Eric Mary: Hi, I'm Eric Mary, Country Manager of Robert Walters Indonesia. And I'm your host for this episode of our Powering Potential with Robert Walters, our leadership series where we interview business leaders, recruitment experts and career growth specialists on their careers, leadership lessons, and the latest talent trends. Today, it's my pleasure to have Tiger Fang, Co-founder and CEO at Kargo Technologies, join us.
Welcome, Tiger. And thank you for being part of this episode.
Tiger Fang: Hey, Eric. Great to be here.
Eric: For our listeners who might not know Tiger, Tiger started his career in product marketing in Apple, followed by stints at various major companies, such as Merrill Lynch, Lazada and Uber across different regions. Today, as Co-founder and CEO at Kargo Technologies, he is disrupting Indonesia's quarter-trillion dollars logistics industry with technology, so we are definitely honoured to have Tiger share his insights with us today.
So, let's begin with our first question. Tiger, could you please tell us in brief about Kargo and its business in Indonesia? Broadly, how has the company and the trucking logistics industry in Indonesia changed since the company was founded in 2018?
Tiger: Yeah. Thanks, Eric. That's a very great and generous introduction. I would say we're not so far as disrupting this industry as much as trying to digitally enable it. And really bring it to the 21st century by enabling the seven million trucks, which is how many trucks there are in Indonesia, essentially to come online.
Just as Uber has done with private cars all over the world, as Grab and Gojek have done with cars and motorbikes. We think that trucks and just the logistics of moving things in Indonesia will come online. It's not a question of "If" but a question of "when". And I think Kargo is really, you know, our mission is to really be able to be at the forefront and really be the first to be able to do that full stuff, all the way from what I call import and export.
So twenty, forty container trucks that will go into the port and pick up raw materials and things that arrive in Indonesia to take it to factories, to warehouses, where they get made into things and produced into consumables, and delivering it all the way downstream to the last mile. And we think that what we're good at is really dealing with truck drivers, dealing with small and medium-sized fleets. These are really the backbones of Indonesia's real economy - small businesses and the mom and pops that own maybe five to ten trucks. Our whole mission is let's give them the tools necessary to be able to come online and find when's the next job, to be able to manage their working capital, to be able to manage their workflow. So you don't have to do all these things that requires manual paperwork and calling people on the phone, “Where are you? Where's my truck?” We bring that all online; we bring that into our app and into our digital ecosystem. And so that the end-to-end transaction; finding a job, booking a job, getting invoice on the job and getting paid, is all seamless and done with a click of a button.
And so, just imagine like the first time you used an Uber or Grab or Gojek, you can get a car, or get something delivered to you by a push of a button, and just be completely worry-free. We want to have that same transformative experience to be had by every business in Indonesia. So no matter if you're large or small, we want that seamless - where is my truck? I know my truck is going to get here by when, and this is how much I'm going to pay. All done through one click of a button.
Eric: That sounds amazing. You were saying seven million trucks in Indonesia?
Tiger: Yeah. So let me just take a step back and give you the context of the market.
So, Indonesia is one of, if you can imagine, the most challenging logistics market in the world, right? The headline numbers is like we have 17,000 islands. There's boats and then there's trucks, and then they have to go on boats, and then they have to go on motorbikes. In Indonesia, that's very true. But especially at night, if you're ever on the road, especially in the cities or even outside the cities, and you kind of just close your eyes and you just kind of seeing how many vehicles are on the road, they're all trucks. This whole country is really still moved by what we call road transport.
What it costs to move goods is one of the highest in the world; it's 25% of GDP, $250 billion dollars a year. And that's done by 7 million trucks and that's only the number of trucks sold in the last 10 years. I'm sure there are much more out there. And so our job is to bring every one of them onto our platform.
So, three, four years in, I think we've onboarded 75,000 trucks, which makes us the largest in Indonesia. That's barely 1% of the total population. So it's incredible how big the opportunity is.
Eric: This is fantastic. I love this kind of ecosystem, where us as a final client, we have no idea what it takes to get all the things that we are getting on a daily basis. So it seems that the size of the game is immense, and it's the beginning of the story. But well done so far, you've managed to get already 75,000 trucks on the platform. Great. So it's about bringing technology at the center of this business. So, as the new technologies constantly come into the market, how is Kargo keeping itself at the forefront as a digital disruptor?
Tiger: Yeah. I think the first and foremost is training our users on how to use the system and what benefits our new way of doing things or the digital way of doing things is better.
