Arnold Egg Reveals All About the Future of the Digital Industry

This article is part of DailySocial Mastermind Series featuring innovators and leaders in the Indonesian technology industry to share stories and perspectives.

It has been more than 20 years since Arnold Sebastian Egg or familiarly called Arno Egg set foot in Indonesia. During that time, he has been trying to build a business in this country, going in and out of the e-commerce world, exploring the travel industry, and finding his passion in the digital world.

It was the vacation that brought Arno to Indonesia, but the digital business that kept him alive. He started at a fairly young age with Tokobagus, spent more than three years until he finally achieved traction, decided to merge, and finally broke away to build his own digital venture. In 2013, he officially broke all limitations by becoming an Indonesian citizen to continue working in the archipelago market.

Arno is a person product guy, he builds products based on what consumers need. However, he also advises against falling in love with your product and still listening to people's opinions. He has tasted sweetness and wiped away the sweat by building a startup from scratch. Tokobagus is his first legacy. He is now focused on developing digital products through Sprout Digital, and recently launched a new platform called stump. Additionally, for the last 6 months, he has also been involved as a Founding Partner of a Venture Builders named Wright Partners.

DailySocial had the opportunity to meet him virtually and discuss the digital industry in the country, and he was very excited. Below we present a more complete story.

When did you become interested in exploring the technology industry?

I was one of the children who first used a PC at school. It all started when I was very young, then developed an interest in computers and became a first generation computer science student. Initially, I studied in Rotterdam then moved to the US to explore the things I was interested in. After that, I returned to the Netherlands.

How did your story come to Indonesia? What keeps you here?

I went on holiday to Indonesia. I enjoyed relaxing on the beach, then found an internet cafe and started discussing with the people there. That's how I started doing digital things in Indonesia. I think this is the best place for digital products.

I come from the Netherlands, but have been in Indonesia for a long time. What I know is that to be successful, you need a large audience. In Europe, this becomes especially difficult because each country has its own culture, making it somewhat difficult to measure. In Indonesia, even though there are many different cultures, the way people do their activities is still the same. That's why I started my digital journey in Indonesia.

In the past, I admit it was difficult, the internet was very expensive, even though the audience was large, no one could go online. Therefore, in the early days, I started to establish software house in Bali, building a line for the European market, as a side project. That was the origin of Tokobagus.

So, Tokobagus was previously a side project, what's the story behind it?

Actually, this is a funny story that I have told many times. This job came from a client in the Netherlands who wanted to set up a business classified then fail and blame us for spending a lot of money without significant results. From difficulty getting users to finally failing before it could enter the market. I think most people forget that when you start a digital company, it takes quite a long time to gain traction.

With Tokobagus, it took 2005-2008 until we got real traction, about 3 years. I think the biggest lesson here is that you have to be patient. When companies start to grow, many start collaborating in the market, they join forces with other companies. We acquired Berniaga because it was clear that we were both fighting for the same position. This made sense, and we could focus our energy and resources on developing products and serving consumers. This is also to bring peace to the market.

Arno Egg with the Tokobagus.com team at the 2011 Power Seller Community event

Not long after Tokobagus, you started a business in the OTA space. How was your experience?

When I left, I had a very strict non-competition clause with Tokobagus, so I couldn't do anything on an e-commerce basis. After exploring, the only thing I could do at that time was OTA. During that time, I finally officially became an Indonesian so I could continue working in the market, and the situation became much better. When I was a foreigner, doing business in Indonesia was quite challenging with all its limitations.

For me, the travel industry has been a wonderful but very difficult experience. Even though it is becoming more digital, it tends to still be quite conventional with the internet. My only experience at OTAs was being a spectator on the sidelines. I spent that time networking, getting context with the product. As soon as my limitations expire, I can return to the e-commerce base. While I enjoyed the ride, OTAs have been a very difficult battle to win, there are many bigger players with more funding and experience. Therefore, it's okay to fall, get ready for the next adventure!

