Lately
people in Indonesia (mostly Jakarta and other urban cities) were shocked when
an innovative business turned out to be disruptive. Most people could not
understand why brilliant idea is not feasible enough. It reminds us of the classic
‘we can't please everybody’ story, but if we look profoundly this is a common
case in innovation process.
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| GoJek Application Source: techinasia.com |
CONCEPT
OF GOJEK
GoJek
is a motorcycle taxi that can be reached through phone and mobile application.
As other ordinary taxi, the fare is fixed depends on the distance. People love
it because GoJek is cheap and easy to access. They feel delighted with the fair
pay-what-you-get service. Moreover they do not have to walk to find the closest
motorcycle taxi since GoJek driver offers door-to-door service. Generally there are 3 main
services: transport service, instant courier, and shopping & delivery.
Frankly
GoJek’s innovation is not completely new. There is similar application called
MyTeksi or GrabTaxi founded by Malaysian entrepreneur. The concept is pretty
much the same, while MyTeksi specifies in cab / car taxi instead of motorcycle
taxi. Beside that the concept of fixed fare motorcycle taxi was formerly
introduced by O’Jack Taxi Motor in Yogyakarta or Bandung TaxiBike in Bandung. I
only aware of these two companies, if you know any please let me know by
leaving comment.
So
the question is: what makes GoJek more phenomenal than the previous
motorcycle taxi? I believe it is because GoJek can adapt with current
technology. Not only provides phone number, GoJek also creates mobile
application which can be downloaded through Playstore and Appstore. The
interface is user-friendly, wrapped with good design, provides professional-look
drivers with their own uniform, and solves people’s problem, who could resist?
CASE
OF JEOPARDY
A
woman posted a provoking status on her Path status. She witnessed a GoJek’s
driver was beaten by some local motorcycle taxis because the driver stepped on
their territory. Apparently this new concept creates an alarming dispute
between them. It did not take long for this news to spread and responded
by fellow people who encountered similar situation. Thankfully each GoJek’s
driver has insurance so any medical expense should be covered.
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| GoJek Driver Source: ekubis.beritaprima.com |
GoJek’s
founder replied that he never intent to bother local motorcycle taxis and encourage
them to join GoJek. However this humble invitation was not compelling enough
for them. They assume that their wage will be decreased because they have to
pay percentage to GoJek’s management. It is also widely known that the price
for local motorcycle taxi is highly marked-up and irrational. They do not want
to lose that privilege. Another reason is some of them can’t adapt with the
technology. It seems confusing to them.
LEVELS
OF INNOVATION
Before
we discuss about the case, let’s take a look at three levels of innovation. Krsto
Pandza (2015) divides innovation into 3 levels.
- Incremental Innovation is an improvement from existing products. It focuses on making previous product better. Example: Apple’s iPhone.
- Radical Innovation is completely new and able to start revolution (many other innovations will come from this innovation). It doesn’t happen frequently. Example: internet.
- Disruptive Innovation is low-cost alternative which can affect other industries. It makes product more affordable and accessible. Example: digital camera.
From
this short explanation, it is clear that GoJek’s innovation can be considered
as disruptive innovation. It explains a lot about why this resentment happened.
Yes, disruptive innovation is often considered as threat. The term disruptive innovation itself was coined by Clayton Christensen (1997) in a book entitled The Innovator's Dilemma.
Disruptive innovation is the most likely to trigger drawbacks. There are so many examples in bigger
scale business and one of them is Kodak. The development of digital camera and
digital imaging force Kodak to collapse. The cycle is always the same and
starts with niche market. At first only several people use it and gradually it
dominates market. Joseph Schumpeter (1942) calls this phenomenon as creative
destruction. It is an innovation mechanism when new production units replace out-dated
ones. So if you want to be an entrepreneur you can ask, “What new product or technology could potentially destroy my business model?”
In
conclusion this innovation cycle is inevitable. What makes it more complicated
is GoJek is not facing companies as rival, but Indonesian culture that has been
rooting for decades. There is no Chief Design Officer or Chief Brand Officer
to brainstorm an alternative strategy. It is a huge challenge but once GoJek
can overcome it, no doubt GoJek will thrive and leads the motorcycle taxi’s
market.
Good
luck, GoJek!
