Thailand: New Prime Minister Paetongtarn Shinawatra, Founder Failure Stigma & Electric Vehicle (EV) Manufacturing with Wing Vasiksiri - E482

Wing Vasiksiri, General Partner & Founder of WV Fund, and Jeremy Au discussed:

1. Founder Failure Stigma: They compared how failure is perceived by founders and society in Southeast Asia versus the US, focusing on Thailand and Singapore. In Thailand, failure carries a strong stigma, making it harder for failed founders to reintegrate into the ecosystem, while in the US, failure is seen as part of the entrepreneurial journey, with founders often wearing it as a badge of honor. They noted that the lack of a talent recycling system in Southeast Asia makes it riskier for founders to fail, as there are fewer opportunities for them to be absorbed back into other startups, VC firms, or incubators. In contrast, Silicon Valley provides a more robust safety net for failed founders, who are quickly reabsorbed into the ecosystem.

2. New Prime Minister Paetongtarn Shinawatra: They discussed the recent political shift in Thailand with the appointment of Paetongtarn Shinawatra as Prime Minister, replacing Srettha Thavisin. Srettha, a former business executive, was removed from office after appointing a convicted cabinet member, which violated the Thai constitution. Paetongtarn, the daughter of former pro-business Prime Minister Thaksin Shinawatra, is expected to maintain many of the previous administration’s policies, including the digital wallet program, which offers financial handouts of 10,000 baht (USD 300) to 50 million citizens to stimulate economic growth. While the stock exchange of Thailand reacted positively, with a sharp rise of over 11%, the long-term fiscal impact of such handouts remains a concern, particularly with potential inflationary pressures.

3. Electric Vehicle (EV) Manufacturing: They explored Thailand’s rapid adoption of electric vehicles, supported by strong government subsidies ranging from 20,000 to 100,000 baht per vehicle. In 2023, EVs accounted for nearly 10% of new car sales, and the government aims for 30% of vehicle production to be electric by 2030. This shift is largely driven by partnerships with Chinese manufacturers, positioning Thailand as a key player in the regional EV market. They contrasted this with Singapore, where the government’s reliance on gas tax revenues limits its incentive to push for EV adoption, despite favorable infrastructure conditions. Indonesia was also mentioned as a key player in the EV sector, particularly due to its rich nickel reserves essential for battery production.

Jeremy and Wing also discussed the rise of the cannabis industry in Thailand, the minimum wage increase, and the lack of B2B SaaS success stories in the region.

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(01:46) Jeremy Au:

Hey Wing, how are you?

(01:47) Wing Vasiksiri:

Hey Jeremy, good to see you as always. How are you doing?

(01:51) Jeremy Au:

Good. It's been aa crazy set of weeks in Singapore, all the conferences, SuperReturns, F1, checking out those concerts at F1, things like that. So lots of VCs in town. How about you? How's life for you?

(02:00) Wing Vasiksiri:

Yeah, this is like the week to be in Singapore. But yeah, I'll go to my end traveling a little bit, but back in Bangkok and yeah, excited to catch up.

(02:07) Jeremy Au:

You recently did a conference as well, right?

(02:09) Wing Vasiksiri:

So yeah, there was a Tech in Asia event a couple of weeks ago in Bangkok. I was a speaker there along with Paul from Radical Fun and Ankit from, from A2D Ventures. It was interesting. I hadn't been to a Tech in Asia meetup before. I think it's supposed to be a very founder centric event, so got to catch up with a lot of people, meet a lot of new founders in the ecosystem as well, I think overall sentiment, it seems like there is some excitement again around the Thai ecosystem. I think this is driven by a few initiatives. One is that we're seeing a number of new funds being launched in Thailand. Some focus on Thailand, some more kind of regional focus, but using Thailand as like the regional hub.

So you have like the Radical Fund, which is a climate focus fund. Most of their team members are working out of Bangkok. There's a prop tech fund that I ran into as well. They're actually trying to incubate prop tech businesses out of Thailand to X founders now moving to the investing slash incubation side.

(03:06) Wing Vasiksiri:

We should talk about incubations at some point. I always thought it was a very interesting strategy and we have the Krungsri Fund. So Krungsri is one of the large banks here. They used to have an accelerator but it seems like they're bringing it back. They've carved out, I believe a billion baht, which is about 30 million USD, to invest across startups in Thailand and they're doing in batches again. So it'd be similar to like what they did in the past, like batches demo day. But one interesting thing here, which I actually just learned at the event is that the bank itself is investing. I don't know what percent of the fund, but they're actually opening up a percent of fund to retail investors as well.

