Albert Lucius talks about OVO’s partnership with Grab as well as how he dealt with failures and challenges

Last week, we encouraged members of our Telegram Group to drop their burning questions for OVO Chief Product Officer Albert Lucius for the revived e27 Ask Me Anything (AMA) feature –and he has returned with his answers.

Find out what Lucius got to say about the company’s partnership with Southeast Asian ride-hailing giant Grab –and how they plan to bring greater inclusivity through their work.

Will Indonesia become a digital-first market for payments? Should it? – Kevin M.

Currently, digital adoption for payments in Indonesia is still very low. However it is growing rapidly. Digital payments have many benefits, including [the ability to] onboard more unbanked Indonesians into financial inclusion.

Whether Indonesia will become a digital-first market depends on many factors: Infrastructure improvements, regulation, and technology enablement. I personally believe Indonesia is heading into the right direction. Indonesia will benefit greatly from digital payments, especially as a fragmented archipelago with physical infrastructure that is far too challenging for a full blown financial and banking service.

What exactly is the greatest challenge in promoting cashless payment in Indonesia? Why did it only begin to take off in 2018? – Anisa M.

The deeply embedded habit of utilising cash and infrastructure are the key challenges in promoting cashless payment. Having an expansive ecosystem also plays a key role in wider acceptance and adoption of cashless payment in Indonesia.

Also Read: [Updated] Tokopedia, OVO team up to offer the payment service on the e-commerce platform

What are some of your most memorable failures, and what lessons did you learn from it?
– Hiro

I’ve personally had many failures in life and I believe that’s part of life. The most important part is that we learned from it.

In the context of building a startup, my most memorable failure was when we put business first ahead of customers. I think the pressure to put business growth ahead is very strong in startup environment, especially due to pressure to grow the business for fundraising. Sometimes, when we are chasing growth, we made business decisions that prioritise short term growth instead of focussing on what the customers really need.

Fortunately, we realised this very early on as we have open communication channel with our customers. We’re here building products ultimately for the customers, so we have to strive to serve them. When you have customers loving your products and services, they will be your supporters for the long term and bring more customers for you.

What is the most unknown and counter-intuitive fact about Southeast Asian startup ecosystem? – Arnaud Bonzom

The Southeast Asia startup ecosystem changed dramatically in the past five years. I remember when I first started hearing about the large Indonesians unicorns (Tokopedia, Traveloka) back then in 2012. No one saw them as a destination to work for.

Then I started Kudo in 2014, we had to literally convince people to move from working in large corporations into joining a startup. Now in 2019, everything couldn’t be more further apart. Working at large unicorns is suddenly the cool thing to do.

What I’m trying to say is that Southeast Asia is a VERY dynamic ecosystem, and it changes very fast. This is not only in terms of people hiring, but also regulation, ecosystem, and competitive landscape. So my tips for any potential founders in Southeast Asia: Don’t wait, do it now. That six months of wait could mean the difference between “you’re the head of the train” or “you’re one of the ‘copycats’ who are always one step behind.”

Also Read: Indonesian digital payment services platform OVO appoints new CTO, with focus on growth

What’s your long-term vision on how the company will change the way Indonesians, Southeast Asians, or even global citizens live? – Julien Condamines

OVO aims to be the premiere digital wallet for Indonesians. We will be supporting Indonesians as they go about their days, from the moment they wake up until they fall asleep. We want to break the heavy habit of using cash, allowing more people to be part of the financial inclusion, and supporting, in the long run, Indonesia’s growth as a digital economy powerhouse.

What is the biggest reward from your partnership with Grab? And what’s the biggest
problem? – Patera P.

Since partnering with Grab, we have seen incredible growth towards our goal of making digital payments something anyone can use anywhere, anytime:

• Made cashless payments available for millions of Indonesians for the first time!
• With OVO on the Grab and Tokopedia platform, OVO is now available on more than 115 million devices
• Our large, shared user base attracts many businesses including many small- and medium-sized enterprises (SMEs)
• With acceptance across offline retail, online-to-offline services and online commerce, we have become the most widely accepted payments platform
• As of December 2018, we have onboarded more than 230.000 SMEs into the cashless movement
• Finally, OVO has now become the e-wallet with the most use-cases
• Millions of middle class consumers use OVO now to pay cashless for Grab transport, Grab food delivery as well as offline transactions at small and large merchants, from warung stalls to major malls

Our value proposition isn’t limited to OVO. As we give Indonesians more reasons to use OVO at more places, I’m glad that it also means Grab drivers can earn more, as more people top-up their OVO wallets with Grab drivers.

