Indonesia’s venture ecosystem has rapidly evolved over the last decade, swiftly shifting from being out of the radar to leading the Southeast Asia opportunity to taking on a more pragmatic perception as the ecosystem undergoes growing pains.

The irony is that in an effort to withstand the whiplash of this tech ecosystem’s momentum, companies are innovating to find stability and to carve out their own share of existing markets (as opposed to redefining markets entirely or creating new ones in the vein of Silicon Valley startups).

In a way, creating the stability to carve out market share would then allow these companies to truly wield influence and transform their industries, as opposed to having the rug pulled from under them by incumbents or regulators.

We wrote about this “innovation to find stability” in three buckets of companies (marketplaces, fintechs, and SaaS) earlier this week.

What this means for investors is that the lens for evaluating companies and their management also needs to align with this reality.

Instead of looking at how contrarian / differentiated / disruptive management is vis-a-vis their market, perhaps it is more valuable to look at how rooted they are:

1. From industry disruptors to industry insiders
2. From superapp to customer-focused growth
3. From fundraisers to entrepreneurs

(1) How rooted startup founders and management are in their industry translates to more pragmatic innovation

In Indonesia, having industry insiders at the helm may be more powerful than someone with experience of scaling tech companies. The latter can be hired or trained with the former has relationships, reputation, and inroads that have taken years to build

Critically, these roots are important for the startup to reduce the costs of finding product market fit and even sell / introduce these products to the market, especially with entrenched behaviors and beliefs

BroilerX’s founders understands from their experience in the poultry industry that digital transformation is not just something that will happen overnight. This has shaped their approach to growing the business, focusing first on building an end-to-end value chain business. With enough scale, this business can be used a platform for them to introduce (and more importantly, standardize) new ways of farm breeding and monitoring that can transform the industry over time.

This pragmatic approach can still produce venture scale growth but driven more by industry fundamentals than technology that is unproven at scale.

(2) How rooted startup founders and management are in their mission translates to more focused growth

As Indonesia’s ecosystem has grown over the years, it has been heavily influenced by both US and China business models that have created costly distractions for companies and industries.

Startup founders and management have been best served with razor sharp focus on the kind of business they want to grow and the market they are targeting. Where investors often come in is to expand the horizons of this mission and vision, but ensuring alignment remains on the shoulders of the founders and their management team (one of the big challenges of being a venture-backed founder is keeping hands on the steering wheel).

Tentang Anak’s approach to growth has been driven by developing products that truly meet the needs of Indonesian children and their parents, with the company’s CEO being a practicing pediatrician herself.

Over the past four years the company has remained focused on this market segment and mission of touching the lives of Indonesia’s 80 million children.  Even with their existing lines of private label brands, they have focused on a few to be the best in class rather than wearing themselves thin with an entire portfolio of products.

(3) How rooted startup founders and management are in entrepreneurship translates to resilience

This is the least tangible of the three but arguably the most critical especially for founder-CEOs.

Being a venture-backed startup founder is a taxing endeavor, especially in a market like Indonesia where the playbooks are being written at the cost of billions of dollars.

Being rooted in entrepreneurship means leadership recognizes what is at stake and finds fulfillment in the challenge this presents. Their vision is one shaped by their customers and goes beyond the fundraising and the business (as the business can change its form over time).

As we cover in this episode of Against All Odds, Fazz’s business has gone through quite the transformation over the years, and continues to do so today, but the mission to enable financial access for the underserved, especially mothers and their families, has remained the same