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In the MHV Podcast, we speak with leading founders, VCs and operators on their journey in Southeast Asia. In this episode, Jeremy Au, MHV Head of Strategic Projects and host chats with Anton Hariyanto, founder of id/x partners, a B2B fintech providing data analytics & decisioning solution to financial services industry in Indonesia and the Philippines. id/x partners was acquired by Caxe Technologies in 2019.

Listen to the podcast on Spotify, Apple Podcast, Google Podcast or watch the video on Youtube.

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Prefer reading? Read the transcript below.

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Jeremy Au:

Hi, Anton. A pleasure to have you on the MHV Podcast. I'm excited to have you as a founder, as a CEO, as someone with such deep expertise. So excited to share. Anton, good to have you on the show.

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Anton Hariyanto:

Hi. Yes, Jeremy. It's very good to be here with you. I'm looking forward to have this podcast, and get everyone to know about IDX Partners.

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Jeremy:

Anton, could you share a little bit more about who you are and what you've done?

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Anton:

Yeah, yeah. I think briefly, I'm the founder and the CEO of IDX Partners. We've been in the business for offer a bit 15 years or so. And we've been becoming the trusted partners in data analytics and decisioning for the multi finance, banking, insurance, all the fintechs in Indonesia. Years for us, despite the pandemic. And we see that the business will keep growing and growing. And I hope that I can share more about it after this.

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Jeremy:

Great. So how did you decide to become an entrepreneur and founder? Was it something that you always wanted to be as a kid? Was it something that you fell into afterwards? How did it get started for you?

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Anton:

Yeah. Well, I get that question a lot. I guess, when I finished school back in the '90s, back then, I think that there was limited choice of what we wanted to do as a fresh grad. I think at that time, the popular choices were banking, consulting or doing engineering stuff like manufacturing. So I happened to be an engineer by major. But I don't really like doing engineering as a profession. And then, while it was my first job, I think it was very rewarding because I got to know about how the banking works, particularly the consumer banks. And at the time, Citibank was one of the best customer banks in the world.

And I think it was just in my aspiration to have my own business. So after working for about six years at Citibank, I saw that there's a great big opportunity, particularly in Indonesia back then, because the banks at the time, in early 2000s, is quite traditional. The way they process the loans. How they managed the customers is very basic and very traditional, meaning it's very manual. So I think I saw a lot of opportunities there, how we can transform the banking world in Indonesia to be more efficient. I mean, that's what started the whole thing where I founded the company, IDX Partners, to help the banks in data analytics at the time.

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Jeremy:

Great. And was it what you expected it to be? Because you thought that you just had to build it and they would come, et cetera. Was it easy? Was it hard? Did it turn out to be a good, easy transition for you?

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Anton:

Well, I think anybody who start up their new business should expect quite a long dry season. I think at the time, for the first one year, we just did marketing, marketing, meeting people here and there, doing presentations. But no actual work came up, because what provided was quite specialized and quite new at the time. So I think it took some time for the banks to really grasp the idea and adopt that.

So I think we're quite fortunate, in a way, that we got our first client from one of the largest foreign banks in Indonesia. I think that gave us a boost in terms of the credibility. And after that, it is quite a good sailing. We got clients after clients. Well, at the time when we started, I and a friend started this, we didn't expect that it will grow in terms of becoming a large B2B fintech company. We started with two people doing everything and anything. And we didn't think that it will grow like hundreds of people. We probably foresee that it's quite niche, probably we'll scale up to maybe 15 to 20 people. Well, it turned out to be a big business. And we have like 150 people right now in our company.

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Jeremy:

Amazing. And when you think about that, how do you think you change as a founder over time? Because there's a common story for a lot of people, is that when you start out as a founder, you're building a business. And just how you mentioned, it's grown to so many people. How do you think you've changed as a leader and founder over time?

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Anton:

Well, I guess when we had 5 to 10 people, employees, I would think it's like a mom and pop kind of shop where we do everything our own, even myself will do the accounting, will do the contracting. Basically we do everything. But as we grow, now with over hundred people, then I think the first thing is, we need to be able to delegate the operational and also the supporting functions to the relevant team, relevant people.

Number two is, we need to be able to, from the senior team like myself to the young team so that they can be the specific knowledge needed oriented. So we have to be able to give as much as possible the knowledge that we have. Now, as we grow bigger and bigger, strategy definitely will play a bigger role here in the greater group. I guess sifting my role more from the operational project specific roles, but going more and more into management and strategy.

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Jeremy:

You know, switching gears a little bit here. You're talking about all these things in a very structured way, about all the things that you learn as a leader. And I also noticed that you also went to UC Berkeley, which I also went to as an undergrad. I did.

