posted on 18 Oct 2019
IN THE glitzy, fast-paced world of startups, everyone wants to know how to identify the next big thing. Terms like "industry-first", "innovative business model" and "big data" get tossed around. But ask any early-stage venture capitalist, and the one big truth emerges: It all hinges on the founder.
Speaking to Anthony Tan, chief executive of tech firm Grab, it starts to become clear why the likes of Vertex Ventures and GGV Capital wanted to back him. The 37-year-old co-founder exudes energy and passion that make him appear unstoppable, even when a little under the weather.
In the two to three weeks leading up to his interview with BT, he visited seven cities for business. He caught a cold along the way, but the sniffles can't stop him. That September morning in Jakarta, he presents Grab's vision to use tech for good to a ballroom full of government officials, industry partners and international media - according to the company's newly unveiled social impact report, Grab contributed US$5.8 billion to South-east Asia's economy in the year to March 2019. A few meetings later, he sits down with BT, rubbing hand sanitiser into his palms and sipping from a glass of water stuffed full of lemon slices.
As Mr Tan recounts his journey of leading Grab from a scrappy startup in Malaysia to South-east Asia's most-watched unicorn, he lets slip glimpses of the aggressive entrepreneur in him. But mostly he comes across as the calm, composed leader he has become. Grab might now be a company with some 6,000 employees and a presence in 11 countries, but he never saw it coming.
"One hundred per cent, it was a miracle," he says. Just the day before, he found himself seated beside New York Times columnist Thomas Friedman, a three-time Pulitzer Prize winner, on his flight. "And he was just asking me all these questions. I said, 'Tom, it's a miracle that I'm sitting beside you. Because I'm that kid who had no clue what you were talking about, and probably still doesn't have a clue - but I'm sitting beside you, and you actually find me entertaining!' And he was like, 'Dude, I want to know more.' And he's coming to Singapore to spend time with us... Every day is a miracle. I still can't believe what's happening."
Grab started off as a taxi-hailing company in 2012, based on an idea presented during a business case competition at Harvard Business School. Working out of a tiny rented storage space in Kuala Lumpur, Mr Tan and his Harvard MBA classmate Tan Hooi Ling (not related) knew exactly what problem they wanted to solve - safety. Malaysia was notorious for its patchy transport safety standards, and co-founder Ms Tan (known as Ling to her peers) had experienced it first-hand.
Grab - which was then known as MyTeksi in Malaysia and GrabTaxi elsewhere in the region - launched an app to match users with drivers. Today, the Grab app has been downloaded on over 163 million mobile devices and facilitated over 4 billion rides. The company, now based in Singapore, has also declared its ambition to be a "super app" that offers a range of on-demand services. Across 339 cities in eight countries, Grab offers transport, food delivery, financial services, logistics services and lifestyle offerings.
"When Ling and I first started, she wouldn't even leave her McKinsey job. We never thought Grab could pay our bills," Mr Tan says. "The beauty of it is that the intention to set up right from the onset was tremendously pure. We couldn't even imagine it being a million-dollar company."
These days, highly valued tech firms in the US such as Uber have drawn flak for burning through mountains of cash in the name of rapid growth, but with no profitability in sight. And in maturing startup markets such as South-east Asia, Grab executives have gotten used to fielding questions about their financials. Scrutiny of the group has also increased ever since it began diversifying into various business verticals. Observers question whether Grab is overstretching itself, though others have also pointed out the value of cross-selling services.
With the company having grown at such breakneck speed, how does its leader grapple with all the different moving parts? It's by staying humble, says Mr Tan. "That's how I see how I can handle all this complexity. It is first, by taking feedback, and then improving. Second, having the humility to hire people much smarter than myself. Because they have a lot more experience than I do, and they can handle the complexity."
Currently valued at US$14 billion by research firm CB Insights, Grab said it is on track to raise US$6.5 billion by end-2019. The firm's rising valuation put Mr Tan on Forbes' list of Malaysia's 50 richest in 2018, with an estimated net worth of US$300 million at the time.
And if Grab's investors were to all gather in one room, it could easily be a meeting of the world's leading industry players. The list includes Microsoft, Toyota, Goldman Sachs, Booking Holdings, and not to mention Masayoshi Son's SoftBank, always in the spotlight for its deep-pocket investments in tech firms.
But Mr Tan says it's easy to remain grounded. "I just open up my inbox every morning, and I get customers screaming at me about how useless I am. One customer (in Singapore) went, 'Eh! Why you charge me 30 cents for the ERP (electronic road pricing)?' And then they copy Prime Minister Lee and the Minister of Transport. Some people see it as Singaporean customers being entitled. But I see it as, it's great that they are giving us feedback."
The ERP issue has since been resolved, "Thank God", Mr Tan says. "I read through every email in my inbox, and that humbles me."
It's easy to dismiss him as yet another upstart who was born with a silver spoon in his mouth - he hails from the family behind Tan Chong Motor, distributor for Nissan cars in Malaysia. But Ms Tan and many of his peers attest to his incredible work ethic. "I remember asking him what Tan Chong Group's market capitalisation was then," says Chua Joo Hock, managing partner at Vertex Ventures, which led Grab's Series A round. "And then I told him that Grab's market cap can potentially be bigger than Tan Chong Group's if we execute well. And, of course, Grab is much larger now."