Yeah, so I think this is, I don't think this has been done in any other region here, to my knowledge, at least. But yeah, so the fund will be open up to retail investors who are clients of the bank, who are looking for exposure to tech companies. And yeah, it's very interesting way to raise capital. So, excited to see how that turns up.

(03:59) Jeremy Au:

Yeah. I mean, it makes sense to have an anchor LP from a fund perspective, it is that, what percentage of it makes sense, right? I think if it's Temasek or Sovereign Wealth Fund anchoring it, which is primarily a financial investment decision that's quite different from the other way around. So it'll be interesting but it kind of makes sense as well as an incubator, you know, you're a little bit more, I would say, neutral because you're doing so many deals, right? , you know, so it's a wider span versus I think a later stage corporate venture capital fund. Probably a bit hard to have some retail if it's like a hundred percent aligned with the corporate mothership strategy.

(04:27) Wing Vasiksiri:

Yeah, exactly. I think for the Krungsri innovator one, they're doing pretty broad. I believe it's generalists. And I don't think they'll touch crypto, but they'll do kind of a more generous strategy. They're supposed to have their first batch selected over the next couple weeks or so. I think they got a few hundred applicants. So I'm very excited to see what that first batch of like 10 to 20 companies look like, what founders in Thailand are building nowadays. And I think, before we had all these accelerators, all these things, kind of, it really was like the centerpiece. And it was a reason that the whole ecosystem came together. Everyone was at the demo days, you got to meet familiar faces, people would collaborate more. So I'm really hoping that this accelerator does, or has at least a similar effect, right?

(05:06) Wing Vasiksiri:

Because I think you know, we've talked about before, the tech, the startup pipeline in Thailand isn't as strong as neighboring countries. And we can talk about some of the reasons for that, but I think booths like this are great to kind of kickstart the ecosystem and make things happening.

(05:19) Jeremy Au:

Yeah, I mean, let's list it out, right? You talked about it in the previous podcast, the things you mentioned before was, I think you just mentioned about the, kind of like, lack of follow on capital. I think it's one stat, which is also the function of like the exit markets is stronger for the local Thai exchange, but unclear for how to get to the US, what are the other factors? If you just want to list them out quickly.

(05:37) Wing Vasiksiri:

Yeah, I mean, I think the biggest one is still lack of talent pipeline. I think as VCs, the one things that we do track a lot is kind of talent flows. Where's the top talent going? A good shorthand, like if you define top talent is people who maybe grew up in Thailand, but were educated abroad, right? Educated abroad means one of two things: either you got a scholarship or you come from a somewhat well off family who was able to afford to send you abroad, but either way, I think this is a good proxy for, for top talent.

You kind of track the inflows of this. Well, what was happening historically was that there was a lot of brain drain. People were leaving Thailand, staying in the US, UK, Australia, wherever it is that they got educated and not coming back. But since 2020, more kind of negative immigration policies with Trump and also COVID, those kind of reverse brain drain where people were coming back.

And if you looked at this specific group, there were kind of three main categories that people were transitioning to: banking, consulting, or running a family business. These were the three, like high status jobs in society that most of the talent was moving towards. So really like tech jobs weren't one of that. So I think that kind of the biggest thing is like talent pipeline where top talent s aren't starting companies, they're not, it's not seen as kind of like a prestigious path. So that's one.

I think what we touched on before is like there's no big winner or example. I think things tend to kickstart when you have an example of a founder who's, maybe looks like you, has a similar background and has done well. So we don't really have those examples like a unicorn exit in Thailand yet where not just the founders but early employees were able to get liquidity. They were able to make generational money working in a startup that hasn't happened for this market yet. And I think usually when that happens, you see a bit of a snowball effect for the startup ecosystem.

(07:14) Wing Vasiksiri:

And I think this last one is something that I've been thinking more and more about.

