The Great Indonesian Startup Hustle: Build, Hype, Cash Out, Repeat
Indonesia’s startup scene has become the Wild West of venture capital. It's a chaotic free-for-all where the only law is "get rich quick." Forget the fairy tales about garages and genius founders scribbling equations on whiteboards. Here, billion-dollar valuations are conjured from buzzwords and slide decks, with a generous sprinkling of vague promises about “disrupting” markets. Disruption, it turns out, is less about innovation and more about upending one’s own tax bracket.
At the heart of this façade lies a dirty little secret: startups here aren’t meant to endure. They’re not built to create value, solve problems, or even survive. No, these companies exist for one purpose: to serve as vehicles for their founders to cash out. Growth? That’s a KPI for the suckers buying in at the next round. Profitability? Not in this economy.
The playbook is as simple as it is brazen: raise money, inflate the valuation, pass the bag to the next investor, and quietly exit with enough cash to retire in Ubud. The rest? That’s just PR, staged to keep the whole house of cards from tumbling down too soon.
The Startup Ecosystem: Family BBQ Meets Ponzi Scheme
In Indonesia, the entrepreneurial dream doesn’t begin in a garage with genius-level coding skills and sleepless nights; it starts at a family BBQ, somewhere between the satay station and a heated debate over the best rendang recipe. Starting a company here isn’t about solving big societal problems; it’s about solving Auntie Dewi’s problem with that “pesky little mortgage” or Uncle Bambang’s need for a new Pajero. Founders don’t aim to change the world; they aim to monetize their network, which conveniently includes a VC partner from college golf trips.
Local venture capitalists are less concerned with market opportunities and more with social ones. Deal-making often follows the sacred hierarchy of nepotism. It works like this: a VC partner decides their friend’s cousin’s wildly unnecessary app idea deserves millions in funding. Why? Because who needs a defensible market position when you have family ties?
The investment team dutifully “runs the numbers.” Never mind that the numbers don’t add up to anything resembling a viable business. Money flows, high-fives are exchanged, and another $10 million is funneled into a startup whose sole contribution to society will be a fancier slide deck for the next funding round.
Due diligence? That’s just something you talk about at conferences to make the ecosystem look professional. Here, trust is placed not in market research but in the sacred bonds of shared vacations and karaoke nights. And why not? Who cares if the startup implodes in two years as long as everyone gets their cut?
Family comes first. And in this ecosystem, family is the entire business plan.
The Hype Machine: How to Inflate a Valuation Without Actually Doing Anything
If you’ve ever wondered how to build a $50 million valuation from thin air, look no further than the tried-and-true playbook of startup hype.
Assemble a pitch deck. Not a product, not a plan. Just a deck. Fill it with jargon like “AI-powered,” “hyper-scalable,” and “disruptive.” It doesn’t matter if your app is just a glorified calendar with push notifications. Nobody’s actually going to check if the technology works, let alone exists.
Launch your “MVP.” No code? No problem! Pay a few Instagram influencers to post about how life-changing your nonexistent app is, and voilà, you’ve got “traction.”
Raise your Seed round using meaningless metrics. Did someone download your app and promptly delete it? Count that as an "active user." Got 12 visitors on your website, all of whom are your co-founders? That’s 12 times the industry average!
By now, your startup is valued at $50 million, even though it’s generating zero revenue. Series A is where things really heat up. You’re suddenly a media darling, branded as “the next Gojek.”
And here’s the pièce de résistance: secondary share sales. As a founder, this is where you can truly shine by selling a slice of your equity for a hefty pile of cash. Nothing screams confidence in your company’s future like cashing out before it has one. It’s all part of an ecosystem where hype is king.
The Art of Cashing Out: Or How I Learned to Stop Building and Love the Fundraising
In Indonesia’s startup ecosystem, "long-term value creation" is about as believable as a toddler’s promise to clean their room. Startups here don’t exist to solve problems or even to last; they’re here to play the world’s most expensive game of hot potato. The rules? Inflate your valuation, pass it to the next sucker, and cash out before the music stops.
Here’s the master plan:
Raise a big Series B round. The secret sauce? Vanity metrics. Gross merchandise value (GMV) is the MVP here. Your margins might be thin, but as long as the slide deck looks pretty, you’re golden.
Cash in on the hype. Negotiate a secondary share sale, convincing starry-eyed investors that your equity is worth its weight in gold. At a $500 million valuation, selling just 5% nets you $25 million. Not bad for a company that’s still burning through VC money.
Keep the façade alive. Blow through millions on office slides, team-building retreats, and “marketing” campaigns that involve handing out free T-shirts. When the funds inevitably run out, either sell to a bigger fish or quietly let your startup die, leaving everyone else to pick up the pieces.
By the time anyone realizes your “unicorn” is just a donkey with a party hat, you’re on a beach in Bali, sipping a mojito and planning your next “game-changing” venture. The VCs? They’re too busy hyping the next house of cards to even notice. It’s not just who cashes out first.
The Ecosystem That Eats Itself
Indonesia’s startup scene is a bubble, and not the glamorous, champagne-filled kind where founders clink glasses at rooftop bars. No, this bubble is delicate, and doomed to pop the moment someone gets too close. This bubble is inflated with billions of investor dollars, and fragile egos.
The issue isn’t just a few bad apples. The entire orchard has been designed to reward short-term grift over genuine effort. Founders with dreams of creating sustainable businesses get sidelined by savvy operators who know how to game the system. Why spend years building a real company when you can slap together a pitch deck, toss in some fake metrics, and cash out before anyone notices the smoke and mirrors?
And the VCs? They’re more than happy to play along. Desperate to deploy their funds and claim their piece of the emerging-market pie, they’ll cut checks for anything that glitters. It’s a mutually assured destruction of credibility, where nobody has time to ask, “Does this make sense?”
Then there’s the media, the hype machine’s most loyal sidekick. Every other day, another startup is crowned “the next big thing” in breathless headlines.
The metrics? Flimsy.
The product? Half-baked.
The scrutiny? Nonexistent.
It’s much easier to celebrate the latest funding round than to dig into whether the business is viable. Why point out that the hype train is speeding off a cliff when you can enjoy the free snacks in the first-class car?
The result? An ecosystem stuck on a cycle of inflate, hype, implode, repeat, leaving real innovation stuck in the shadows.
When the dust settles, the real casualties of this never-ending startup circus aren’t the founders or the VCs; they’ve already laughed all the way to their beachfront villas. No, the ones left holding the bag are
The employees who genuinely believed in the mission,
The customers who trusted in a product that barely worked, and
The future entrepreneurs who now face a funding landscape scorched by scandal and skepticism.
So, what’s the way out? Perhaps it’s tighter oversight, though that’s unlikely. Maybe it’s a cultural revolution, where founders prioritize sustainability over short-term riches. Or perhaps we just sit back, let the bubble burst, and cross our fingers that the next ecosystem rebuild isn’t quite so cynical.
For now, the Indonesian startup scene remains a wonderland for the connected, and the morally flexible. It’s a loop of “build, hype, cash out, repeat,” where disruption is about finding creative ways to exit before the house of cards collapses. Why bother fixing the system when milking it is so much easier?