Achmad Zaky: to Achieve Something Big, One Must Dare to Dream Big

This article is a part of DailySocial’s Mastermind Series, featuring innovators and leaders in Indonesia’s tech industry sharing their stories and point of view.

Some people say entrepreneurship is like investing. It is often said that to be a successful investor, you have to think like a business owner. Technically it makes sense. Achmad Zaky is one of the inspirational stories of entrepreneurs who left his previous growth company to build a new venture in the tech investment landscape.

As a Founder & former CEO of Bukalapak, Zaky becomes one of the pioneers in the local e-commerce industry. Through his hard work, he managed to build an e-commerce site in 2010. After a decade of building and nurturing Bukalapak, he resigned as chief executive officer (CEO) of Bukalapak effective January 6, 2020. However, he is still an active advisor to the Board of Commissioners in the unicorn.

Zaky started Bukalapak with his hometown schoolmate, Nugroho Herucahyono. Before establishing Bukalapak, Zaky and Nugroho already had a company called Suitmedia. Being friends and partners for the past 20 years, they decided to set up another venture in the form of a VC fund, called init 6, currently deploying funds from their personal pockets, to invest in early-stage startups in Indonesia.

This is a profiling session with Achmad Zaky sharing his experience building ventures and insights on the tech startup and investment ecosystem in Indonesia.

After a decade of building and nurturing Bukalapak in the e-commerce vertical, you’ve recently entered the tech investment scene with Init 6. How does the VC life been treating you lately?

It is marvelous. I mean, in Bukalapak, we’re kind of single-minded. It’s all about e-commerce until the very technical aspect. In the VC industry, it is more horizontal, with all the industry potentials. Also, this industry is quite challenging, that is actually part of the reason I shifted from the e-commerce sector, to seek more challenges. It’s also been ten years and Bukalapak has grown this big, mature, and independent. In a parable way, I consider Bukalapak as my big-grown child, and in order to grow the ecosystem, I need to create a new venture. Not easy, but I’m refreshed now.

Init-6 team member — Achmad Zaky and Eduka’s team member. Eduka is Init 6’s first investment portfolio

Back in those days of Bukalapak, how do you feel about leaving your first-big-venture? How is it different from managing a company and VC?

It’s very difficult. I think this is what my parents feel as they sent me to college. However, when I see the Indonesian ecosystem, it’s clear that we need a more mature ecosystem. In order to reach that stage, there may have required more unicorns. With the existing ones, hopefully, the alumni including the founders can make another success story. It is for the sake of the young generation because they also need a role model.

Again, in the e-commerce area, it’s quite single-minded. Every day I go day by day move vertically to learn e-commerce to the technical aspect because I’m the founder. As an investor, it’s different to some degree. I savor the e-commerce sector very well, my ability expert on a specific industry. However, as investors, it’ll definitely not going to be just about one sector. I learned a lot for a while now, regarding the fintech sector, cloud computing, SaaS, as we recently invest in

In this tech investment landscape, I need to gain extensive insight from the industry. Therefore, in terms of knowledge, it will not be as deep as when I was in e-commerce, but it’s absolutely fine. As an investor, I’m not expected to be Mr. Know-it-all. We have Founders who we believe have expertise in their field and we’ll take a perspective where they may lack, such as experience and network.

When you first started building this new venture, is it the same feeling like your first time in Bukalapak? Please do share a bit about the journey.

It all started with a dream. Nugroho and I have been friends since high school through university, it has been almost 20 years. Along the journey, we realized that we have a shared dream about how Indonesia can have lots of tech companies. As we noticed that the global war is all about technology, and Indonesia should drive the industry. The young generation must be able to compete in the future industry.

The world is now dominated by tech companies, while Indonesia still lacks those ventures. Also, we’re not to be complacent with all the achievements in Bukalapak by challenging ourselves. Can we create more unicorn in the next ten years? Then it becomes our personal challenge. If we can only create one unicorn in the last 10 years, hopefully, we can create more in the next span of ten years.

As good as it impacts the industry, it also affects the country positively. Especially with many young generations are motivated in being a player rather than just the end consumers. It is also our dream to cater to global demands with more Indonesian products. I’m not saying this is an easy task, it will be hard indeed, that is why we’re very thrilled. The biggest challenge is in front of us, to solve as many problems at a time. The way quite varies, it can be through another startup venture, but instead of doing something we’ve done previously, we tried to contribute to the same amount by supporting founders.

init 6 is relatively new in the tech investment landscape. What is actually drives you to invest and what the key qualities you look for in a startup? What kind of VC do you want init-6 to be?

We are industry agnostic. In fact, we’ve been invested in 6 companies, and two of those are edtech. We seek for every industry, particularly in the most problematic area. Edtech is one of them but not the only one. This sector is lucrative and quite sexy for startups to disrupt and solve many problems.

In addition, when we invest in one, we’ll look for a founder with the capability and clean track record. Another extra point when the founder can grow the company with only a small amount of money. That’s the kind of founder we look for as if we’re looking at ourselves in the mirror.

However, as an expert, as I am in e-commerce sector, in my hypotheses, the sector has no longer become a problematic space. There are several unicorns that have done quite a good job of solving the problem. Except, when there is a sub-sector with quite an issue and sexy enough, we’ll consider to tap in.

Also, we’re kind of a typical executor investor. In other words, investors with more execution capability. It’s not the same as a venture builder, but we’re more than willing to help founders scale-up through collaboration and technical assistance. Indeed, exit becomes one of the goals, as it would also grow the ecosystem. That is also our goal for this venture. I think those are the key qualities we look for since we always want to keep things simple.

This is not an ideal situation for everyone. How Covid-19 affect your company and its portfolio? Given the situation that the venture debuts at the beginning of a crisis.

