Taxi mafias, cash vaults & 100% MoM growth: The story of SEA’s biggest startup | Kevin Aluwi (Gojek)

These areas are essentially controlled through violence by specific area mafias. When we started having drivers pick up orders and passengers, these people would physically assault our drivers. We've had everything from bricks thrown at our drivers to knives and machetes being brandished at them. It would have been easy for us to say, 'Hey, they're all contractors, they're third parties, let them sort it out.' But instead, we hired private security. We actually worked with private security companies for a fairly long time.

I'm glad to be in a small group of category of people that you invite. Thank you. I'm a huge fan of what you do.

We have millions of motorcycle taxi drivers in all the urban centers in Indonesia. We started with a very local problem, and the first product was an on-demand super app where you could ask someone on a motorcycle to give you a ride, send a package for you, or buy something and deliver it to you. This evolved over the years into a more general on-demand consumer super app that also included car drivers and other services ranging from the ones mentioned to grocery deliveries, payments, and financial services. Today, across Southeast Asia, we've completed about three billion orders last year. That's three billion orders, so the scale of our region is often underappreciated. We also have about 15 million merchants doing general e-commerce but also restaurants on our food delivery service. On that IPO, we were pretty proud to say that it was Indonesia's largest IPO of all time, where we raised over a billion dollars at something like 27 or 28 billion dollars in valuation.

I would say that we're up there with Uber globally, and definitely larger than Lyft. I don't remember how many drivers are in the US, but we definitely have more drivers in the region than all of America.

At the point when we had the most services, we had everything from ride-hailing to package delivery to food delivery to grocery deliveries. We had moving services, you could pay for things. I think at our peak we had something like near 30 different services all in one app.

Yeah, definitely. I would challenge anyone within the company to be able to name all of our services that we've ever had on the app, because it was pretty wild at one point. And I'd love to talk a little bit about my thoughts on super apps at some point during this session, because I definitely have some mixed views over it as a product strategy. As we've gone through that whole cycle, it might be actually a good time just to jump into it.

Okay, I'm gonna come off a little strong on this, but I am kind of annoyed at how much it's being mentioned these days. It's really popular in VC, consultant, analyst circles because it sounds really great on a strategy deck. All of the things that are really appealing, they will talk about lower customer acquisition costs, higher attach rates to different products, higher retention across different services, the ease of cross-selling and upselling. All of these things sound great on a strategy deck, but in practice, it's much harder. Let me give you an example. In Southeast Asia, a majority of people are on prepaid plans instead of post-paid plans. So everyone basically buys their minutes and their data plans upfront at the beginning of the week or the beginning of the month. We had a product which was a mobile top-up product. The reason I mention this specific product is as a really illustrative point on super apps. It's a product that 95% plus of our customers need because they're all on prepaid plans, so it's a very relevant product. We had our UX research team actually look into why the engagement on this product was so low. We found that only about 30 or 40 percent of our customers knew that this product existed. That completely blew our minds because one, it's a product that is relevant for all of our customers, and two, it was literally there on one of the six buttons on the home page. The insight we got here was that there needs to be a unifying concept across all of your services within the app for your users to be able to think about your product in a sensible way. For us, the way our customers thought about us was through the driver. When they thought about the Gojek driver, that made sense. You could easily cross-sell somebody from a ride-hailing customer to a grocery customer or a food delivery customer because they understood the unifying factor being the driver. But when you start doing other things that don't have that unifying factor in terms of the concept a customer has when they think about your service, it starts breaking down. One other fun UX research insight was when we launched massage services. We had at one point massage services where you could order a masseuse to come to your place. A question that many of our customers asked was, 'Oh, is the driver going to give me a massage?' Because they associated all services with the driver. So if there was a massage service, they assumed it was that same man who's going to give me a massage. This illustrates the importance of having these unifying concepts that are easy for customers to think about the multiple different services. It's not as simple as just saying, 'Oh, we have a lot of engagement, we have a lot of eyeballs, so we have a super app that makes sense for customers.' That whole nirvana of lower CAC, higher retention that are on these great strategy decks often don't pan out because you have to resell this idea of 'Oh, this is another service you can use,' and that's another bit of investment that you need to make. That's why when you see super apps today, it's kind of like this giant menu or this giant grid, which does limit the design decisions you can make. It's an unsolved problem at this point.