I would say that the technology exists, right? And we are the best at it in terms of bringing, let's call it the latest machine learning, the latest algorithms, but to a customer, none of that matters. At least in the beginning. Can I trust you? Who has used your service and can attest to your SLAs, and your speed, and your reliability. And I think that’s really important. Over time, technology obviously is going to make that incremental improvement, right? So we today are managing 75,000 trucks, that's 8,000 vendors. If I have to call every single one of them, it doesn't work. Our whole business just doesn't work. It doesn't scale. And so we've made it - our technology is working in the background. And so, for Unilever and Coca-Cola, they don't know what's happening in the background.
And that's what the key part of technology is, is how is it going to be quiet and how is it going to make you more efficient, and how do you make sure that your customers don't know that it's been working.
Eric: When it comes to digital transformation, what's the main challenges in Indonesia? Any key advice that you would offer companies and the senior business leaders?
Tiger: Eric, if I had the answers to that, I’d be in a different place. Indonesia will be in a different place. Look, I think my hypothesis and my thesis is that with e-commerce penetration going higher and higher, and COVID obviously push that e-commerce adoption with consumers as well as businesses into what would have taken, I would think, years and decades into the last two years, it's really sped that up. And so customers are using Grab and Gojek; they're ordering online from e-commerce. And so customers' expectations of what they need from their businesses and their brands are always changing, and they're always getting up-ed to the next level. And so, that is going to have to push a lot of businesses to think about their own supply chains, and to really think about what type of visibility and what type of SLAs are acceptable by customers.
And so, what we've seen in the beginning when we first started, that trucks used to be just hanging out at warehouses and it'll take days. We're talking about days to unload. And that's just absolutely unacceptable. The reason why it is taking days is because the downstream is not properly planned. The warehouse is not operating 24 hours a day. They have set hours, and there's a whole bunch of things. But prior to digitalisation, you anecdotally hear these stories, "Oh, this is why it happened, the truck driver fell asleep, and the truck was blocking". But now we have data. We have exact points of when the truck is arriving, at what point are they loading, what point are they unloading, and what is the performance and the scorecard of every single trucking company, as well as every single warehouse. And we have that from again, when the materials comes in ports all the way down to when it's delivered to the last round.
And so now, brands and different parts of that supply chain can be data-driven. How do I improve performance? And if they don't, look, when Lazada, Shopee - these are e-commerce marketplaces, they're going to eat these guys as lunch. And they're going to be then forced to have to change.
And so, I think we were kind of there to make sure that, "Hey, when you're ready, we're here. Just so you know, here's the delta. Just so you know, this is the cost expectation that you should be aiming for because your competitors are doing it." So again, I think this is inevitable.
Eric: What's really interesting is that, actually things are going pretty fast, and there are a good number of people who are really not aware on how fast this digital transition is coming. And it's really interesting because you're saying, "Hey guys, actually there are a few actors on the market who are on top of their game on this, and actually if you don't change your habits, actually they are going to be capable to give to the customer an experience that it will be a differentiator and they will go to them." And it takes pretty long to do this digital transition, I guess, for some more classic actors, how they could get better educated that it has to be done now?
Tiger: Yeah, I think necessity is always the mother of inventions. And so as long as folks feel that they're comfortable that their market share isn't being eaten, then there is no motivation or incentive for folks to change. And I think, maybe 10 years ago, folks could have said, "Hey, e-commerce is never going to work in Indonesia because you would need to try things, and blah, blah, blah," and look at where they are today.
And so, I think that those who adapt and those... and look, I think a lot of the conglomerates here in Indonesia are smart. I think I have a lot of conversations with the second, third generations; the eventual owners of these businesses, and they understand the trends. These are mega trends that are happening globally. But yeah, I think it's adapt or die.
Eric: So I was saying you started your career in product marketing in Apple followed by these roles in various organisations - Merrill Lynch, Lazada, Uber. Now, you have co-founded this company, Kargo, as an entrepreneur. What is the key lesson you've learnt throughout your career, and later as an entrepreneur?
Tiger: Yeah, I think there's two. I think one is, in my experiences, I've really learnt a lot about the power of leverage, which is, why have a hundred people do one task when it can be automated to a programme and that one programme, let's call it Engineer, can now do the job of a hundred, and imagine the leverage that you get managing a hundred engineers, right?
