Why US startups triumph over Asian family businesses
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Why US startups triumph over Asian family businesses

WHEN you think of the competition in the international market, companies in Asian countries such as China and Japan seem difficult to beat.

However, there’s a distinct advantage that US companies have over those businesses. And although they’re catching up, American companies, especially startups, have a lead over companies in the East.

Many of the successful businesses in Asia are family-run, and lead by the older generations. As a result, they find it difficult to deploy new-age solutions and make the most of emerging technologies.

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According to a recent study by the Economist Intelligence Unit (EIU) which assessed the readiness of family businesses across Asia-Pacific, families understand the importance of technology and are confident about being able to add new technologies to their business – but fail to take action.

“Family businesses cannot last beyond this generation if they do not innovate,” explained Annie Koh, Academic Director of the Business Families Institute at Singapore Management University.

“Although the survey shows that family businesses are aware of emerging technology trends, it remains to be seen whether they are actually taking advantage of these given the questions surrounding the need for greater professionalism,” she added.

On the other hand, US startups are digital natives, born in the digital age. Using Evernote to organise notes and boost productivity or using Slack and Trello to communicate with colleagues and manage workflows perhaps comes more naturally.

Investing in a holistic CRM that ties into the customer journey on an e-commerce portal, feeding chatbots suggestions of new products to customers based on their past choices, is not something the younger generation would feel uncomfortable doing.


A woman touches a screen on a robot developed by iFlytek at the outpatient hall of People’s Liberation Army General Hospital in Beijing, China March 16, 2017. Picture taken March 16, 2017. Source: Zhao Naiming/Qianlong.com via Reuters

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Similarly, building an omni-channel experience will almost come naturally. Of course, online customers must be recognised via facial recognition when they walk into your store, especially when seeking medical advice and help with customised prosthetics.

As a result, startups in America, or rather, businesses in the country, are more skilled at incorporating technology into their workflow and their offering, wowing customers along the way.

When they expand coverage and cross geographic boundaries to do business with the millions of buyers in Asia, US companies often find they exceed expectations – which is why it’s easy to win quickly in new markets.

A quick search on Google will tell you that a lot of Asian companies aspire to US brands – many times its because of the experience they’re able to create with technologies on hand.

Asian companies, especially family-run businesses, find it harder to adopt technologies that improve the lives of customers. However, this isn’t true in all cases.

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Several family businesses are finding ways to partner with specialists or delegate responsibility to younger members of their family in order to quickly get to grips with new technologies.

“In our partnerships across the region, the best-run family business is a result of a good balance between promoting the unique business culture of a family-owned business and openness to implement new technologies,” said McMahon,” explained Anthony McMahon, Senior Vice President, Small & Medium Enterprises (SME), Asia Pacific and Japan, SAP.

This is a unique advantage that US startups have – and although the tables may turn soon, it’s something startups must take advantage of right now.

A version of this article originally appeared on our sister site Tech HQ.