Classroom Cartels, Pt. II: Was I Wrong?
Elite schools, startup hiring, venture capital and social capital in Indonesia. Why familiarity may have been rewarded over merit during the startup boom.
Two and a half years ago I wrote an article that many readers interpreted as satire, a few interpreted as bitterness, and a surprising number privately admitted described something they had also noticed but had never dared say aloud.
The piece was called Classroom Cartels, and its central question was uncomfortable: why did so many of Jakarta’s startup founders, executives and investors appear to emerge from the same remarkably small collection of educational institutions? Not the same universities, but often the same handful of elite schools that had introduced future founders, executives and financiers to one another long before they had learned what a cap table was.
It was intentionally exaggerated. Satire has always worked by stretching reality just far enough that readers suddenly recognise something they had previously accepted as perfectly normal. Nobody laughs because something is ridiculous. They laugh because it is uncomfortably familiar.
In the years since that article was published:
Money became more expensive.
Venture capital stopped falling from the sky
Investors who once celebrated “growth at all costs” rediscovered “profits.”
Layoffs replaced launch parties.
“Founder mode” gave way to “survival mode”.
The mythology surrounding startup brilliance suddenly had to survive arithmetic.
And that is precisely why revisiting the original argument feels worthwhile.
This is no longer about asking whether certain schools produce exceptional entrepreneurs. The more interesting question is whether ecosystems begin confusing selection with proof.
Healthy ecosystems understand the distinction. Less healthy ones tend to forget it.
This matters because unlike mature industries, where competence eventually becomes difficult to fake, early-stage companies operate almost entirely on expectations.
Investors fund future possibilities rather than present realities.
Boards hire potential rather than demonstrated performance.
Recruiters become amateur psychologists.
Entire careers are built upon answering the unscientific question of whether someone “looks like founder material.”
Looking back today, I suspect my original article focused too heavily on the schools themselves. While schools are visible, networks are not. Yet it is the network, not the classroom, that deserves scrutiny.
The schools just happened to be where many of those networks first crystallised.
More Than an Education
One of the more amusing reactions to the original article came from readers who assumed I was arguing that certain schools possessed a mysterious entrepreneurial curriculum unavailable to ordinary mortals. As though somewhere between Year 10 economics and afternoon football practice there existed an elective entitled How to Raise Series A Funding Before Turning Thirty.
If only education were so efficient.
Imagine two students beginning life with identical intelligence, ambition and work ethic.
One spends their formative years surrounded by classmates whose parents occupy senior positions in business, finance, government and multinational corporations.
Their school events become informal networking occasions.
Their classmates become future investors, lawyers, executives and founders.
Their understanding of business is shaped by textbooks and by conversations overheard at dinner tables.
The second student learns exactly the same mathematics.
Only one of them also learns the geography of power.
We often imagine inequality as something dramatic, but some of the most enduring advantages are almost invisible because they arrive disguised as ordinary friendship.
The school reunion becomes the investor dinner.
The debating teammate becomes the future co-founder.
The person copied into an email already knows half the room.
None of this is corruption.
Nor is it meritocracy.
And the longer one remains inside these networks, the more valuable membership becomes.
Critics frequently attack academic standards or tuition fees, while defenders proudly point to examination results and university placements. Both sides are discussing the curriculum.
The curriculum is almost beside the point.
The real asset graduates carry away is not what they learnt inside the classroom but who left the building alongside them.
Silicon Valley has Stanford.
Britain has Oxbridge.
France has the grandes écoles.
Every society develops institutions that become informal sorting mechanisms for future elites.
Indonesia is hardly unique.
Where Indonesia becomes more interesting is that the sorting appears to occur unusually early. Before university. Before careers. Before anyone has actually demonstrated the capability that later justifies the confidence placed in them.
Which brings us to the most interesting question of all.
Not whether the same names repeatedly appeared around Jakarta’s startup ecosystem, but whether the ecosystem gradually became so comfortable rewarding familiarity that it stopped asking the more difficult question every investor, board and founder should eventually confront:
“Would we have made exactly the same decision if we’d met this person for the first time today?”
The Boom Years
The Dutch had tulips. America had subprime mortgages. Silicon Valley briefly convinced itself that losing billions of dollars was simply another way of saying “playing the long game.” Indonesia, meanwhile, seemed to discover an equally fascinating proposition: that confidence itself was a productive asset.
To be fair, this was hardly an Indonesian phenomenon. From San Francisco to Singapore, venture capital spent much of the previous decade behaving like an enthusiastic uncle who had just discovered cryptocurrency after two glasses of wine.
Growth solved every problem.
Profitability was a detail for tomorrow.
Governance was something one promised to think about after becoming a unicorn.
Indonesia simply adapted this global script to local conditions.
Yet every ecosystem adds its own cultural flavour to a speculative boom, and Jakarta’s contribution often appeared to be a remarkable faith in social familiarity.