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Anton:

All right. So go bears.

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Jeremy:

Go bears. You studied engineering as undergrad. When you were an undergrad, did you ever think that you were going to be a founder one day, or were you intending? I mean, what were you thinking back then as undergrad? Did you know what you were going to be?

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Anton:

Yeah. Well, I did actually bachelors and masters in Berkeley for mechanical engineering. You're going to be working, I think gives all the technical, the logical, the problem solving skills required to be successful in any field.But I never thought about being a founder. I mean, founder, I think is a term with the startup world now. But back then, I think I just wanted to start something by myself. That's why we started very small, only two people. And we didn't expect to grow a lot. So it's very like a small boutique kind of consulting. And didn't expect to grow big to becoming, later, a publicly listed company or whatever.

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Jeremy:

What were you like as a student back then, rebellious, or were you always in the library or you're exploring America, driving around?

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Anton:

Well, no. No. Well, I was not really a library type student. I guess, I only stepped into library maybe twice in my five years there. So I'm more like a self-learner in a way, rather than reading textbooks. But more like self-learner, and then doing exercises on my own. That's my style of study. And I think now with working also, I think that carries on. I'm still doing a lot of self-study online or offline. But other than that, I think pretty much the usual, what the students do, hanging out with friends, going out to explore. You're playing some, what is it, what we call billiards? A pool table, bowling. All the fun stuff there.

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Jeremy:

What was your favorite memory of those years, because you spent a good chunk of time there, both the undergrad and masters there? What was your favorite memory, in one or two of those years?

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Anton:

Yeah. Well, I guess as a student, it's kind of like protected. I worked a bit here and there, but didn't really know about the working environment, real working environment. Didn't get the pressure of that. So I guess it's a different pressure. In terms of, I think I have some fun memories in terms of classes. There are some classes that I enjoyed most about operations research, about manufacturing, how we can make everything more efficient and optimize profitability, et cetera, et cetera. And also doing hands on projects using robots all those other stuff. It was fun and very memorable for me. Well, other than that, I guess, again, friends were I think where you have all the fun with friends and meeting a lot of people. It's countless, I guess, memories there.

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Jeremy:

Amazing. Beautiful memories. And so, one interesting thing that you chose to do, I mean, obviously because so many people. And I made that same journey years down the road was, you made a decision to go back to Indonesia. You and I both know that so many people made a decision to go either way. It's like, stay in America, California is a wonderful place, versus go back to Southeast Asia. So I'm just wondering, what was the context of your decision, I guess? Why did you choose to go back versus, I mean, lots of people chose to stay in America. So how did you think about it? And obviously you made a decision back then. I guess I'm wondering how you now reflect on that decision, years down the road.

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Anton:

Back again to the field that I want to do. If I chose manufacturing or production, I think I would consider staying in US and working there. But it is not my passion. So I chose banking because something that I, at the time, I think that will be big. I mean, it is already big, but I think it will continue as a business to be bigger and bigger. And especially in Indonesia where we have the fourth largest population in the world, a lot of consumers. And definitely the population also in terms of GDP, everything is going up. And the consumer spending will be going up. So I think in emerging markets, that's where the growth will be.

So I guess there are some pointers there. One is definitely going to banking. Second is going to emerging market. Now, in emerging market. I think Indonesia is the perfect and safest choice for me. Life, largest population in the world. And that's how I ended up picking going back to Indonesia and doing banking. And also, definitely, even back then, I knew that I wouldn't be working for someone or for a company quite some time. So at a certain period of time, I would set up my own business. And again, Indonesia, I think it's the perfect choice because in terms of the barriers of entry or the cost to set up a company, it's quite low. And so the risk, I guess you can manage the risk better doing it in Indonesia.

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Jeremy:

Were you thinking like that back then? Or is that something you think about now?

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Anton:

No, no. Even back then. I knew that I will set up my own company. I don't know what though.

Yes. I think it's amazing how the startup grows, not just in terms of quantities, but the varieties of verticals that the startup goes into. I mean, back then in the IT, what is it, the early 2000, we have the internet boom and bust. While everybody's doing e-commerce, everything internet. So I think back then we know that internet is going to be big, definitely. Digital's going to be big. But it's just amazing to me that now in the past five years, we see that a lot of verticals of startups that we probably didn't think before, like Uber, Airbnb, all those stuff. I mean, who would've thought that a company can be providing places to stay, but not actually owning the place? Same thing with Uber. I think it's very, very, very amazing and very good for the economy and society that we have all these startups providing that kind of service. And especially now, in the pandemic, that really helps a lot.

