How this 34-year-old created Indonesia's first billion-dollar start-up
When Nadiem Makarim launched Indonesian ride-hailing service Go-Jek back in 2010, he couldn't have anticipated its runaway success.
For him, it was simply a way of improving his country's flailing motorcycle taxi industry. But, within six short years, Makarim had gone down in the history books as the founder of Indonesia's first unicorn — a start-up valued at $1 billion or more — and, today, at the age of just 34, he is the CEO of a company with an estimated value closer to $5 billion.
It all started, as many start-ups do, at Harvard. Having grown up in Indonesia, Makarim had seen first-hand how important motorcycle taxis, known locally as ojeks, were to the country's economy. And yet, the market was hampered with inefficiencies in pricing and reliability.
So, while studying for his MBA, Makarim decided to do something about it, teaming up with co-founders Kevin Aluwi and Michaelangelo Moran.
“I think lot of people did not believe back then that ojeks could be professional and could be trusted," Makarim told CNBC's "Managing Asia."
“That was very frustrating for me because I got to know many of them personally,” explained Makarim, saying that, while working in Indonesia, he would regularly hire them to make deliveries and collect food for him. “By getting to know them I quickly realized that this informal sector is incredibly valuable.”
What started out as a simple call-center business matching an initial 20 drivers with passengers quickly evolved into a multi-service app boasting a workforce of more than a million people.
While much of that success is down to "good timing," according to Makarim — Go-Jek, like others, has ridden the wave of the growing sharing economy — he also credits what he described as the company's "counter-intuitive" business approach.
“When we began, everyone told us that you have to be only good at one thing, because if you're not super good then no one will use your product or other people will come and circumvent you with better technology, more money etc.” Makarim recalled.
Contrary to conventional advice, Go-Jek decided to move quickly from pure ride-hailing to food delivery, on-call beauty services, entertainment booking and even e-payments, with the aim of becoming a full-service "platform that fixes things." That was something Makarim felt was especially needed in Asia, where mobile adoption is growing and consumers have shown a preference for "one-stop shop" platforms.
“I think the mindset that we had in the beginning is that a customer is not a ride-hailing customer, a customer is not a food delivery customer, a customer is not an e-payment or an e-wallet customer, a customer is just a customer,” Makarim told CNBC's Christine Tan.
“He or she is a human being with day-to-day problems, and we built a product around the frictions that an average person experiences in their day to day life.”
It's a strategy Makarim hopes will continue to pay off as Go-Jek expands across Southeast Asian in its efforts to compete with — and surpass — its closest competitors in the ride-hailing space.
Currently, Go-Jek is only active in Indonesia but, from next month, it will launch in Vietnam and Thailand. The company is also expected to soon enter Singapore to fill the void left by Uber, which saw its regional operations bought out in May.
The move would pit Go-Jek against Grab, the Singaporean ride sharing company set up by Makarim’s former Harvard buddy Anthony Tan.
While their competing businesses mean the two entrepreneurs “talk less nowadays,” according to Makarim, he said the pressure has also helped drive him forward.
“It's tough when you're in the moment, when you're in the battles, when you're in the trenches and there's a lot of tussling and a lot of bad blood and everything,” he said.
“But when you take a step above and you realize that, actually, competition is a necessary requirement to scale, then it changes.”
“You see in a weird way your enemy as kind of a supporting figure in actually fighting against the real enemy, which is the old way of doing things. That's actually the real competition we have.”
Makarim added that he hopes Go-Jek, in turn, will motivate other entrepreneurs, both in Indonesia and the wider region, and act as a kind of "blueprint" for how technology can disrupt the status quo and improve lives.
“We're barely scraping the surface of how big these markets can become in the region," he noted.
“I hope that Go-Jek will be talked about 10 years from now — 20 years from now — as the company that proved technology is actually the key enabler in unleashing an economy, in making it leapfrog into the next stage of societal evolution."
Courtesy : Entreprenuer Asia - Pacific