In fact, we saw this as an opportunity, when we first started at the time of the pandemic. The crisis becomes a natural screening, of what kind of startups worth invested and whatnot. Honestly, one of the reasons we launched this fund is due to pandemic Covid-19. We invest in early-stage startups to build a new way of life after Covid-19. We invest in great founders. We love technical founders with the passion to solve big problems. We understand their challenges and we are not afraid of getting our hands dirty in helping them.

The pandemic accelerates the digital era. People can’t go anywhere, even school must be held online, and digital becomes one and the most reliable tool. In terms of the founder, it is expected that founder quality will be improved, as the pandemic becomes a test. I called this venture a Covid University. Later, the Covid graduates will be very good in quality and mental. This is what we also encourage our portfolios. They are beyond ready to face this crisis with a number of anticipations. We believe this mental quality remains even after Covid-19, therefore, the company can achieve growth at all times.

I noticed a few startup founders who eventually becoming an investor or create a VC fund. Do you consider this as some kind of level-up or do you have other insight?

The thing is, it is very important for ex-founder or those contributed to the development of the Indonesian tech startup landscape to stay active in the ecosystem. We should perceive to grow our tech industry. There are many ways, which I personally decided in the form of a fund to back founders. Others might have their own channels, as long as they didn’t leave the ecosystem.

Some people can be very disappointed that they want to just stop and look for another industry, it is unfortunate for the ecosystem as if losing a small part of the brain. This is also what we’re trying to plant in the Indonesian culture. In Silicon Valley where the ecosystem has been mature, failure is common. In fact, people/founders who fail will have a better accumulation of knowledge. It is because they did what they’ve done and gained a lesson for the next venture.

In Indonesia, it is only natural to blame the founders. I think that’s the mindset/scene that our country needs to develop. There have to be more success stories from people who experience failure. That failure is not always a bad thing. Also, we, as founders also aware of the fact.

When the news spread of you leaving Bukalapak, there’s this plan about a foundation. What encourages you to do so? And how is it the foundation nowadays?

I mentioned supporting the young generation and create a foundation. In terms of supporting the young generation, it is through init 6. Moreover, Achmad Zaky Foundation is also quite active in supporting the education sector, such as building a school, providing scholarships. Honestly, this is partly because both my parents are teachers. They grant me a mandate to support Indonesia’s education sector, not limited to basic education, but also entrepreneurship skills and so on.

As an entrepreneur and investor, what can you say about the tech startup and investment landscape in Indonesia? In terms of founders, challenges, and projection.

There are two key factors, it is the seed and the environment. These are cross each other’s path, not in a black and white form. When we want to grow the seed, the land must be fertile, if we are to nurture, it’s the environment. There are people who are born with the gift of entrepreneurship, but I believe the success comes from above.

We, through our fund, will try to nurture as many startups with a little we have. I’ve done my research, there are some countries with fertile land to grow startups. Indonesia indeed a leading environment in Southeast Asia, but not in the global competition. The indicator varies, from the high rate of a startup per capita, high exit rate compares to the less fertile land, also the numbers of startup employees. In the investment scene, when the exit rate is high, investors will be attracted, it will create more founders. This is quite a chicken and egg situation. Indonesia still a long way to go, and it starts with the investor and founders.

The cycle usually takes a decade, soon there will probably more exit news. I’ve been observing that Indonesia has quite a low exit rate with other countries in the same league, such as Israel and Berlin. In terms of the ecosystem, we have loads of homework. However, if we can be a leading market in Southeast Asia, why not upgrading the standard into a more global market. If we are to achieve big, we must dare to dream big.

It’s been over a decade you’ve been actively contributed to the ecosystem. During your journey, what is the most important lesson learned in the Indonesian tech industry?

To be honest, there are a lot of lessons learned. I’m here to speak as a startup founder because it’s still too early as an investor. As a founder, perseverance and experiment may be the most important practice I’ve learned in the startup industry. As a founder, we should never easily satisfied and always create innovations. Improve your standard growth by growth, and do not ever give up experimenting. I think that is also what has brought Bukalapak this far, innovation first.

The startup ecosystem is dynamic, it can be attached to a big space hypothetically, but uncertain. It’s not as simple as corporate launching a product. The market might not be ready, it requires an experiment and strong will. The startup is to bridge dreams with reality.

On Gojek’s Efforts Against Social Engineering

Starting in the Slack’s chat room, a hacking act succeeded to penetrate Twitter’s layered security in mid-July. The attack took over a number of large profile Twitter accounts such as Elon Musk, Bill Gates, Barack Obama, and many more. As well as humiliating Twitter’s reputation as one of the world’s leading technology companies, billions of rupiah have vanished in the form of bitcoin due to the attack.

Saying the attack as hacking is quite inaccurate because the perpetrator did not attack the platform’s security holes. What happened to Twitter in that attack was social engineering. This social engineering attacks human negligence in quite a variety of ways. The perpetrator deceptively managed to earn the trust earned from Twitter employees and used the information he obtained to bypass the platform’s security system. In the ISACA State of Cybersecurity 2020 report, Part 2: Threat and Landscape Security Practices, social engineering is called the number one digital security threat in the world. This encourages the belief that humans are the weakest chain in a digital security system.

Identifying social engineering

What happened to Twitter is also common in other digital platforms, including in Indonesia. If the attack makes employees a foothold to jump over the platform’s security system, there are many cases that attack platform users. In general, user literacy levels are much more diverse than those working in technology companies. Therefore, it is not surprising that social engineering attacks happen to common people. Domestically, this attack trend is increasingly evident. As one of the largest digital platforms in Indonesia, these happen a few times with Gojek users.

