‘It’s time to believe in the nation’s capability’: Willson Cuaca
November 3, 2021
The pandemic is not only a crisis, but also a situation that accelerates the growth of the digital economy. Co-Founder and Managing Partner of East Ventures, a sector-agnostic venture capital firm that has supported startups in Southeast Asia and Japan, Willson Cuaca told Kompas, Monday (8/16/2021).
Since the very beginning, he has had faith in the capabilities of our own nation. This faith is what brings their investments and portfolio startups success.
What are your views on Indonesian startups?
In 2009, we raised funds for Tokopedia, then Traveloka in 2012, and so on and so forth. It was all a long journey of digging into the potential of Indonesia’s digital economy. We saw the enormous potential in Indonesia due to the rapid growth of tech companies that will keep speeding up to the inflection point. Back then, there were only 30 million internet users in Indonesia, but that number rose to 200 million last year. There are 300 to 400 million internet users in Southeast Asia and Indonesians makeup half of them.
What happens in that kind of market?
The adoption of digital technology is very fast as a lot of people use digital products. Hence, a lot of people invest in startups. We also have digital infrastructure, both public and private, like payment, logistics, marketplace, digital advertising, and MSMEs development.
The combination of 200 million internet users and that infrastructure makes us the best in ASEAN. Singapore is well-known for its pro-business government, but other than that, they are actually looking at Indonesia closely. We are in a really good position right now.
Without COVID-19, we are already doing well. But once COVID-19 strikes, what comes after is acceleration. What could be achieved in 2 years, can now be achieved in just a few months as everyone is forced to use digital products.
What about the talent resource to respond to this growth?
It’s a classic problem, not only in Indonesia. It happens in other countries like Singapore, China, and the United States as well. From my perspective, there is no way we can wait until the talents are complete. With or without talent, we shall invest. We need to believe that there will be a way for us in the future. We invest first, and we will see what comes after.
The digital industry has raised a lot of funding rounds and those funds are being used for talent development as well. Tokopedia, Gojek and many other companies start by recruiting more human resources and educating the internal talents later on. Our talent position is very good compared to other countries. Why? Our talents are handling a really huge market. Which other countries can handle the traffic of that many users? Only in Indonesia. Our talents are being forced to learn.
An evolving industry does not only attract new talents, but also talents from other industries. There are skills that are relevant between industries, hence they only need to change their point of view into a digital point of view. However, with a flourishing digital industry, we still lack talents. That is precisely why tech companies still try to accelerate talent development.
What becomes the talents’ strengths and weaknesses?
The strength is, we are in a market that provides a platform for these talents to learn and develop well. The weakness is nothing, for now. I don’t see any weakness in our talents since the industry keeps growing.
Your company has a long history. What is the key to investing in tech companies?
East Ventures believes in our nation’s capability. Who else if not us? If we spent too much time on calculation and planning in the beginning, we would not be investing in Tokopedia, Traveloka, Ruangguru, and many others that time.
Once we have faith, we need to learn fast. We observe closely what is happening, we possess and learn skills, then we see which capability needs to be upgraded. We learn from other countries, then we raise funds. We do not only take the funds, but also their knowledge, so there will be knowledge transfer.
We make sure to bring out more new entrepreneurs. Hence, there should be a waterwheel effect. We build the components and the ecosystem will be the wheel that spins. Waterwheel cannot spin without the energy of the water. That is why we believe in the nation and the components have already been built, the rotation accelerates and it will become faster.
When did East Ventures become sure that the step taken that time was the right step?
The point where we were confident was when our portfolio startup founders did the right thing. When they learn the right things, it will be seen in the excellent growth numbers. This is what we learned from overseas companies, everything starts from those growths.
We must also understand that the digital industry is different from traditional companies. Financial returns will take longer, like Amazon that only became profitable after 10 years. They took their time to make sure of their users in the ecosystem. Once they are comfortable with it, only then will they strategize to earn money without harming the users. The business model becomes more dynamic. Earning money doesn’t always come from transactions — the key is in user education. If you didn’t know about this, you will think we are only burning money.
You don’t only invest in Indonesia, how do Southeast Asian startups compare?
East Ventures invests in Singapore, Malaysia, and Vietnam. Everything is great. When we invest, we don’t only see the country or the market, but also the people. We want to invest in the people. Once the people are good, or the CEOs are good, we will invest.
However, Indonesian CEOs are benefited by Indonesia’s position as the largest country in Southeast Asia. Other countries don’t have that benefit. For example, a Singaporean startup has become the first in the country. To get an even bigger market, they need to expand outside Singapore. The point is, Indonesian founders are very lucky, hence why I really support Indonesian entrepreneurs to innovate.
How are the qualities of Indonesian startups?
Exceptional. We have a big market with a lot of competitors so that business models are more creative. We have even more talents. When we see it, there won’t be unicorns without the Indonesian market. Anyone must be in Indonesia. That is something unique from Indonesia.
How is the development in China, will investors shift to Southeast Asia?
Because of the situation in China, investors have become more careful with the regulatory movement. This situation will benefit the Southeast Asia region as it is much more stable. In Indonesia especially, I see the government more eagerly supporting startup companies, for example the Ministry of Health supports innovations in health technology. Startups play a huge role during the pandemic and we see government support.
After backing numerous companies, where do you see East Ventures head to?
East Ventures’ vision is very simple, that is digital equality for all Indonesian citizens. How we are going to make every aspect of society better, more efficient, cheaper, and more prosperous by leveraging technology.
We started with SMEs, education, logistics, payment gateways — why not embrace the fishermen as well? One of our portfolio companies, Aruna, has solutions to the problems faced by our local fishermen, which is why our visions synchronize. The fisheries supply chain became more efficient and more approachable.
Before fishermen, we also embraced warung owners through Warung Pintar. The point is, East Ventures will invest in every sector. Everything can be empowered by digital technology, and the most important thing is we meet people with the same vision who can execute and understand digital technology.
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Original article on Kompas, August 18, 2021.