(07:19) Wing Vasiksiri:

I'm curious to kind of get your thoughts and comparison on this one too, but just this general idea that people are very scared to fail, like failure isn't necessarily accepted, especially in Thai community or Thai circles. It's seen as something very negative in your history, whereas you compare this with the US, people are quite proud to fail, right? They'll say like, I'm a failed startup founder twice or whatever it is. They wear it almost like a badge of honor. They had this really big audacious ambition or goal, and even though they weren't able to succeed, they really invested and kind of shot for the stars. And even though they felt it was okay, I mean, I definitely see this with like, even founders I work with where they're much more hesitant to talk about what is going wrong and try to focus on what is going right. So it kind of, this idea of like failure, not being widely accepted, I think is a problem that we're still kind of wrestling with as well.

(08:08) Jeremy Au:

Yeah, I mean, you've listed, all of these reasons and a quick note is that, when I was running a startup, a Series A startup in the U. S., we actually lost a Thai employee because of the Trump administration immigration policy. So there's the H1B renewals. They normally are automatic renewal. And unfortunately, the whole administration didn't let it through. So I lost two employees. One went back to Thailand, another one had to go through this whole exit a country, leave his wife and kid in America, and then apply to be a student again to, you know, start working and then getting that US visa to be back with his wife and kids.

So, what a journey, I think, for that turbulent time, but I think the question about failure is not an easy one because everybody wants to be a winner. And if not, everybody wants to be invisible, but nobody wants to have the scarlet letter, you know, shame of, quote, unquote, being a failure. And I think you're right. I mean, I think even if you have a startup or company that is a failure, it doesn't mean that you're a personal failure. I think that's one thing. And also, I think people are not yet sophisticated to understand that startups is a high risk activity, right? Like if you tell me like, Hey, Jeremy, I'm an Olympics athlete. I would be like, yeah, there's a pretty much an 80 percent chance you don't get a gold prize because, or 90 percent because, you're training to be an Olympics athlete, but it doesn't mean that you win the medal. So all of us can be like, Oh, you are an Olympics athlete, but we don't say you're a failure because you didn't get a gold. And I think a lot of people kind of look at, Oh, being a founder is that means you get a gold medal, but it's not right? Being a founder, this means that you're trying and running for the Olympics. But you know, 80, 90% you're not going to make it.

So I think society doesn't really understand that as a profession, there's a high risk, high reward profession. So I think to some extent as you also require society to absorb and learn and mature. This is a high risk profession. I don't know the same way we probably look at, it's like, I don't know, you're an F1 driver, right? It's a sexy job, but only one person gets the gold, right?

(09:49) Wing Vasiksiri:

Yeah. I think the difference probably in the US and Silicon Valley especially is just that the rate of startup creation and the number of successes is so much greater. Like the delta of successful companies is probably like 20 to one, this region. So what that means is that even if you fail, very quickly, you can kind of take those learnings apply to the next thing. And in three or four years have a unicorn company, right? So like that success, that turnover is so quick that like people are more open to talking about their failures because you can very quickly turn it around, right? Like, like the canonical examples, like, like Travis Kalanick at Uber, I think it's like his third or fourth startup. None of his early ones were doing well. And then he built kind of, you know, one of the most important companies of his generation. It was very quickly. So I think that's kind of the main difference, but yeah, it'll probably take a while for the ecosystem to kind of be able to rotate the other way.

(10:42) Jeremy Au:

The biggest issue I see is that there isn't a way to reabsorb that talent either, right? In Southeast Asia. So I think in the US, like if you're a founder and you kind of like, didn't have a good outcome, I think you had a lot of job opportunities. There'll be VCs that want you to be a VC. That would be incubators that need to run a program that, I think lots of people that would want to hire. But I think that in, I think emerging markets in Southeast Asia, it doesn't feel like there's a very strong, I mean, I think there is a career penalty ding actually, if you are found and you fail. I think I've seen a lot of them really struggle to find next gig, to be reabsorbed.

(11:13) Wing Vasiksiri:

That's, that's a good point. That's not something I had thought about previously. So you're saying that like, founders who have started a company, but the outcome wasn't the desired outcome, their next thing, I guess their skill sets that they pick up is really the most applicable to that zero to one stage. So I guess the most viable next career option would be potentially joining another company at that early stage. Or,

(11:35) Jeremy Au:

Yeah. There could be another

(11:35) Wing Vasiksiri:

yeah, I guess there's not that VC ecosystem and there's not that like VC ecosystem to like support hiring of that. Yeah, that's a good point. Hadn't thought of that previously either. So it's even riskier here than when you initially think.