The Center for Digital Society (CfDS) from Gadjah Mada University considers social engineering techniques as fraud which is performed by penetrating security networks through user manipulation to obtain classified information. Indeed, the mechanism is not as complicated as a hacking attack. However, as previously stated, this method is widely used because it takes advantage of the victim’s ignorance of the digital ecosystem.

CfDS researcher Tony Seno Hartono revealed some concepts used in social engineering techniques. Phishing is the most common cause. In this case, the perpetrator uses telephone, email, or other media to gather information about the target of the attack. The next mode is SMShing, which mechanism is similar to phishing but using SMS. Furthermore, there is pretexting which relies on a narrative that convinces the victim to retrieve information. Lastly, there is an impersonation. This mode is done by pretending to be someone to collect information from the target victim.

Seizing the victim’s trust is the red thread of all these cases. Making victims off guard and gaining important information regarding personal data, one-time passwords (OTP), and other sensitive data makes it easier for them to penetrate the platform’s security system. For perpetrators, these social engineering techniques are more practical than hacking into security systems. In the context of the digital ecosystem in Indonesia, the threats these social engineering techniques pose can have a huge impact.

Fungus in the rainy season

The form of crime always adapts and develops from time to time with the conditions of society. The fertility of this social engineering method of deception. Indonesia is currently home to Southeast Asia’s largest digital business ecosystem. The We are Social 2020 report shows that there are more than 175 million internet users, thousands of digital startups, and six unicorns in Indonesia. Temasek and Google‘s research stated that the value of the digital economy in Indonesia has reached US$40 billion last year and potentially to double to US$133 billion by 2025.

Although, digital literacy in the country is quite far from sufficient. CfDS stated that digital technology security competence in Indonesia is quite basic and still in middle categories. This is directly proportional to cyberattacks targeting internet users in the region.

The Covid-19 outbreak has become a catalyst that accelerates society’s adaptation to the digital economy. The situation that requires most people to do activities from home forces them to adapt to using all kinds of digital services. This large migration can certainly be interpreted as an opportunity for cybercriminals. The large number of new users who are yet to understand much about digital solutions is an easy target for users of social engineering.

Gojek acts against social engineering

Of the many digital businesses in Indonesia, Gojek is one of the driving forces. Gojek is a decacorn with 20 different services with 3 super apps for customers, driver-partners, and merchant partners. They have also expanded to other countries in the region such as Vietnam, Singapore, the Philippines, and Thailand. By the end of the second quarter of this year, their application has been downloaded more than 190 million times, with more than 2 million drivers, and 500,000 GoFood partners. A study by the Demographic Institute of the Faculty of Economics and Business, Universitas Indonesia in 2019 found that Gojek’s contribution to the national economy has reached IDR 104.6 trillion.

Imagine millions of rotating transactions in one day is enough to convince digital bandits to aim at Gojek users as targets. Gojek acknowledged the threat was real. In fact, Gojek makes three approaches to protect its service ecosystem: technology, protection, and education. The technological approach is the foundation of the security system. They added some innovations such as number masking, two-factor authentication, chat intervention, fingerprint features, face verification, and piracy prevention. GoPay’s SVP IT Governance, Risk & Compliance, Genesha Nara Saputra explained their team always keeps an eye behind the scenes on the latest attack trends and improves the capabilities of the security infrastructure. However, Ganesha believes that all the technical sophistication they provide can be useless when the perpetrators of social engineering attacks target their common users.

“In the case of social engineering, there is only one effective way, it is education. It has been recognized by the world that this human is the weakest chain. That’s why the key is practical education,” Genesha explained.

Regarding this educational approach, Gojek emphasizes four things for its users. Those are including not to transact outside of the application, secure personal data, use a PIN for every transaction, and immediately complain to customer service or the police when there is something suspicious. This is indeed targeting Gojek driver-partners and merchants too. Of the social engineering cases that happened to Gojek, the perpetrators often target the victim’s electronic wallet.

One of the significant improvements Gojek managed in maintaining the security of its ecosystem is the ability to detect fictional orders. In the past few years, fictitious orders have become a scourge for driver-partners. Another thing is the use of illegal applications such as Fake GPS or most popular among drivers with the term “tuyul”. The illegal application allows rogue drivers to manipulate their location. Gojek’s Head of Driver Operations Trust & Safety, Kevin Timotius said the progress came from the use of machine learning and artificial intelligence that they developed in the Gojek SHIELD technology.

“We have utilized machine learning and artificial intelligence technology to detect and crack down on various fraudulent acts that harm driver-partners, including fictitious orders and the use of illegal devices. Previously, similar technology has also helped improve partner security through face verification and phone number disguise,” said Kevin.

Regardless, social engineering scam remains a latent danger that lurks any user of digital services. This technique is less affected by the sophisticated security infrastructure used by digital startups like Gojek as this act targets a person’s psychology. This problem can be suppressed only with qualified digital literacy.

However, digital platforms cannot run solely. They need a helping hand from industry, government, non-governmental organizations, and the community to prevent the proliferation of cases of social engineering in Indonesia.

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Original article is in Indonesian, translated by Kristin Siagian

Data Security Optimization in the Fintech App

Data security for a digital startup is a must. Apart from protecting company assets, data security also serves as a guarantee of trust for their customers.

This factor is becoming increasingly relevant for fintech startups. It is common knowledge that companies engaged in the financial sector. Therefore, data security in fintech is absolutely not something that can be negotiated.

Andre Pratama as Acting CTO of UangTeman explained that preventive measures against data leakage are a very important requirement. Andre shares his knowledge and experience in data security in the latest #SelasaStartup edition.

