Indonesia’s startup landscape is still developing, but the country has what it takes to be an awesome startup incubator.
In fact, more entrepreneurs are choosing to launch their startups in Indonesia. Even foreigners are leaving their homes to build their companies in the country.
So what pushes them to try their luck in Indonesia? What makes the country an ideal place for startups? Let’s find out.
Technology friendly population
According to Indonesian Internet Service Providers Association, internet users in Indonesia is increasing. Their statistics show that there are around 132.7 million internet users in 2016. Aside from that, the number of smartphone users also reached 63.1 million.
What do these numbers mean? They reflect that mobile-related startups have a big chance to skyrocket in Indonesia. People already embraced technology. They are more than ready to test the latest innovative products and services.
Due to increasing number of internet users, there are more problems to solve. The key is to highlight the problem and provide outstanding solutions.
Also, compared to China and Singapore, the startup ecosystem in Indonesia is less saturated. There are many sectors you can tap into. Just last year, DailySocial conducted a survey with investors. They asked about which sectors are going to rise in Indonesia in 2017. According to the survey, there are four sectors that are likely to shine. Fintech, e-commerce, software-as-a-service, and service marketplace.
Experts predict that fintech will be the center of the spotlight in Indonesia this year. The president even opened a fintech festival in Jakarta. Major banks and regulatory bodies supported the event.
Low cost of living and incredible environment
DN Ventures founder, Rukesh Varan, a leading venture capital firm focused on raising the profiles of Indonesian startups thinks that one of the attractions for startups in Indonesia is the cost of living and accessibility to a region that is growing rapidly. Compared to other Asian countries, the costs for staff and rent are more affordable. This gives entrepreneurs an edge. Instead of spending their money on expensive rents, they can save it to develop their businesses.
The country’s beautiful environment and friendly locals also allure foreign entrepreneurs. “Bali is simply breath-taking and allows entrepreneurs to enjoy great work-life balance,” Rukesh shares.
Access to ecosystem builders
There are many startup incubators and accelerators in the region. These organizations are willing to guide entrepreneurs in their journey. They provide mentorship, training, and sometimes, even funding.
Investors are more excited to fund startups in Indonesia. It’s because of the success of other companies who penetrated the market. Tokopedia, Kaskus, and Go-Jek successfully dominated Indonesia’s business scene. This inspired and motivated more investors to get involved.
There are many notable key investors and firms in the country like:
East Ventures- a mix of Indonesian and Japanese investors. This group is the reason behind Kaskus’ success.
Rocket Internet- Birthed Lazada and Zalora
GREE Ventures- Investment arm of a Japanese gaming platform
CyberAgent- A Japanese firm which invested to Tokopedia.
DN Ventures- Bali’s first accelerator that launched.
Challenges in Indonesian startup scene
While launching your startup in Indonesia has many benefits, there are also challenges.
If in Singapore you can fill out paperwork in a few days and process it online, it’s a different story in Indonesia. It can take 2-3 months for a company to register in the country.
Each city in Indonesia has its own tradition and habits. Most companies choose to operate in one location first. Once they understand the culture in other areas, they expand slowly.
Indonesia offers limited talent pool, especially in engineering and science. To get the talent your business needs, you have to invest heavily in training.
Some essential points to consider if you want to launch your startup in Indonesia
1. Consider partnership. Most startups team up with local businesses. One of them is Malaysia’s iFlix. Before launching in Indonesia, iFlix partnered with media company Emtek and telco Telkom. This way, iFlix avoided Netflix’s terrible fate. Telkom blocked Netflix due to pornographic content on the site.
Teaming up with local entrepreneurs will give you an idea on how you should operate your business in the country. Keep in mind that Indonesians have their own set of culture. And if you want to enter their market, you have to respect them.
2. Localize. Some companies change their brands or names when they launch in Indonesia. India’s Wudstay, a budget hotel, came to Indonesia as Tinggal.
Localizing isn’t just about changing your name. You might need to change your rules and methods, too. A great example is Spotify. Since credit cards aren’t widely used in the country, they gave Indonesians other options. Indonesian users can pay thru bank transfers, or by cash at local convenience stores.
Lazada and Zalora did the same thing. They added cash on delivery as a payment method, giving shoppers another easy way to pay.
3. Pay attention to work culture. Management is a bit different in Indonesia. It requires personal involvement. Their culture is different from the West or other Asian countries, so you need to pay extra attention. When you practice good work culture, you will attract more talent and customers.
In conclusion, Indonesia is one of the best startup incubators in Asia despite the few challenges. You need to be flexible and adapt to their culture, but the rewards can be amazing.
There are some great events coming up from the 17-19th of November to help us all better understand the startup scene in Indonesia. Events are ticketed but its a great opportunity to meet, network and understand why Indonesia just could be the next Silicon Valley of the East.
For more information visit: http://www.festivalentrepreneur.id/
For more information visit: https://www.eventbrite.com/e/startup-weekend-bali-global-2017-tickets-37642558907
For more information visit: https://www.facebook.com/events/125648091449137/