Also Read: How coworking space operator UnionSPACE plan to support fintech startups in Indonesia

What are your plans to ensure inclusivity moving forward? – Prisca A.

OVO currently partners with many organisations focusing on financial inclusivity, such as Kudo and Warung Pintar. Through the reach of their agent network, OVO will be able to reach many Indonesians who are still untapped by technology and financial services.

In addition to that, OVO will continue to expand its partnership with notable brands in the technology and retail sphere, as well as strengthening OVO financial services to attract more merchants and customers. Ultimately providing significant contribution to the national financial inclusion rate.

More payments players will enter in 2019. What’s OVO’s user retention and acquisition strategy other than cashback? It seems like payment players are competing in giving bigger cashback percentage nowadays – Richard D.

We keep expanding our services based on Indonesian most use cases. We want to be their primary wallet where customers can use OVO’s financial services from the moment they wake up until they sleep.

In the long run, by enabling consumers to pay cashless for things they usually pay for –but in a more convenient, more affordable, and safer method– that’s what going to make cashless win against cash.

We’ve seen this trend happening in other countries, such as China. I recently visited China, and everyone is using digital payments to pay and send money around because it is the most convenient thing to do. When paying via digital is easier and more convenient than cash, eventually more and more users will create a snowball effect to move to digital payments.

Also Read: Aiming to add 4 new startups, Mandiri Capital Indonesia targets insurtech, investment management sectors

There are so many cashless services. What’s OVO doing differently, and is it too idealistic to think that mobile payments can solve financial inclusion challenges? – Budi Azwar

Our open ecosystem makes it super easy to choose cashless: Our strategy is to build trust and value. We open up our ecosystem and create interoperability with the partners people trust enough to spend their money with: Grab, Tokopedia, Hypermart, Matahari Department Stores, even your favourite cendol and satay stalls.

Is it too idealistic? I really don’t think so. Financial inclusion is all about opening access to the people to begin with, and then providing a product solution that caters to them. Digital payments have far less barrier to entry compared to a full blown banking solution. Digital payments also don’t require the heavy investment of infrastructure such as bank branches; it makes digital payment solutions able to expand more rapidly across the archipelago of Indonesia.

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Image Credit: OVO

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The Singapore-based company raises the round from Singapore’s Wavemaker Partners

Musiio, an AI-based digital music discovery and creation platform, has secured US$1 million seed round from Singapore’s Wavemaker Partners. Joining the round is Exponential Creativity Ventures from U.S. and angels, as reported by Techcrunch.

Musiio focusses on reducing inefficiencies in music curation using artificial intelligence that augments the human curators’ work. The purpose is to give those who lack the time to scour Spotify the opportunity to automate or partially automate the music search process.

Also Read: These are the five startups joining Phandeeyar Accelerator third batch

This would be the second deal Musiio secured but the first that is out of its Entrepreneur First (EF) program. The first one was done April 2018 and was worth US$57,000 courtesy of EF.

The seven-person operation was founded when Musiio CEO Hazel Savage, who’s a former streaming executive, met CTO Aron Pettersson in the Entrepreneur First program in Singapore.

Musiio’s clients include Free Music Archive (FMA), the public music site by independent U.S. radio station WFMU. With FMA, Musiio worked on developing a playlist that raised the profile of a number of songs that had been buried deep in the catalog, allowing fair chances for a track to get more number of plays.

Also Read: IOT-based bike-sharing service GOWES launched in Semarang, Indonesia

“We’re expecting two or three commercial announcements as we’re working with streaming companies and sync companies for now,”Savage said.
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Photo by rawpixel on Unsplash

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Your defining features could be the problem

Two years ago, we took a long hard look at our business.

We had recently made substantial changes to our business model but weren’t getting the results we wanted.

After spending some time with a whiteboard and a few smart people, we could see clearly where we needed to focus our efforts — we had a lousy conversion rate.

There were two possible solutions:

1. We could get more eyeballs — drive more traffic to the website.
2. We could figure out why our product wasn’t converting.

Let me state the obvious — dramatically increasing the traffic at your site is not easy. We were already doing everything we could on this front.

