Seri pivot pandemi ini merupakan tulisan bagaimana bisnis bertahan menghadapi COVID-19. Post ini adalah hasil brainstorming dengan beberapa teman dari berbagai macam industri. Semua seri Pivot Pandemi bisa dibaca di link berikut.
Setelah sebelumnya membahas bisnis tradisional, Pivot Pandemi kembali membahas tech startup. Di edisi ketiga, gue ngobrol bareng teman lama dari kuliah, VP startup SaaS untuk manajemen supply chain. For the rest of the article, kita sebut startup ini sebagai Startup 123. Lets go!
Ive been managing a business development (BD) team for 3 years now. During this time, i see that BD role can meant different things. In some companies, the role skews more to sales, in other it might be more to product development. There also stark difference from BD in big corporate versus in startup. The first one might be more to high-level strategic partnership, while the latter more hands-on with business operations and expansions.
In Amartha, i can summarize my work as developing new business by pushing ideas into rollout. In this post, ill share several of my learnings developing new product / business, starting from brainstorming scribbles in notepad, work the ideas into concept slides, running a pilot and finally decide to expand it in multiple areas.
In the past decade, the insurance industry in Indonesia has been growing from IDR 125 trillion in 2010 up to nearly IDR 500 trillion this year. Despite this growth, penetration in population is still very small. In terms of economic contribution,, insurance spending only account for 2.3% of GDP while the number of private insurance policy holders also less than 3% of the population. In 2014, national health insurance (BPJS Kesehatan) was established by SBY Administration. Current coverage for this is estimated around 75% of population or ~180 million people. With the rate of growth and low penetration of private policy holders, Insurance market in Indonesia is a massive untapped opportunities.
Current market value are still majority contributed from Life Insurance. Based on Insurance Association data, more than 80% of gross written premium are from Life Insurance product such as Term-life, Whole-life and Investment Bundled Product (Unitlink). Unit Link is the most sold product of all life insurance, with contribution of more than half of premium sold in 2014. For general insurance, market size are driven by car and motorcycle insurance.
In terms of distribution and sales channel, majority of insurance sales are still driven by agents and banc assurance. Agent solve the needs of consultation and product knowledge due to the complexity of insurance products. While for banc assurance, insurance companies are helped by bank agents and customer services to advocate their product to banks existing customer base.
Recent surge in insurtech makes many people buy insurance online. However they mostly buy simple, one-time product such as flight, delivery or gadget insurance which have simple straightforward policy. Price is usually very cheap as well. Online channel drive high-frequency, low-value transactions. Hence in terms of total market gross premium value, it will still likely contributed by life-insurance sold by agents.
Insurance principal can be divided into two big categories : Life insurance and general insurance. Both have distinct market dynamics. Life insurance are quite concentrated with Prudential as clear market leader. Most of the big players in Life Insurance also foreign entities such as Allianz and Manulife. General insurance on the other hand is quite fragmented with Sinarmas, Jasindo and Astra closely competing to be top 3. Sinarmas and Astra premiums are driven by auto and property insurance while Jasindo and other state-owned insurance (Tugu, Askrindo) are contributed by industry insurance supporting other SOE (e.g Marine, Oil & Gas insurance).
With low market penetration and sales mainly driven by offline channel, Insurance market are just prone to be disrupted by digital players. From big insurance principal who goes digital up to rising startup who try to break through using innovative products.
In the past years, there is a rising trends of startups and companies which aim to digitize traditional retail merchants a.k.a Warung.Kudo pioneered this back in 2014. They then acquired by Grab in 2017, and recently rebranded into GrabKios. Next is E-commerce unicorn Bukalapak who dove in in this space big time by launching Mitra Bukalapak in 2017. Mitra Bukalapak is estimated to have 3 millions registered user which makes them market leader in digital warung. Tokopedia followed on by launching Mitra Tokopedia in 2018. There are also smaller players such as East Venture backed, Warung Pintar, KiosOn and Payfazz.
This warung trend apparently not only happening in Indonesia. Amazon last week just announced their move to partner with thousands of kirana store, Indian version of warung, to be used as delivery hub. Jeff Bezos himself came down to India to launch this. There is also Mastercard which enabling multiple initiatives to digitize mom-pop store in Latin America.
In this article, i dive into the reason why the trend is happening and which direction will warung digital going to go in the near future. Lets go!.
Quick recap on attending what probably the biggest tech and startup conference in South East Asia. I only attend day 2 hence this might be short. Hopefully still useful.
Xendit on Running Experimentation and Hiring Practices
Moses Lo and Tessa Wijaya from Xendit shares their experience scaling startup beyond series A. Xendit itself is a payment gateway, enabling apps or website to do everything related to payments.
First interesting insight from them is their dead simple guidelines on running experimentation : 3 months, 7% growth per week. Any experimental product which consistently passing those bar will get invested more. Below the bar, project will be scraped. Nothing happened to the team, they will be assigned for something else. Any point of time, Xendit will have 3 or 4 “business as usual + 1” experiments , new product which adjacent to their current offering.
This is a good innovation practice by nurturing exploration while still budget conscious. Moses learned this from his time in Y Combinator.
