work at AWS or Microsoft, you see how it works. Microsoft is actually one of the best with "I sell through a marketplace." You always tell these startups, "Look, you go and look at any startup in the US from about Series B on. They focused on their sell-through distribution." That becomes half of their business. Then you look at these ASEAN startups, they'll tell you, "Well, what do you mean I should be a partner to—"
Bernard Leong: I was—
Michael Smith Jr: It's distribution.
Bernard Leong: What was my biggest challenge is trying to make sure that I signed on, getting all the certifications done. It's a lot of work.
Michael Smith Jr: It's a lot of work.
Bernard Leong: It's a lot of work. But it's worth it because the more they actually—what people don't know—you're a green light. Once you get it done, you get a green light, you actually start to get customers from them. Then they help you to actually point you to like, "Hey, you can work with this company, this company, these customers." How you scale. This scaling function, how you—
Michael Smith Jr: Yeah.
Daniel Cerventus: But can you enlighten me in terms of why you have to go and play by that certain rulebook in terms of not being in a marketplace?
Michael Smith Jr: Well—
Bernard Leong: I don't know. I find that—
Daniel Cerventus: Don't you want to make money in the marketplace? You're not making money.
Bernard Leong: No, no, no. It's very simple.
Daniel Cerventus: That's what I'm curious.
Bernard Leong: If you are a B2B company, you need distribution. The best place to work with distribution is to work with someone who has the distribution—in this case, hyperscalers. All these cloud companies service all the businesses. So if I list my solution on their marketplace, it is very easy for me to touch some of these customers.
Michael Smith Jr: It's very easy for them to sell it. So you now get their sales force selling it. The last point that he didn't bring up is when I go and sign a contract with Microsoft or AWS, his product is inside that contract. AWS is the biller. So now the customer doesn't have to onboard Bernard as a biller.
Daniel Cerventus: So why do people pooh-pooh this, basically?
Michael Smith Jr: Because I don't want to use—like, they don't pay attention. But I don't think they realize that this is a GTM strategy for B2B because they just think they should find their own customers.
Bernard Leong: They think of finding their own customers, and they think that doing these things like AWS certification is a waste of time. Putting yourself into the AWS marketplace is a waste of time. But I find it super useful for me because when I start doing all these things, the AWS account manager will ping me and say, "Hey, I got this customer. Are you happy to meet them? I got this breakfast meeting and you can go to where I got five customers."
Michael Smith Jr: Microsoft's really good at that.
Bernard Leong: It is a growth, go-to-market strategy, but some founders just think that you should just start from scratch. I'm like, this is not a scaling function.
Daniel Cerventus: That is just the ego speaking, basically.
Michael Smith Jr: I think some of them don't know how it works, or they look at the amount of work you've got to do to get into it and get certified—it's not simple. But you know, the other thing is—what's the Charlie Munger quote? "Show me the incentives and I'll show you the outcome." Remember, the sales reps at these hyperscalers are not going to get out of bed for you if you're not in their marketplace because that's how they get paid. They're going to make money on your name.
Bernard Leong: On my thing. So actually that's the—remember in those days when we go to Malaysia and we need to become onboarded vendors and all that, it's so difficult to collect money. Now that I can just leverage on AWS to collect the money for me, then it saves up a lot of time in terms of revenue. I mean, I'm not big enough in that sense that I should do it now, but you know, later stage I can always build it by myself. But at this early juncture—
Michael Smith Jr: then there are actually, for the people that are not well-versed in this, there are startups that do this—that have a product to help you get into multiple marketplaces and kind of manage the process. You lose a little bit of the money, or you pay them like a SaaS subscription. So it's not impossible to do. I think a lot of people, and it is not just the startups—you'd be surprised how many VCs in Southeast Asia with their B2B startups don't even know that this is the thing that they should—
Bernard Leong: I want to be fair. Recently one of the AI startup founders came to me and asked me for advice on that. I have to give her credit for that. This TikTok founder funded by our good friend Temasek. She was asking me how to be a partner. So I started explaining the mechanism, and she immediately got it done. Then she even asked me, "Well, how do I make sure I get into the APM program?" So actually it's just signed out.
