From Zero to Hero: Go-JEK

Back in 2011, Nadiem Makarim had numerous frustrations with the Indonesian economy. One of these problems was the lack of transportation options for the average individual. He initially theorized that this was due to the rich owning too many cars, and the poor not owning enough. After attending a class at Harvard, his alma mater, titled "businesses at the base of the pyramid," the professors argued that the most significant opportunities in emerging markets were not catering to the upper-class, but instead helping the poor. This sparked Makarim to look at creating a different impact on the Indonesian economy, one appealing to the mass public. Looking ahead to 2019, Makarim's passion project, titled "Go-JEK," which is a word that stemmed from ojek (Indonesian word for motorbikes), is standing with a 9.5 billion dollar valuation backed by Google, Tencent and Sequoia Capital. With 11 million downloads in 2019 and growing, Go-JEK has become a staple to an average Indonesian, following the likes of Instagram, Snapchat, and Facebook.

Go-JEK's origins and expansion

The rise of Go-JEK was supported by the increased influence of venture capitalists and private equity investors in Southeast Asia, with the intent to compete with Chinese and American economies. According to a report by Ernst and Young, venture capital investment increased from 4.1 billion in 2017 to 5.2 billion in 2018, with 55% of the CEO's of these new companies being under 30 (Davis). Go-JEK was labeled by VC's as an O2O space, or online-to-offline, leveraging technology to provide services for individuals sprawling across Indonesia's 18,000 islands. There were three centralized benefits Makarim focused on to differentiate themselves from other transportation applications such as Uber.

Makarim aimed to capture market demand by emphasizing on mass supply to reach market equilibrium. He argued demand was insignificant, and that if there were higher supply in the transport industry, consumers would gravitate towards it. Therefore, Makarim focused on building trust and loyalty with drivers by creating recruitment events in stadiums instead of marketing towards consumers. Within these populated areas, drivers started feeling more inclusive, as if they were an integral part of the movement. Furthermore, each driver was given branded attire to represent Go-JEK. The increased presence of drivers wearing green attire gained prominence in Indonesian subculture, labeling the drivers as "the green men". Secondly, Makarim chose to market the increased use of ojeks as vehicles that were efficient and agile, allowing consumers to beat traffic. Ojeks avoided stringent Indonesian transport regulations, such as the odd-even system. Go-JEK's early campaigns saw students and celebrities such as President Joko Widodo hail a Go-JEK to avoid traffic, as people could get to locations in half the time they spent in a car ride. Lastly, Makarim integrated multiple personal services into its app to increase Go-JEK's offering to the potential consumer. After doing initial market research, he realized that "a motorcycle just goes from point A to B, the difference is one can pick up a human, one can pick up a package, and the other can pick up food." Thus, Go-JEK was able to increase its services from just Go-JEK rides to Go-SEND (courier services), Go-FOOD (food delivery), Go-MART (grocery shopping), Go-CLEAN (housekeeping services) and Go-MASSAGE (spa treatments). These various services, along with Go-JEK’s growing influence and convenience became massive selling points towards the Indonesian population. Within 14 months of its launch in 2013, there were 100,000,000 transactions in all services (Davis).

