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Industry Research : Indonesian Bike Taxis Get Smart
Nadiem Makarim belongs to a new breed of entrepreneurs in Indonesia: young, technology savvy and well-educated.
Faced with a daily traffic gridlock for which Jakarta is famous, the 27-year-old man decided to start a motorcycle taxi company, taking advantage of the internet to create buzz for his innovative project.
Many Jakarta residents have been forced to switch to motorcycles to beat the worsening traffic, triggering the growth of bike taxis, known locally as ojek.
"The traffic problem in Jakarta is becoming a real crisis," Makarim in an interview in his small office tucked in an alley in a southern Jakarta neighbourhood.
"We interviewed a bunch of ojek drivers and I learned that they spent about 75 per cent of their day staying idle, waiting for customers to come to them," said Makarim, who graduated with an MBA from Harvard Business School.
He said the company he founded with three others, called Go-Jek, sought to make ojek services more efficient by creating a call centre and a network of pick-up spots across Jakarta.
With a well-designed website and a presence on social networking sites such as Twitter and Facebook, Go-Jek has created a buzz in the cyber world.
"Now not only can these ojek drivers get bookings for transport, they can also get bookings for all kinds of different services, and most of our bookings come from people delivering items."
The company was last month named one of the winners of a business plan competition sponsored by the US State Department's Global Entrepreneurship Program and Makarim said it was negotiating with several interested US investors.
Indonesia has in recent years seen the emergence of tech savvy and often Western-educated young entrepreneurs like Makarim.
Most of Indonesia's start-ups are internet companies seeking to tap the country's growing online market.
About 45 million Indonesians use the internet and the country has the second-highest number of Facebook users, after the United States.
The biggest story in the country's start-up scene has so far been Koprol, a location-based social networking site founded by a group of young Indonesians. Last yea Yahoo bought Koprol for an undisclosed sum.
Groupon, an online coupon firm in the United States, this year acquired its Indonesian clone Disdus and its US rival LivingSocial bought another Jakarta-based start-up DealKeren.
Rama Mamuaya, founder of DailySocial.net, a website devoted to news on Indonesian start-ups, said there was a lot of interest in the local scene.
"Everybody is all over it," he said. "Investors are coming, government is paying attention, media is helping them spread the word."
Even so, he acknowledged that not many of the start-ups were of good quality.
Indonesia's economy grew 6.5 per cent last month from the previous period last year, thanks to rising investment and strong domestic consumption.
The coordinating minister for the economy, Hatta Radjasa, said Indonesia, with a population of 230 million, needed millions more entrepreneurs.
"Four per cent of Indonesia's workforce need to be entrepreneurs," he said. "So far they only make up 0.4 per cent."
"The government will continue to make it easier for people to start businesses."
The BBC reported in May that a survey conducted for its Extreme World series found that Indonesia is the best place for entrepreneurs to start a business, after the United States, Canada, India and Australia.
Makarim said many young Indonesian entrepreneurs had great ideas.
"I wish there was more mentorship to teach them how to think about fundraising, growth and building an organization," he said.
"The economy is growing, people are doing well and the market is exponentially growing. Foreign investors finally realize that Indonesia is the next big thing."
Posted by Veronica Silva Cusi, news correspondent
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Published: Monday, August 8, 2011