Indonesia’s “everyday” app and unicorn Go-Jek processes more than 100 million transactions a month across its wide array of services – from ride-hailing and payments to food and medicine delivery to massage and laundry.
Go-Jek’s user and partner network is just as impressive: up to 25 million monthly users, 900,000 drivers, and 125,000 merchants.
That kind of reach is massive for a company that has only 200 engineers making software decisions every day.
John Fitzpatrick, head of Google Cloud’s Startup Program in Asia, calls it “hyperscale.”
“I’ve had lots of experience working with startups and I’ve witnessed the growth that we’ve seen from Indonesian unicorns in the past years,” he says onstage at Tech in Asia Jakarta 2018, referring to Go-Jek, e-tailers Tokopedia and Bukalapak, and booking platform Traveloka. “Around Asia, it’s a special and unique story.”
While it would be tough to replicate what these companies have achieved, he says startups can learn tangible lessons from them. He details four of the elements that make up the “secret sauce” to hyperscale.
You need to be fast to market. You have to be the first to bring your product to the customers and leave no time for your rivals to catch up.
In tech, there’s a concept called “migration mindset” – you map out a plan and do a cost-benefit analysis of what it takes to get from point A to B. But that’s not the mindset that hyperscale unicorns have, Fitzpatrick points out. For them, there’s no point B.
“What they have is a ‘transformational mindset.’ You’re constantly innovating, accelerating development… you’re constantly pushing out your code, iterating, and improving your tech,” he explains.
If you want to scale quickly, you’d have to use platforms, he adds. Go-Jek is a platform in itself, but internally, it also taps platforms to power its operations. For example, it’s using serverless architecture like cloud computing to store big data.
“Data is everything when you’re a unicorn,” Fitzpatrick suggests. You crunch that data with tech like artificial intelligence and machine learning to derive actionable insight that can improve your product as well as customer acquisition rate and retention.
“Machine learning trains algorithms to recognize patterns, and that changes the behavior of the algorithms as a result. It’s a self-improving model,” he says.
Google has used the same tech with sensors to monitor and reduce the energy its data centers have been consuming by 40 percent in the past five years. That’s allowed the US giant to cut its costs down by half, Fitzpatrick shares.
“If you’re Bukalapak or Tokopedia, you’re probably thinking about fraud detection using machine learning or thinking about recommendation. If you’re Go-Jek, you might be creating a heat map. And if you’re Traveloka, you might be thinking about how to better optimize your spend on advertising for customer acquisition using the data you have.”
3. Work culture
You can have speed and insight, but none of those is going to work if you’re not building a solid team and the right culture and mindset in your company, the Google Cloud executive contends.
Indonesian unicorns have a culture of learning and the ability to fail. They also believe in mentoring and building a strong talent bench.
“You have to develop your team’s skills and provide them opportunities to grow so they stay,” Fitzpatrick tells the audience. “If the person seeing the floor inside Tokopedia wants to learn to code, we’re gonna teach him how to code!”
He claims there’s one mistake that unicorn startups don’t make: They don’t go around dangling higher salaries as bait to poach engineers from other companies. “That signals to the other engineers you’ve hired before that the only way to move up and succeed is to get poached.”
Finally, Indonesian unicorn founders have a strong sense of nationalism. “They’re not just thinking about growing their business, but also the effect it has on the larger economy and how it’s building society. It’s a point of pride.”
4. Market opportunity
The last ingredient needed to attain hyperscale is an obvious one: the opportunity that exists in Indonesia.
Fitzpatrick notes that three things separate the archipelago from the rest of the region. First is the size its population – nearly 264 million people, the biggest in Southeast Asia. “It’s very young and well-educated. Did you know that the average age here is 30 years old?”
Second is the pace of economic growth. Indonesia ranks 16th in the world in terms of growth, and is poised to jump to seventh place by 2030, says Fitzpatrick, citing World Bank data.
hird is the explosion of devices – 106 million smartphones are in the market and the number continuously grows.
“The opportunity is available to all. We’ve seen four unicorns here and I’m confident there will be more,” he concludes.
This is part of the coverage of Tech in Asia Jakarta 2018, our conference which took place on October 23 and 24.