Many Startups VS Successful Startups, Which One Is Better?
Switching into industry 4.0, Indonesia started to be flooded with startups. Indonesia itself has entered the top five for the country with the most startups in the world. That’s why the competition is getting tougher with the increasing number of startups in Indonesia.
It also raises a dilemma between the need for other new startups or successful startups in the country. What is the most important one: many startups in all sectors or a few successful startups in each industry? CEO Cyberwhale Solutions shared his thought related to this case.
Aldi Ardilo Alijoyo said that the increasing number of startups in Indonesia is a good thing. “So the quantity of Indonesian startups is helpful. Because developing a startup is not free, so there is a contribution to Indonesia,” he said during the ERM Academy Risk Beyond 2019 recently.
According to him, startups cannot be separated from existing natural laws. Among the many startups in Indonesia, some of them will be selected by themselves. “It is like when we were thrown into the water, we would either drowning or swimming. We try to survive,” he added.
Not All Startups in Indonesia Are Successful
The Vice-Chancellor for Academic Affairs at the Parahyangan Catholic University, Tri Basuki Joewono, revealed similar things. “In my opinion, the more people want it, the better. This is because those who want it are not necessarily all successful,” he said during the same occasion.
Aldi added that the large startup growth without being accompanied by the growth of markets was also dangerous. However, he said that currently Indonesia was still in a safe growth stage or it was even considered in a very good phase.
“For example, if there are 1 billion people in Indonesia and all of them create startups, t would be dangerous too. But until this stage, it’s still very good,” he explained. Cyberwhale itself is a startup engaged in the field of product digitalization services.
On the same occasion, Aldi also emphasized that the burning money strategy is not always dangerous because there is a calculation behind it. He also said that every startup has the funding capacity to ‘burn’ their money through exclusive promos and discounts.
“Let’s say one brand is considered to have burnt USD 100 billion of money, it is just tolerance. Its capacity could be beyond it,” Aldi said. Thus, people don’t need to feel sorry about it because the amount is typically only a fraction of tolerance that is usually 10 percent.
Burning Money Strategy Done by Startups Is Not Always Dangerous
Aldi continued that the capacity in question is the number of money startups have when making a startup. “For example, shareholders invested in some money, let’s say 100 million rupiahs. It means that the capacity to burn money is only 10 million rupiahs” he said.
According to him, the amount of money burned is usually calculated first based on the risk. “So, how much risk capacity is calculated first. If I have a capacity of USD 100 thousand burned, but I tolerate up to USD 10 thousand only,” he added.
This was Aldi’s thought related to the popular ‘burning money’ strategy that is considered dangerous by some economic observers in Indonesia. The case of WeWork becomes the reflection of many Indonesian economic observers to say that burning money is not always a good strategy for startups.
In Indonesia itself, many startups have done this kind of strategy by offering massive promos in their platform. Some startups including Dana, OVO, and also Gopay have used this strategy to gain the number of users. Yet, one of the OVO investors found this strategy uninteresting.
ERM Academy Risk Beyond 2019 itself is an event that was recently held in Bali. The theme of this year’s event is The Next Generations, Embracing GRC in Industry 4.0. This event discussed how to deal with challenges in the upcoming industry 4.0 eras.