Finally you return to the e-commerce industry. Can you briefly explain the process?

Back to e-commerce, I worked for corporate, helping set up online channels for HP which focuses on the consumer and SME markets in Indonesia. In the corporate industry, they do things very differently. Even though they have an incredibly strong product, the digital movement is still quite slow. I didn't stay here very long, but I learned a lot. This experience gave me insight into how to move in the market in a corporate way and how their execution is different from other digital startups. After that, I was asked by a friend to help set up digital products at Lippo.

I actually went to Lippo to set up a digital bank, which is now known as OVO. Because we do a lot of research, apart from that I also help MatahariMall.com (E-Commerce Marketplace), Mbiz.co.id (No.2 B1B e-procurement in Indonesia), and Red Carper Logistics (RCL - A logistics company that specializes in in fulfillment last mile). However, OVO was my first case in the fintech field. It's really fun, because I like doing new things. We learn how to do core banking system, Switch, and what the payment system is like in Indonesia. It's been a great journey in learning a lot and understanding how banking works and how we can disrupt it.

You had time to try out the e-commerce industry, OTA, and then fintech. What actually became passion You?

PASSION I am digital. I am very happy that digital has now become the normal way of business. That way, you have to be active in the digital realm to survive. This happened really fast. Indeed, my initial passion was in e-commerce, and while I devote a lot of my time there, I still enjoy doing other things.

I am happy with Sprout digital, helping people build their products, as well as building corporate businesses. During my time at Lippo or Bizzy, I had many ideas that didn't get approval or funding. However, now I can execute it myself and release it to the market and be ready to serve the Indonesian market. Whenever an idea pops into my mind and I have time to try to work on it and see what happens, I feel blessed.

In one timeline, you have responsibilities at several companies in parallel. How do you make sure everything goes together?

It's important to put your trust in the right people around you as well as establishing good relationships with everyone you work with. With a good layer around you, things can be easier, because they can give you the information you need to make decisions. At OVO we don't have that layer yet, so everyone reports directly to me, and it's really important to get to know everyone.

When you build connections, not only on a co-worker level but also on a personal level, therefore, you can understand what other people are going through. I personally don't believe everyone can function 100% of the time. There are always ups and downs. Everyone has personal problems and work problems. If you can understand them and you can give them space when they need it. That's important too.

Arnold Egg with Bizzy Korea

When he first came to Indonesia as non-native, What is your impression of this country? Are there any difficulties adapting?

Of course, that takes time. I come from Europe where people's movements are not as fast as when I lived in Bali. In Jakarta, it's getting more alive. For me, because I was so young when I got here, I was able to fit in easily, just trying to blend in. I'm just like an ordinary kid who happens to be a foreigner. When I arrived in Indonesia, I decided I wanted to work here, so I learned the language as quickly as possible. Although English works well, because people speak English everywhere, for certain purposes, it is very important to understand the locals. You will get a lot of information when you speak the same language.

You've built several companies, with everything ups and downs, What makes you believe in the Indonesian market?

In my opinion, Indonesia is the perfect market for digital. It is quite disappointing to know that some global investors have never put Indonesia on the map. There are so many islands and digital can bring equality to the market. That problem is not resolved to this day, I am working to digitize the logistics supply chain, working on several projects with farmers to ensure those outside Java can stay involved. Infrastructure is not yet optimal and there are many processes that are still inefficient, this country is very large. Digital will be a great tool to make it more efficient and put Indonesia in a competitive position in the region.

At school I learned a lot about Indonesia, there were many contacts in my past. At least I am happy to call Indonesia my home, to be able to make my dreams come true, Indonesia is the best market to do it. This land has all the elements to become a very powerful country. With all the unicorn companies and big players, if you compare with other markets in the region. There are many winners involved in the competition and the market is already educated. I was so excited to hear that.

Tell us about your current company, Sprout Digital? What vision do you want to realize?