(11:45) Jeremy Au:

I think it is objectively to be more risky and fail in Southeast Asia. I mean, I guess, I run this annual offsite for founders who are transitioning from their last company and moving to a new chapter of their career. And yeah, I think that's a real thing that I've been shepherding about, I'll say about 20 founders to that process and, obviously there's all qualitative as I kind of like shepherd the process, but I think, like you said, if that isn't a bunch of high rate growth startups that happening in the US that can absorb you back immediately as a product manager or something like that, then I think you're in a real purgatory, I would say limbo. So it's not an easy dynamic.

(12:18) Wing Vasiksiri:

What's like a common path or a common next thing that you're seeing as you're kind of working with this this group of founders.

(12:23) Jeremy Au:

I think the first is psychologically inside out versus outside in. So inside out is basically saying, like, are these founders really processing the learnings from whatever happened? And obviously, it's a kind of like seven stages of grief, right? Because being a founder is such a consuming identity and workflow and day to day, that I think the first default that for many founders as they kind of process this is that they actually want to default to becoming a founder again. Because, it's this most comfort. It's a continuation of everything. And I don't think it's necessarily wrong. I think I've seen some founders successfully fundraise because if that one company failed, you know, so so forth, but again, fundraise again, I don't think it's a problem because of that skillset.

So I think those founders separate into three personas. I think if they want to do a startup again. I'll call them rebound, revenge and rebirth. So, rebound is quite simple. It's like, I'm primarily thinking about it. There's a founder identity. They seem to me, from my perspective, to kind of like rebound like a rebound after breakup into a pretty like just a startup idea of me rebound into like a accelerated program like Antler, you know, or some of those incubators, just to kind of like get back into it, but they don't really have a very strong product market fit thesis. That's one.

I think revenge is a bit clearer. It's like, they feel like that company failed because got killed by VC or killed by some bad mistake or killed by a co founder. So there's going for the same startup effectively, but going after the same customer segment or approach, but very much of a kind of revenge mindset.

And then I think the third, I think it's more like a rebirth piece, which takes a bit longer, but it would be like, Hey, I'm getting to a point where I have a really good sense of where my strengths are. I have a really good sense of what I'm not good at. So some people are like, Hey, I'm actually really good at tech and I'm terrible at blue collar. And I was doing a blue collar startup. So it's time for me to kind of like take a step back and do something. It's a little bit more integrated in that sense. So that feels like, the three types I see. And the rebirth founders tend to may even have taken another job in between, whether it's VC or some other startup.

So I think that's the founder set. And then very quickly for the non founder set, I think they basically find jobs that are available. So I think the two big ones are either like VC or incubator ecosystem, which, I think, they're supporting founders. So they're a little bit more receptive. I would say a permeable to founders. So they often become like innovation managers or program managers. And they're servicing other founders.

And then I think the other category that we see but as much less would be like other big tech or other companies in the, mean ecosystem that can absorb them as some kind of like, talent, whether it's sales or something like that. But I would say that this category is much smaller than I saw in the US cause in the US, I've seen other founders and, like, yeah, Google will absorb problems in the US, you know, as a product manager, they can't stop hiring. And then, on the product managers, I would say, but it's also so many programs that are there. Anyway, I was just saying like, this is an interesting, set of paths and it's not an easy one for sure.

(14:56) Wing Vasiksiri:

No, I think that that alliance of kind of what I'm seeing, I mean, I'm curious if like that VC incubator position set of jobs is even available in Southeast Asia right now because like you hear of funds, mostly letting people go and people leaving funds as opposed to them scaling up at this stage.

But yeah, I mean, typically I've seen founders move to another company as like country director, country head, or like head own some kind of like product line or some kind of a P&L or just advising other startups as well for a good number of time as they kind of transition. But yeah, that makes sense.

(15:27) Jeremy Au:

No, I think you actually spot on actually some nuance there, which is that I think several years ago there were like founders that being absorbed as entrepreneurs and residents, or just apprenticeship model for VC. But I think right now, yeah, there's a VC chill in Southeast Asia. So I think the VC side is low.

