Editor’s Note: This essay was taken from the April edition of our monthly Insignia Insights newsletter (sign up on the Insignia Business Review home page).

The last ten years of digital transformation in Southeast Asia have seen a market obsessed with “dots”, whether it’s the latest unicorn round, IPO, or tech trend. While it’s good to celebrate and aim for these milestones, current market conditions are forcing entrepreneurs and investors to think bigger, beyond these dots, and towards how they connect.

It’s not just about digital transformation anymore, but digital sustainability. In a cover feature for The Peak Magazine’s April 2023 issue, Yinglan Tan talks about these fundamental paradigm shifts and their role in sustainability. We cover key points from this interview and more below, with quotes from the interview:

1. Not just building, but selling. Bear markets are for builders, so is often said, but building a product is just “a dot” — getting money and profit on it is what makes these products “a line”. If you’re producing a product, but paying people to use it, that’s not sustainable. After all, selling products is the ultimate form of feedback and engagement that can open up more resources to build even further. On that note, Intellect’s Head of Marketing Frank Ng shares on this podcast how to better tie marketing operations and spending to revenue growth and sales cycles.

“If you’re producing a product, but paying people to use it, that’s not sustainable.”

2. Not just wins, but hows and whys. The last ten years have been quick to celebrate wins and headlines (the dots) without really considering what it took to get there (the lines). At the end of the day, mindsets like “nothing is impossible” or “win at all costs” must be tempered with sustainable processes. This is where the importance of robust finance functions and corporate governance comes in.

“Always judge their actions, not just their words. If they have consistently exceeded goals, that’s a good sign.”

3. Not just deals, but partnerships. From the venture capital or investor perspective, amidst the greater spotlight on venture building, the frequency of startup pivots, and the slowdown in activity in this market, there is an underlying momentum (and arguably, necessity) toward treating investments not just as deals or bets to make (the dots) but purposeful partnerships that come with a lot of growing pains (the lines), both for the founders and their investors. Our podcast conversation with Hernan Kaszek, himself an entrepreneur / COO / CFO who matured through the dotcom crash and GFC and then became a VC, sheds light on the importance of this meta for venture capital.

“We treat founders as business partners. We want to be that first call in the middle of the night when they have a problem.”

4. Not just innovation, but risks. With the rapid developments in generative AI, we’re also starting to see the risks in leveraging these technologies, from workforce shifts to data leaks and IP infringements. Some risks are acceptable but others can render the tech unsustainable. Having a risk management framework in practice is fundamental, regardless of the industry you are in. We discuss risk management frameworks for fintech in this podcast with Flip COO Gita Prihanto, as well as how this supply chain financing business scaled its risk management approach in this podcast with AwanTunai CEO Dino Setiawan.

“You’ll see companies suddenly become extremely disciplined, cut costs, and be nimble. In fact, we’re seeing some of our best companies do that today…”

5. Not just transformation, but sustainability. Faced with the pressures to drive sustainable bottom lines, businesses are forced to go through the learning curves of what it takes to meaningfully leverage technology or innovate, whether that means working with deep-seated behaviors that seemingly run counter to the intuitive assumptions on driving digital adoption, or considering and acting upon the materiality and double materiality of products and operations.

“We see new kinds of business models emerging from Southeast Asia that target the world and are net beneficial for the economy. It is increasingly clear that what is good for everyone is good for business.”

This lines, not dots mindset is not easy to have and maintain. It is complex and not instantly gratifying, but it will define the companies that thrive in this environment.