Investors naturally looked for indicators that reduced uncertainty.
Founders sought executives they believed they could trust.
Boards recruited people who looked capable of representing the company in front of international capital.
None of this was irrational in isolation. Collectively, however, it risked creating an environment where familiarity became a substitute for verification.
One consequence of this dynamic is that reputations begin to appreciate more quickly than experience. An impressive educational history, international exposure and the right professional references become bundled together into an attractive package labelled “leadership potential”. Sometimes that assessment proves correct. Sometimes it just reflects the fact that humans are remarkably good at mistaking confidence for competence.
Behavioural economists have spent decades documenting our tendency to rely on proxies when making decisions under uncertainty. We infer quality from prestige, credibility from association and capability from confidence because gathering complete information is expensive.
These shortcuts are surprisingly difficult to detect because almost everybody appears successful.
Companies continue raising money.
Salaries continue rising.
New roles appear almost weekly.
A founder who closes another funding round is celebrated as visionary,
An operator moving into a senior title is assumed to be climbing because of exceptional ability not because an entire market has become extraordinarily generous.
Then money develops standards again.
Why are margins still negative?
Why has customer acquisition become more expensive?
Why does every strategic review contain more adjectives than numbers?
Markets rarely expose weak judgement immediately. They wait until optimism has become habitual, then quietly remove the conditions that allowed said optimism to masquerade as strategy.
Trust as Capital
Successful startups are often described as meritocratic machines in which the best ideas naturally rise to the surface through relentless competition. It is an appealing story because it flatters everyone involved.
Founders believe they earned their success through brilliance.
Investors believe they identified brilliance before anyone else did.
Employees believe they joined the winning team because they recognised greatness early.
Reality prefers messier narratives.
Imagine an ecosystem in which one entrepreneur must spend six months convincing potential investors they are credible enough to deserve a first meeting, while another begins the conversation with credibility already assumed because of relationships or overlapping networks.
Neither entrepreneur has yet proved anything.
One just starts several chapters further into the story.
Human beings constantly recycle trusted relationships because doing so reduces uncertainty, lowers transaction costs and minimises perceived risk. Economists call this information asymmetry. Sociologists call it social capital.
The unintended consequence is that ecosystems gradually become better at reproducing themselves than renewing themselves.
People who resemble yesterday’s success become easier to fund than people who might represent tomorrow’s.
Experience outside established circles is discounted because it arrives without familiar references. Different perspectives are interpreted as greater risk rather than potential advantage. Proven operators can find themselves competing against stronger narratives rather than stronger records, not because anyone intends to exclude them but because stories travel through networks faster than evidence.
This may be the least discussed cost of concentrated trust.
Entire ecosystems slowly converge on a shared mental picture of what leadership is supposed to look like.
Certain biographies begin appearing repeatedly.
Certain communication styles become synonymous with competence.
Certain educational pathways acquire an aura extending far beyond anything taught in a classroom.
The network has escaped the classroom.
It now lives inside recruitment decisions, investment committees, board appointments and founder introductions.
No secret handshake is required.
Which is perhaps why the original metaphor of a “classroom cartel” still lingers in my mind, albeit for slightly different reasons than when I first wrote about it.
Classrooms appear effective at producing the one resource every entrepreneurial ecosystem prizes above almost everything else.
Not intelligence.
Not ambition.
Not even technical excellence.
Familiarity.
Choosing the Familiar
Markets, unlike social circles, have very little sentimentality. They rarely care who introduced you, who recommended you or whether your parents played golf with the chairman thirty years ago. They care, eventually, whether the business actually works.
During the years of abundant capital, however, those questions became easy to avoid.
The difficulty is that when enormous quantities of capital begin chasing relatively few credible founders, the market inevitably starts relaxing its standards. Potential begins replacing proof.
Consider two hypothetical founders.
One has built profitable businesses before, understands customers intimately and has spent years solving operational problems that never appeared on conference stages because they were too busy fixing warehouses, negotiating suppliers or managing payroll.
The other has an exceptional educational pedigree, moves comfortably in investor circles, communicates with remarkable confidence, possesses all the polish expected of modern entrepreneurship and arrives with a network that reassures everyone in the room that somebody else has probably already done the due diligence.
The question is whether they begin the race from the same starting line.
Because if they do not, the conversation has already ceased to be purely about merit.
One of the habits of startup ecosystems is their tendency to confuse visibility with rarity. The people who appear repeatedly on conference panels, podcasts and investor dinners gradually begin looking indispensable, rather like actors who become famous for playing famous people.
The irony, of course, is that genuine operating talent often looks unimpressive.
The best logistics operator rarely gives inspiring TED Talks.
The strongest finance leader usually possesses the charisma of aspreadsheet.
The engineer capable of preventing catastrophic outages is unlikely to describe themselves as a “thought leader.”