Besides, with bad conversion, we were throwing a huge amount of users away. It made a lot more sense to focus on option 2.

Still, option 2 was no easy road. Determining what is preventing users from converting is difficult.

For example, we use Aha! to collate user feedback — and listening to users, you would believe we just needed to add more features.

But features are rarely the reason software adoption efforts fail, plus our product already had a shit ton of features.

According to research from the University of Washington, here’s what is important for software adoption:

_{Most important factors for realising the value of software (I got this from HBR/University of Washington. But sadly can’t find the original link)}

As you can see, functionality is rarely the problem. We also looked at our usage metrics to see if any particular feature was standing out.

After some research, it turned out several features had a high correlation with conversion.

Unsurprisingly, they were the features that made Hiri different from other email clients.

Great! Surely all we needed to do was inform and educate. Tell users about these fantastic features so they would use them and convert.

Time for a new onboarding mechanism

At Hiri, we’re big fans of Samuel Hulick’s UserOnboard.

By tearing down some well-known applications, Samuel does an excellent job of teaching people how to think about onboarding. It’s fantastic.

We created an onboarding process that followed Samuel’s rules. We refined the login process, carefully highlighted our key features. We took the time to craft the copy, adding some much-needed personality. The results made us pretty happy.

But, when we pushed it, it didn’t have the impact we were hoping for (not blaming Samuel here!).

We iterated and measured, redesigned and tweaked. But nothing seemed to work.

The reality was that most users paid little attention to our onboarding.

They weren’t reading our precious copy. They simply blazed their way through it as quickly as possible — dismissing pop-ups and walkthroughs just as fast as they could click.

I mean, who doesn’t know how to use an email app?

A different lens to look through

I’ve been handling “User Experience” (UX) since before it was called UX.

By training, I’m an Industrial Designer. A lot of UX concepts have been taken from Industrial Design, but I think one is particularly relevant when it comes to onboarding:

Mental models.

A mental model is an important part of the product adoption process, which looks something like this:

^{The line in the background depicts how a user is feeling at a particular gate. Might cover this in a future post.}

I’ve highlighted the attributes relevant to mental models. The two key points here are:

1. Your product should work the way I expect it to.
2. How I expect your product to work is largely based on my experience using other products.

I’ve known this stuff for a long time but always looked at it as a usability principle rather than a conversion principle.

Also Read: These are the five startups joining Phandeeyar Accelerator third batch

We use elements of this stuff throughout Hiri.

For example, we use conventions that people are familiar with; dropdowns, toolbars, autocomplete, yada yada.

But it occurred to me that we might be able to leverage this principle to help with conversion.

The other important onboarding concept came to light when my co-founder, Kevin, finished the book Hacking Growth, by Sean Ellis.

This is a much more natural way to discover features.

It puts the user in control — no more force feeding them information through a complicated educational onboarding process (which people ignore anyway).

More importantly, it reduced our time-to-Aha moment from one week to one hour.

Our conversion rate shot up from 1 in 50 to 1 in 10. A huge difference.

Conclusion

This approach isn’t going to work for everyone. But I think everyone can take something from it.

Here are the key takeaways:

1. Know what your Aha moment is.
2. Know how long it takes to get there. Try to reduce this time.
3. Be aware that what makes your product unique could also cause confusion.
4. Try to meet user’s expectations — before they use your product, how do they think it should function?
5. Find ways for users to take control and discover your USP/Aha moment naturally.

I hope you’ve found this article useful. Questions, comments? Leave them below and I promise that I will try to answer them. If you liked this article, please share!

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David Power is Founder & COO of Hiri, an ingenious email app.

Photo by John Schnobrich on Unsplash

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Investors seemed open-minded, but did not think it would radically change their strategy

The Stock Exchange of Thailand (SET) has applied for a digital operating license, a move that would allow people to buy and sell cryptocurrencies on the bourse, according to the Bangkok Post.

A core part of the plan is to leverage third-party private companies that already use the exchange. Companies that trade securities on the SET will be able to apply for a broker and dealer license that will allow them to trade “digital assets” (aka cryptocurrencies).

If approved, SET would join a handful of stock exchanges around the world that allow people to buy/sell cryptocurrencies.

Pattera Dilokrungthirapop, the Chairwoman of the Association of Securities Companies told the Post that the hope is to follow the trend of people using cryptos as an investment vehicle.

Dilokrugthirapop said the SET still needs to iron out important details like setting up the actual wallet and and figuring out the back-office workflow.

