3. Findings and Recommendations
3.10. Outlook, Risks and Opportunities
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Nadiem is very charismatic and down to earth, driven to solve fundamental problems and needs of people. He is applying the best practices of entrepreneurial leadership that is suitable for his cause. He is focusing on the solution, but also ready to adjust his vision according to newest circumstances and developments (pivot). He is constantly innovating and keeping up with recent technology. He understands how to take advantage of the economics of multi-sided platforms and how to grow.
His way of leadership and attitude is directly transferred to his people. They are trained to take entrepreneurial ownership and to experiment, fail and learn in an iterative way. They apply a flat hierarchy, high autonomy leadership model which let them grow so rapidly, because less bureaucratic obstacles need to be climb. The escalation and approval chain is much shorter.
“The bigger we grow, the looser our control is. We allow different teams and leaders to run their teams their own way. The team leaders are free to develop their own management approach, so long as they can achieve their targets.” Nadiem Makarim, CEO, Gojek (Life at Gojek, 2017)
3.10. Outlook, Risks and Opportunities
After above discussion about Gojek’s success factors and analysis of their business plan, what follows are an attempt of recommendations for future opportunities to ensure Gojek’s growth and success, as well as looking at the risks.
3.10.1. The Risks of Internationalization
In May 2018 Gojek announced to expand to other regions in Southeast Asia. It is imperative to avoid the mistakes that other digital platforms had made when entering Indonesia. What works in Indonesia might not work in other places. This is one mistake that Uber made when entering
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Indonesia. Uber implemented something that worked in United States into Indonesia that resulted in poor response from the public. When going abroad, Gojek should continue with one important practice: localization. As every region has different problems, Gojek should not replicate the same services provided in Indonesia.
One approach that they can take is to collaborate with local companies. When entering this partnership, Gojek can allow these local companies to identify the needs and problems at the present market and then allow them to create the solutions to it. In addition, the local companies that choose to enter a partnership should share a common vision and culture. The role that Gojek should take in this scenario is an advisor, giving past experiences in operations and developments to allow them to have a better understanding of Gojek’s spirit.
Foodpanda’s experience in Indonesia is also something that Gojek can benefit from. Although Foodpanda hired local Indonesians to run its business, the corporate structured model likely slowed down the flow of knowledge and communication between Indonesia team leaders and Germany’s headquarters. Therefore, Gojek should avoid this mistake by giving enough power to the business unit to make decisions.
As of December 2019, Gojek has started operating in Vietnam, India, Singapore, and Thailand, while, so far, they have failed to open a subsidiary in the Philippines, due to strict foreign ownership regulations. Motorcycles are heavily used in Thailand and Vietnam, where Gojek’s business model seem to be more successful, compared to Singapore, where they only launched Go-Car, due to a different infrastructural environment. Also food delivery becomes more difficult, which shows, that Gojek cannot apply their business model directly, but need to adapt to the local circumstances, e.g. using e-bikes in Singapore.
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3.10.2. Adapt Features of Successful Platforms
Learning from successful platform giants might still be beneficial for Gojek. For example, open up to third-party contributors. Similar to platforms like WeChat, Line, Android and iOS, Gojek can become an open platform and let third-parties come up with new business ideas and adapt the user interface and business logic via API calls depending on to the business case.
On the other hand, it shall not be too open, as experience shows. Gojek still should be involved to make sure third-party developers adhere to their UI standards. The end-user shall be able to rely on certain quality standards and behavior of the UI for a consistent and pleasant user experience. Otherwise, the brand image might suffer.
Letting third-parties contribute might increase the stickiness and locked-in factor. The more useful services are on the platform, the more difficult it will become to switch to other applications of competitors, due to rewards and ease of payment via Go-Pay.
3.10.3. Horizontal Expansion through the Informal Sector
Besides global expansions, there are still opportunities available in Gojek’s home country. They have the ability to add profitable services in its app without incurring high costs, as this is the nature of a digital platform. In Indonesia, there are still many suppliers in the informal service sector. One of the possibility for Gojek is to be able to iterate the same success that they had with the ojek sector on other informal service sector.
The Go-Life sector can be expanded into all directions with the help of third-party contributors as mentioned in chapter 3.10.2. Any business case that helps individuals to save time, and connect them to other skilled people, who will create value for the requestor, will work. Go-Party, as am example, if in need of creative people who will entertain guests during the next
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party. Go-Talent, if one seeks educational services from the skilled community who is able to teach at the requestors own home (of course using Go-Ride to reach there and using Go-Pay for compensation).
In Gojek’s home country, there is still a lot of opportunity to grow in the fintech sector, as there are still the majority of Indonesians who do not use the banking system. Gojek should continue to focus on attracting more customers into this area by giving price cuts and discounts. At the same time, marketing efforts should educate the people of the convenience of using Go-Pay.
3.10.4. Go Green
As pointed out in chapter 3.2.3, Gojek has huge potential expanding to greener alternatives, like electric scooters, motorcycles and bicycles. Recently, most of the world is discussing the effects of climate change (Greta-Effect) and politicians are putting it on top of their agendas.