In general, issues in data security come from internal and external factors. Andre said that vulnerability from within could be the biggest problem in his field. Without a strict surveillance system, vulnerability holes can appear here and there. Apart from needing capable tools, the internal integrity of the company needs to be nurtured from the start.

“I think there are a lot of tools out there, but if the integrity is not maintained, it will be conceded too,” said Andre.

Secure from the inside

There are several steps a company can take to prevent security vulnerabilities from emerging. One of the first steps is to make sure the entire employee team is safe from the worst.

According to Andre, these steps can be started from making a non-disclosure agreement (NDA) or a confidentiality agreement with employees. The next step is to create a system that prevents problems that can arise accidentally.

An example of this step is not allowing laptops that employees use to connect to WiFi. Even if you need access to WiFi, it can only be used by certain people with clear purposes. Another example is erasing the contents of the blackboard after a meeting and requiring that minutes of meeting (MoM) only circulate within the company.

From the infrastructure aspect, there are steps needed. As a fintech, Andre said that his party has created a layered security system for every transaction that occurs. Likewise, in the data itself, everything is encrypted and hashed.

Collaboration with the third party

Vulnerability is also very possible when a startup wants to collaborate with third parties. The confluence of methods and technology between the two parties allows for loopholes that intruders can enter. Therefore, preventive measures are also needed.

Andre emphasized that before starting the cooperation, NDA must attend first. Then he assessed that the company must see whether the API that each uses is open or encrypted, whether the API can be installed directly or must register first, whether the API already uses https or not. Although it seems complicated but steps need to be taken.

“Usually intruders will take APIs that are still hollow or only http. It’s better to be strict than easy but vulnerable,” he added.

Data safety from and for all

The platform certainly has the responsibility of storing and using personal data that has been provided by its users. They are also bound by a number of regulations made by the government and associations.

However, in terms of preventing user awareness, it is also expected. Due to the fact that a number of data leak modus operandi can occur taking advantage of the user’s lack of knowledge of personal data security.

At UangTeman, according to Andre, education on data security applies to borrowers and lenders. They also provide education to both parties. The most basic example is a one-time use username and password (OTP) that no one can know. In addition to education like that, UangTeman also uses a forced system to protect the security of user data.

“We also do soft force for customers. So we detect from our mobile app if it takes too long to log in and just stay silent, we will force quit,” Andre concluded.

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Original article is in Indonesian, translated by Kristin Siagian

Kata.ai Joins a Strategic Partnership with Instagram for the Latest Innovation

The good news arrived from Kata.ai. A startup that focuses on developing conversational artificial intelligence (AI) and Natural Language Processing (NLP), was selected as one of the few technology companies to benefit from the Instagram Messenger API.

A concrete act as Kata.ai become the only Indonesian based partner for Instagram is a new feature on Kata.ai’s omnichannel dashboard called Kata Instagram Solution. This service allows business owners who use Kata.ai to connect Instagram’s direct message for the omnichannel platform.

“Kata Instagram Solution allows business owners to manage messages and conversations from consumers in a sustainable and more effective manner. This will make it easier for them to create higher interactions and serve customers better,” Kata.ai’s Co-Founder & CEO Irzan Raditya said in a written statement.

This partnership did not happen overnight. They have already established good relations with Facebook – as the parent company of Instagram – when they were appointed as official WhatsApp Business Solution Provider partners in 2019. Irzan also explained that they have been working with Facebook several times to help their clients integrate and build solutions on Facebook Messenger’s platform.

He further explained, through the word Instagram Solution, business owners who use Instagram can handle conversation messages on social media creatively and boost customer engagement via Direct Messages. The new Kata.ai service has been effective for their clients to use.

“As for the products currently being developed, business owners can use the Omnichat word product to be able to manage incoming inquiries through the Diret Message API,” he added.

The fact that Kata.ai is selected as a platform that can use the Instagram API is arguably significant. It is well known that Instagram is the most popular social media in the world after Facebook. Their monthly active users are more than one billion with an average usage of about 53 minutes per day. In Indonesia alone, it is estimated that Instagram is used by 69 million users.

There is an increasing trend of customers contacting business owners via direct messages compared to telephone or email. That’s why Kata.ai expects big on this new product. In late 2018, Instagram made a survey regarding the number of businesses using Instagram. The results show that 52% of business owners are directed their consumers to their Instagram business profiles. “Therefore we can see the potential is quite large and it is important for business owners to have an integrated messaging platform of conversation.”

Instagram also welcomes its collaboration with Kata.ai. They confirmed that this collaboration is indeed possible to help businesses and their customers to interact more closely.

“The Messenger API for Instagram service enables business owners and developers to manage communication with customers on Instagram at scale,” Konstantinos Papamiltiadis said as a VP of Platform Partnerships at Messenger.

Kata.ai is the only company from Indonesia selected by Facebook in this program. Apart from Kata.ai, several other companies were selected, including Hootsuite, Zendesk, GoDaddy, MobileMonkey, and Sprinklr.

Kata.ai plans to develop this new product with other features according to the demand of its users. However, Irzan said that currently the Kata Instagram Solution service is limited to enabling business owners to manage incoming inquiries via the Direct Message API.

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Original article is in Indonesian, translated by Kristin Siagian

Hukumonline Introduces E-Learning for Law Study

The portal for legal information and service provider Hukumonline recently showed its commitment to enter the edtech industry. Still surrounding their expertise, they released “Online Course Hukumonline” as an online legal learning service.

The delivery model is in the form of an online course, in which there is a learning management system that contains learning content on certain topics. Each material has been arranged systematically and contextually, consisting of 5-6 sessions with teaching methods through video-on-demand, practice questions, quizzes, and reading references.

