Indonesia: Apple’s $1 Billion Investment in Indonesia, Traveloka and the Middle-Class Economy, Cultural Barriers and Financial Literacy in Startups - E510
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Jeremy Au and Gita Sjahrir discussed three key themes during their conversation:

1. Apple’s $1 Billion Investment in Indonesia and Local Content Policies:

Indonesia’s regulation requiring local components in imported products initially banned iPhone 16 sales, sparking public frustration. The government negotiated with Apple, escalating from a $10 million offer to a $1 billion investment. Gita highlighted President Prabowo Subianto’s role in global diplomacy, marking a shift from Indonesia’s traditionally insular policies. They also explored the broader context of deglobalization, where nations prioritize domestic production, and discussed how similar strategies could be applied in other markets like Vietnam.

2. Traveloka and the Middle-Class Economy:

Traveloka, founded in 2012 by Ferry Unardi, Derianto Kusuma, and Albert Zhang, represents a scalable digital-first platform in Indonesia. Despite this potential, economic insecurity among the middle class limits its growth. Indonesia’s GDP grew 5% in 2023, but discretionary spending remains low due to middle-class vulnerability. Traveloka also faces competition from Agoda, part of Booking Holdings, and new entrants from China. Jeremy and Gita stressed that stabilizing the middle class is crucial not just for Traveloka but for consumer-driven industries across the region.

3. Cultural Barriers and Financial Literacy in Startups:

Gita discussed how Indonesia’s “shame culture” prevents founders from addressing their weaknesses, particularly in financial literacy. She noted that one in three founders struggles with basics like distinguishing GMV, revenue, and contribution margins, which often leads to poor decision-making. Jeremy and Gita emphasized the importance of personal growth to overcome these challenges, encouraging founders to “do it scared” and take action despite fear.

Jeremy and Gita also discussed the challenges of navigating the “messy middle” in startups, often spanning over a decade; lessons from the 2014–2015 tech boom, which highlighted the risks of overfunding and rapid scaling; the transition from physical to digital industries, with Indonesia’s digital economy growing 16% in 2023; Prabowo Subianto’s efforts to position Indonesia as a neutral geopolitical player; and how founders can reassess their long-term priorities and time investments in startups.

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