I do agree with you that it is kind of the squishy thing that most people see as an afterthought, maybe because it is hard to define. But I'm a very, very big believer that the two most important things in a consumer business are product and brand, in that order. I don't think I need to sell the idea, especially to your audience, that product is absolutely critical and probably the most important. But to give an appreciation of the scale for audience members who might be unfamiliar with us or with the region, I wish I did have to start there because we actually started as a very scrappy company where we were by far the underfunded player. Without brand, we probably would have never gone to escape velocity beyond that scrappy stage. We maintained our leadership in Indonesia through a lot of the things we actually did on the brand side. To give you a sense of how scrappy we had to be in competition, for the first six months after launching our app, we had only raised about two million dollars. We came from a place where we were seriously underfunded. I think a big reason why we survived was that we built a great brand for our consumers, for our drivers, and for our merchants. I think that great brands create associations in their customers' minds that transcend the typically transactional or utilitarian one that most people have with businesses. They become part of one's identity. Some of the best-in-class examples of these are probably all the Apple fanboys and fangirls, Nike sneaker heads. For these individuals, the brand becomes a big part of their identity. That creates a level of loyalty that other competitors might not have. I'm a really firm believer of how important this is because you can see it if you step out of the tech bubble for a second. There are so many great companies out there that really rely on the strength of their brand to build fantastic businesses and create great experiences for their customers. As for what one can do, we invested a lot in our brand across multiple areas. One specific area that I think is really important is consistency. It's really about the impression that a customer or a user has with your product and with your business. Having that consistency across all customer touchpoints is really important. How you write copy in advertising and in the app, how you've even designed the app. We were the first company of scale to have ads that don't take ourselves too seriously. We make fun of ourselves, we make fun of our cultural observations of Indonesia, to build this overall feeling of 'Hey, we get you, we are part of the overall culture of Indonesia.' Even going beyond the more aesthetic or cultural artifacts, in Asia it's fairly common to send food as gifts to your loved ones or people you're interested in dating. When we launched our food delivery service, a lot of people were actually using it for this purpose. It became this whole cultural phenomenon of sending GoFood for these people. We leaned into it in our product feature. All the other players in the market at the time basically only allowed you to deliver food to your home or your office to prevent fraud. But we leaned into it and actually created features that allowed you to put your pickup point far away from where your actual location was. We just had fun with this whole idea of GoFood dating. So yes, it's kind of part of branding, but thinking about branding beyond just marketing communication, actually being relatable and being part of the culture and being sensitive to what that culture is. I think this was something we did really well in the early days that allowed us to continue maintaining leadership in spite of the fact that our competitors had more money, which meant they could offer more discounts and more incentives to drivers. But we really won on brand.

People were familiar with the imagery and the name, but I think it's also really important that people saw what was happening. If we were like an airline and we branded a bunch of people on the streets with our brand, it might help with brand recall and people might know about the name. But what was really powerful was that when people would see these drivers with their jackets and helmets, they would be seeing passengers on the back seat as they were stuck in traffic. So I'm stuck in traffic and I'm seeing these people whiz past me with this imagery, and I'm thinking, 'Oh, that person is using that service to get somewhere faster.' Or they would see a driver carrying a GoFood box and think, 'Oh, that person can deliver food or deliver packages for me.' It was this beautiful combination of having that imagery and having that visual everywhere as a reminder of the brand, but more importantly, it was also a physical reminder of the service, of what we do, and of how we can help you. Looking for these opportunities where customers can make that connection between the logo, the colors, and the name with actually what the service is, I think are the opportunities that people should look out for. They're rare, admittedly quite rare, but there are these opportunities to reinforce the value proposition of your business in a way that is beyond just visual recall. I think that's why that specific anecdote is something I like to talk about because it was really one of those special things that reminded people why we're here.

Totally, totally. You talked about how scrappy you've been. One of the things that we did in the early days that was absolutely crazy was that we were one of the pioneering technology companies in Indonesia and in Southeast Asia. We came into an environment where a lot of the things that companies or people in more developed economies take for granted, for example having electronic or digital payments, that was something that didn't really exist much when we first started. We had a problem of actually trying to pay drivers because every day we would be paying out incentives. We actually had cash booths. We had physical spaces with a vault and cash sitting in the vault where drivers could show up, show their driver ID, and we would give them the cash. We had these physical locations where there would be lines of drivers essentially taking cash. We eventually figured this out by working with a bank and integrating with an ATM network, but in the early days we just did it ourselves, building essentially a mini ATM network. Another story that Crystal reminded me of recently was that at the time there were a lot of fake driver apps out there because we didn't have all the security investments that we eventually made, like code obfuscation and better API security that wouldn't allow fraudulent driver apps to connect to our platform. There were a lot of drivers using these third-party driver apps that were doing unsavory things. One of the interesting things about these apps was that they actually added some features that at the time we didn't allow. For example, we wanted our drivers to be conscious of what was happening on the app, so we made sure that drivers would push the accept order button. But this app had a functionality that would automatically accept orders as soon as they came in. It was this interesting situation where they were doing things that were fraudulent and not safe for the integrity of the platform, but at the same time they were providing some value to the drivers. We didn't have the bandwidth to be able to do that because engineering and security talent was super scarce in Southeast Asia at the time, still is today. We ended up making the decision of actually copying those features. We saw all these third-party fraudulent apps and instead of building a whole system to prevent them from being built or working on the platform, we just said, 'Let's take their top two or three features and build them into our app.' That significantly reduced the number of users on these third-party apps.

