A venture capital firm with a successful track record since 2015, Jefrey Joe is the co-founder of Alpha JWC Ventures, which focuses on investing in technology companies in Indonesia. As a seasoned businessman who has helped build a start-up called Sepulsa, and who has also served as Chief Operating Officer with Groupon, Jefrey pooled his operational knowledge with his business partner Chandra, who has been investing since 2010. Together, they want to take technology firms in Indonesia to shine on the global stage. We recently caught up with him and talked about investing in start-ups—and why a good founder makes all the difference.
Where does the name Alpha JWC Ventures come from?
JWC stands for Jef, Will, and Chandra. We also wanted to create value for everyone as well as gain returns above market benchmarks, and hence we chose the name Alpha.
What is the motivation behind Alpha JWC?
Personally, when I took my master’s degree in the US, I remember how big the impact of technology was on my daily activities. For example, whenever I wanted to order something from Amazon, I could just do it lying down in bed [laughs]. If you see large companies in the US right now, most of them are technology companies. We decided to set up Alpha because my partners and I wanted to create the biggest impact in Indonesia. We are very focused on the Indonesian market as we have noticed that there are not many investors who focus mostly on start-ups in Indonesia. One of my partners, Chandra, has been investing since 2010, so we had a track record already.
What is the biggest difference between what Chandra was doing back then and what the three of you are doing right now?
Chandra used to invest but in the form of institutional Venture Capital(VC) funds. So in 2015, we decided to create Alpha JWC Ventures to provide an institutional fund focusing on the Indonesian market. Institutional funds are sourced from among others, foundations, listed companies and fund of funds.
How do you know which start-ups to invest in?
It all boils down to experience. Previously, I was the COO of Groupon and I also created the start-up Sepulsa. Chandra has been investing in start-ups since 2010. So when we pooled our experience, we have both operational and investment experience, and in a way we know which start-ups to invest in.
How do you decide the amount of funding needed by a start-up?
It all comes back to experience again [laughter]. Intuition plays a little part, too, but mostly we rely on our experience, analysis, and a good understanding of the market. From this combination, we can confidently tell a start-up that if it wants to build certain things, here’s the amount that it will need. In addition, we have to see what kind of resources they are using to create traction.
How do you characterise a good business founder?
You can always know whether a business founder is good or not from the way he or she answers questions like: “How do plan to grow the company?” From there, we can see whether he or she thinks in the short term or long term.
So it is important for founders to have long-term thinking?
Long-term thinking is important, but it has to be balanced with good short-term execution too. If everything the founder said is just vision with no traction in sight, then it won’t do. You cannot go far if you can’t take the first few steps.
When assessing potential start-ups to invest in, what kinds of mistakes by founders do you usually see?
Some mistakes that I have observed are that there are founders who are not focused on their product, there are those that are not aggressive in their business development, some are finding a hard time recruiting great talents, and there are some who are not able to pivot. Pivot means that despite your desire to create something, it might not work out in the end, and a good founder will know how to do a pivot. For example, in a scenario, if plan A doesn’t work, you should be able to find a plan B.
What is the most common theme you notice in failing start-ups?
For Alpha JWC Ventures, there fortunately haven’t been any failing start-ups that we have invested in. For Chandra, as he has been investing for a longer time, he already has experience with failing start-ups. The common threads include several factors: wrong timing, the founders’ capability, the ability to build a good team, and the ability to face competition.
What are the challenges faced by start-ups right now?
The first challenge is talent. Finding a good founder and the right set of team members who can execute well is difficult. No amount of funding will help if you don’t have the right talent. The second is user adoption, which is natural as it is part of growing a business. Thirdly, regulation can be a potential challenge as well. But it depends on the government. So far, the government has been very good in terms of supporting the growth of start-ups.
What kind of potential investments are you looking for in the future?
There are plenty of potential investments for sure. For example, insurtech (insurance technology) is something new that we can possibly explore, but we can’t say for sure that we will invest in certain technologies because it all comes back to the founder or the people behind the company. Even though we want to invest in insurtech, we won’t invest if we can’t find the right founders.
How do you see the growth of e-commerce in Indonesia?
There is still a lot of potential. Currently in China, there is a company that is trying to compete against JD and Alibaba even though both are considered as giants in e-commerce. So I believe that big companies can still be disrupted. If you take a look at the companies in the Fortune 100 list, every 50 years more than 90 per cent of the companies listed there will change. So don’t be afraid of not being able to overtake these big corporations.
What is your vision for Alpha JWC Ventures?
We want the company to be the most impactful value-adding partner and to take our partners onto the global stage. I see vision as something that is long term, and I believe that technology is something that is scalable and easier to expand to other countries. That is why we have the bold vision of hopefully taking our founders onto the global stage in the future.