Michael Smith Jr: But if you take like an a16z or somebody, they have people on staff.
Bernard Leong: Which our VCs don't understand.
Michael Smith Jr: Who get their startups into the marketplace.
Bernard Leong: Let me tell you something. A prominent VC here, which shall I not name, man, explained to me—because I was explaining this is how I'm going to do my go-to-market strategy. He said, "But Bernard, do you know any two kids from a university can get through a partner ecosystem on your GTM strategy," and trying to mansplain to me how to sell enterprise. You know what? In my mind I was saying, "I am not going to take money from you for the fact that you don't even understand how it works." In order to get yourself approved as a partner, do you know I can make a phone call to my former colleague who I wrote the promotion document for on the day I left the company and say, "Hey, I know now you're heading up partners. Can you approve the status of my company to a partner?" They usually take you two to three months to get approval. I got it done in 7 days.
Michael Smith Jr: Click the button please.
Bernard Leong: I just got the click the button. It's like, can you—
Michael Smith Jr: then—let's be fair, it's matured into a racket because these marketplaces are huge and everybody—so it's like it's a check-the-box thing, but it's an important check-the-box because you can ride on bigger contracts. You have the sales force working in your favour. Then they also do some marketing. They'll do events.
Bernard Leong: I'll just give you an example. I got what is called the Foundation Tier Review. That means my solution is certified to run on the platform. Immediately I send it to my customer who signed the SOW for me. It's very standard. I have gotten approval. Now I can deploy this solution securely on your platform. So I really don't understand why even VCs do not understand.
Michael Smith Jr: To me it's no different than a consumer app advertising on Facebook. B2B app gets in marketplace.
Daniel Cerventus: I mean, it's a simple thing in terms of when the iPhone came out, the App Store and stuff like that. So you're just leveraging on the distribution channel, basically. So is there any downside?
Bernard Leong: No downside at this—
Michael Smith Jr: Inside? Why? It's work to be fair. You were inside the system. It is work.
Daniel Cerventus: Let's say two months—
Michael Smith Jr: Of certifications you've got to go get and test. But I don't think there's a downside, as in doing that work wouldn't be seen as very worthwhile.
Daniel Cerventus: No, Bernard and I are in the training space, basically. The certification works because it's like, "Hey, this—"
Michael Smith Jr: It's a badge.
Bernard Leong: I think it was worth it because I feel that I actually got the certification. I was working with my ex-colleagues, and my ex-colleagues were helping me to find new customers. But I don't want to get into this whole B2B bitching about VCs. But I want to get into the Google SEA economy report. I just interviewed all the three stakeholders.
Michael Smith Jr: I didn't dig through all those stats.
Bernard Leong: Actually this year was a bit of a repeat of last year's stats, except that the penetration of digital payments has gone to 60% from 50%.
Michael Smith Jr: Seems low.
Bernard Leong: So, and then there's the other thing about the Indonesian e-commerce—the video commerce has gone up by 5X: TikTok and also YouTube Shorts as well. Then there's also the other part about they have now included—instead of the famous ASEAN six countries, now it's all the 10, which is adding the remaining Southeast Asia countries.
Daniel Cerventus: Oh God.
Bernard Leong: But I think it was just first initial numbers. So I think where they're now seeing is that there are a lot of companies this year that are going to go profitable thanks to, of course, you know, circumstances.
Michael Smith Jr: As they had to, to survive because they're not getting funded.
Bernard Leong: But I was quite surprised that Southeast Asia is three times more AI curious than other regions.
Daniel Cerventus: How do you define that, actually?
Bernard Leong: So the way they defined it was they say that based on the AI usage from the different platforms—for example, you do know that Singapore has the top 10 usage in OpenAI ChatGPT.
Daniel Cerventus: Really?
Bernard Leong: Top 10 globally. Global usage by capital. That means a lot of people are using ChatGPT here.
Daniel Cerventus: I don't know, but I think Southeast Asia jumps into trends really fast. Like next week, a bunch of us, we are hosting a 1,200-people hackathon for Cursor in Malaysia.
Michael Smith Jr: Is that part of Sherry's thing or a different thing?
Daniel Cerventus: It's part of the Build Club folks, basically. So different.