Hukumonline’s Online Course also provides business packages for group purchases. Each paid material, access will be given for one year.

Hukumonline’s COO, Ramos Pandia said that currently there are still few learning platforms with legal subjects that offer competent instructors. This online course aims to strengthen Hukumonline as the most comprehensive technology-based legal learning center in Indonesia.

Hukumonline also collaborates with the Indonesian Law College Jentera in content development. The lecturers from the campus are also a resource in the courses provided. However, it is stated that the content does not refer to the curriculum, but rather to the expertise and experience of each teacher.

“We expect this platform to become an effective learning alternative for fellow practitioners and legal academics in Indonesia, therefore, distance is no longer a problem. With a relatively low cost, our hope is that it can reach all levels of society to become more lawful,” Ramos said.

E-Learning Belajar Hukum di Hukumonline — E-learning study legal on Hukumonline

On the other hand, law study material looks tough for many stages. However, Ramos is quite sure that along with the education that is being carried out, more and more people are interested in studying law. “Many people do not realize that everything in life almost certainly intersects the law. We are innovating to present the law in a way that is relevant and also easily understood by the public.”

Ramos continued, “We also see amid this pandemic the moment of distance learning becomes important, therefore, we present the materials needed for law students / fresh graduates to prepare themselves for the world of work. Meanwhile, for professionals or society in general, we also try to present important materials such as licensing for business entities, corporate criminal liability, the importance of delivering LKPM which in the future will be followed by other materials. ”

Releasing new products

Last February 2020, Hukumonline announced the Series A funding led by the Emerging Media Opportunity Fund. There was no mention of the nominal amount of funds obtained, but it was said that this additional capital would be focused on developing new products, one of which was boosting the “premium subscription” feature as the main business model.

Hukumonline recently released “Premium Stories”, a premium legal article service that is presented in a comprehensive manner, which can be used as a practical reference for legal professionals. “We present this service to help legal professionals to facilitate legal research, study certain legal issues while working from home,” explained Ramos.

In addition, Justika as a subsidiary in the field of online legal consulting platforms has also released a paid chat product. Not long ago, Justika’s services were also integrated into Bukalapak’s marketplace service in the Tanya Hukum product. Also conveyed, until the end of the year, Justika will focus on developing advanced products from chat, such as document services and negotiation assistance.

Meanwhile, another business unit Easybiz, which is a platform to help establish online businesses, also adds new services. One of them is a postal business license and a property trade intermediary license. “Easybiz will create a system to expand access so that more and more business actors throughout Indonesia receive assistance for processing Micro and Small Business Permits (IUMK). Starting from information gathering to payment, it will be integrated into this system,” concluded Ramos.

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Original article is in Indonesian, translated by Kristin Siagian

Hi App Is Eager to Grab Business Pie in the Instant Messaging App Industry

The local instant messaging application Hi App officially opened its doors to the public on Tuesday (20/10) yesterday. As newcomers, they are quite optimistic that they can reap the cake in the “one-sided” instant messaging business because it is controlled by outside players.

Previously, in DailySocial coverage, one of the sources said that a reason for local messaging application has yet to dominate in the country is that it has failed to create a network effect, and this is the fundamental part of a messaging application.

The network effect is an effect that makes users and the people around them use the same application to communicate with each other.

Hi App suggests that in order to create this, it depends on the features offered. Hi App’s Managing Director, Michelle Kusuma said, this feature is very important, and its development will surely not happen overnight.

“What elements are missing in our society that could revolutionize the way we communicate with each other? There is no one-size-fits-all answer to this question and it will always develop,” Michelle told DailySocial.

The current and future development of the Hi App relies heavily on comprehensive data analysis and market research to determine which features will be particularly useful for the Indonesian market. The company will conduct surveys and interviews with various groups of people to get a better understanding of the communication problems faced by many people in Indonesia.

Also, collaborate with communities according to their segmentation, therefore users can try and recommend Hi App to the people around them.

In Indonesia, there are currently several messaging applications made by local developers. Aside from the Hi App, there are ChatAja, liteBIG, Catfiz, and others. There are some platforms introduced in the market and ended up losing.

Hi App feature and target

Currently, the features included in Hi App are translator, chat organizer, file sharing, light, and dark mode.

Hi App’s Product Specialist, Fanny Febriani Susilo explained, the translator feature was introduced for Indonesians who often interact with other people who do not speak Bahasa resulting in an obstacle when communicating. The available language is currently Indonesian to English and vice versa.

Next, the chat organizer feature separates personal and group chat rooms, therefore, they don’t get mixed up like similar existing applications. This is adjusted to the characteristics of Indonesians who tend to be communal, such as eager to talk and share information in groups.

In order to support user flexibility in sharing files, Hi App provides a maximum shareable file capacity of 100 Mb. Users can share documents, photos, and videos in their chat rooms.

Another aspect is, Hi App uses end-to-end encryption by default for every message it sends and it never saved user messages on the server in their regular format. This is to ensure data protection and user privacy.

Also, it implements a secure end-to-end identity system using phone number authentication via OTP verification. Fanny said that the Hi App application was designed to be very light to be used smoothly on various types of cellphones, both low-end and high-end.

“This application can be installed on mobile phones with a minimum operating system Android 5.1 Lollipop and iOS 11.”

Michelle continued, currently, Hi App is only operating in the B2C segment, then starting to enter the B2B. “The Hi App development team is currently working on a next feature which we hope will help businesses adapt.”

She cannot disclose this feature, but she ensures that the feature will be designed by considering the synergy between the formal and informal business sectors, especially in terms of support for the micro, small and medium enterprises sector.

As this launching, she expects that Hi App will be able to attract at least more than 700 thousand downloads by next year. “The ETA will probably change as we release more features and analyze more market data going forward,” she concluded.