So I think that is really the power behind software. There was one little section I forgot to mention, which is we're an asset-light company. And so everything that we do is done on a code, playbook in operations. We own no trucks. We own no warehouses. But yet we're, now if you think about it, the largest trucking, sort of fleet. We have a virtual fleet of seventy-five thousand trucks. And so, it really just comes down to our people and our software, which is basically the whole company.
And so what I've learnt is that leverage is super important. I think in finance, there's a lot of financial leverage in technology. There is obviously machine, which gives you operating leverage.
But if you think about your own career as a manager, just where I want to even set up a business, one thing that really resonates with me is, be in a fast-growing part of the world, in a fast-growing economy, in a fast-growing sector, in a fast-growing company.
That's going to just give yourself just so much leverage because even if you don't do anything, even just doing the same thing over and over again, because of all these external macro factors, you're going to still just feel like you're growing and feel like you're learning. And so, I always tend to try to direct my life and career towards that. And that is why I quit my job in Wall Street, came to Lazada to do e-commerce. Then I quit being an MD at e-commerce in Lazada to become a launcher at Uber, et cetera. So that I think has given me just tremendous leverage in terms of my own personal growth.
And then the second comes down to people. I think that's a really easy one, and I'm sure it's something that you've heard a lot from multiple people but that's really, really true. There's a lot of times where I'm always like, "Hey, should I hire this person, or this person, you know, here's the traits.” And then every single time, if they're that good, we should just hire both of them. And because smart people and really folks that are aligned to your vision into kind of the culture of your company, they will prove their value and they will find other ways to be valuable and they will multiply essentially your company’s growth trajectory and their worth to the company and they will find that. And so that is one sort of another common takeaway that I had throughout all my experience.
Eric: Yeah. I think I share the same views on that. So being in the right environment is absolutely critical for the vibes, for the energy, for the opportunities. And yeah people, people, people all the time. And you’re correct, if they are the right people, they are going to make their space.
Tiger: And it's tough, like you said, right? Like tech companies, talent is so rare in Indonesia. And there's so many opportunities chasing very few talent. And so, it's becoming very, very hard for us to go in and find those hidden gems.
And we have to sell B2B, we have to sell trucking. These are not sexy industries or sexy things to be a part of. But I think that problem is an opportunity for us because those that we do find are really sort of aligned with us in the long term, and are with us for years rather than quarters. Which I think is very, very hard in this market.
Eric: Actually, I always believe that people are joining a company for also the story that they can join. At the end of the day, this is why I like this kind of B2B business because again, nobody expect really that - they don't know, and actually, it's a big surprise. The figures that you were sharing are just massive. And we can really feel that it’s just the beginning of the story.
So people are looking for something fulfilling when they can see that they can contribute or that they can have an impact that is going to last. And when I'm listening to the story that you share today, I don't see an end for it. Just sounds like you guys are extremely busy. And at the end of the day, there will be something for everyone.
So yeah, if you have the opportunity to have two good talent in front of you, let’s not think too much - hire them because if you have people aligned with the story, then that just make the business stronger and stronger. This is something that we are always trying to be extremely careful with because at the end of the day, this is what brings the energy and the long-term energy. We are not talking about people who are only going to join for three months, six months, nine months. I don’t believe in it because it doesn’t bring the strength that you can have with the loyalty of people, while sharing the same vision. So, great for that.
Tiger, thank you very much. I think we are now at the end of the session. Thank you again for sharing your insights and personal advice with us. I'm sure our audience will appreciate learning more about Kargo, and how it is transforming Indonesia's logistics space, and more broadly about the digital transformation in companies of the industry. But thanks again for the time.
Tiger: Eric, I have one prediction. I don't know what's going to happen next year or the next 10 years, but I do know what's going to happen in the next hundred years. And that is in a hundred years, I think people in Indonesia, and even in Southeast Asia, I would say, because I think we have regional ambitions, will be still drinking Coca-Cola and all that Coca-Cola will still be moved on trucks. I think I can predict that with a lot of certainty. So we're solving a hundred-year-old problem, and we're going to be continuously solving for the next hundred years.
So I think that's really the timeframe that I'm at least thinking about the company. And so hopefully, folks will want to join for the next hundred years.
Eric: Yeah. I'll be ready to take the bet as well. So in terms of sustainability, potential of growth, sounds infinite. So, well done guys. All the best, for sure. And for our listeners and viewers, don't forget to stay tuned for our next episode. Take care and stay safe. Goodbye everyone. Thank you.