GO-JEK IN INDONESIA: SEIZING

DIGITAL OPPORTUNITIES AT THE

BOTTOM OF THE PYRAMID
(MM5012 – Business Strategy and
Enterprise Modelling)
SYNDICATE 3 – EMBA 60
M. Hadi Pradana 29118532
Ihsan Atmana 29118520
Natasha Elberta 29118382
Devy Dzikyan F. 29118420
Company’s Profile
Go-Jek, a unicorn startup that
revolutionised the informal transport
and logistics business in the booming
01 cities of Indonesia, was one of the
fastest growing and most visible tech
startups in Asia.
As of June 30, 2016, Go-Jek’s on-demand
mobile platform had connected millions
04 of customers to more than 200,000 ojeks
and taxi driver partners, 35,000 food
merchants and 3,000 service providers.

Go-Jek was conceived by

02 founder Nadiem Makarim. 05 Go-Jek’s services could be found in more
than 14 cities in the archipelago.

Through its mobile app linking

motorcycle taxis, known as Backed by heavyweight investors
ojeks, with consumers, Go-Jek
03 offered on-demand transport, 06 Sequoia Capital, KKR, and NSI
Ventures, Go-Jek was valued at USD1.3
delivery, shopping, and a host of
other personal services. billion in 2016.

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Problems
Internally, Go-Jek recognised the need to shift gears as it matured through rapid growth
over the last few years. Amidst the demanding expectations from its funders, how should
Go-Jek bet on its next phase of hyper-growth?

1 2
Should Go-Jek expand Alternatively, Go-Jek could
Go-Life and become the expand its business to the other
platform to offer on- cities across Indonesia and bring
demand services for its battle for legitimacy beyond
everything? Offering Jakarta. Go-Jek was already in 14
more complex, on- cities – Jakarta, Bandung,
demand tasks meant Surabaya, Bali, Makassar,
that more systematic Medan, Palembang, Semarang,
efforts would be needed Yogyakarta, Balikpapan, Malang,
to standardise service Solo, Manado, and Samarinda.
offerings and tighten up When would the underlying
service levels to sustain economics of Go-Jek start to
customer trust. make less business sense (for
3 instance, in cities with fewer
traffic congestion issues)?
Or, should Go-Jek expand its geographical focus beyond Indonesia and follow the example of its
competitor GrabBike to regionalise its business model to emerging countries with thriving informal
service sectors? After all, Go-Jek had been approached with opportunities to offer its services in
Southeast Asian, African and Indian cities, which had enormous economic growth potential for a tech
3
business like Go-Jek.
 Timeline of History (1)
1 JANUARY 2015 1 MARCH 2015 1 APRIL 2015 1 AUGUST 2015

Go-Jek transformed its call centre

operation (started in Oct 2010)
and introduced a mobile app that
offered transportation, courier and Expanded to Bali with 300
shopping services in Jakarta and riders. Fleet of riders in Launched food order service Increased fleet to 30,000
satellites cites, supported by a Jakarta and satellite cities (GO-FOOD) and expanded to riders and expanded to
fleet of 800 riders. It had also been expanded to 2,200. Bandung (West Java). Makassar (South Sulawesi).
partenring with corporations
(about 90 of them) as a call centre
and was morphing into mobile-
first company.

1 SEPTEMBER 2015 1 OCTOBER 2015 1 FEBRUARY 2016 1 APRIL 2016

Announced the acquistion of C43

Lainched on-demand Engineering and Codelgnition, two
Launched auxillary Go-Jek
shopping assistant (GO- engineering startups based in India.
services: massage, make-up,
MART) and opened Gojek Intoduced taxi hailing service (GP-
and cleaning services (GO-
Texh Valley (GTV) in Established a product development CAR) similar to Uber.
MASSAGE, GO-GLAM, and
Yogyakarta as the centre for centre in Bangalore, India. Fleet
GO-CLEAN).
Go-Jek app development. strength grew to 200,000 riders.

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Timeline of History (2)
1 MAY 2016
Introduced an e-payment service
(GO-PAY) in collaboration with BCA
Bank (largest private bank in
Indonesia). Expanded to Malang,
Solo, and Samarinda (Kalimantan).
Announced colaboration with
BlueBird, a major taxi company in
Indonesia.
1 NOVEMBER 2016
Introduced top-up service for
pre-paid card phone (GO-
PULSA).
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1 JULY 2016 1 OCTOBER 2016
Intoduce a car maintenance
service (GO-AUTO), providing Introduced drug pick-up
mechanics on demand. service (GO-MED).
1 DECEMBER 2016 1 FEBRUARY 2017
Announced new collaboration
Closed Go-Jek Tech Valley
with Bluebird that allowed
(GTV) in Yogyakarta and
GO-CAR users to book
moved programmers to
BlueBird Taxis using the Go-
Jakarta.
Jek App.
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Risk Matrix (1)
Intended Market: x-axis