Part of Mr Tan's plan to grow Grab lies in his obsessive need to understand its customers. "Nobody will say that they know more about the customer than me," he says. In August, he spent 25 out of 31 days in Indonesia - the group's largest market - and met about 150 drivers and 25 merchants.
"All I did was ask, 'How can I serve you better? Where did we screw up? What is good, so that we can double down on it?' "
He is often asked why he still needs to travel so much. "Because the truth is always at the ground. Ground zero, right? Where they're actually feeling the service."
It's how Mr Tan discovered the problem of fraud in Grab's operations. "Literally, I was talking to (people on the ground) to find out how they were gaming the system. I was looking at all the duplicate apps, all the emulators. I was looking at all the fake GPS. I was like, Wow, these guys are so entrepreneurial, so innovative, and they had engineers on their end too. So I got our engineers to say, 'Okay, let's fight!'"
Grab has invested heavily in a suite of fraud detection and prevention tools and now boasts a statistic of less than 1 per cent fraud on its platform.
"It's just a passion of mine to find out how to kill off all this because these are bad actors, right?" he says, thumping the table.
"And again, it's not just about the bottom line, it's about the customer experience. It kills the customer experience. So I've really seen it, even in Singapore. The service has kept improving. Because we're literally annihilating all these parties."
Eye on competition
Like all entrepreneurs, Mr Tan has had his fair share of mistakes. There was a point in his life when he was extremely competitor-centric.
Grab's history of competition is high-profile, to say the least. In Singapore alone, it fought off startups such as Brazil-based Easy Taxi, which exited the market in 2015. It then took on the behemoth from America in a fierce battle that resulted in Grab buying Uber's operations in South-east Asia in exchange for a 27.5 per cent stake in the company. The deal, as expected, trampled on the toes of many competition watchdogs in the region; Grab was handed a S$6.42 million fine in Singapore.
Mr Tan, too, is not one to back down from a fight."I really like competition," Mr Tan tells BT, beaming. "I generally thrive on it. I don't think I would wake up so excited if it wasn't for competition."
But loving competition is different from being competitor-centric - that is, obsessed with certain competitors. After feedback from his team, Mr Tan accepted that there will always be competitors.
"It could be a train, a food delivery company, a mapping company, a ride-hailing company, doesn't matter. It could be taxis. Could be walking, right? So don't anchor yourself on a category or on a competitor. You can be inspired by them."
Grab's largest regional rival now is Indonesia's Gojek, founded by Mr Tan's former Harvard schoolmate Nadiem Makarim. The two have gone head-to-head in a fierce battle for dominance, with Gojek now operating in 207 cities in five South-east Asian countries.
"I really believe that competition is a good thing. I think that people like to play up this whole, 'Oh you were former schoolmates'," says Mr Tan. "There will always be competition. And I think we just got to stop thinking about killing any competitor."
As Grab continues on its meteoric rise, how does he see its role now in South-east Asia's startup ecosystem?
"Grab for Good. I think if there is one thing that we can do really, really well, it will be Grab for Good," he says, echoing the firm's tagline for using tech to increase social impact.
Mr Tan insists that it's more than just a public relations stunt. "We don't need that. What we do need is for other entrepreneurs to see that this is the way." As an entrepreneur, one role model he looks up to is BlackRock CEO Larry Fink, who advocates for companies with a sense of purpose. "A double bottom line does make a difference, and doing good does have a premium to it," he says.
At a time when public scrutiny of tech firms is at a high, Grab has a clear interest in portraying itself as a force for good. In July, it pledged US$2 billion of investment into Indonesia, where it plans to double down on its geo-mapping solutions - a challenge in the country's fragmented transportation landscape - and build infrastructure for electric vehicles with support from the government.
While it's great to be good, the reality is that startup founders often have their hands full just trying to keep the business together. How can they make an impact that aligns with their business interests?
"Make it core. It has to be part of the business model," Mr Tan emphasises. "So today, if a driver does not do well, we won't do well. It's a complete incentive alignment, right? There are some departures sometimes, but if a driver gets lots of throughput... and we see it in Singapore, right? Our tech allows for back-to-back jobs, it allows for his or her earnings per hour to keep going up, and our revenue share is a percentage of that."
After seven years at the helm, it looks like Mr Tan has identified the legacy he wants Grab to build: "You can do good, and it's great for your company and it's great for your soul, it's great for retention and employees get excited by it. It is great for your customers, it is great for governments. It's a win-win-win."
Co-founder and CEO, Grab
Born in February 1982
2000 - 2004: BA with Honours in Economics and Public Policy, University of Chicago
2009 - 2011: MBA, Harvard Business School
2004 - 2011: Head of Supply Chain and Marketing, Tan Chong Group
Since 2012: Group CEO and co-founder, Grab
Source: The Business Times
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In Grab's early days, co-founder Anthony Tan was out to kill off rivals. Seven years on, he now thrives on competition, and has turned his passion to using the company to drive tech for good.