Bernard Leong: I think we usually jump on quite fast as well. I think—
Daniel Cerventus: There's the web3 market, the crypto—
Michael Smith Jr: But the Cisco data showed this too. We're talking about it. You know, I always try just to wrap my head around why is it happening. I think when you miss these gaps of infrastructure, you can take advantage of tooling that allows you to kind of—someone in Thailand could be as AI proficient as somebody in America given the access because there's the internet mobility, and there's even different pricing that I think some of these people naturally see as like, "Hey, I can jump into the fray and be as advanced as everybody else, no matter where I come from." That's correct. It's pretty impressive. I guess I didn't glean anything new. Maybe we're just in that era now where there isn't something new to learn.
Bernard Leong: I had the same feeling when I was interviewing them because when they were just reiterating some of the common numbers.
Michael Smith Jr: Like, we've heard this before.
Bernard Leong: We've heard this before. I didn't hear anything new and insightful. Where I think last year was quite interesting because it was the first time the digital financial transactions have gone more digital than cash. That's something new to me. But to be fair to the three companies who actually are Google, Temasek, and Bain, you can't expect every year to have groundbreaking—
Michael Smith Jr: No, no. That's what I'm saying. I think this is no different to me than, you know, is your iPhone 16 different? It is not. Because they've come all so far that these are all just incremental things.
Bernard Leong: But the best result is that they predicted a $200 billion economy by 2025. Now they have—we actually reached $300 billion economy for this year already. So there is a great milestone where, you know, sometimes everybody's doubting the region, like, "Oh yeah, nobody cares about this region anymore." No, that's the economy.
Michael Smith Jr: No, I think sometimes we've got to check our silliness and realize—go back 10 years. If you can recall, because we were here, just remember what you had then versus now, and you kind of got to go, "Okay, it's come a long way."
Daniel Cerventus: It's definitely a long way. But the thing I'm really surprised is basically three out of five people purchase something online. I'm surprised it's quite low.
Michael Smith Jr: It seems low. You think it'd be like five out of five.
Daniel Cerventus: Like 4.5.
Michael Smith Jr: But I think it's a generational thing. You still have a lot of old people that probably don't buy online.
Daniel Cerventus: Really?
Michael Smith Jr: I'm not saying that they can't. I'm just saying you have a lot of—
Daniel Cerventus: No, like especially the live streamers—a lot of older generations are buying online. So like whether this is the younger generation, or do they have—
Bernard Leong: No, the people within my generation are all using Lazada or using TikTok shopping.
Daniel Cerventus: You are not that old. I'm saying older than us.
Michael Smith Jr: We're talking about way older.
Bernard Leong: No, no, they're way older than us. Even my in-laws are doing it.
Michael Smith Jr: Where are the other two people? They don't have a phone. They—
Daniel Cerventus: Yeah. Are they not like—
Michael Smith Jr: It's bad.
Bernard Leong: But you do have to give me the two out of five. But Indonesia, we still have a lot of rural areas. I mean, when we talk about the—
Daniel Cerventus: No, no, fair enough. But I mean, to a certain extent, they will still have like Gojek or Tokopedia or something like that.
Michael Smith Jr: Think that there's the case? Well, there's that whole notion of first-tier, second-tier, third-tier markets. You have a lot of products that try to even work in tier two that don't even get the third tier when it comes to—but what—
Bernard Leong: So this is a question that I always don't understand. Maybe you can help me a little bit with. Why is it that in China when we go from first-tier, second-tier, third-tier, it seems that it can still trickle down, and then even now you can go into fourth-tier, fifth-tier markets and then you can create companies like Pinduoduo. But whereas in our region where, let's say first-tier, like Jakarta going into, say, Bandung—
Michael Smith Jr: I think it's the one-country thing. Because the one country is so big, the amount of revenue and volume happening in tier one and two tiers is funding getting to three and four and five. It's the same company, the same product. I think if you take Indonesia, none of these guys have gotten that profitable in a core market to keep putting more money into second and third and fourth. There is no notion of doing this regionally. That's been tough. I just think it's a difference in the amount of money, the rails, you know—in China, it's all in Chinese, it's—you know, it's RMB, the same everywhere. The wallet's the same everywhere.