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Original article is in Indonesian, translated by Kristin Siagian

Application Information Will Show Up Here

Northstar Seeks Hefty Gem in the Indonesian Market

Last April, Singapore headquartered Private Equity firm Northstar had announced the closure of its fifth flagship fund. Since its debut in 2003, Northstar has been actively investing in the Indonesian market. One of their notable portfolios is the ride-hailing giant, Gojek.

With the number of young population and growing consumer base powering the country’s economy, Indonesia remains the largest market for investors in Southeast Asia. This is clearly stated by Northstar’s Co-Chief Investment, Sunata Tjiterosampurno, in an exclusive interview session with DailySocial. Therefore, whenever some investors look for opportunities in Southeast Asia, Indonesia has to be on the map.

As we continue discussing the investment landscape in Indonesia and other countries in Southeast Asia, he suggests to not generalized the VC and PE landscape. On the PE landscape, he continued, Indonesia is said to be quite an interesting market due to lots of mid-market deals ($50-100 million).

Singapore, on the other hand, is a market on its own. It’s a relatively similar landscape to Thailand, Vietnam, and the Philippines. He also highlighted the fact that there are not many natural resources or community-related sectors in Singapore. Also, there are more manufacturing-based deals in Thailand, compared to Indonesia which serves mostly consumer mass-market types of deals.

In terms of private equity firms, historically and still going forward, getting exposure to the growing consumption in Indonesia because the middle class is growing is an important theme in Northstar. Especially in this digital age, where everything starts to shift into non-conventional ways.

“Digital has become a big component of the economy and it is impacting consumer mass-market and financial services businesses in various ways. The transformation of business models in such segments has resulted in investment in a more digital-oriented business often leading to an online-offline business mode,” he added.

Focusing on the big market

In terms of investment, Northstar has three focus areas, consumer mass-market, financial services, and digital. This strategy has been implemented in fund IV and to be continuously adopted by fund V. It is confirmed that the firm’s largest market by far is Indonesia. From a geographic perspective, Indonesia is to take 60% – 70% of the plate, while other markets will take up to 30% – 40%. In the region, Northstar has been arranging deals in the Philippines, Thailand, Singapore, and Vietnam.

Investing is not an easy task. There are a few key qualities to look at or focus on. For Northstar, first and foremost is the entrepreneurs. As they further meet the rest of the management team, the founders are indeed the most important person who can drive this business and make it big.

Next, how big is the market size that they’re going after? There are lots of digital startups, but if they’re going for the small market then it’s time to reconsider. As the company committed to investing in growth companies, it is obvious to target a big market.

Third, the business model should be defensible, meaning that they have attractive ways to make money. Also, they can create a mode to manage the competition when it gets tight.

As the firm started to open up, DailySocial allegedly asked about Northstar’s journey in finding and investing in one of Indonesia’s treasure, Gojek. Long story short, as the founder of Northstar, Patrick Walujo was first involved in the early days of Gojek, its affiliated venture capital fund NSI, which is now rebranding into Openspace Ventures ended up investing in 2014 in series A. Gojek was barely digital.

As Openspace invested, the goal is to take the company online and to create an app. In six months, the company managed to launch an app and got tremendous traction. With a number of connections to the company, it’s a privilege to pick up the investing call on such short notice. However, as a later stage investment, it’s only natural for Northstar to invest in series B. With an average ticket size between $50 – $60 million, the company invested progressively to the extend of $60 million.

Sunata also mentioned that Northstar observed the rapid global growth of Uber starting back in 2014 and anticipated that it would come to Indonesia. Northstar saw the opportunities in the ride-hailing and transport segment, and backed Nadiem as he was starting Gojek as a local version of Uber.

Work closely with the management team

The pandemic has been very tough on some businesses that had large offline components, but for digital-native businesses or large digital businesses, it’s actually experienced a lot of growth, because people are at home working, trying to get access to things they’re doing previously through their phone. Last year, Northstar is reportedly invested in an edtech company named Zenius, and it has shown very strong growth for the past year. Especially in times of the pandemic, a lot more people are looking to learn at home because they can’t go to school.

Due to Covid-19, digital adoption has increased. Therefore, some businesses are having exponential growth such as e-commerce and a lot of different spaces benefit from digital behavior increase. At the same time, the overall macro condition is tough in Indonesia right now, resulting in difficulty for businesses with large offline components. The company is aware that it’s very hard for them to grow the same scale during the pandemic.

The Northstar Group is confirmed to be an active investor in all of the business portfolios. They occupied board seats in the Boards of Commissioners and work very closely with the management team, especially during the crisis. Some of its businesses have been badly hit by the pandemic. It’s as we’ve often heard that the travel and tourism industry has declined significantly, and globally.

“Given the COVID-19 pandemic, in some cases, we have had to make some strategic decisions at our portfolio companies to refocus the strategy of the business on potential growth areas. We work very closely with the management teams on these changes,” said the Northstar representative.

For those founders whose businesses were badly hit, here are some insights. A lot of foreign investors are finding it hard to invest without having people on the ground. In another way, it’s right to assume that it’ll be hard for Indonesian companies to tracks foreign capital until the pandemic is over.

“One of the most important things for founders is to make sure that they can fund their business for as long as possible without needing external capital. In terms of business models, how you constantly innovate, adapt, and evolve given rapidly changing consumer needs. For a lot of business, it is about adapting to the different climate we are in and learning how to prosper in the new normal,” he continued.

The flavor of the year

Regarding the long-term strategy, most private equity or venture capital fund already has its own asset allocations, focus areas, and geographic, also types of business to invest while raising the fund. In terms of implementation, Northstar is to stick with the long term strategy, but calibrate depending on the business cycle. Therefore, what will change is actually in terms of valuations, specific sectors, but the high-level focus remains the same.

