Jakarta, CNBC Indonesia – The startup world in Indonesia is facing shocks of instability, so some of them have to stop their employment (PHK) for employees. National entrepreneur and Sinar Mas owner Franky Oesman Widjaja has an explanation for this.
According to Franky, the current conditions for startups have really changed compared to before, namely when big countries like Europe and the United States (US) implemented a “money printing” policy, so that liquidity was plentiful .
The term “money printing” became popular after the 2008 financial crisis, when the Fed (central bank of the United States) and many other major central banks around the world implemented a quantitative easing/QE policy. This central bank QE policy is called “money printing.”
Read: After Mass Layoffs, Ruangguru CEO Reveals Business Plan
“So it was time to raise money [menggalang dana] it’s easy for startups because many print money. These funds have been invested a lot, all the startups have been given a lot of money,” Franky said during a dinner at the Grand Hyatt Hotel, Jakarta on Tuesday (7/12/2022).
Franky said that in the “money printing” era, investors have made big investments in startups. Money is used to be burned on promotions to attract customers, or the term is burning money. “So the business model was like this [burning money]. If someone is successful, that’s great,” she said.
Now a tight monetary policy has started, not as relaxed as before. The US central bank, the Fed, has also started raising its key interest rates. As a result, investors are more careful with how they use their money.
According to Franky, this condition is good, to be a lesson for startups. So that these startup entrepreneurs can learn, compete and adapt in order to become stronger.
Read: Not just startups, this row of tech giants are mass layoffs
“If there’s never been a crisis like this, we won’t learn. Everyone learns how to do real business, but it’s not the easiest way anymore. So how do you find a fast and accurate way,” said Franky.
Recently, the startup world has been increasingly shocked by the mass layoffs of GoTo, Shopee, and Ruangguru. Afterwards, many other startups went bankrupt.
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