1) Emerging market startup ecosystems face challenges including a lack of investors, entrepreneurs, customers, and exits. However, these ecosystems are improving as more founders gain experience, customers increase with economic growth, and acquirers look outside major tech hubs for deals. 2) The document provides advice for emerging market startups and investors, such as focusing on customer acquisition and growth over features, aiming for regional success before global expansion, and distributing equity widely to create more angel investors. 3) It argues that most accelerators will struggle due to tough economics but can improve by specializing in industries, and getting corporate partners to boost funding and time horizons for supporting startups.

1. 1 0 C H A L L E N G E S F O R
E M E R G I N G M A R K E T
S TA RT U P E C O S Y S T E M S
@ D A V E M C C L U R E @ 5 0 0 S TA R T U P S 5 0 0 . C O

2. 1 ) T H E R E A R E N ’ T M A N Y I N V E S T O R S .
M O S T O F T H E M A R E E V I L O R S T U P I D .
• low valuations and crappy terms: “51% for
$100K”
• supply vs. demand problem; fewer investors
than startups, lack of competition = no
urgency,
• say NO to business plans / revenue projections
• say YES to marketing plans, expense
projections
• wins & exits => FOMO, competition increases

3. 2 ) T H E R E A R E N ’ T M A N Y E N T R E P R E N E U R S .
M O S T O F T H E M A R E C L U E L E S S .
• need more
mentorship, more
founder experience
• product management,
design & UX, growth
hacking & marketing
• changing quickly as 1st
gen founders exit ->
2nd gen startups

4. 3 ) T H E R E A R E N ’ T M A N Y C U S T O M E R S .
M O S T O F T H E M D O N ’ T PAY.
• Not true anymore; 3B+ smart
phones
• increasing internet penetration +
consumer GDP
• improving payment & logistics
• local/regional markets getting BIG
• access to global markets easier

5. 4 ) S TA RT U P S D O N ’ T H AV E T R A C T I O N ,
A N D N O I D E A H O W T O G E T I T.
• Growth Hacker movement
• STOP building product features; START
growing customers (via online platforms)
• unit economics: CAC vs. CLV, timing of
revenue & expense, conversion metrics
• find profitable, high-volume customer
acquisition channels that convert to
KPIs, learn how to grow them
• WMD.co (weapons of mass distribution)

6. 5 ) T H E R E A R E N ’ T M A N Y E X I T S .
M O S T O F T H E M A R E S M A L L .
• where are the unicorns?
• acquirers crossing borders to find
talent (US, EU, China, Japan, Korea,
etc)
• non-tech companies acquiring
startups for innovation
• global companies looking for
emerging market footprint
• local -> regional -> global growth

7. 6 ) I N V E S T I N G I N R E A L E S TAT E I S B E T T E R
B E T T H A N I N V E S T I N G I N S TA RT U P S
• startups aren’t real estate!
• real estate doesn’t go up
forever
• most startups fail completely
• but a few startups grow up to
be unicorns
• use real estate to lower risk,
drive liquidity

8. 7 ) M O S T A C C E L E R AT O R S S U C K .
A N D T H E Y ’ R E G O I N G T O D I E . S O O N .
• Accelerator economics are tough.
• Most startups fail. Most wins are small.
Big wins take time (5-7 years).
• Most accelerators are under-staffed,
under-capitalized, short time horizons.
• Accelerators should verticalize, focus on
industry-specific expertise, get
corporate / academic / govt sponsors
• Create operational capital via investment;
use real estate to hedge risk, be creative

9. 8 ) E M P L O Y E E S D O N ’ T U N D E R S TA N D E Q U I T Y.
F O U N D E R S D O N ’ T G I V E I T T O T H E M .
• equity should be distributed
widely among team (not just
founders and management)
• when exits happen, a thousand
angels are born
• PayPal Mafia, Google, Facebook
• Yemekspeti example
• create equity culture, angel
investor culture

10. 9 ) M O S T S TA RT U P S N E V E R G O G L O B A L .
M O S T T H AT T RY W I L L FA I L .
• startups have to start SOMEwhere
• some local & regional markets are BIG
— Turkey, MENA, Brazil, Indonesia
• 50-100M customers is a good place to
start
• hard to jump to global markets without
local market MVP, product/market fit
• you don’t need to go to Silicon Valley,
but you need to get Silicon Valley to
come to YOU.

11. 1 0 ) M O S T F O U N D E R S & I N V E S T O R S D O N ’ T
T H I N K T H E Y ’ R E A S G O O D A S S I L I C O N VA L L E Y.
• Silicon Valley isn’t a place, it’s a
State of Mind.
• Most startups in Silicon Valley
came from somewhere else
(PayPal, WhatsApp, Udemy)
• The biggest problem isn’t lack of
experience, it’s lack of confidence
(for both investors & founders)
• You’re Good enough. You’re
Smart enough. Get Going!