I think it's more like the incubator side, which is more like government funded or the CVC oriented that still has some absorption capability. The other nuance I think that you're spot on about is that what's different versus Silicon Valley is that, I think Silicon Valley, you don't really have country managers or that many general managers but in Southeast Asia, there's a lot of country or city manager roles GMOs, which is a form of product management, but I guess in a geographic area, right? And I think us companies are trying to find somebody that can launch or start a new market for them or run it. I think they capped these founders as well, which is quite an interesting. I think nuance that's different, I would say from the US founder absorption ecosystem.

(16:17) Wing Vasiksiri:

Yeah.

(16:18) Jeremy Au:

So I think one of the big changes that we've also seen recently in Thailand is also the change of the prime minister, right? So we were discussing that at a high level about the charges and stuff like that for the last prime minister three months ago, but I was kind of curious about, from your perspective, what has happened?

(16:32) Wing Vasiksiri:

Yeah, definitely. So big changes in the country. So the big headline is the previous PM Srettha has been replaced by Paetongtarn Shinawatra so what, what happened was he was removed from office by court because he appointed a cabinet member who had a criminal conviction. This is illegal under the Thai constitution. So ended up getting replaced by his fellow party member Paetongtarn. It came as a bit of a shock, honestly, I think to, to most people. I don't think a lot of people saw this coming unless they're kind of like super involved and very, very well connected in the space. And it seems overall the markets have reacted quite positively to this change.

So the, the stock exchange of Thailand saw a pretty sharp rise. I think it's up over, 11%, close to 12% since the new PM's appointment, so it seems like the market is reacting quite positively. But yeah, I think still, to be determined how different or similar their their policies are. But I think a lot of people are kind of keeping a close eye and seeing what's what's gonna happen next.

(17:32) Jeremy Au:

I mean, although they're both from the same party, the current Prime Minister is the daughter of Thaksin Shinawatra, which is I think one of the most pro business prime ministers in Thai history as well. So, there's that affiliation as well. So, yeah, I mean, I think there's a lot of like, surprise definitely, in Singapore, everyone's like, what is going on?

And I guess I was a little bit more clued in because of, what you had been sharing with me. Both kind of like over the podcast and privately. And I think it was just an interesting debate, I think, like you said, about whether, this was good for the market, what's going to happen? Are we going to see stability for a longer period of time, or a shorter period of time, right? And also what's the impact on a lot of the legislative reforms that he had been proposing, we talked about, right? We talked about the marijuana, the casino and the cash handouts as well. So, I think it's a good time for us to discuss and say, like, between the shape of the last administration versus the current administration, which is from the same party, do you see any changes or differences versus what's going to stay the same?

(18:23) Wing Vasiksiri:

Yeah so I think you're spot on. The big change, it's like, Srettha, the previous PM, he came from a more business background, right? So I'm not sure who's the founder or he was the CEO of one of the biggest real estate development companies in Thailand. The new PM comes from long history of politics with her father and her aunt also being previous PMs of the country. So I'm sure she understands how the game works and how to play it. Like you said, I think historically her father has been quite pro business. So I think that's one of the differences.

Similarities wise, I think a lot of the initiatives and a lot of the key initiatives they talk about are quite similar. One, I think one of their big platforms is the digital wallet, so that was the program that would provide handouts of about 10,000 baht, which is about like 300 US dollars to 50 million Thai people. There's certain criteria that you have to face where your income doesn't exceed X amount or your assets in a bank doesn't exceed X amounts. So, it's supposed to help stimulate kind of the lower class people that they get this free handout supposed to stimulate the economy. The program has faced some criticism, there's like potential fiscal risks down the line by kind of printing and giving out this much capital.

The pro argument is that this is going to stimulate the economy. I think the expectation for Thailand this year, is it's growth for about 2% or something like that in the economy. So the idea is that this will stimulate it, which I'm sure it will. But then you can think about potentially inflationary pressures down road as well. I think one interesting thing that's happened since the new PM came into the office is that foreign investors have begun to return to the Thai market. So for the last couple months to a year or so, a lot of foreign capital has left the Thai market. It was a prolonged period of selling and once the new PM was elected, it seemed as though there's a lot of capital inflows kind of reentering the market, which I was surprised to see, right? Because, we talked about a lot of foreign capital wanting to see stability, even the government, things not shifting as much, but this shift seemed to have prompted a lot of capital to move back in.

