Many people are curious about the rapid growth of startup businesses. “Startup” has become a popular term in Indonesia among adults and adolescents alike. Startup businesses in Indonesia have experienced significant growth in recent years. The utilization of all available resources and technology makes startup businesses appealing to investors and young, productive individuals.
To learn more, here are five reasons why startup businesses thrive:
Also read: 8 Key Differences Between Startups and MSMEs You Need to Know
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Low Operational Costs
how do startups grow so fast
One of the primary reasons for the rapid growth of startup businesses, especially in Indonesia, is their low operational costs. Startup businesses require minimal operational expenses to function smoothly. Additionally, the average salary for workers in Indonesia is lower compared to other countries.
For instance, while a programmer in the Philippines might earn around IDR 74 million, in Indonesia, the figure is approximately IDR 20 million. Office rent costs are also lower in Indonesia. For instance, the average office space in Jakarta is rented for IDR 500,000 per square meter, whereas in London’s West End, the cost is IDR 32,000 per square meter.
Also read: Early Startup Funding Stages: Explained From Seed to IPO
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Advanced Technology
Another reason for the rapid growth of startup businesses is the swift advancement of technology. Technological progress in Indonesia has occurred rapidly. Everyday tasks such as bill payments, shopping, trading, and charitable contributions have been made easier through existing technology.
These complex activities can now be accomplished using a smartphone. For instance, QRIS payment technology enables buying and selling transactions, even in traditional markets. Online taxi applications in Indonesia facilitate public transportation access. All these technological advancements simplify people’s lives.
Also read: What Does Stealth Mode Mean in Startups?
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Solutions-Oriented Products
how do startups grow so fast
The core concept of a startup business is to provide solutions to existing societal problems. Both the products and services offered by entrepreneurs need to address customer needs. The products or services provided must enhance people’s mobility and daily activities. As a result, startup entrepreneurs must continuously work to develop their offerings.
Over time, new challenges will arise, and startups must be prepared to provide solutions through their products and services.
Additionally, effective customer service should be in place to gather feedback on new problems, allowing startups to swiftly evolve and foster strong customer loyalty.
Also read: Lean Startup Method: Purpose, and The Basic Principles
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Government and Investor Collaboration
The collaboration between the government and investors plays a pivotal role in the growth of startup businesses in Indonesia. Their joint efforts facilitate startup development and contribute to the nation’s economic growth. An example is Gojek, an application offering online taxi services and payments, which achieved decacorn status (USD 10 billion valuation) through its partnership with the Indonesian government.
Indonesia was ranked fifth globally for the number of startup companies, with 2,100 recorded in 2021. Several startups, including Tokopedia, Bukalapak, and Magic, even reached unicorn status.
Also read: Getting To Know SaaS Startup, Its Benefits and Weaknesses
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Indonesia’s Untapped Market Potential
The final reason behind the rapid growth of startup businesses is Indonesia’s immense market potential. With a population exceeding 273 million in 2021, a significant portion falls within the productive age group. This demographic data indicates Indonesia is a highly lucrative market for entrepreneurs. It’s no surprise that startup businesses are thriving in this country.
Also read: 5 Main Role of Venture Capital on Startup Business
These are several reasons explaining the current rapid growth of startup businesses in Indonesia. Entrepreneurs must comprehend the prevailing challenges within Indonesian society to facilitate their development. By offering products and services that enhance mobility, daily activities, and problem-solving, business growth will be proportionate to the subsequent benefits achieved.