Execution is deeply unfashionable.
Until it isn’t.
One suspects this explains why so many mature businesses quietly recruit seasoned operators while startup ecosystems continue searching for unicorns disguised as human beings.
Every role awarded because somebody already looked like leadership is a role not awarded to somebody who may have become exceptional had they simply been trusted with the opportunity. Every founder receiving disproportionate attention subtly reduces the attention available for others building equally compelling businesses beyond the fashionable social geography of Jakarta’s investment circles.
When possibility repeatedly flows through familiar channels, ecosystems slowly become less curious about discovering unfamiliar excellence.
That may not feel like injustice.
It should certainly concern anyone interested in efficiency.
After the Classroom
One imagines graduation as a ceremonial conclusion, a symbolic moment in which adulthood finally replaces adolescence. Caps are thrown into the air, photographs are taken, and everyone embarks upon independent lives determined solely by talent and hard work.
How charming.
Instead:
Former classmates become future clients.
University friends become venture partners.
A recommendation becomes a board appointment.
An internship becomes a co-founder.
People naturally trust those whose behaviour they have observed over years rather than months. That instinct is perfectly rational. If you have known somebody since they were sixteen, you probably possess richer information about their judgement than any interview process could ever provide.
Trust is therefore not the problem.
Overextending trust is.
Every ecosystem eventually reaches a point where personal confidence begins replacing institutional discipline.
References become more persuasive than evidence.
Reputation starts travelling faster than results.
Questions become shorter because everyone assumes they know the answers.
That is usually when complacency arrives.
Healthy elites remain obsessed with identifying exceptional outsiders.
Unhealthy elites gradually become obsessed with reproducing themselves.
Once ecosystems begin converging around a relatively narrow definition of leadership, everyone outside that definition faces a burden. They must be undeniably extraordinary.
The insider is assumed competent until proven otherwise.
The outsider is required to prove competence before competence is even considered.
That difference compounds dramatically over careers.
It influences who receives mentorship, who gets introduced to investors, who becomes the obvious candidate when opportunities arise and, perhaps most importantly, who develops the confidence that opportunities belong to them in the first place.
People repeatedly trusted with meaningful responsibility tend to become more confident because experience justifies confidence. People overlooked often become more cautious, not because they possess less ability, but because repeated exclusion quietly teaches restraint.
This brings us back to the original metaphor of the classroom.
Perhaps the classroom merely represented the earliest visible manifestation of something considerably older than Indonesia’s startup ecosystem and considerably broader than venture capital.
Every society develops mechanisms through which opportunity becomes concentrated. Sometimes those mechanisms are universities. Sometimes they are military academies, political parties, consulting firms or investment banks.
Indonesia’s startup scene merely adapted its own version.
That should not outrage us.
It should interest us.
Indeed, many successful founders almost certainly deserve every achievement they have earned. Many executives undoubtedly justified every promotion they received. Many investors made genuinely thoughtful decisions based upon the information available at the time.
The more interesting question, that I didn’t ask two years ago, is whether Indonesia’s startup ecosystem occasionally became too comfortable confusing social certainty with economic certainty.
Looking back, I no longer think Classroom Cartels was fundamentally about schools.
Schools were simply the easiest part of the pattern to notice.
The deeper story was always about how ecosystems decide whom to trust before anyone has actually earned that trust in the marketplace. Every investment community develops shortcuts because uncertainty is exhausting and due diligence is expensive.
That is not uniquely Indonesian.
Yet recognising that tendency should not become an excuse for accepting it uncritically.
Companies that once seemed unstoppable suddenly discovered that profitability matters.
Founders celebrated for raising ever-larger rounds found themselves being judged instead on cash flow, governance and execution.
Businesses that had mistaken momentum for resilience discovered the distinction at precisely the moment investors stopped confusing the two.
Booms flatter.
Corrections educate.
How much of success is genuinely earned, and how much is inherited through proximity to institutions, networks and assumptions that quietly pre-select tomorrow’s winners before tomorrow has even arrived?
The answer, inevitably, is somewhere between the comforting myths told by meritocrats and the cynical determinism preferred by their critics.
Talent matters. So do networks.
Hard work matters. So does timing.
Execution matters. So does being invited into the room where execution is first given a chance.
Healthy ecosystems acknowledge all of these truths.
The unhealthy ones choose whichever version best flatters themselves.
Perhaps that is the lesson worth carrying forward.
The real danger was never that Indonesia’s startup ecosystem contained too many alumni from particular schools. The real danger was believing that familiar backgrounds could reliably substitute for difficult judgement; that polished narratives could stand in for proven execution; and that confidence, once wrapped in sufficient social proof, somehow became indistinguishable from competence.
History has an unhelpful tendency to mark its own homework.
Eventually every ecosystem discovers whether it invested in capability or only invested in comfort.
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