Startup Company Indonesia: Build a Successful Team for a Small Business

The Current Landscape of Indonesia’s Startup Ecosystem

As the largest economy in Southeast Asia, Indonesia has seen drastic upward changes in economic growth over the last ten years. Pivoted by a dynamic startup ecosystem and a population that embraces emerging technology, it should not come to anyone’s surprise that the World Bank projects Indonesia to be the world’s fifth-largest economy by 2024.

When talking about pandemics, it is clear that every industry has suffered a loss. However, one industry that managed to thrive is the startup ecosystem. There has been significant startup growth in Indonesia over the past few years. In fact, it has been reinforced by the government through the Ministry of Communication and Information Technology. The Indonesian economy that relies on natural resources and agricultural products can slowly see the change.

Understanding Key Drivers of Indonesia’s Startup Ecosystem

A Solid Internet Penetration

The Covid-19 pandemic saw an accelerated rate of Indonesia adopting digital services. The digital transformation during this time was led by the successful implementation of government policies, which saw the number of internet users in the country skyrocket. The Indonesian Internet Service Provider Association (APJII) states that Indonesia’s number of internet users is close to 200 million, or almost three-fourths of the whole population. The increase in numbers could be attributed to the government support in recent years for local startups that have gained international exposure and eventually the status of unicorns.

A Rapid Digital Acceleration

As early investors in local giants, such as Tokopedia and Traveloka, East Ventures said in the Digital Competitiveness Index 2021 report, the pandemic pushed digital competitiveness among provinces in Indonesia to become equal. As Indonesia’s most active venture capital responsible for the early wave of Indonesia’s digital transformation, they found that the reason for this equality was mainly due to infrastructure development and increased spending for ICT. In addition, Indonesia’s Ministry of Communications and Information Technology has even gone as far as to say that their aim this 2022 is for providing equal access to 4G networks across the nation.

Increasing Capital Investment Despite Ongoing Pandemic

For Indonesia’s startup ecosystem, venture capitalists and their assets can still provide capital funding despite the economic stagnation. There is still a high potential for investment funding to increase venture capitalist assets. The Indonesian Venture Capital and Startup Association (Amvesindo) stated that as of September 2021, 52 startups raised over USD1.9 billion in capital funding. This number indicates how Indonesia is an attractive destination for starting a business.

Fastest Growing Digital Economy

According to several sources, by 2025, the digital economy growth in Southeast Asia will reach an estimated USD 363 billion. Indonesia is well on its way to contributing to nearly half of that amount. Drivers of this massive growth are still in the e-commerce, travel, media, transport, and food industry. Seeing that online spending rose by 49% in 2021, the number is very attainable.

How to Build an Effective Team for Your Startup Company in Indonesia

Designing Organizational Structure

One of the keys to a successful startup is a well-oiled organizational structure. There are two main organizational structures that most recent startups use, flat and hierarchical. The idea is to find a suitable one that suits the business. Four main steps a company should do when developing an organizational structure are:

• Determining Structure: the best structure for the business is based on the goals and objectives. Does the industry rely on fast execution or a more detailed plan?
• Evolution of Roles: this is when a founder or the CEO decides that they cannot take up all decision-making roles and will need to hire a subordinate. As the business grows, the CEO focuses on bigger picture goals, while the management subsequently just gets better performing their jobs.
• Developing an Organizational Chart: keep this as a priority whenever the hierarchy goes more than two levels. This clearly states the reporting structure and each person’s job title is clear for all co-workers to see.
• Adapting to Growth: understanding this is vital to every startup. As each office grows, some structures that may have used to work well in the past, might not work as efficiently anymore. This would result in the office functioning in a different system, which would benefit the whole team.

Why Designing Your Organization is Critical for Your Startup Business in Indonesia

No matter how promising a business idea may seem, mismanagement in the workplace will ultimately eat up a business from the inside out. During a company’s early days, the founder or CEO needs to think just as much about their people as the product. The most commonly used structure is a flat structure that usually works for a business running below 20-30 people. Once reached, the management team needs to step in, ensuring that the company isn’t run to the ground with all the employees ranked the same.

One main takeaway from this is that founders need to consider what works best for their business, implement it, and stick to it. Ensuring that the organization has the best people to support the business is essential in the early stages. Therefore, InCorp offers Recruitment and HR Establishment services to help the business owner implement their vision as efficiently as possible. For more information regarding our Recruitment and HR Establishment services, please contact our consultant by filling out the form below.