For me, Sprout is a foundation. There are several goals I want to achieve with Sprout, namely to put new talent into the market. I am very happy to see that many people who were previously at Tokobagus now have good positions in the industry. That's also what I want to do here. I supervise many young people who are just starting out in the digital industry. I want to give them the right tools to then be successful in the future.

And of course, Sprout allows me to build products I love. We just launched Toco. From the beginning, the Tokobagus story was never finished. Seeing e-commerce become less and less useful for small players made me think it was time to pick up where I left off. Today's Toco is not much different from the Tokobagus of the past, but we will continue to add features to allow users to buy and sell more conveniently without losing their hard-earned profits. Making it more transparent. Currently, the form is C2C and will increasingly move to a mixed market of C2C and B2C. The process will not be fast but sure.

New things always appear in my mind. In addition to supporting many companies to succeed in the digital space, Sprout allows me to get those ideas out of my head into products that people can start using.

It's terrible what is happening to the world, it's painful to see people suffering because of Covid, not only in the world of health but also in business. One positive thing is that this accelerates market education. I went to Lampung for a project to help farmers. I see everyone has a smartphone for their children's education. It speeds up the whole digital process, people start to understand how to use it. All of this will bring the distance between rural residents and urban residents closer. Digital transformation helps level the playing field and gets everyone on the same page.

Arnold Sebastian Egg with the Sprout-Toco team

In today's digital era, how do you describe the technology industry in the future?

I love seeing how people are setting up their businesses now. Indonesia itself is already an attractive market, we don't need to look too much at the global world from the start. If you want to start something in Indonesia, if you're successful, that's a big market to serve. It's not that I don't see Indonesia being able to compete in the global market, I think in the future it might be able to. But I think it's also important to take things one step at a time. Don't do it because you want to, but if there is demand, then do it. For me, success in Indonesia is enough, going global is not my biggest goal.

Organic growth is fundamental. You can speed things up but you shouldn't explode by buying users. That will leave you with nothing. I admit to being old-fashioned, it makes me go against the grain. For me, it's all about PnL (profit and loss). Does this business make sense? can you scale it? If you scale it, is it still profitable or not? I build products because I want to serve customers. I understand customers, what they need, and their problems. I think that's also the reason why Indonesian companies can compete with global players when they come in. Amazon, eBay, Rakuten don't understand users, we understand our customers. It was an eye-opening experience.

But when it comes to investing, it's something people have to understand. Companies brag about how they are raising more money when what they should be doing is focusing on building the right company. It is important to create a healthy investment climate.

As a person serial entrepreneur, What can you say to the technology and digital enthusiasts out there who want to succeed in this industry?

You need to love what you do, therefore, every struggle will be enjoyable because you enjoy it. There are no success stories from day one. Everything is about struggle, there is always a fight. It's very difficult to be successful. I say this because I experienced it myself, every startup will be painful and have many obstacles. I started Tokobagus with my own domain, building it with all the time I had. If I may say, bootstrapping is a good way to start a business.

Don't fall in love with your own product. If your customers say they don't like it, believe them. It's okay to fail, it's better to fail quickly, rather than going too far. Maneuver, pivot, understand what consumers want and do it again. If you want to do something truly new, be prepared for an uphill battle because you need market education. Note to self: Work is important but you need to set aside time to be with your family and loved ones. It is important to have the right balance in life.

If the opportunity arises, would you like to return to the Netherlands to start a new business?

No. In Indonesia, people like innovation, people like trying new things. Every time I go back to my hometown, it always scares me. I always do the exact same thing I did when I was there. What I'm saying is, they're so much slower to innovate, it would be very tiring for me. I was very blessed because I went to Asia. Right now I'm in the center of the epicenter. Asia is where innovation or new markets will head into the future. I believe there will be ups and downs. It's an exciting time to be here. Why go back to the past?

-Original article in English, translated by Kristin Siagian