The times are a-changing.
As we get older, we become more aware of the old maxim, “Nothing stays the same for very long”, and we realise not only is it an accurate saying, but that we can apply it to almost all walks of life. Changes and developments in all facets of our existence are happening at an alarming rate like never before, and like it or not, those of us unwilling or unable to adapt are getting left behind.
Almost literally every week new advances are being made in technology, and in particular in artificial intelligence, and although some of the more conservative of us may feel threatened by this emergence, we all need to realise that change is unavoidable and must be embraced.
This leads us nicely to the topic of “Startups”.
Who hasn’t ever dreamt of just starting afresh with a new idea, a significant dose of investment and lots of energy? After all, that’s just what a startup is, isn’t it? A new business which anybody with a little drive and a grain of an idea can put into operation? Wrong. There is much more to it than that.
The term “startup” arguably first became part of the verbal lexicon in the mid-1990s with the explosion of the internet and IT-driven industries. Everybody has heard the success stories of those who managed to get in on the ground floor of a good idea and then rode its coattails onto millionaire street – whether through formulating an idea of their own or else investing in one at the right time.
The success stories of such startups as Twitter, Airbnb, Instagram, Facebook and Uber are well-known and are examples of what a bit of forward-thinking can do as well as a carefully crafted business plan combined with the perfect timing and just a generous dollop of good luck. However, for every successful venture, there have been untold dozens that have fallen by the wayside and left nothing more behind than a trail of lost opportunities, broken hearts and depleted bank accounts.
What makes a successful start-up, then? Well, the first thing to realise is that there are several types of startups and they have different labels and conditions.
Basically, there is what is known as a Unicorn Startup. This is a privately held startup with equity or a value of US$1 billion or more and is usually to be found in the venture capital industry. Currently, in Indonesia, there are a total of nine Unicorn Startups.
Then there are Decacorn Startups and these are those that have a valuation of over US$10 billion. In Indonesia, there are just two Decacorn companies, the GoTo Group and J&T Express. Finally, there are what is known as Hectocorn Startups – these are companies that are valued at over US$100 billion.
So, what are the attributes required to create and maintain a successful startup? The first and most obvious thing would appear to be a good idea and a clear vision. There are two schools of thought; one is that the IT market is already saturated and there there are no further gaps in the market, and the other is that where there is a will there will be a way. Those with the latter sense of thinking are the ones who will stand any chance of succeeding.
As we mentioned right at the start of this article, times and conditions are always changing and this means there will always be opportunities for those who have the foresight to think ahead and to think big. That said, it is not as easy as just having a good idea and running with it, and this lack of foresight and planning is why the majority of businesses – startups or otherwise – either fail to get off the ground or else do not last long.
It is said that there are three essential P’s involved in successful startups – these are; people, product and process.
The people aspect involves who you are going to work with and the division of labour and skill expertise. The temptation when starting a business is to try and do it as cheaply as possible in the beginning and this often involves trying to save on labour costs. The way people most commonly do this is by taking on the majority of tasks themselves and not outsourcing them to the experts.
This is a narrow-minded approach which is likely to cost more in the long run. If the product is not ready or is underdeveloped, then the launch will be delayed and not to an optimum level, therefore causing problems from the outset. Therefore, the right people must be brought on board and are in the right positions from the outset.
The second P is the product. It must be a product that either serves an existing need in the market or else fills a gap which nobody realised existed before. By this we mean it serves a purpose which was not obviously apparent. The product itself must be effective, cheap to use or purchase and user-friendly. The marketplace and the public do not want something complicated which is not going to bring any real material change or benefit to their lives.
Finally, the process must be a smooth one. This relates to the process of creating the product, manufacturing it and marketing it. Again, these are specialised functions and they need considerable planning and forethought. What exactly are you trying to achieve with your product? Who do you see as your potential market or users? What is the level of competition that exists or is likely to exist in the near and medium future? How are you going to reach your potential customers and then retain and increase them in number? All of these aspects require planning.
Indonesia is a country that is seen in Asian markets as being innovative and is attracting investment in IT fields like never before. As a result, the nation is trailing only Singapore in terms of Unicorns and is one of the region’s most reliable and quickest-expanding leaders in the startup market.
The success in Indonesia of startup companies such as Gojek, Tokopedia, Traveloka, Bukalapak, and OVO – all successful before the onset of the COVID-19 pandemic – has shown what can be achieved and with figures showing that more than 200 Indonesian startups attracting at least a million dollars in funding by the start of 2022, there are hopes that this economic growth can be maintained.