For the co-CEO of Indonesia’s so-called “super app” Gojek, the shock surrounding WeWork and its failed IPO late last year — which has led to talks of a “tech winter” — will require a change in strategy, but ultimately is a positive for the startup community as it levels the playing field for all.
“If you ask what the impact on the whole market was … I would like to say it is much more on the positive side,” Andre Soelistyo said, speaking at the Nikkei Forum “Innovative Asia” in Singapore on Thursday.
“With the sudden changes in the environment, it levels the playing field for everyone. Now everything is about whoever has the better product and better institution will eventually win,” he said.
Steady economic growth and rapid digitalization had attracted investors from around the world to Asia, inflating startup valuations, but last year proved to be a turning point for the region as it battled the ripple effects of lackluster public debuts in the U.S., as well as the botched IPO and a sharp markdown in the valuation of We Company, the operator of coworking space WeWork which is backed by Japan’s SoftBank Group.
To remain attractive to investors, technology companies across the board that recently pursued cash burning, growth-at-all-costs policies are now making profitability and sustainability their new mantras.
“When excess capital [goes away] and everyone is disciplined at looking at fundamentals and understanding the market really well, then a lot of fluff has been taken away. A better company, a better execution [and a] better strategy will have a better time. That is why I say it is positive,” Soelistyo said.
The profitability and sustainability mantra is now being championed by Gojek as well, although the co-CEO said “at a company our size, it is natural to progress on that path” regardless of the global trend.
“In the early days, we invested in growth because we needed to have certain scalability for our demand and supply market to equate itself,” he said. But now, with Gojek’s services — which range from ride hailing and e-payments to on-demand masseurs — ingrained into Indonesians’ everyday lives, “certain things that we didn’t monetize … you can start monetizing. That is why I’m saying, at this stage, we are gearing toward profitability anyway.”
Soelistyo became the co-CEO of Gojek in October when its founder Nadiem Makarim left the company to become Indonesia’s education minister. In an interview with the Nikkei Asian Review on the sidelines of the Nikkei forum, Soelistyo said that a “lot of progressive changes” were happening at the company as it strives to become a “sustainable, everlasting” business.
The company has been on a hiring spree recently with additions in “certain positions that require technical talent”, such as its new chief data officer Gautam Kotwal, formerly chief analytics data officer at American grocery company Albertsons.
It has also discontinued all but two of the lifestyle services offered on its platform in December and January.
Shutting down services “will continue to be the trend, meaning if products, features that we build are not scalable, or don’t adhere to the user expectation, we will shut it down and use that failure to learn how to build a better feature or product,” Soelistyo said. “Rather than launch so many different things, we decided to focus on certain things which we have to be really good at so that users can feel they are treated nicely by the platform.”
This article was first published in Nikkei Asian Review.