Indonesia plans to grow 1,000 startups – with no money

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Indonesia last Friday saw the launch of a government-backed initiative called the “1,000 startups movement.”

The program’s goal is to grow 1,000 startups until the year 2020. Together, they will amount to a valuation of US$10 billion.

It’s designed as a roadshow consisting of a series of workshops, hackathons, bootcamps, and incubation programs that will roll through ten large Indonesian cities in the coming months.

From June to September, the “movement” will take off in Jakarta, Yogyakarta, and Surabaya. From September to December, it’ll focus on Bandung, Semarang, and Malang. By early 2017, the program will arrive in Medan, Pontianak, Denpasar, and Makassar.

Initiators of the program are Indonesia’s ministry of communication and information technology and Kibar, an oganization calling itself a tech startup ecosystem builder.

Kibar is involved in a range of startup-related events in Indonesia. For example, it has partnered with the local branch of global startup competition Seedstars World, ran Startup Weekend Jakarta, and organized events for Google through its associated event agency, Gaharu Activation.

Unicorns wanted

At the program’s launch event. Photo credit: Ministry of communication and information technology’s Twitter account.

Kibar and the tech ministry designed the program like a funnel – it sees individuals progress from participating in basic entrepreneurship seminars, to building prototypes, to eventually – if they’re on to something – joining an incubation program.

The goal is to have 200 new startups across the 10 cities emerge from the funnel each year, starting now – which would amount to 1,000 startups by the end of 2020.

The plan sounds ambitious, especially the goal to achieve a total valuation of US$10 billion.

Consider that from the 1,000 startups, only a fraction will survive (the rule of thumb often cited is that 90 percent of startups eventually fail).

If 100 startups survive the program in the long term, each of them would need to grow into at least a “centaur” – startup lingo for a company with a valuation of US$100 million. Even a startup acceleration program as experienced as 500 Startups has only been able to raise a couple of dozen of centaur companies – not hundreds.

Endorsement but no money