Not entirely sure what what the reasoning is for that. I think one thing I've heard people say is just that this capital has left the market for a while. They were kind of like waiting for the time and opportunity to come back into the market. And this catalyst was something that stimulated interest and intrigue. So people were supposed to start investing back into the market anyway. It seems like a bit of a, like that argument doesn't make as much sense to me. It seems as though like if they've been sitting out this long, they can wait a little longer. So it seems like there is some confidence in the new PM from the smart foreign money, if you will.

(20:46) Wing Vasiksiri:

Another policy, which maybe we can talk about is the minimum wage policy. So they have plans to increase the minimum wage to 400 baht by the end of the year from from 300 baht per day. Which is, like less than $10 a day to a little over $10 a day. So that's one policy that they're planning to implement as well. I mean, the idea there is like, typically we see as an economy moves from developing to developed, you see the minimum wage increase. Higher standard of living, reducing poverty, but you know, the flip side of that is there could be some job losses. Maybe businesses would choose to digitize, use technology instead of replacing labor and also inflationary pressures, right? As, as a businesses costs in terms of wage go up, typically they increase prices and pass that along to the consumers. So will be interesting to see how that plays out.

(21:31) Jeremy Au:

Yeah. I think that both of those moves are, when you're giving out cash to everybody, that's one, but obviously that dollar is worth more to somebody who is less well off as someone who's rich, as well as increasing the minimum wage is really focused on like, I guess, the best of the class. So I think it's gonna be interesting to see how that plays out. Obviously that's popular in terms of votes and political wins. So I think that's really important for us to happen. But yeah, I think, it kind of goes back to things like, what does it take to really stimulate the Thai economy as well?

(21:56) Wing Vasiksiri:

The, minimum wage thing is interesting, because I think something that we've talked about historically is this idea that, Hey, why are there no large b2B SaaS businesses? Why are there no large winners in that space in Southeast Asia yet? Like most of the big winners are B2C. You look at like the Grab, Gojek, Shopee, Lazada, Bukalapak of the world. And you look to another ecosystem that's a little ahead of us, which is China. And you actually see that it's somewhat similar, where all of the large businesses are more in the B2C space, the big winners, as opposed to B2B. One reason for that is probably because a lot of businesses don't need to automate when labor is relatively cheap, right? Like you don't need that next SaaS tool when you can kind of outsource that to labor, but raising the minimum wage, we're expecting to see this continue in Thailand and also in other economies as they move from like developing to developed.

As minimum wage continues to increase, it's going to be more difficult to outsource everything to labor, right? Something that people, something that business owners are willing to outsource historically, maybe they're going to shift to trying to automate. This current trend, as we see it kind of continue, I think will be interesting to see how that affects kind of the B2B SaaS industry, which is where I think both of us spend some time as well.

(23:06) Jeremy Au:

Yeah. I think it's interesting because Thailand actually has so much manufacturing already. One of the interesting pieces was that is one of those countries that has a lot of manufacturing. It's also the aging population. So it's a lot of the dynamics that China has in terms of needing robotics in the manufacturing side. And I think Thailand is actually absorbing quite a lot of productivity improvements over time. But of course that is different from the B2B SaaS side, which is more selling to the domestic economy, rather than the factories. So I think it's going to be interesting to see how much automation gets going.

(23:35) Wing Vasiksiri:

Yeah, no, completely agree. Like, I guess you could argue, like putting on the economist hat here, like on one side, it can lead to decrease competitiveness in some sectors, right? As costs increase, maybe people move production out of Thailand to vietnam or other neighboring countries that are strong on manufacturing but don't have as high a minimum wage. And then on the other hand, you can think about how maybe it shifts the economy's focus as a whole to more skilled labor.

I think that's something that we've, we've talked about where the talent pipeline of developers, engineers is not there, but as the minimum wage increases, you maybe become less competitive in production, manufacturing and you have to shift the talent pipeline. And this takes a long time, right? It's not going to happen overnight, but you start shifting more to kind of skilled labor and see kind of what, what that does to an economy.

(24:24) Jeremy Au:

Yeah. How's the unemployment rate? Because Indonesia is still having a relatively a bit of unemployment. So I think it's a bit difficult for them to raise the minimum wage, but what's it like for your side of Thailand?

