Jakarta shows how to think outside the Silicon Valley box
It is said that Jakartans spend 10 years of their lives in traffic. The populous Indonesian capital city is a sweaty, gridlocked cacophony of just about every type of vehicle you can think of.
It’s a problem that has been tackled by the region’s tech entrepreneurs. To this end, two tech unicorns dominate the ride-hailing market. Go-Jek and Singapore’s Grab are the Ubers of the region. Both have been so successful that they brought the worldwide ride-hailing leader, Uber, to its knees, forcing the San Francisco company to bow out as a stand-alone company during the first half of 2018.
This is no small deal. Indonesia, with 260-million people, is the fourth most populous country. The Southeast Asia region where Uber waved the white flag (by closing shop and taking a minority stake in rival Grab) is a market of 620-million people.
In this tale is a lesson for tech entrepreneurs in SA. One of the biggest criticisms of tech startups is that they create businesses with a “Silicon Valley mind-set”. Tech entrepreneurs often specialise in creating high-tech copies that are irrelevant for local markets.
It is something venture capitalists look for in businesses. When assessing an investment, a key question they ask is “what is your competitive advantage?” or “what is your unfair advantage?” They are looking for what will make your business fly (and make a return on investment).
Woven into SA’s idiosyncrasies and complexities is the local entrepreneur’s global competitive advantage. Not to see this is to squander your biggest headstart.
Entrepreneurs often note with despair that strong, wellfunded multinationals have already moved into their local market and are dominating the sector. In SA we have Uber (taxis), Google (search, advertising), Netflix (video streaming), Facebook (social media, advertising) and others.
So how can we compete with the great Uber, they ask. Well, in Jakarta the Go-Jek founders had answers. From the start, the Indonesian company reasoned that the best way to tackle traffic jams was to bet on the more affordable and appealing ojek (or motorcycles) rather than cars.
To ensure its vehicles are used beyond rush-hour traffic, Go-Jek switched on about 18 other on-demand services, expanding beyond ride hailing to include delivery services involving food, groceries, medicines, ticketing, logistics, cleaning services and even massage and beauty options.
There is an SA twist to this impressive story. Via its Tencent stake, Naspers is an indirect shareholder. And what a stake that is: the fast-growing eightyear-old “start-up” is now worth about $5bn, is recognised as one of Indonesia’s top 10 brands and is at number 17 in Fortune’s list of 50 companies that change the world, alongside the likes of Microsoft and Apple.
Go-Jek teaches us that the great local start-ups of the future will be those that solve real local problems. Some great local start-ups are doing just that.
Cape Town’s Sweepsouth aims to improve the hiring process in the informal domestic worker sector. Luvuyo Rani’s Silulo Ulutho Technologies incubates and educates township entrepreneurs. Mobile payment solution Snapscan fills a mobile micro-payments niche, allowing even parking attendants to collect money.
Logistics start-up Pargo provides last-mile courier services so companies can reach informal settlements. Spazapp is a funded Durbanbased company whose Android application connects a community of informal traders directly to big fast-moving consumer goods.
Vula Mobile connects healthcare workers in remote areas and patients they serve to medical specialists.
These are just a few of many local start-ups solving SA problems. More are needed.