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Jeremy:

When you say that you've seen a lot of the ecosystem mature and become deeper. Do you have any fun stories of how it was the opposite of that, I guess, in the early days?

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Anton:

Well, maybe I can speak of in the line of business that we do. We do data analytics and decisioning. So we have to rely on data to be able to make the right prediction, analysis, and how to be utilized in the strategy of the business. So back then, in early 2000, 2005, data is very scarce. We don't have, like now we can just connect to the credit bureau. We can connect to the eCommerce provider, telco, all those stuff who can just provide data to us and use it. So back then, data is very scarce. And we needed to work with the clients to get the data. In certain projects, we actually need to pull up the hard copies, the application forms, from different branches and manually input it into Excel.

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Jeremy:

Wow. That sounds like a pain. Pain equals fun. Fun equals pain. So now it's a lot easier. Things are moving faster. I think obviously there's a lot more data in the system as well. And also, that's the new generation of founders that have grown up as such surplus or such a high velocity of data, et cetera. So lot of new generation of startups that assume this velocity of data. What do you see the future for that will be, from your perspective, for these trends?

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Anton:

I think the data growth definitely will still explode. I guess in the future, I think we'll see more like a balance between data regulation and data accessibility. Because for example, like Europe with GDPR. And I'm pretty sure in Asia, Indonesia will follow suit in terms of how we can limit or manage the data privacy. So that can become, I would say, a blocking in terms of how we can leverage data for insights and analytics. But I'm quite confident that, from the regulatory point of view, I think we can still balance. I mean the whole industry, the whole ecosystem, the FinTech and the supervisory bodies will be able to find a balance between how we still manage the data properly without sacrificing the privacy.

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Jeremy:

Let's talk about that because there's always a big debate between data, privacy and the right approach. Because it feels almost like there's the western way, talk about GDPR, obviously in the EU. To some extent, there's the American, some of the dynamics around privacy there. But also, I think there's also the China way. It's a certain amount of regulation, but also it's very localized as well. So what do you think, is there a Southeast Asian way or an Indonesian way? What do you think that is going to be, I guess, from your perspective?

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Anton:

I'm pretty sure that it won't be, I guess, going extreme to the Western world where, by nature, the Western people, they are more privacy oriented. So that will be less extreme to that. But I think with the more technology coming up with the web 3.0, where we have the decentralization of everything. The technology is there. The blockchain, everything is there. That also can change the whole landscape because now with the blockchain, we don't need anybody to be a supervisor. No one is supervising anyone. And it can be a trustless technology. So anyone can participate in it without really filling too much identity. And that, I think, will be a game changer. And it's also something that we are putting efforts to. We have a special team now doing a blockchain based credit scoring, hoping that we remove the friction in sharing the data between the customer and institutions.

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Jeremy:

What would you say are Some of the Southeast Asia data game changers. One that you mentioned is obviously regulation is a big game changer. Then there's something else they mentioned was web 3.0, that allows for these trustless transactions. But what else do you think are the game changers within Southeast Asia or impacting Southeast Asia?

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Anton:

Well, another one, well, again, I'm talking from our line of business. I think open API will also be a game changer because that also allows institutions to share customer information in the right way. Right now, without that open API, there's some, I would say a gray method to get data, which I think is not a proper game changer. I know that some of the countries in Asia have started doing that. Indonesia, I think, is still in the early stage. And hoping maybe in the next year or so it's going to be regulated.

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Jeremy:

What's interesting is that, as you talk about all of this, you've obviously had such a lot of experience as a founder. I'm just curious, when you think about also the fact that you've worked with a lot of VCs along the way and so forth, we're always curious about what advice would you give to founders when looking out for VCs, when fundraising, et cetera? Because we always get that question ourselves. And then we tell people, okay, this isn't the advice we give. So we figure we might well ask our founder friends just to be like, what advice would you give to founders when selecting, when picking, when going out fundraising? Any advice you'd give to folks?

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Anton:

Okay. All right. Well, I didn't have the direct experience in getting VC for myself because when we started, we started small. Pretty much, we used our savings to start the business. We know that it's going to take some time to start off the business. So we made sure that our savings are enough for a year or so, so we don't go starving. But now that I've been doing this and also exposed to VC, I think at the end of the day, as a founder, passion about the business. And you need to have the expertise in that business. I think those two are the main ingredients to start off any business whether it's a startup or any brick and mortar business.

And then the number three, you need to have the right partner to start with. Ideally, you need the right partner to start with. Ideally, you need to have a partner that can complement each other. And I think I was fortunate that I had a partner.

