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Growing digital ventures in Indonesia and the region
Entrepreneurs with feasible start-up ideas are flourishing, yet only a small fraction have managed to become high-growth ventures.
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Up and down: The stock price of Indonesia’s decacorn PT GoTo Gojek Tokopedia Tbk (GOTO) is seen increasing on the monitor of Indonesia Stock Exchange (BEI) on April 12. Many startup companies across the world have been unable to perform, forcing them to lay off their employees en masse. (Antara/Handout/GoTo)
Recently, there has been a brouhaha regarding massive lay-offs among digital start-ups in the region and across the world.
TechinAsia reported that as of June no less than 3,000 employees working in the technology start-up sector have been laid off in China. In Southeast Asia, around 1,500 employees have lost their jobs -- mostly in Indonesia; while in India, the figure stands at around 1,000.
This has become a concern for many policymakers because technology has been touted as a sector that can provide employment in Asia, especially during the COVID-19 pandemic that has hit hardest the world’s economy.
In the wake of the mass layoffs, many skeptics have argued that the start-up bubble finally comes in.
What happened? Why are the darlings of the start-up world suddenly troubled with financial problems?
Beside the recent global economic turmoil and slowdown that affect many different sectors, the crux of the problem perhaps lies in the long-standing debates in the entrepreneurship academic and practitioner circles on whether start-ups need to engage in “growth-first” or “profit-first” strategy.
Many big-technology entrepreneurs, backed by strong funding, believe in the growth-first path. This perspective is behind the aggressive expansion of recent technology start-ups. Many of these ventures introduce new technologies and therefore, rapid rollout to the market is necessary.