3 Key Growth Strategies

1. Acquisitions With its numerous benefits, Go-JEK propelled itself as a regional player in Indonesia and began to employ strategies to expand its significance in the Indonesian economy. Co-CEO Kevin Aluwi then aimed to acquire other localized companies to build an arsenal filled with knowledge and resources to compete with more prominent companies. Acquisitions were Go-JEK's first growth strategy and worked relatively well as it provided smaller-scale companies to exit the market and allowed Go-JEK to gain access to new markets. Within the last two years, Go-JEK has acquired seven startups in the Southeast Asian region. When Go-JEK wanted to expand in the financial technology space, one of its most notable acquisitions was Kartuku, a leading offline payments processing company, and Midtrans, a community based-savings network with up to 3,000 online merchants. With these acquisitions, Go-JEK possessed close to $5 billion net worth of credit and debit card transactions, allowing them to build Go-PAY (Hasnan). This created a competitive advantage in the digital wallet headspace, allowing them to compete with Ovo, Indonesia's largest e-payment application. Another example is Go-JEK's acquisition of LOKET, a platform used for online ticketing and event management, as Go-JEK wanted to create a gateway for individuals to buy tickets to concerts. Thus, Makarim created Go-TIX. In turn, Makarim employed Edy Sulistyo, the co-founder of LOKET to be the head of entertainment in Go-JEK, allowing Go-JEK to tap into the 250 merchants and relationships with Indonesia's two largest cinema networks, CGV and Cinemax (Hasnan). Go-JEK’s most recent acquisition was with AirCTO, a company that accelerates talent recruitment to venture into human capital management. The increasing acquisitions created extensive hyper-growth within Go-JEK and allowed them to gain adequate due diligence before entering unknown markets.

2. Investing in IT 

Along with its acquisitions, Go-JEK's second growth strategy was pouring investment into heavy IT restructuring and testing. Go-JEK had initially started as a call center, with individuals calling a number and then getting a driver after being allocated one from an excel sheet compiled by the engineers, utilizing a "bidding system," similar to Uber and Lyft to matchmake driver and customer.

Due to the rise of Go-PAY and Go-TIX, Go-JEK was unable to handle rapid growth. Therefore, they decided to code an application to highlight their services. In response, they began spending a significant amount in user testing, specifically in niche coding languages to differentiate their user experience from other applications. In 2015, engineers first employed Golang, a program used to manage big data and organize systems efficiently. Initially, it worked, drawing in new drivers, but caused trouble in accountability (rewarding high- performing drivers against low-performing ones) and high concurrency (unfulfilled orders due to multiple order blasts). Accountability and concurrency proved to be significant liabilities, instead slowed down the process when a user was utilizing a service. After a company discussion, the rewrite came in 2016, in which Go-JEK decided to use Clojure, an application used by more foreign competitors to design better infrastructure. This was revolutionary in Indonesia, as no application had used Clojure because it was deemed complex. CTO Niranjan Paranjape proposed a vocational program to teach Clojure and simplify Go-JEK's formula, but only to a select few engineers. Thus, Go-JEK focused on training 12 engineers from 2016-2018 while acquiring various companies before mass expanding (Venkatesan). This was a part of Go-JEK's aggregate planning strategy, as they wanted to focus on a small pool of talent to effectively train. Because of their decision, they were able to code their data and expand from 4 to 18 services. As of October 2019, Go-JEK has a team of 210 engineers catered to its 261,000,000 users. (Venkatesan). Go-JEK’s focus on quality over quantity of talent during its two years of expansion has helped increase their sense of efficiency due to investment in IT education towards engineers.

3. Virality

The viral nature of Go-JEK's marketing campaigns has also increased its exposure and appeal towards consumers. Its third growth strategy allowed them to tap into the mind of an average user. #LifeWithoutLimits, one of Go-JEK's campaigns, featured a tagline of a limitless life, where you could do certain activities with Go-JEK such as "attending meetings without being late, buying items without queueing and surprises without waiting." The ad smartly highlights Go-JEK's 18 extensive features, showing its various services for an average user. Within its first month on google analytics, this advertisement prompted 1.7 million app downloads, signaling a positive reaction. Other ads included the #CariPahala (find rewards) campaign featuring the unity of Ramadhan, reaching 6,457 mentions on Twitter and over 17,000,000 views on YouTube. #AnakBangsaBisa was created to create a sense of nationalism of being Indonesian by promoting brands doing well abroad during Independence Day, reaching 235 online organic impressions online. Furthermore, Go-JEK delivered flower arrangements towards all merchants to show gratitude by using them as their providers. These advertisements helped shape the identity of a Go-JEK user and allow for increased rates of search engine optimization (SEO). The viral nature of these campaigns also spread positive word-of-mouth. With all these campaigns being created with extensive market surveys and research, they helped humanize the brand towards Indonesians. They helped Go-JEK evaluate the trends and consumer behavior of the Indonesian population.

