Sok Piseth joined the Young Entrepreneurs Association of Cambodia (YEAC) with a vision to provide mentorship to young businesspeople while fostering a positive overall business climate. As a young entrepreneur himself – he launched his first company, Toys & Me, in 2007 – Piseth understands the difficulties of navigating Cambodia’s complex and competitive business environment. Since then he has diversified his business portfolio to include G Gear, the official distributor of LG Electronics in Cambodia, and co-founded Cambodia Investment Club and Mega Leasing – a firm that provides small, low-interest loans for motorbikes, cars and electronics. In 2013, he was elected president of YEAC, and the association now plays an integral role in bringing entrepreneurs together to solve common problems, engages in communication with relevant government ministries, and guides university students and budding businesspeople in the formulation of business plans.
Piseth spoke with Management Insider about the YEAC, the challenges of managing a startup and the growing entrepreneurial spirit amongst Cambodia’s ambitious youth.
What is the history of the Young Entrepreneur Association of Cambodia
The association was established in 2009 under the initiative of the top leaders of ASEAN and China at the time. Each ASEAN country has a young entrepreneur association and we expect in early 2016, after the integration of the ASEAN Economic Community, that we will form one body, allowing us to coordinate with other members across the region.
How does the association help young businesspeople gain a foothold?
We have three main missions to this end: the first is through networking – locally, regionally and globally.
The second mission is about etiquette and policy: in emerging countries like ours, no matter how much the government improves laws and regulations, we still have to protect the common interest of the entrepreneurs and business people. Thirdly, we also work with the Chamber of Commerce to make sure we have a proper voice. This is the official channel that we use to amend or clarify policy.
When starting a new business, what is the best way to begin?
In Cambodia, most new businesses still begin as family businesses. And this is still the best method. On a small scale, they know how to manage money to make an initial profit and they also have financial support from their relatives. But this strategy has its limits because, overall, these businesses are often mismanaged as they grow.
“ IF YOU ARE OPEN AND TRANSPARENT (OPERATING A BUSINESS THAT COMPLIES WITH ALL LAWS AND REGULATIONS) IT IS EASIER TO FIND A PARTNER THAT SHARES YOUR VISION. ”
What obstacles face those attempting to transform a family business into a corporation?
A lot of it has to do with proper business planning and transparency, especially when it comes to accessing financial capital. If a business wants to grow, they often need a loan. But many of these smaller startups don’t have the necessary collateral and are not open about how their business operates. If you can’t see the internal structure of a business, it is difficult to help them access financial capital.
How does YEAC help businesses access financial capital?
Many startups struggle with this because of their high- risk nature. A lot of startups in developing countries rely on accessing NGO funds because they are the only ones that will invest in new and exciting companies. This is something that YEAC helps facilitate. Besides that, YEAC has created the Cambodia Investor Club (CIC). And although the CIC doesn’t yet invest in startups, it does look at businesses where we see potential growth.
How does your association collaborate with universities?
Each year, we collaborate with the National University of Management on a business plan competition – this is part of developing the business ecosystem for the youth. Recently, we launched a bootcamp that helps people pitch business plans to the Ministry of Commerce. Another thing we do to foster young businesspeople is bring them to the Startup Nations summit every year. The summit has about 60 countries attending. This year we will travel to Mexico, last year it was in South Korea.
Why do some startups fail?
This is something I don’t have an exact answer to. In general, from my experience, I can say that that most fail because of poor planning. Another problem is a lack of commitment: Once you launch a startup you cannot succeed if you are not a 100% committed. The final problem I see is mentors who provide the wrong advice and teach incorrect practices.
How can a business ensure its survival in a highly competitive market?
Cambodia is at a crossroads for fair competition. Creating a fair and transparent market is one of the government’s main challenges. And navigating the current environment is one of the great challenges facing entrepreneurs. If you are complying with laws and regulations, obviously you need the rest of the market to be held to the same standards, otherwise you will die. Also, an unfair business market leads to informal companies.
What are the consequences of operating an informal business?
Primarily, it reduces your ability to attract foreign investment. I believe that, to understand the local market, foreign companies need a local partner. And if you are open and transparent (operating a business that complies with all laws and regulations) it is easier to find a partner that shares your vision.
What do you see in Cambodia’s emerging, or soon to emerge, entrepreneurs?
In terms of knowledge and ambition, I see the younger generation improving from year to year. They are more flexible and can more easily adapt to the changing business climate. They know how to succeed. When you ask university students what they want to do when they graduate, they want to start their own business. But if you asked my generation, they would say they want to work for an NGO. It is completely different now because of the development of the country.
Text & Photograph by Kali Kotoski
With Kali Kotoski photography by Kali Kotoski