I really don't like the idea of moats. Again, one of the concepts that gets thrown out a lot by strategy-type folks is, 'What's the moat of your business or your product?' I don't believe that any moats are durable over time. Eventually, with enough time, all moats can be crossed. One so-called moat that doesn't get talked about enough is the fact that you're able to do hard things, because hard things are hard. Simply doing things that are hard, as long as they create value to your customers, actually is a position that makes it harder for your competitors to win over your customers because it's hard to do those things. Another example of doing something that sounds very difficult but was necessary was dealing with resistance from motorcycle taxi mafias in the early days. You would have these areas that are essentially controlled through violence by specific area mafias. When we started having drivers pick up orders and passengers, these people would physically assault our drivers. We've had everything from bricks thrown at our drivers to knives and machetes being brandished at them, to physical altercations with mobs of people. It would have been easy for us to say, 'Hey, they're all contractors, they're third parties, let them sort it out.' But instead, we hired private security. We worked with private security companies to help our drivers in those situations, to help extract them out of these sticky situations. We ran a fairly big private security operation for a fairly long time until it became common to have Gojek drivers doing all these things across cities. We ran this very operation-intensive thing just to make sure that our drivers could be as safe as possible. That also helped build the brand because drivers felt that we weren't just a platform that didn't care. We actually cared about their safety, and that helped build goodwill. Even as competitors started coming in and paying more money, we still had a lot of loyalty within the driver community because of things like that.

A minority of situations were like that, but a lot of that was just having an on-call service where they could dial a number and somebody within a five to ten minute distance would actually show up on site and help diffuse it.

I think that is kind of one of the hallmarks of this region in general. I have no doubt that what we were building and what we are today is a technology company, but I do think that in the early days, you spend a lot of time on operations. Over-focusing on purely technical or product solutions would be doing your customers a disservice because there are opportunities to make things a lot better through more innovation in operations to kickstart things until you have the more elegant, scalable technical or product solution.

In the early days of the project, I would write copy, I would upload ads onto Facebook and Google and try my best to optimize our online marketing spend. I think I did all of those things not because I wanted to be scrappy necessarily, but I do think that as a founder, it's really important to understand the work that needs to be done in order to see what excellence looks like. For us, we came from an ecosystem where the availability of talent was really low. A lot of times I felt like I needed to understand what this job entails and what exactly it does. Seeing how bad I am at it allowed me to understand what good looked like. I held a lot of those roles just because I wanted to understand every part of the business as best as I could in order to then find somebody who could do it orders of magnitude better than myself. I would say that is true for all of these roles except for being a driver. Being a driver, I wasn't trying to understand what excellence looks like. I was trying to understand the driver experience so that we could build products that were catered towards what those needs were. When we first launched our car ride-hailing services, I think I was the first actual driver on the app. Every now and then I would be a driver. I remember in the early days when I picked up a customer, she put in her destination as a mall. I went to her house, and she came out with this giant bag. I had to hop out of the car, take this giant bag, put it in my trunk, and off we went. When we arrived at the mall, I lugged this giant bag out of the trunk and helped this lady do her laundry. I got very little money out of that experience. It wasn't instant, but this eventually led to a lot of the support I gave to our driver teams when they were pushing for more waiting fees and multiple stops to make sure that this extra work was compensated. It was something that I experienced personally and was definitely excited about as a set of product features and principles when it came to building the product.

I am basically a failed finance professional. I didn't really know what I wanted to do in my life. In 2005, when I entered college, the hot sexy thing to do was finance, and I guess that was what I wanted to do. I studied finance, and then the crash of 2008 happened. I graduated in 2009, so it was probably the worst time to be a finance professional. I went through a really challenging time. I was not very good. My bosses thought I was underperforming, and I didn't feel like I was performing. I left that field that I thought I built my entire future dreams and identity around. After that, I decided to take a bet on Indonesian technology. This was around 2010, 2011, and I was starting to see the development of the current technology giants in the US at the time. I thought that the same thing could happen in Indonesia, where the level of talent, funding, product-market fit, and the number of people who transacted on the internet was still super low. People still saw the internet as a place for chat apps and social media. The level of belief that people had in the space at that time was pretty low. People didn't think that real businesses and real valuable products could be built, especially locally. Taking that bet really panned out for us to be really early in this space, which today has become very vibrant. The tech scene in Southeast Asia has become one of the most exciting in the world in a very short time. I think it's something that people in technology in the US can relate to, those who've been working in the space for 20 or 30 years. Being able to see those early days for me was really valuable and an experience that I definitely cherished.