Go-JEK's socioeconomic impact

However, Go-JEK's most significant impact in Indonesia is perhaps carving its cultural footprint amongst millennials who love to seek involvement in varying activities. Go-JEK was able to make their product an "experience," as opposed to a standard application, prompting it to become a cultural emblem in Indonesia. Leo Hermawan, one customer who is a TV host in the day and a diet coach at night, utilizes Go-JEK to travel to work and Go-SEND to send his customer's diet plans and supplements, improving his business and transport costs. If he is unable to cook for dinner, he orders Go-FOOD, thus utilizing the app three times a day (Jakarta Post). Leo is an example of an average Indonesian user, someone who is willing to trade cost for convenience. Therefore, Go-JEK's mottos emphasize on the increased accessibility and rapid, face-paced lifestyle. CMO Piotr Jakubowski thus says, "There is an Indonesian mindset that there lies a commodity more precious than money: time. The solution to this is Go-JEK”.

To increase its cultural significance, Go-JEK used gamification strategies to help consumers compete for prizes. Drivers are also allowed to participate, as they are rewarded for earning the highest stars/ratings as "driver of the month." When individuals like Leo use the app, they are able to gain points in exchange for a free ride or other services, incentivizing others to frequently use it to unlock Gold or Premium level. If he had utilized four of those services, he would have gotten 4 points or more, depending on the amount he had ordered. With gamification along with viral marketing in mind, Go-JEK was able to capture a majority of customer segments in Indonesia, especially within families. Men use Go-RIDE, women use Go-MASSAGE, and soon the whole family utilizes it. With the entire family roped into using Go-JEK and the point system, this carves a culture and ideology that Go-JEK is a loyal, versatile brand. Building the company culture through gamification and marketing, together with their acquisitions and quantity over quality growth strategies have helped propel Go-JEK as a market leader.

Go-JEK's benefits and growth strategies have helped them positively impact Indonesian society and improve their standard of living by unlocking new employment opportunities. A domestic worker can find a job through Go-CLEAN or Go-GLAM. A single mother can cook food in her kitchen and sell it to a large consumer base without infrastructure through Go-FOOD. People with disabilities have a real chance of earning money through Go-JEK. These opportunities further engaged the Indonesian community, allowing them to participate in the workforce. According to a study conducted by the University of Indonesia, 90% of Go-JEK drivers have felt an improvement in their quality of life after joining it. The community aspect of the app is also highly emphasized, as they are they are encouraged to tip and give back. After an individual purchases a service, they are given the option to provide a 10-20% tip to help the driver. In 2019, it was reported Indonesians had given up to 285 million rupiahs or around $21,000 in tip towards drivers. The success of the tipping system allowed Sonny Radhityo, the head of Go-JEK's third party platform, to launch Go-GIVE, a platform that facilitates more accessible donation money towards favored charities. In November 2018, a trial was initiated for natural disaster victims in Aceh under Go-GIVE. Within six months, it had collected up to Rp 2.3 billion, or $160,000 from 75,000 contributors to help the victims . Go-JEK thus fostered its unique form of corporate social responsibility by granting individuals the ability to "pay it forward" and give back to help an individual driver and favorable cause without the company furthering its objectives for material gain.