Opt.
Opt. Opt. Opt.
11 2 3

4 2 5
4 4 5
4 2 3

1 2 3
1 3 5
1 4 3

15 17 24

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Risk Matrix (2)
Product/Technology: y-axis
Opt. Opt. Opt.
1 2 3

2 2 1
2 3 1
1 3 1
2 2 1

3 3 3
5 3 3
3 3 3
18 19 13

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Risk Matrix (3)

Opt. 2

Opt. 1 Opt. 3

To balance its innovation portfolio, a company needs a clear picture of how its projects fall on the
spectrum of risk. The risk matrix employs a unique scoring system and calibration of risk to help
estimate the probability of success or failure for each project based on how big a stretch it is for
the firm

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 The R-W-W Screen (1)
Is there a need of desire for the product? (1)
Can the customer buy it? (2)
Is the market real? (I)
Is the size of the potential market adequate? (3)
Is it real? (A) Will the customer buy the product? (4)
Is there a clear concept? (5)
Is the product real? (II) Can the product be made? (6)
Will the final product satisfy the market? (7)
Does it have a competitive advantage? (8)
Can the product be competitive? (III) Can the advantage be sustained? (9)
How will competitors respond? (10)
Can we win? (B) Do we have superior resources? (11)
Do we have appropriate management? (12)
Can our company be competitive? (IV)
Can we understand and respond to the market?
(13)
Will the product be profitable at an acceptable Are forecasted returns greater than costs? (14)
risk? (V) Are the risks acceptable? (15)
Is it worth
doing?(C) Does the product fit our overall growth strategy?
Does launching the product make strategic sense? (16)
(VI)
Will top management support it? (17)

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 The R-W-W Screen
Option 1 Option 2 Option 3
A YES NO NO
I YES YES NO
1
2
YES
YES
YES
YES
NO
YES
(2)
From the R-W-W, we can see that Option 1 is the only
3 YES YES YES
option to fit the criteria.
4 YES YES NO
Option 1 itself is: Go-Jek expand Go-Life and become the
II YES NO NO
platform to offer on-demand services for everything.
5 YES YES YES Offering more complex, on-demand tasks meant that more
6 YES YES YES systematic efforts would be needed to standardise service
7 YES NO NO offerings and tighten up service levels to sustain customer
B YES YES NO trust.
I YES YES YES
8 YES YES NO
Go-Life itself concludes:
9 YES YES YES
10 YES YES NO
II YES YES NO
11 YES YES NO
12 YES YES YES
13 YES YES YES
C YES NO NO
I YES NO NO
14 YES NO NO
15 YES NO NO
II YES YES NO
16 YES YES NO
17 YES YES YES

Conclusion YES NO NO

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 The R-W-W Screen – OPTION 1
01 Is It Real? (3)
IS THE MARKET REAL?

Is there a need or desire for the product? YES

Small traders, farmers, fishermen, and all those related to small economies can be improved through creative solutions
coming from such applications. All these creative applications will help the people from the bottom of the pyramid to
increase their prosperity level.
President Jokowi had asked Nadiem to make Go-Jek a role model in driving technological innovation to create new
business opportunities that can benefit individuals and businesses at the bottom of the pyramid.
Besides, President Jokowi said that Go-Jek exists because people need its services.

Can the customer buy it? YES

With the push of a button, customers could launch the Go-Jek mobile app and select their desired service.

Is the size of the potential market adequate? YES

There are numerous small shops in villages across Indonesia which are not yet connected through the application that
creative industry can build.
Indonesia had the fourth largest mobile cellular subscriptions in the world, with 325 million mobile connections.
Indonesia also had 88.1 million active Internet users, and 36% of the population carried smartphones.

Will the customer buy the product? YES

The products are made based on customer’s needs.

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 The R-W-W Screen – OPTION 1
01 Is It Real? (4)
IS THE PRODUCT REAL?

Is there a clear concept? YES

For the launch of every new on-demand service, Go-Jek would work on both the supply and demand issues. On the supply
side, they sought to understand the requirements and the definition of these personal services (e.g., in deriving the
service categorisation and pricing catalogue) and factoring these requirements into the user interface design in apps
development (e.g., gender preference parameter for Go-Massage). Working closely with the business and technology
teams, the progress of service development was systematically tracked and managed using agile methodology.

Can the product be made? YES

Go-Jek has a key capability on the design and architecture of its backend systems and technological infrastructure.

Will the final product satisfy the market? YES

The products are based on customer’s needs and the company always monitors clients’ ratings and feedback to ensure
quality service.

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 The R-W-W Screen – OPTION 1
02 Can We Win? (5)
CAN THE PRODUCT BE COMPETITIVE?