Daniel Cerventus: At least there's two wallets.
Bernard Leong: There's a Grab wallet and there's a GoTo wallet.
Michael Smith Jr: So I think it's like, for you to be that big, that China-scale big, you'd have to be regional. But now you have each language, each—I think it's always that problem. I'm guessing in China that just doesn't happen. It's all the same.
Daniel Cerventus: So the thing about China that's actually very interesting—certain regions are very hyper-focused on different niches, basically. If you look at certain parts, like, "Okay, we are manufacturing for this." Alibaba brought us to this particular village called Bawan Village. All they do is—when we were there, it looked—it was supposed to be this rural area. It used to be poor 10 years back. People were driving Ferraris. People were driving Mustangs and stuff like that. Like, what do they sell? They sell walnuts, and everyone sells walnuts, basically. It's so weird. It's so bizarre.
Michael Smith Jr: But they're probably selling in all of China.
Daniel Cerventus: Exactly. they're hyper-specialized until there is actually a communal processing plant where every single family will just come and process their walnut order.
Bernard Leong: It just reminds me—recently when I was in Japan, I went to Uji, which is the place where all matcha is made. Like if you go into the whole region, everything there is just matcha.
Daniel Cerventus: Matcha.
Michael Smith Jr: But I think if you took the walnut example and just pretend for a second that this city in Indonesia has the best walnuts—they're not going to be able to become a Southeast ASEAN-wide walnut dominant player. Where in China, that guy can get all the traffic.
Daniel Cerventus: That's why we come back to the distribution because they just plug into Taobao, they plug into JD.
Bernard Leong: Maybe it was like Malaysia. Durian plantation owners are making quite a lot with durian because now China is a super big market.
Daniel Cerventus: Oh. It's always been a super big market.
Michael Smith Jr: But these are like edge cases.
Daniel Cerventus: No, it's always big. It's always big market. That's crazy.
Michael Smith Jr: But I think there's—you know, I believe the narrative has shifted a little bit in the Southeast Asia stuff with—this data kind of supports it—that we're incrementally getting better, we're incrementally accessing more of the markets. There's some reality now about valuations and exits that it's—you know, talk to VCs right now. I don't think enough checks are being written. Maybe they have too many choices. But you hear about nominal valuations again, some reasonableness in people's terms.
Bernard Leong: You know—
Michael Smith Jr: So—
Daniel Cerventus: I'm sorry, there's a return to sanity.
Michael Smith Jr: I think that's what it is. Or reality, you know.
Bernard Leong: You know, I always find it very strange, and I think this is probably the way we are thinking about it—we're always having these two extremes. Return to founder-friendly. Bombastic return to sanity, like the markets.
Daniel Cerventus: But welcome to the startup world, man. We ride on hype and bubbles.
Michael Smith Jr: No, but that's what was fun when I talked to those search fund guys. Just kind of the stats around—even myself, I don't realize the amount of SMEs, the volume of them, the age of the people running them, the things—I don't, because I'm always in this startup or enterprise bubble. I don't see the—maybe it's the middle of the—what, you know, 70 million SMEs across Southeast Asia that are big employers, move on. I just don't realize it. I talk to them a lot. It's a good business.
Daniel Cerventus: No, and the best part is I think I mentioned that when I spoke to some of the M&A folks in the startup space and the M&A folks in the SME space—the startup space, they are all seeing red, and we are all seeing black, basically.
Michael Smith Jr: That's a good one. Like a roulette table.
Bernard Leong: So I think we are just almost at anything on the table that we want to talk about.
Michael Smith Jr: No. We've made everything—
Bernard Leong: Yeah, I'm in the chitchatting. I don't know, I just always wonder—is there any subjects to talk about? I hardly can get you both onto one room to just have this conversation. Maybe I might just want to ask you one of my favorite questions. What is just the one thing you wish more people would ask you about the Southeast Asia region that they don't ask you about?