(24:35) Wing Vasiksiri:

Last I checked it was is relatively low. I think it was like 1% or something like that in 2023 so relatively low unemployment. I think people for the most part are employed who are kind of willing and looking for jobs so yeah, the unemployment rate has been relatively low here. I think one of the reasons for that is that there's always been high demand for lower skilled workers in Thailand. Like you look right now where Thailand is, is strong at, it's definitely the service industry. So you think of like tourism, hospitality, restaurants, hotels, and manufacturing, and then agriculture, right? So, for the most part, it's, it's a lot of blue collar workers, lower skilled. The labor supply is also actually quite flexible in terms of kind of like movement between jobs as well. It's not uncommon for someone, you see someone to work kind of two, three jobs. Depending on the time of the year or even what they feel like doing. So yeah, because of the focus on low skilled workers, the unemployment rate has always been somewhat low. I think it's hovering around 1% or something near there last I

(25:35) Jeremy Au:

So there's definitely room to have a minimum wage, so even though you might advise unemployment a little bit, yeah, I think it makes sense. I mean, I think generally, I think a minimum wage, kind of increases the salaries and expense of corporations, right? So the question is, are the corporations like SMEs or the large corporates, right?

So I think that's the dynamic between what makes sense versus what doesn't make sense. I guess one thing from my perspective is, there's also a bunch of other legislation changes that we were discussing as well. I think it sounds like the cannabis bill is going to get loosened a little bit. That's what I read on the news. Any other changes like that?

(26:07) Wing Vasiksiri:

Yeah. The, the cannabis one is interesting. You know, obviously we legalized it a couple years ago, boom for tourism, a lot of people coming in and kind of really being attracted to that as one of the main things I think. I'm sure the government's made a lot of revenue just through the legalization. And then last year, especially the PM, or Srettha the first PM coming into power. There were some plans to actually criminalize it again, which would be, walking and backwards taking a lot of steps back, in my opinion, to kind of decriminalize, to re criminalize. And now the latest I'm hearing or at least what we're seeing is that they're planning not to reclassify it as a narcotic, but to limit the use a little bit.

So this might be limited more to just medical as opposed to open recreational usage. But it doesn't seem like they're going to walk it back all the way. Okay. And I think, we touched on this before where it's like, once the genie's out of the bottle, it's very hard to kind of put it back in, right? You have so many stakeholders involved now. You have so many people involved from like the manufacturing to the distribution. Like you look at, you walk around Thailand, you just see how many weed shops, storefronts, distributors have opened up. It's really become a booming business in and of itself. And I think walking that back is going to be very, very tricky. So that's one.

(27:18) Wing Vasiksiri:

Haven't heard anything, any new updates on the gambling front yet, but maybe one thing that's interesting related to the jobs that we're talking about is just the EV stuff as well that's happening. So I actually think that this is an industry, as a VC, like this is an industry I think that has a lot of tailwinds. As investors, we're always looking for kind of inflection points in terms of where we want to be investing our capital and we want to look for markets that have a lot of strong tailwinds. The electric vehicle space in Thailand is very interesting because there is very clear regulatory inflection point. The government is offering heavy subsidies for EVs, mostly EV cars at this point. So what they're currently offering is there's a scheme offering incentives of from 20, 000 to 100, 000 baht per vehicle. This would be subsidized by the government and depends on the vehicle, the battery size and the price, but this is mostly applied to vehicles that are priced under 2 million baht, in order for you to qualify.

(28:08) Wing Vasiksiri:

So that's about like 60, 000 US dollars. So, yeah, there's a lot of subsidies here right now where, like, the government seems to be making a real push into the EV space, and I'm wondering if Thailand is going to push ahead of like Singapore and Malaysia in terms of at least EV adoption. I think some stats like last year, close to 10 percent of all new car sales were EV cars. There's also a push on the production side where the government wants to target 30 percent of total vehicle production to be EVs by 2030. So a lot of really interesting tailwinds and inflection points. And I mean, if I was a founder, this is something, an area that I'd be excited to explore and think about, just in terms of what's going to happen. I think this is, we're going to see a lot of change in the near future. Like, when a consumer changes from an ICE vehicle, internal combustion engine vehicle to an EV, thinking about what's the infrastructure necessary to enable that, I think would be an interesting area to

(28:57) Jeremy Au:

Yeah, I think it makes a lot of sense. And I, I actually agree with you that I think that Thailand and some other countries in Southeast Asia would really be first. I think Thailand has all of the ingredients as necessary, right? First of all, it already has the domestic population in terms of the manufacturing. And obviously there's a lot of partnerships now with the Chinese EV manufacturers to set up factories as well. So shared expertise. Thailand isn't anti China right now. So that's a good JV on the expertise and factory manufacturing side. Two, I think you've got a large enough domestic population that if you do a subsidy like this it actually does stimulate the local domestic manufacturing piece.