Also Read: A novel approach to onboarding

The stock exchange is hoping to attract investors because of its advantage in public capital and trust. The issue of trust is particularly highlighted this week after the CEO of Quadriga, Canada’s largest exchange, died suddenly and left US$145 million worth of crypto unaccessible.

That being said, private companies have been operating wallets for years and have a lot of experience to lean on.

Presumably, the SET would be subjected to tougher government oversight which could make mom-and-pop investors more comfortable to put their money in the exchange.

The SET will be responsible for regulatory oversight but the Ministry of Finance will control the operating licenses.

Also Read: AI-based digital music discovery platform Musiio secures US$1M seed round

Investment companies quoted by the Bangkok Post were open-minded to the cryptocurrency push but were quick to point out that it would be viewed as something of a ‘side project’ internally. The quotes suggested investors would still be focussed on their main business and the crypto exchange would not be part of that core.

While the application from SET signals a strategic desire to be a crypt0-friendly bourse, there is still a long way before it becomes a reality.

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Photo by Adam Dore on Unsplash

 

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Launching consumer loan service, Akseleran plans to continue on fundraising to hit its IDR105B (US$7.5M) target

Indonesian peer-to-peer (P2P) lending platform Akseleran announced that it has raised a IDR35 billion (US$2.5 million) funding round from undisclosed banks as well as local and foreign venture capital firms.

On a press conference on Thursday, February 7, Akseleran CEO Ivan Tambunan said that the company is aiming for IDR105 billion (US$7.5 million) for this Series A funding round. If everything goes according to plan, the startup will finalise the funding round in March or April 2019.

With the funding, Akseleran plans to develop it technology, particularly its UI/UX; acquire new talents; and expand its presence in Bali and Celebes. The company is also planning to launch several new products.

Akseleran said that at the beginning of the year, it has begun working with e-commerce giants Tokopedia and Bukalapak. By working with these two marketplace platforms, the company expects to add the number of loan recipient this year.

“Our target is to have more than 2,000 loan recipients by end of 2019. By far we have secured around 450 loan recipients. We also have plans to work with B2B companies to add the number of loan recipients,” Tambunan said.

Also Read: Akseleran launches as Indonesia’s first equity crowdfunding platform, aims to bridge funding gap for SMEs and startups

Throughout 2018, Akseleran had channeled a total of IDR210 billion (US$15 million) of loan. By the end of 2019, the company aims to channel up to IDR1.2 trillion (US$85 million).

“We had also experienced an increase in the number of lender, from 25,000 in 2018 to 56,000. The majority of them came from three finance institutions –Indo Surya, Global Indo, and Andalan– and individuals,” Tambunan said.

At the moment the company own four lending products for businesses: Invoice financing (which contributed to a total of 85 per cent of loan on the platform), inventory financing, capital expenditure, and online merchant financing.

“We have recorded 75 per cent of repeat transaction. This indicates lenders’ commitment to loan recipients on the Akseleran platform,” Tambunan said.

Licence finalisation and product launch

 

Akseleran has also begun to add consumer loan to its list of new products since January. In this segment, the startup is working with relevant partner Best Finance.

Also Read: Beauty services marketplace Mecapan completes equity crowdfunding campaign, launches in Indonesia

“We also have plan to launch employee loan service. Once it is ready to launch, the service will be beneficial for recipients with employers’ recommendation,” Tambunan said.

As a P2P lending service, Akseleran claimed to have been able to curb non-performing loan (NPL) rate to 0.5 per cent. The company was able to achieve this number by focussing on mid-size businesses such as oil and gas, retail, and construction. These certain nature of these businesses is able to convince lenders to continue on using Akseleran platform, according to Tambunan.

To strengthen its position as a P2P lending platform, Akseleran expected to secure licence by the financial service authority (OJK) this year. The process requires time and preparation, which includes the implementation of seamless digital signature feature. OJK also requires digital lending companies to keep money on escrow accounts for no more than two days.

“In accordance to OJK’s regulatory sandbox, we aim to be able to fulfill all the requirements for official OJK licence this year,” Tambunan said.

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The article Akseleran Kantongi Dana Segar Baru 35 Miliar Rupiah, Fokus Kejar Izin Resmi dari OJK was written by Yenny Yusra in Bahasa Indonesia for DailySocial. English translation and editing by e27.

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