Does it have a competitive advantage? YES

The visibility of the societal impact of Go-Jek had made it a champion of technology for the nation.
Go-Jek also announced its collaboration with Tokopedia, one of Indonesia’s biggest online marketplaces, to provide
package delivery service.
Go-Jek shows the world that social impact and scalable tech businesses are compatible and inseparable. Because it’s one
of the few business models that not only optimises a particular market, it actually grows the market itself. It’s one of the
only business models that concurrently grow demand and supply at the same time

Can the advantage be sustained? YES

Go-Jek’s key funders are optimistic that with a rapidly expanding middle class, increasing urban density and a young
demographic that is internet savvy.

How will competitors respond? YES

There is possibility that the competitors will follow what Go-Jek does such as Grab launched GrabBike after they saw Go-
Jek success and there will be incumbents who do not join Go-Jek saw their incomes significantly reduced and then protest
to Go-Jek and Indonesian government. But, Go-Jek has ability to handle these based on its experience.

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 The R-W-W Screen – OPTION 1
02 Can We Win? (6)
CAN OUR COMPANY BE COMPETITIVE?

Do we have superior resources? YES

The capital injection would help Go-Jek become the “largest on-demand application of choice for all Indonesians.”.
The availability of this vast pool of labour in the informal economy “With a rapidly expanding middle class, increasing
urban density and a young demographic that is internet savvy, Go-Jek is well positioned to become the ‘go-to’ platform for
high frequency daily services including transport, food, logistics and payment,”.
Go-Life was jointly headed by Dayu Dara Permata and Windy Natriavi (both ex-McKinsey colleagues of Nadiem).
Go-Jek acquired two Indian startups.

Do we have appropriate management? YES

Nadiem has prior experience in tech start-ups and gathered a highly competent managers with both overseas experience
and local knowledge and tasked them with developing core capabilities and driving Go-Jek’s growth trajectory.
Go-Jek called their employees partner to emphasise equality.
The partner go through the basic training.

Can we understand and respond to the market? YES

Go-Jek become an application that responds and serves (goods and services) on demand. Whatever that’s needed in (the)
nick of time.
Go-Jek filled a gap in the market created by the poor infrastructure in Indonesia by leveraging on its data advantage. The
data are analysed both from the “inside-out” and the “outside-in” perspectives.

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 The R-W-W Screen – OPTION 1
03 Is It Worth Doing? (7)
WILL THE PRODUCT BE PROFITABLE AT AN ACCEPTABLE RISK?

Are forecasted returns greater than costs? YES

Backed by heavyweight investors Sequoia Capital, KKR, and NSI Ventures, Go-Jek was valued at USD1.3 billion in 2016.
Go-Jek has huge number of potential markets because Indonesia had the fourth largest mobile cellular subscriptions in
the world, with 325 million mobile connections. Indonesia also had 88.1 million active Internet users, and 36% of the
population carried smartphones.
Go-Jek’s monthly orders grew by over 98 times from March to October 2015. According to a Go-Jek representative, “there
were over 20 million bookings on our platform in June 2016, meaning that we are processing roughly eight bookings per
second just last month.”

Are the risks acceptable? YES

Go-Jek was a huge success among the grassroots economy so that was helpful for Go-Jek when Go-Jek launched the next
services. So, they can overcome money crisis.
Go-Jek always does continuous improvements.
Go-Jek has capability to face challenges. As example, in facing challenges with individual service providers in the informal
sector, Go-Jek had to interact at the individual level with average Indonesians.
Although many incumbents that reject Go-Jek, Indonesian Government keeps supporting Gojek. “As long as the services
are needed by people, the regulation should support these services.”, said Joko Widodo.

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 The R-W-W Screen – OPTION 1
03 Is It Worth Doing? (8)
DOES LAUNCHING THE PRODUCT MAKE STRATEGIC SENSE?

Does the product fit our overall growth strategy? YES

The product are made based on its tagline “An Ojek for Every Need”. So, Go-Jek continued to expand its offering of on-
demand services.
Nadiem’S vision for Go-Jek in the next five years is Go-Jek will become an application that responds and serves (goods and
services) on demand. Whatever that’s needed in (the) nick of time.

Will top management support it? YES

Go-Jek will provide people needs.

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CONCLUSION
1. The risk matrix and the R-W-W are tools to measure risk of innovation. In
this case, we measure risk of Go-Life expansion.

2. Risk matrix is used to locate Go-Jek’s innovation on the graph and how
different and risky is it from our current markets and products/technology.
In this case, the probability of failure in the 40-50% range.

3. RWW is useful to guidance Go-Jek while accessing possibility of the success

of the product. Because there is no questions turns out to get a definitive
negative answer, the option 1 can go ahead.

4. We consider that big innovation is profitable if they can manage risks.

Because of it, by using these tools, we suggest Go-Jek to expand its Go-Life
because based on RWW, there is a possibility of the success of the product.
But, Go-Jek have to manage their risk because the probability of failure is
in the 40-50% range to achieve the success.
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THANK YOU !

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