“What I am saying is that our strategy of investing in financial services, digital and consumers, would remain the same, whether there was a pandemic or not. We think these remain attractive sectors and we will continue to focus on them,” Sunata added.

He also mentioned that the long term strategy is different from the flavor of the year. In 2020, it’s actually Covid-19. Therefore, private equity needs to be more cautiously optimistic in terms of deploying its capital, focus lots on optimizing the existing portfolio companies. Every year there will be a different flavor of the year. The situation is dynamic and the company will continue to look for an opportunity that fits the circumstances.

“We are actively looking for deals, but each opportunity is case by case-based, depending on valuation, management team, business performance, and prospects. In general, we are actively looking for good opportunities in our focus sectors,” Sunata said.

To date, The Northstar Group has invested over US$3.3 billion with its co-investors in the Southeast Asian region. The fund channeled through more than 35 companies across the banking, insurance, consumer/retail, manufacturing, oil and gas, coal and mining services, technology, telecom, and agribusiness sectors. The recent one is for eFishery, Indonesia’s leading aquaculture intelligence company.

Mangan Is Launched to Connect Restaurants with Corporates

It is no longer possible to count startups that tried their luck in the culinary industry. Various startups with different approaches and business models have emerged in Indonesia. Mangan is the latest one rising to taste the sweet pie of the culinary industry.

Mangan was founded by Hardi Halim and Hutomo Halim in early 2019. Hardi as the CEO explained that Mangan’s business idea was first appeared to overcome employee boredom with the same food menu in a company.

Hardi grasped inspiration while working at a logistics company in the United States. Every day in the cafeteria at work, he can only eat sandwiches and coffee. It is also available on vending machines. Hardi knows that there are some obstacles when companies want to use catering services from restaurants, especially in terms of payment. That experience encouraged Hardi and Hutomo to create a platform that could help companies provide good food choices for their workers.

“Therefore, we combine the problems in offices, communities, and F&B. Mangan is formed to connect restaurants and corporations,” Hardi said.

The SaaS platform

Simply put, Mangan is a software as a service (SaaS) that serves customers on a B2B basis with a focus on the culinary field. Hardi likens the Mangan platform to Airbnb for the culinary world. Hardi emphasized that Mangan does not cook or deliver the food independently.

Based on their data, Mangan estimates that the culinary service has huge business potential. Last year, the value was estimated at US$ 160 billion (around Rp. 2,356 trillion at current exchange rates) in Southeast Asia. This number is predicted to increase to US$ 200 billion or nearly Rp 3,000 trillion by 2025.

Through this platform, people can find a variety of catering and pop-up restaurant services from home-based to top-tier restaurants. Service quality and cleanliness factors are Mangan’s main requirements to attract partners. Therefore, when a company or community wants to use catering services and pop up restaurants, it’s available on their website.

Hardi says what makes Mangan different and has no direct competitors in the country is because they only serve B2B customers. “We are a B2B SaaS. We provide a platform that simplifies business processes between institutions and restaurants. If we look closer, most of the other applications are B2C,” added Hardi.

However, Mangan has recently started to explore B2C. Hardi said that they’ve recently launched a B2C marketplace. However, Hardi emphasized that B2B is still Mangan’s main focus.

Funding and target

In terms of finances, Hardi said that Mangan is currently raising a seed funding round. One of the angel investors has already joined, from the top officials of US Foods, a culinary service and distributor company from the US. Mangan will continue to hold this funding round until the end of this year or early next year.

Currently, Mangan has partnered with more than 200 restaurants. Through the funding they are currently raising, Mangan plans to expand its services. One way is to expand coverage in Java. They are currently available in 80 locations. Their target is to be used not only for offices but also for public institutions such as hospitals, schools, and others.

“Our vision is to make it easier for F&B restaurants in Indonesia to accept large orders from institutions without following complex business processes,” Hardi concluded.

To date, all Mangan services are still accessible through their web portal. However, Mangan plans to launch a mobile application for its B2C customers early next year.

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Original article is in Indonesian, translated by Kristin Siagian

Zomato to Disband Indonesia’s Local Operation

As an effect of the pandemic, Zomato is adjusting (downsizing) its business in Indonesia. After officially launched at the end of 2018, the Zomato Pro or Zomato Gold features were discontinued. It’s a paid service that users can use to get exclusive access to Zomato’s restaurant partners – including selecting menus and making reservations.

In the FAQ statement in the application, it is stated that the closure of this feature was due to the company’s decision to disband the local operational team in Indonesia – all employees affected by the layoff. As contacted, Zomato only provided information that Zomato’s basic service (restaurant directory) is still accessible in Indonesia, its operations are carried out remotely from India.

The F&B sector has been badly hit by Covid-19. Last May, Zomato reportedly laid off 13% of its total employees. Also, for those who stayed, there is still a deduction of up to 50%.

In order to strengthen the business foundation and accelerate growth, Zomato’s parent company has been intensively raising series J funding since April 2020. The latest funds were announced a few days ago, Kora Investment participated in investing $52 million. According to Fintrackr, Zomato currently has a valuation of around $3.5 billion along with this round.

Zomato alone has been existing in Indonesia since 2013. Thanks to impressive business growth mid-decade, in 2016 the Indian startup has achieved Break-Even Point (BEP), including for its business unit in Indonesia.

Aside from Zomato, there are several similar services in Indonesia, two of which are Qraved and Eatigo.

