“We never intentionally look for unicorns”: Willson Cuaca

Since East Ventures was established in 2009, we never intentionally look for unicorns. The statement came from East Ventures’ Co-Founder and Managing Partner, Willson Cuaca during the panel discussion titled ‘Finding the Next Unicorn’ in OCBC NISP Business Forum 2023.

“We invest based on convictions, instead of looking for valuations or unicorns. We never intentionally look for unicorns, because a unicorn is a by-product when you are able to create value. What we’re looking for is the problem statement that you are looking to solve, which will determine if the solution is a ‘painkiller’ or simply a ‘vitamin’,” said Willson.

In the digital industry, an attribute of a good digital startup is being disruptive, creating something entirely new, which can require time and resources. Thus, the primary goal of a startup in the beginning should not be to make money, but to build a strong product.

In terms of due diligence, we always assess the “2P”: People and Potential Market, because good products are built by good people who address big markets. We don’t consider ourselves as digital investors, but an ordinary investor who invests in people leveraging digital technology to disrupt traditional industries.

Building a good product requires creating a key differentiator that is defensible. To achieve this, the startup needs to establish a strong product position, find the product-market fit, and leverage technology to disrupt traditional business models. Once these factors are in place, the startup can generate revenue and experience exponential growth, referred to as the “hockey stick growth” or J-curve.

Once at this stage, we do not encourage our startups to ‘burn money’ to acquire customers, instead the company needs to focus on achieving its profitability; as the customers’ acquisition is cheaper, and the customers are more likely to retain the products.

Despite the challenges posed by the global recession, the tech winter, and the collapse of Silicon Valley Bank in the United States, which have affected startup valuations, we remain committed to investing in Indonesia – the largest market in Southeast Asia. Willson notes that the company is continuing to conduct its business as usual.

East Ventures has observed a remarkable increase in Indonesia’s digital economy for 14 years. In 2009, only 13 million out of the 230 million population had access to the internet, which represented a total internet penetration of 13%. However, the current population stands at 272 million, and the number of internet users has surpassed 200 million, representing a 77% internet penetration rate. This means that over 170 million people have joined Indonesia’s online demographic and are eagerly adopting any digital solutions presented to them. As a result, Indonesia has become the key for any tech-based businesses looking to capture the Southeast Asian market.

At East Ventures, we used to assess the “3P” – People, Product, and Potential Market. However, good products are built by good people who address big markets. So what we focus on now is the “2P”: People and Potential Market. We don’t perceive ourself as a digital investor, but an ordinary investor who invests in people leveraging digital technology to disrupt traditional industries.

Watch the full panel discussion below.