Indonesia must become a regional player
Having helped develop the country’s largest online community, Kaskus, from its beginnings eight years ago, Antonny Liem and his partners gained the experience to become Indonesia’s first generation of tech incubators. Their emphasis is on building a digital ecosystem as the infrastructure for developing start-ups.
Antonny Liem looks back at the beginnings of Kaskus with a wry smile. “At that time, the three of us didn’t have an incubator company. We helped incubate Kaskus under our digital advertising company called Semut Api. Now we have a holding, Merah Cipta Media (MCM), which established Merah Putih Inc. as a digital incubator that so far has given birth to eight growing websites,” Antonny told GlobeAsia on the sidelines of the Demo Asia 2012 tech start-up gathering in Singapore recently.
Antonny, 36, stresses that despite the huge potential digital market buzz in Indonesia, building what he calls the digital ecosystem is of utmost importance. “Yes, we have a lot of people and creativity, but the huge market is not for us to be consumptive. We have to be productive and become a major player in the region,” he said.
The Merah Putih Inc. CEO explained that he and his partners are obsessive about building real and profitable tech companies which will be self-sustainable, provide jobs, support economic development and in the end pay taxes. “It’s not easy. It takes time to educate the market, encourage start-ups and on-line transactions and the building of brands. It’s a process but first we have to build the digital ecosystem. In two or three years time, we will see some significant results,” Antonny said.
The young entrepreneur made it clear that, unlike digital incubators in developed countries which adopt a hands-off stance in operations, start-up companies in Indonesia still need a close watch from their incubators.
“The industry is still in its infancy. We still take part in the operations and oversee the developments. We attend weekly meetings, look at the reports and are closely hands-on with all of our eight incubees. But we also don’t want to give the impression that we are calling the shots or are the operator. It’s not healthy. What we are doing is to ensure that all the start-ups grow big. We also facilitate third-party investment for the start-ups. You can say that we are incubators plus,” he said.
Trained in finance and IT, Antonny said Merah Putih Inc. currently oversees the following start-ups: Lintas.me is a social aggregrator focusing on user-generated content by gathering news, photos and video; Krazy Market, a niche online marketplace; InfoKost, an online directory of boarding houses for students; Daily Social, a tech and digital start-up blog; the Ads On It social media ad network; the Bolalob football portal; Oneb1t digital advertising agency; and MindTalk social network.
Funding the key to success
Antonny, who first worked for Fujitsu in Japan, explained that currently Indonesia is getting plenty of world attention but the key to success of tech start-up companies is the right funding. “We can’t disclose figures or percentages. We can’t say yet whether it is bearish or bullish fearing that hasty evaluations might result in market bubbles. But we can disclose that we are fortunate to have GDP Venture as our main partner,” said the graduate of Satya Wacana University at Salatiga in Central Java.
The MCM holding is now made up of four partners including GDP Venture, a venture capital outfit owned and established by a relative of Djarum Group’s Hartono family.
According to Antonny, Lintas.me is now booming in its second year while Mindtalk, an Indonesian social media network in English, already has 100,000 users. “We want to aim for the secondary market outside of the US and China such as Brazil, Japan, Europe, Singapore and Vietnam,” he said. InfoKost meanwhile has 8,000 listings in Jakarta and is expanding to other cities. The site provides listing of boarding and lodging houses for students and has become popular.
Touching on market value, Antonny said that at the moment income from advertising still dominates as Southeast Asia’s largest economy continues to move forward. But the trend of transactional business is increasing as customer-to-customer commerce is increasing while entry barriers are diminishing.
“We need to have accurate statistics first before we talk value. For instance, they say Indonesia has 240 million people or Indonesia has 45 million internet users. Are these accurate figures? It’s still just what people say. But I think e-commerce this year will be huge although payment gateways still rely on SMS banking. It’s a millions-of-dollars market that still needs to be tapped,” he said.
“You need to adopt the Gold Rush stance as in the US. Select the river first and then mine the gold.”
Antonny added that Indonesia needs to learn from other countries such as Vietnam and China with good digital infrastructure, due to the strong support of the government, even though there are fewer brands on offer.
“Imagine, Vietnam has a digital company earning $100 million a month and China has a company with a market capitalization of $42 billion. They support infrastructure but develop their own products. We on the other hand prefer Facebook and Twitter with 40 million users and 30 millions users. Why not have our own social media?”
The founders of Merah Putih Inc. were Danny Wirianto, Herman Kwok, Antonny Liem and David Wayne Ika. Meanwhile other digital incubators and venture capitalists that have a presence in Indonesia are ProjectAlpha, Project Eden, Batavia Incubator, East Ventures, InvestIdea, Nusantara Ventures, Nusantara Incubation Fund, Bandung Ventures, Raja Capital, Ideosource and Jakarta Founder Institute. GA