5 Essential Startup Tips From Indonesia

One of the most difficult things about talking to successful people in the tech world is seeing through the layers of PR-department lacquer that get painted over their companies. We want juicy details on lucky successes and frustrating challenges — instead, we get rehearsed lines about starting in a garage or a college dorm, and a smooth little narrative of rising to the top.

That’s why a session called Panel Without Fear at last week’s Tech in Asia Jakarta conference was such a breath of fresh air. Helmed by the ever-provocative Magnus Ekbom, CEO of e-commerce site Lazada Indonesia, the talk dove deep into the frustrating, complicated, and real world of running a successful tech company.

From left to right: Magnus Ekbom, Nabilah Aslagoff, Alex Rusli, and Patrick Williamson

Magnus grilled fellow panelists Alexander Rusli, CEO of Indonesian telecoms giant Indosat, Patrick Williamson, VP and director of business development and strategy at media powerhouse Kreatif Media Karya (KMK), and Nabilah Alsagoff, COO of Doku, Indonesia’s largest electronic payments provider.

The four talked hard truths on startup valuations, mentors, infrastructure, and more. The talk was heated, funny, and above all, informative. If you want to know what it takes to succeed in Indonesia, these are the people to listen to.

1. Fix the problem that’s right in front of you

"There is value in looking at what’s happening in the US, China, and Japan and trying to bring that here," says Patrick. "But if you really want to do something innovative and imaginative that’s going to be adopted — think about what is in your daily life that is really annoying. How do you get around it?"

Problems in Indonesia come in a variety of shapes and sizes. Some are as broad and difficult as the nation’s "unbanked" individuals and inadequate cellular coverage, while others are more specific — like a lack of fun mobile games.

"In Indonesia today, anything to do with logistics and payment — those are the two areas where I’d put my money," says Alex.

Jakarta has some of the worst traffic congestion in the world. One startup that’s attempting to tackle the issue is Go-Jek, the motorcycle-based transportation and delivery app.

"They looked at something that was frustrating and they asked ’how can we make that easier?’" says Patrick. "We don’t have a Go-Jek in the US, that’s for sure. It’s about looking at what’s just not working, and how do I get around it. How do you develop solutions that work here?"

See Also: If you work at Go-Jek, Nadiem Makarim is your coach, sugar daddy, and friend

2. Get a mentor — and don’t expect them to work for nothing

"Those who have done something successful — be mentors!" exclaims Alex. "It’s really needed badly here. The younger companies need assistance to show them what good looks like."

Running a team, pitching investors, and developing a strong company culture aren’t natural skills. One open secret about the startup world — and, probably, life in general — is that nobody knows what the hell they’re doing at first.

That’s where mentors come in. Especially in less-established markets like Indonesia, it’s important to make connections with people who have been through it all before.

"We need more success stories," says Alex. "Also for startups, you have to open yourself to the idea that mentors are not doing it for love — they also want some potential upside. So you need some structure to allow them to contribute but also enjoy the upside."

"Mentoring within a company is so important," adds Nabilah. "Without leadership, there is no direction."

3. Look to China — sometimes

"This is purely a cash economy," says Nabilah. She adds, "I hope that [the Indonesian epayments space] will be like the China market" within a few years.

In some respects, China’s massive internet industry growth over the past decade is a model to be followed by other countries. Especially as Indonesian tech firms attempt to develop epayments systems, China provides an example of how a country can go from cash-based to cash-and-digital in just a few years.

Apps like Alipay and WeChat’s built-in wallet have changed the process of buying goods in China, and have also made ecommerce payments an easy, seamless affair.

See Also: I tried to survive an entire day using WeChat to pay for stuff. Here’s how it went

"Using China as a reference is quite good," adds Alex. "A lot of people say that Indonesia is like China, five years before it took off. But I don’t think it will take five years — the situation is much more advanced, it will be accelerated."

While China certainly has its share of success stories, it also provides some cautionary tales.

"Indonesia will definitely grow," says Patrick. "But I’ve been working with Baidu and Tencent for over ten years, and they have struggled for ten years to get outside of China."

"China is a unique market," he continues. "You can’t take a Chinese model and put it into another country. The situation is just not the same. So I think the solution that will come will be local — the growth may match China, but the solution will be local."

4. Don’t take infrastructure for granted

Ecommerce, payments, and many other aspects of tech are only as good as the infrastructure you’re using them on. If you want to buy something online but your internet connection is shaky, your bank doesn’t support mobile payments, and there’s too much traffic on the roads to get anything delivered, then it doesn’t really matter how good any ecommerce website is.

"Everyone should remember that Alex [CEO of telecom company Indosat] is basically picking up the tab for all of us," says Magnus. "All of us are using his infrastructure to get our customers and users. We’re not really giving him credit — the only thing I say to Alex is, ’Where the hell is the 4G you promised?’"

In a country with robust telecom infrastructure, the very experience of using a smartphone is different. Developers can focus on things other than fast loading times and light data usage, leading to more sophisticated apps and services.

"At least 30 cities [in Indonesia] by the end of this year will be covered by 4G," says Alex – although Magnus doesn’t quite seem to believe him. "That also means that apps that are heavy on videos will be much more possible."

Telecoms is just one line of the equation. Between a lack of wireless towers, clogged roads, and tech-phobic banks, there is a lot of room for improvement — or disruption — in Indonesia’s infrastructure.

See Also: I am Alexander Rusli, CEO of Indosat. Ask Me Anything!

5. Patience is a virtue: Both for you and VCs

"VCs need to understand that it’s a marathon," says Nabilah. "In my honest opinion, I don’t think [they do].

The word "marathon" came up time and time again during the discussion. In Indonesia, you can’t expect to open a company in the morning, pull in some investment cash in the afternoon, and IPO that evening. It’s a long, bureaucratic, frustrating slog — both for startups and investors.

And yet many investors — particularly venture capital firms — can be more interested in making money quickly than spending years in building up a company. Or, as Magnus put it: "Do you think the VCs have the stamina it takes and understand that it’s going to take a long time? Or is it just — ’Oh let’s throw money at everything, and give a five million valuation for a PowerPoint?’"

"A good VC will worry about your success," Patrick replied. "As you do well, they will do well."

"You can’t just inject adrenaline and skip five years of the process," he continues. "The mentors need to be there, the angel [investors] need to be there, the logistics need to be there. A lot things need to come, and you cannot just throw money and jump over it."

"My optimism in Indonesia is absolute," adds Magnus. "We have three, four, five fantastically exciting years ahead of us. But people who come to this market and say, ’I’m going to be here for a one- or two-year venture’ are going to massively fail. You need to have the stamina, you need to localize."

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