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Jeremy:

That's great. And starting to wrap things up here. If you could go back in a time machine, and go back to the start of your founding career as a founder, what advice would you give yourself back then? You take yourself out, buy yourself some tea or coffee. What advice would you give yourself back then?

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Anton:

Yeah. Well, if I could turn back the time, I wouldn't change much. Fantastic. But also getting another partner who are more like an investment profile. So I would think that we could grow the business, we have a funding. With everything from our own pocket, the business grew. But I think it grew very organically because we didn't have the money to support the cash flow to grow the business. So I think that was just one thing that I would change a bit, that we have that partner.

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Jeremy:

Do you feel like that's something that a lot of founders often ask you about or often face as a problem these days?

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Anton:

I guess back then in the 2000, there is no angel investment. There's no seed investor. I guess it's totally different. I guess even the term VC, I don't think it was coined yet back then. So I think now the investment world is abundant. I mean the investment vehicles are abundant. We have VC. We have angel investors. We have all kinds of VC. And there are a lot of also the incubators as well that can promote the startups. So I think in terms of the access to the funding right now, it's much, much easier in a way. But keep in mind that the number of startups also, like a lot. So I think the challenge now is how we can get the attention and compete and make your startup shiny and better than other startups.

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Jeremy:

How do you advise founders to make their company shiny and better than other startups?

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Anton:

Ideally, I think the startup has to be operating in a while. It cannot be a very greenfield startup. So that will give, I mean, we, as a founder, front the business. Even though if it's a prototype or if a very small scale. But again, I think the investor will also look at the founders, whether they're passionate about it, they have the skills to do it.

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Jeremy:

And I think one interesting problem that everyone always talks about is just, what is performance? Is it more? Is it less? I mean, more is better obviously. But is it enough? And then people are always trying to compare to each other and everything. Do you have any advice about how people should be thinking about performance from a startup perspective?

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Anton:

Yeah. I guess that we'll keep changing. Years back, you're looking at the number of users. Now, probably you're looking at what is it now, the CAC or whatever, the new terms coming out. Well, in terms of performance, I guess, depending on what actually the startup is in, has to demonstrate growth. I mean growth, profitable growth. Now I think we are looking at profitable growth rather than revenue. Profitable growth, and then the path to it. A founder who has a passion and has knowledge on that, I think will be able to clearly explain to the investors how to achieve that road or path to the profitable growth, because he knows them inside and out. So I think that gives the investors the confidence and also the startup.

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Jeremy:

Do you feel like the market has become clearer over time about these metrics about performance over time, or do you feel like it's becoming more complicated?

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Anton:

Well, up to date with all the metrics. But I think that's somehow also driven by investors. I mean, they want to see something growing, looking at different metrics. So now the startups also follow what the investors are looking at out of startups. I don't think it's complicated. Pretty much it's more or less the traditional metrics that we've been doing in the brick and mortar business, but now with the new terms. And I think it's logical to use those metrics.

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Jeremy:

Awesome. Thank you so much. And if there's one piece of advice that you'd give to founders these days, what is that one piece of advice to wrap things up?

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Anton:

What is the end so that you can make the right plan and path? Of course, it will take some time. It will take small steps to start anything. Just persevere and aim for that goal.

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Jeremy:

Awesome. Thank you so much, Anton. I'd love to summarize the three big themes that I learned from you. The first, of course, is thank you so much for actually sharing your early days at UC Berkeley, as an engineering student who was not at a library. So that means you were one of the cool ones driving around and, like I said, being a self learner and learning by doing. And also choosing to go back to Indonesia very early on before everybody thought it was a good idea. And choosing to build your career, not in banking or in consulting or manufacturing, but actually, like I said, banking, but really in the data and eventually becoming a founder. So really quite interesting to hear that thinking, I think at an early stage.

And I think the second part that was really interesting was, of course, hearing about how you observed and seen the early days of the Indonesia startup ecosystem, and how it's matured over time. Not just from a personal basis where the data was very painful, yet fun, like you said, to now very plentiful and easy to connect. But also, I think, how the founders think differently in terms of investing and profiles and pitching to where they are today. As well as how metrics are measured from users to lifetime value and customer acquisition costs today. So I think it was interesting to hear that timeline dynamic in your own words.

And lastly, I think thank you for sharing in bits and pieces the game changes on data a little bit, from a technical basis, about what you see are the big trends that are impacting how data, finance and technology regulation will all impact each other in terms of trends, especially outside the west versus east dynamic/paradigm towards more of what it actually means for Indonesia and Southeast Asia. So thank you so much, Anton, for coming on the MHV Podcast.

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Anton:

Likewise, Jeremy, thank you. Thank you for having me.

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