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Original article is in Indonesian, translated by Kristin Siagian
Header: Depositphotos.com

Application Information Will Show Up Here

Philoit Q&A Platform for Millennials’ Creative Space

Not just building a question-and-answer platform, Philoit was initiated last year because of the uneasiness of the “unconscious problem” or the phenomenon of unconscious problems in society, which was felt by the Co-Founders Philoit Aldi Tahir and Pieter Surya. They feel that young people in Indonesia spend their energy on content that does not build literacy and knowledge in digital media.

From the data Aldi quoted, more than 60% of Indonesia’s young people spend more than 4 hours on the Internet. In fact, as many as 7% of them spent more than 11 hours on the internet. In other words, the youth’s time and energy is spent on media discussion content that does not build knowledge, such as the thousands of comments on YouTube and Instagram that every opinion written on them will not be read and lead to ongoing discussion.

“This anxiety makes it difficult for us to share the background of [the Philoit being initiated], because the problem we are solving is called an” unconscious problem “. But fortunately recently there was a Netflix documentary “The Social Dilemma” which can very clearly describe the problem in the algorithm on the internet, making us bound and become a product of media consumption, “explained Aldi to DailySocial.

The background of the two co-founders has to do with the core product of Philoit. Aldi mastered technical expertise in data & machine learning which was strengthened by literacy from books about technology and its relation to human behavior in consuming the digital world, and the use of AI.

Meanwhile Pieter has a passion in education in the field of teaching teachers and tutors. He previously started a startup called Tutoreal, to connect parents who need tutors. “But before Pieter launched its digital product, we met and agreed to build a Philoit.”

Philoit is one of the startups participating in the DailySocial Launchpad 1.0 incubation program, the incubation program from TheGreaterHub SBM ITB, BekUP Bekraf for Startup 2020, Cubic Incubator (Bandung), and one of the startup partners at Block71 Bandung.

Currently, Philoit is still actively mentored by Aji Santika from Feedloop-DeepTech-StartupBandung and Novistiar from HarukaEdu.

Zhihu as an objective not Quora

Aldi continued, a popular question-and-answer platform, especially in Indonesia, is Quora, which is always used as a mecca. Even though the basic functionality of the platform is similar, he claims Philoit is more focused on providing features to engage active users in discussions within the application.

These features include gamification, points & levels, titles & achievements, and the digital currency “Philoit COIN” which can be exchanged for prizes. “Philoit wants to stand in the middle as a combination of conventional forums and media-based applications full of various unique features because its aim is to target young people.”

He prefers to place Philoit as an “expert hub” by taking the mecca of a Chinese player named Zhihu. This question and answer platform is included in the top 10 most accessed applications in the Bamboo Curtain country. Its features are more or less the same as Philoi, there are gamification and stats features, like playing games in the form of sharing and discussion.

“Apart from that, the demographics and forms [of habits] of Indonesians and Chinese are similar, which can be good examples in building a similar success platform.”

Because he is passionate about becoming an expert hub, Aldi admits that his party is still perfecting Philoit’s features and core business which will be implemented by inviting experts to join. This is because the company wants to build an ecosystem from a question and answer platform first, then inviting credible people into it.

This strategy was taken because the lessons learned were drawn from the failures of previous players, that in the early stages they immediately used experts / public figures to attract the audience. Meanwhile, the discussion ecosystem in which the form is formed and has not even been validated, which in the end faces difficulties in maintaining the experts / figures in it.

Business plan and challenges

Aldi said that currently Philoit has not carried out monetization. However, in the plan, the company will implement a business model form “Pay Per Question”, not freemium or subscribe. For that, he invites credible experts or resource persons to the platform to answer any questions.

“Just like experience in the game world, users are required to buy diamonds which will later be used to ‘unlock’ content from experts.”

According to him, this concept is the customization of the user experience because users can choose what content they need and want to access. Moreover, this method is in accordance with the habits of young people who tend to be choosy. Users only need to pay for content for which they want to read answers, opinions, or opinions, from experts who are experts in their fields.

As for the challenge itself, considering that Philoit has a coin redeem feature as a form of appreciation for every opinion, discussion, point of view, and a form of content contribution from anyone and gives the same right to benefit.

“This is very different from other UGC platforms which do manual filtering of people who become partners or special contributors and get benefits such as money and others.”

However, at the beginning of the test, many users took advantage of the gap in order to collect as many coins as possible in various ways. Common examples include answers that do not fit the context of the question, copy and paste other people’s answers or from other content without including links, spam best answers, spam unvotes, and use multiple accounts.

“There are even those who directly attack our system and access coin changes through the database. Honestly, that’s not what we wanted from this coin system. ”

Finally, the team made a strategy change by updating the terms and conditions of the redemption, and updating the system that could automatically differentiate content quality based on text analysis. You do this by giving weight to the input from the user, so that the provision of content by the system varies.

Meanwhile, to minimize negative content, his party chose several active users to become moderators who manually report on existing content.

“For other challenges in the future, we believe there will still be, but on the way, we believe that honesty from users, sincerely sharing opinions along with a balance of benefits to be obtained, will form a good sharing ecosystem in Philoit.”

Aldi explained that in the future he wants to apply AI technology like those already used by large platforms such as Quora and Zhihu. Also, developing other interesting features such as Room to accommodate the questions and answers that occur during an event

“We have tried this feature by conducting several independent events and inviting experts in the form of sharing and online discussions. Every question submitted to the expert at the event will be shown live in a specific room that can be accessed by anyone, even after the event ends, “he concluded.

Philoit has so far been bootstrapping and is planning to do some fundraising. Since its release last year, now Philoit has more than 20 thousand registered users with a total of about 190 thousand question and answer content and 14 thousand blog posts. The application has been downloaded more than 10 thousand times on the Play Store.

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Original article is in Indonesian, translated by Kristin Siagian