So it's kind of like left hand, right hand. I think Singapore is kind of like, has a lot of oil and gas, obviously, because so much oil and gas flows through Singapore's port and so much processing is happening. Also, I think what's interesting is that Singapore has taxation on gas versus other governments in Southeast Asia. They have to subsidize gas, right? And I think that's really important actually, because if you're subsidizing gas and I think there's a lot of countries, Southeast Asia, that are suffering from actually, it's a huge amount of subsidization and they can't unwind that as a political benefit to the economy because if they cut it, people are going to, say that, increases inflation and cost of living, et cetera.

I think it's very hard political benefit to unwind. But you know, if you encourage EV vehicles, then you stop paying gas subsidy, over the longterm, versus I think in Singapore, there's a gas tax, government is collecting revenues from it. So I think, from my perspective, there isn't as much of an incentive to accelerate EV adoption, because, you're losing revenue by accelerating that, for example, in Singapore, even though, of course, like you said, the country is so small, Singapore is, EV range anxiety doesn't exist, and good electric grid everywhere, power is cheap. But I think that's one of the interesting like nuances of the Southeast Asia ecosystem for EV adoption.

(30:38) Wing Vasiksiri:

Yeah that makes a lot of sense. And it seems like it's like the more developed countries that are ahead in terms of EV adoption right now, especially among the four wheeler site. Like you mentioned Singapore, Malaysia, Thailand seem to be a bit ahead in terms of both government policies and also just consumer adoption. But for two wheelers, I think Indonesia and Vietnam are an interesting market. And you're starting to see a push there both on the consumer and on the government side. So, I mean, this is a space that I'm looking at closely. I'm very excited about over the next couple of years. I think it's, we'll be spending a lot more time here.

(31:08) Jeremy Au:

Yeah I think it makes sense. And, I think that both Indonesia and Thailand feel like the big winners on electric vehicles. I mean, Indonesia, because of the fact that they have the nickel mines, then they're working down the nickel battery processing side. And then obviously there's a large domestic market and there's some import tariffs on Chinese electric vehicles that is incentivizing Chinese factories to set up in Indonesia. So I think we're going to see an Indonesia EV industry. And I think there's some similarities with Thailand as well. So it'd be interesting to see. I think Singapore may not be the forefront of this one. So I think what I've seen in Singapore so far has been more on the software side startups that are trying to service the EV side. I've also seen kind of like Singaporean startups to go after the battery recycling side. So I mean, the goals are saying like, Hey, regionally, all these batteries, yeah, they can be collected. But recycling them takes a lot of chemistry and it takes a lot of like, careful work to make sure things don't explode, but make sure that they are safely processed and, kind of like, disassembled into basically effectively new batteries. So I think those are some of the plays that Singapore as a country is trying to have a toehold in the EV side, but it's not going to be the same as like, I don't think we're going to see like massive electric vehicle factory assembly in Singapore anytime soon

(32:19) Wing Vasiksiri:

That makes sense.

(32:20) Jeremy Au:

Yeah. On that note let's wrap things up. Thank you so much for waiting for sharing. I'd like to summarize the three big takeaways. I think first of all, thanks so much for sharing about, failure and founder failure across Southeast Asia, comparing Thailand, Singapore, Southeast Asia versus US, and I think it was just fun to discuss a little bit about some of the nuances about how founders see failure but also how society absorbs failure versus how founder talent is recycled into the ecosystem.

Secondly, thanks so much for sharing about the political change with the new prime minister from the Shinawatra family. So I think it's interesting to hear about some of the policy administration changes that we expect to see versus things that we expect to see stay the same. And then lastly, thanks so much for sharing about the electric vehicle as an industry and talking a little bit and getting to compare some of it across the markets.

On that note, thank you so much. See you next time.

(33:02) Wing Vasiksiri:

Thanks Jeremy. Always a pleasure.