GoJek: Jeopardy Behind Disruptive Innovation, A Case Study

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Lately people in Indonesia (mostly Jakarta and other urban cities) were shocked when an innovative business turned out to be disruptive. Most people could not understand why brilliant idea is not feasible enough. It reminds us of the classic ‘we can't please everybody’ story, but if we look profoundly this is a common case in innovation process.

GoJek Application
Source: techinasia.com

CONCEPT OF GOJEK
GoJek is a motorcycle taxi that can be reached through phone and mobile application. As other ordinary taxi, the fare is fixed depends on the distance. People love it because GoJek is cheap and easy to access. They feel delighted with the fair pay-what-you-get service. Moreover they do not have to walk to find the closest motorcycle taxi since GoJek driver offers door-to-door service. Generally there are 3 main services: transport service, instant courier, and shopping & delivery.

Frankly GoJek’s innovation is not completely new. There is similar application called MyTeksi or GrabTaxi founded by Malaysian entrepreneur. The concept is pretty much the same, while MyTeksi specifies in cab / car taxi instead of motorcycle taxi. Beside that the concept of fixed fare motorcycle taxi was formerly introduced by O’Jack Taxi Motor in Yogyakarta or Bandung TaxiBike in Bandung. I only aware of these two companies, if you know any please let me know by leaving comment.

So the question is: what makes GoJek more phenomenal than the previous motorcycle taxi? I believe it is because GoJek can adapt with current technology. Not only provides phone number, GoJek also creates mobile application which can be downloaded through Playstore and Appstore. The interface is user-friendly, wrapped with good design, provides professional-look drivers with their own uniform, and solves people’s problem, who could resist?

CASE OF JEOPARDY
A woman posted a provoking status on her Path status. She witnessed a GoJek’s driver was beaten by some local motorcycle taxis because the driver stepped on their territory. Apparently this new concept creates an alarming dispute between them. It did not take long for this news to spread and responded by fellow people who encountered similar situation. Thankfully each GoJek’s driver has insurance so any medical expense should be covered.

GoJek Driver
Source: ekubis.beritaprima.com
GoJek’s founder replied that he never intent to bother local motorcycle taxis and encourage them to join GoJek. However this humble invitation was not compelling enough for them. They assume that their wage will be decreased because they have to pay percentage to GoJek’s management. It is also widely known that the price for local motorcycle taxi is highly marked-up and irrational. They do not want to lose that privilege. Another reason is some of them can’t adapt with the technology. It seems confusing to them.

LEVELS OF INNOVATION
Before we discuss about the case, let’s take a look at three levels of innovation. Krsto Pandza (2015) divides innovation into 3 levels.

  1. Incremental Innovation is an improvement from existing products. It focuses on making previous product better. Example: Apple’s iPhone.
  2. Radical Innovation is completely new and able to start revolution (many other innovations will come from this innovation). It doesn’t happen frequently. Example: internet.
  3. Disruptive Innovation is low-cost alternative which can affect other industries. It makes product more affordable and accessible. Example: digital camera.

From this short explanation, it is clear that GoJek’s innovation can be considered as disruptive innovation. It explains a lot about why this resentment happened. Yes, disruptive innovation is often considered as threat. The term disruptive innovation itself was coined by Clayton Christensen (1997) in a book entitled The Innovator's Dilemma.

Disruptive innovation is the most likely to trigger drawbacks. There are so many examples in bigger scale business and one of them is Kodak. The development of digital camera and digital imaging force Kodak to collapse. The cycle is always the same and starts with niche market. At first only several people use it and gradually it dominates market. Joseph Schumpeter (1942) calls this phenomenon as creative destruction. It is an innovation mechanism when new production units replace out-dated ones. So if you want to be an entrepreneur you can ask, “What new product or technology could potentially destroy my business model?”

In conclusion this innovation cycle is inevitable. What makes it more complicated is GoJek is not facing companies as rival, but Indonesian culture that has been rooting for decades. There is no Chief Design Officer or Chief Brand Officer to brainstorm an alternative strategy. It is a huge challenge but once GoJek can overcome it, no doubt GoJek will thrive and leads the motorcycle taxi’s market.

Good luck, GoJek!

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6 comments

  1. Hello, I just found a good article to read! The information about Go-Jek you provide is brief and understandable.

    Well, I think all businesses find obstacles at the first time they launch. Resistance always rise, but if they can survive by overcoming those resistance, that would be an open door to big success of the business. I hope Go-Jek is strong enough to survive during this period of resistance.

    ReplyDelete
    Replies
    1. Hi, thank you for reading my blog & sharing some thoughts here :)

      Delete
  2. Hi Aulia ,

    I'm doing my MBA thesis about GoJek . Would you mind to contact me through rinita.d.ekasari@gmail.com?
    Thanks

    ReplyDelete
    Replies
    1. This comment has been removed by the author.

      Delete
    2. Hi Rinita,
      I also doing my MM thesis about GoJek too. I'm so glad finding this article for my future reference. Hope you don't mind on sharing information too between us. My email sspritadevi@gmail.com.
      Godspeed!

      Delete
  3. "Hi!..
    Greetings everyone, my name Angel of Jakarta. during my
    visiting this website, I found a lot of useful articles, which indeed I was looking earlier. Thanks admin, and everything."
    Ejurnalism

    ReplyDelete