Second one is their hiring practice to do trial day. Candidates applying for Xendit will have to spend one day to work with the team as part of their hiring assessment. By doing this both the team and candidates can sense whether they can fit together or not. Since interview is a bad predictor of performance, Trial Day help Xendit avoids bad hiring by test the candidates on real working condition.
OVO on Solving Problems Using Fintech
On main stage, Jason Thompson from OVO delivered quo vadis speech on where the fintech is going. It was the best presentation ive seen on Day 2. Jason gave insightful and humble presentation on OVO’s journey so far.
Three key points from Jason’s speech.
First, OVO achieved 10x growth due to strategic partnership with Grab and Tokopedia. Grab Bike & Grab Car contribute high frequency of transactions while Tokopedia drives the value of the transactions. On top of that, OVO itself boost ubiquity and reason to use by having presence in almost every shopping mall in Indonesia.
Second, answering on the skepticism on cash-back, the growth of OVO has been healthy. This is due to the growth in both users and value, is followed by growth in stored value fund. Seems like users are more comfortable to left their money in OVO balance.
Third, OVO aimed to expand beyond wallet into other financial services. Investment will be their first expansion, powered by Bareksa acquisition. Jason spent quite a time emphasizing how big investment opportunities in Indonesia while investment in adoption is still very low compared to the region.
Lending and insurance will be next. OVO transaction data will be leveraged to make their financial services attractive for each users ( e.g credit scoring for cheaper lending and insurance).
And yes, Jason also confirm OVO status as the fifth unicorn in the country.
Tokopedia on Their Next 10 Years
William Tanuwijaya interview was probably the most sought-out session in Day 2 of the conference. Main stage area was jam-packed with people, i could barely saw the stage.
Guided by Willis Wee of Techinasia himself, William talk about a decade of Tokopedia journey, key decisions thats important for growth of Tokped and also his personal growth as a founder CEO.
Three important takeaways for me.
First, asked about early decisions that has been pivotal for Tokped foundation, Willliam answer was the decision to not blindly copy global ecommerce promotion day (e.g 11.11 in China, Black Friday). Relying on big-bang promotion day to boost sales is not only unsustainable, but also many of these promotion day is out of context for Indonesian hence it doesnt bring good result. Tokopedia choose to pick promotion day on the last week before lebaran. Smart move considering most office workers already got their THR bonuses during this time. This is also a subtle jab for Bukalapak which make promotion day every single month (1.1, 2.2 and so on).
Second is about their Super Ecosystem strategy. Tokped is exploring many new things such as financial services, selling tickets and bill payment. However, William emphasized that Tokopedia will prefer collaborate with aligned partners rather than building their own. Different path from what Amazon is going where they start to develop many in-house verticals. Hence Tokped platform will be geared to be more open and William invites startups and other institutions to develop the ecosystem together.
Last and the most interesting one is his vision on Tokped next 10 years. Tokopedia next decade vision is to enable smalll business owners in rural Indonesia to have the same capabilities as national (or international) retailer. William cited that he wants store owner in Aceh can possibly make their business big without having to move to Jakarta to get better access to market. This could contribute into decentralization of economy of Indonesia and also reverse urbanization.
To realize this vision, Tokopedia will make most of their e-commerce capabilities as a services for this small business. For example, if a seller need logistic or warehousing capabilities to do overnight delivery, Tokopedia could provide it. This also goes for marketing, payment and other capabilities.
In their last impact report, Tokopedia claimed to contribute 1% of Indonesian economy. William aim to push this into 5% in the next decade.
This is series of study case analysis that i like to write from time to time. Check out my first post on Traveloka.
This week in fintech, state-owned e-wallet provider T-CASH announced that they will transform into LinkAja. Not only the name change, the new T-Cash will be backed not only by Telkom group but also six other state-owned enterprise (SOEs) : Bank Mandiri, BRI, BNI, BTN, Jiwasraya and Pertamina. The change will be implemented late February and current T-Cash users will only need to update their app once LinkAja launched.
I cant believe how fast 2018 have been going for me. I went lot of new challenges, good thing most of them turn out quite well. In 2018, I’ve ventured into new areas at work, managed bigger team and took terrifying steps into the big financial commitment (i bought a house on mortgage). Been hell-a-lot of personal developments which was exciting and scary at the same time.
Speaking of personal developments, ill share top three great books that I’ve read last year with interesting points from each. These books helped me find perspective and calmed me down during roller coaster ride. I hope this list give you ideas on what to read to start your 2019 right.
In Indonesia, access to basic financial service such as saving and lending is a priviledge. The country with more than 250 million people has only less than 40 million recorded bank account according to World Bank. The country stands at the top of Asia Pacific in terms of unbanked population with three quarter of total population are still outside of conventional financial system.
At glance, these statistics looks bleak. But for entrepreneurs and startups, it means massive opportunity fintech. Indonesia is currently a fintech hotbed with more than 150 startups and record-high investment of USD 57 million in 42 deals by last year alone. Half of that deals went to lending and payment startups.
I work as a product and business development guy in a peer-to-peer lending startup. Our startup focus is to provide microlending to millions of unbanked and underbanked women entrepreneurs in Indonesia. In this post, i will share three challenges that i have to deal on a daily basis. The challenges will slightly skewed to lending business model but i try to make it relevant for other fintech as well.