Aside from social impact, with the appointment of Makarim as the minister of education and culture, Go-JEK's influence has helped rewrite the future of politics in Indonesia. With strategy consultants like Makarim entering the political spectrum, he is able to provide expertise in a rapidly technologically changing Indonesia. This is part of a political movement enforced by President Joko Widodo, who wants individuals in the technology and entrepreneurship sector to provide suggestions to improve the economy. After hearing complaints from female passengers about driver mistreatment, one of Makarim's first acts as the minister was partnering up with the ministry of empowerment, women, and children to increase workshops to educate women and children about using ride-sharing services safely. These workshops allowed Makarim to gain insight and create Go-JEK's "share my trip" feature to share their journey with loved ones wanting to track their whereabouts, as well as implement insurance coverage for riders (Farveen). Makarim was also able to launch the #MulaiRespek, or the "begin to respect campaign" and utilize his political resources to bring about to light sexual harassment issues within Indonesia through the data garnered from Go-JEK. The fusion of technology and politics helped create a more socially conscious environment within Indonesia, as the government can utilize applications like Go-JEK to understand internal problems within Indonesia's ecosystem on a micro-level. Therefore, Go-JEK's impact helped improve society and build new bridges between technology and politics. Although Go-JEK found massive success in the Indonesian economy, its next goal is to expand influence into other foreign markets. One of Go-JEK's biggest threats toward growing as a regional unicorn is Grab, a neighboring startup based in Singapore that features primarily similar services. In fact, Grab merged with Uber in 2018, which allowed them to lead in terms of transportation solutions. Grab also utilizes additional services such as GrabFamily, which will enable individuals to book vehicles for larges parties and has acquired Ovo in Indonesia to compete with Go-PAY. Currently, Grab is the market leader in transportation services and partnerships with larger startups, but their services are also relatively expensive. In addition, Grab has more market coverage, having operations in southeast asian countries like Thailand and Cambodia. Although Go-JEK is able to achieve more brand loyalty and provide more lifestyle services, it has much to prove outside of the Indonesian arena. Therefore, Go-JEK is attempting to market these aspirational lifestyle traits as when expanding regionally. Go-JEK aims to capture up to 50% of non-Indonesian users to compete with Grab and grow their ratio from 80:20 (80 Indonesian, 20 non-Indonesian) to 50:50 in the next few years (Mulia). Kevin Aluwi, new co-CEO, announced that they were naming the strategy "Going the Distance," and aiming to expand their services to the Philippines and Malaysia in 2020 by increasing customer satisfaction and harmonizing corporate development.

Future Challenges Nevertheless, Go-JEK faces numerous challenges from the Philippines and Malaysia. Go- JEK has attempted to enter the Philippines twice in December 2018 and early 2019. Still, their transport licenses have been rejected due to strict foreign ownership rules, as local Filipino companies need to acquire at least a 60% stake (the minimum requirement) of the country's affiliate in the country (Venzon). With Grab already attaining a majority of the company's shares, Go-JEK struggled to find an investor. However, it was finally able to acquire a 60% stake from company Pace Crimson Ventures and fashion startup Zalora Philippines, allowing Go-JEK to access to the Philippine economy. Coupled with its acquisition of coins.ph, a local startup focusing on mobile payment services, Go-JEK is determined to capture the Philippines (Southeast Asia's second most populated country) to gain more market share due to its large population. Go-JEK entering the Philippine market comes at a pivotal time, as the Philippine competition chairman (PCC) has been fining Grab 23.5 million pesos ($500,000) for overcharging passengers (Cordon). Grab's activity allows Go-JEK to capture a more substantial amount of consumers due to the legal troubles Grab is facing. Malaysia, the third largest Southeast Asian economy, however, is more accommodating and enabling shorter trial runs for Go-JEK that have been implemented. Malaysian transport minister Anthony Fook and Go-JEK co-CEO Andre Soelistyo have agreed upon a six-month program to allow the government and firms to gather market research while the Malaysian government drafts policies to increase bike-hailing. The expansion into the second and third-largest economies will help springboard Go-JEK to be an adequate market competitor with Grab.

Dubbed as the "crown jewel of the East" and the "Indonesian Alibaba," Go-JEK has created a tremendous impact in Indonesia. Makarim had a clear vision to improve the betterment of the Indonesian public through transportation and executed it promptly. Its various growth strategies through acquisitions, restructuring, marketing, and building global culture have helped them create a societal and political impact in the Indonesian ecosystem and compete with regional giants like Grab. Within the next five years, Go-JEK is predicted to compete with Alibaba and other multinational firms. With Go-JEK's limitless potential and growth, the possibilities are endless for this humble Indonesian company.