Indonesia, just because of its scale, but I think overall Southeast Asia was such a valuable market and it was interesting for global companies to want to win it. We competed with global and regional companies, but the local talent and funding ecosystems were really underdeveloped. The challenge of having to compete with the best in the world for customers in the market while also not having all the resources available within the market to build products and companies that can compete was one of the most challenging parts of building. Probably in markets that are atypical or outside of Silicon Valley, you need to be scrappy in the beginning. We were a lot more ops-heavy than tech-heavy. Doing the things that don't scale through other means is definitely something that is absolutely necessary if you're building outside of these main technology hubs. Another thing I would say is you need to get good at remote work really early. Today, that's become a lot more prevalent as more people have experience with remote work. For us, we built an engineering center in Bangalore in 2015, and this allowed us to compete a lot better with the talent concentration outside of headquarters. I do believe that companies who want to compete against world-class competitors outside of these technology centers like Silicon Valley need to become good at remote work really fast because getting that talent probably means having offices or individuals who are outside of your home market or your headquarters. Probably the final tip here is don't just copy. Gojek was not an Uber clone, even though that was how some investors or analysts talked about us. We were built around the insight that a human being on a motorcycle could do a lot of things. We built a product around that idea, and hence we ended up with a super app even before super apps were really a thing. That branding point we talked about earlier, giving our drivers jackets and helmets so people could see them zip around town, actually doesn't make sense if you're a car ride-hailing service because it's not very easy to brand a car and the drivers are inside the car. All of our competitors at the time, when they first entered the motorcycle ride-hailing space, didn't brand their drivers because they came from a car-centric view. Again, don't just copy.

Specifically on Indonesia, most people don't know that Indonesia is the fourth largest country in the world and that Southeast Asia holds almost 10% of the world's population. Beyond the macro picture, we've experienced a pretty unique level of pace of adoption for products with great product-market fit. Products with great product-market fit can grow incredibly fast. We more than doubled every month for more than a year. That is insane. I've never heard of that. Our investors at the time, Sequoia, told us that this was the craziest growth story that they've ever heard of in the world. I wouldn't say it was because of our brilliance. It was a combination of how in Indonesia and Southeast Asia there are a lot of things that are obviously broken and could be improved with better technology and better products, but also we have a very young population who are excited to try new things. That combination is really powerful and is something that is unique to developing regions like this one. One company that's really interesting, just to give a flavor of the type of off-the-wall product or company being built in this part of the world, is a company called eFishery. What they do is they basically create a closed-loop ecosystem for fish farmers. Currently, I think they're only operational in Indonesia or recently expanding beyond Indonesia. They help farmers feed their fish through this IoT smart device that helps measure the amount of fish feed that needs to go into the pond. They're doing something like a quarter billion dollars in revenue, and it's profitable. It's basically a fish farmer closed-loop ecosystem. It's pretty wild that something like this exists, but it does speak to what I said earlier about the hunger that the population has for better solutions. If you can find these better solutions, you can really build companies of very meaningful scale very quickly.

I'm still kind of on this journey honestly of how you make me a way better person actually. Now that I've stepped away, I am not as bored or as aimless as people would expect after having such an all-consuming thing be part of my life experience. What's next honestly, Lenny, I don't know. I don't have a plan at this stage. I do some angel investing on the side, work with other founders to share some of these experiences that I had. I think I will start another company at some point. That's my default. But right now, I'm just kind of taking things easy and trying to figure out what another problem I could be obsessed about.

I think we've covered a lot today. I just wanted to thank you for the time.

Yes, let's go.

'What You Do Is Who You Are' by Ben Horowitz. I think that was the second most recommended book. We talked a lot about branding today, so there's this book called 'How Brands Grow' by Byron Sharp. I don't agree necessarily with everything in it, but I do think it's a great primer on how to think about branding and marketing.

Favorite recent movie: 'The Menu'. Favorite recent TV show: a Netflix show called 'Cyberpunk: Edgerunners'.

Oh yeah, it's super cool. Check it out.

Tell me about a subject or activity you've been obsessed with for a long time.

I want somebody to be really passionate about an obscure thing, even better. I think it shows people's capability to be really passionate about something, to sell something, and to think about something in a very structured and detailed way.

Two products I've found absolutely delightful: one is the Arc browser. I know it's gaining a lot of traction out there, but I'm a very chronic tab hoarder. My Chrome tabs are just all over the place. I love that they've figured out the best approach to tab management. There's just a ton of little features that make it delightful.