Michael Smith Jr: Interesting. They don't ask me about it. I think it's—I don't know if they don't ask me, but I know when I am speaking with people, when I, especially when I go back to America, is that in their mind—I don't know if exotic is the word—they still have in their mind that it's like white elephants. Maybe it is exotic and that it's like, "Oh, tell me something." You just try to tell them that, look, there are definitely places you can go that feel off the beaten path and that. But if you land in, I would argue, any of the core Southeast ASEAN cities, it's not going to be that shocking to you. Sure, the food will be different and the smells and the languages, but it's very accessible. It's not crazy to think that you could even move to these places. You should just realize that what's in your mind is this place 20 years ago. It's—you know, I don't even know if it's a good thing—it's homogenized and modernized to the point that it's major cities, quite comfortable.
Daniel Cerventus: You look at the CBD [central business district], you look at the malls. You can't tell.
Michael Smith Jr: God, there's more malls there than where these people come from.
Daniel Cerventus: Literally, I've been trying to think about it, but most of the time people are asking me a lot of questions about SMEs these days.
Bernard Leong: Good question.
Daniel Cerventus: why is there a market there? Because I feel like, "Look, these businesses are all aging, run by old owners and et cetera." But why are we interested in it at the first place? Because Malaysia, Singapore is roughly about what, 50%, 70% powered by SMEs, essentially.
Michael Smith Jr: That's the two biggest—
Daniel Cerventus: Yeah. Areas for them. So that's a bit of a national threat in terms of what we need to preserve. They hire a lot of people, they provide a lot of jobs, but there's also a lot of room for growth because most of them are either geographically bound—Malaysia regional or et cetera. So there's a lot more room to go—
Bernard Leong: Or maybe a heritage that is required to be modernized. I felt that is always the case when we think about—
Michael Smith Jr: But I think that the—you know, I'm not trying to shill for GenCap, but just because that's who I talked to and—No, no, no, I know that. But I think the interesting thing is, you know, you have this, "Hey, I'm going to be a startup, zero to one, raise capital." That's very hard to do. You guys all know this. You may make it, you may not make it. You know, how do you attract people into the, "Hey, rather than you go and do your zero-to-one thing, come over here and do one to two." But it's in an SME. It's not technical. I think that's a hard pitch to the generation that you need to come into these things. What's the advertisement there to get people hooked?
Daniel Cerventus: So basically, I mean, one thing is definitely risk, but the second thing in terms of this—there's a well—
Michael Smith Jr: Less risk than a startup.
Daniel Cerventus: Definitely less risk than a startup. It's going to be hard, but there's a big opportunity of modernisation, basically. That's a big gap that people are—
Michael Smith Jr: That's my suspicion, but I'm still saying, "How do you get this group of operators who might have been—" and maybe it's different cohorts—it's the retired executives. It could be people coming from big tech.
Daniel Cerventus: Well, failed startup.
Michael Smith Jr: Operator. It's just like, I see this. There's almost more of this thing that you could buy and automate than the people that might be attracted to go in and do it.
Daniel Cerventus: Not going to lie, it's not an easy sell for operators, but it's an easy sell for investors.
Michael Smith Jr: Yeah.
Daniel Cerventus: So investors are keen on putting money. Operators are still something to look forward to.
Michael Smith Jr: That's the trick. But I think that it's interesting because I think in this part of the world, there's a lot of these, and they're aging out. But the businesses are good businesses.
Bernard Leong: Well, I think it's a pretty good place to wrap. Sure. So where do they find you both?
Michael Smith Jr: I just tell people LinkedIn's the best place. The Generalist podcast, which I post on LinkedIn, but that's usually where I hang out.
Daniel Cerventus: I'm strangely on Facebook, basically.
Bernard Leong: I just don't understand the Facebook when people—
Daniel Cerventus: X [or formerly tweet].
Michael Smith Jr: I've logged out.
Bernard Leong: You definitely can find me anywhere. So thanks once again. I think we are going to do it again soon.
Michael Smith Jr: We will.
Daniel Cerventus: Thank you, guys.
Bernard Leong: We'll do it again. Thank you.
Podcast Information: Bernard Leong (@bernardleong, Linkedin) hosts and produces the show. Proper credits for the intro and end music: "Energetic Sports Drive" and the episode is mixed & edited in both video and audio format by G. Thomas Craig (@gthomascraig, LinkedIn). Here are the links to watch or listen to our podcast.
