Momentum Academy’s second public event, Off the Record: What’s up with Grab? happened earlier this month and more than 400 people attended this virtual talk. We were blown away by the Q&A session, and we also covered great points about Grab and other super apps as well.
You can watch a replay of the event here.
So what did we talk about? Here’s a summary of the 6 key points:
1. The elephant in the room
Grab’s share price dropped after they released their Q4 2021 results – their revenue had fallen due to an increase in incentives given out. We explained what these incentives were, what happened behind these incentives, and whether these were transitory or permanent.
There was unanimous agreement that “the era of generous incentives globally and specifically in the on-demand industry will probably come to an end soon”.
2. Don’t forget about the macro factors
Of course, when we look at stock price changes, we should not neglect the macro factors. Every time Jerome Powell says something, the market reacts violently and there’s a fluctuation in interest rates.
What’s the impact of this on the tech industry and Southeast Asia? This did impact Shopee’s business in Poland a little because of the exchange fluctuation, but we believe most of the impact will only be felt 2 and 3 quarters later when the consequences of sanctions are visible. This was also covered in the Special Low Level Barbarian talk – “A Russian’s inside views on the war with Ukraine”.
3. Building a regional company in Southeast Asia is hard but worth it
We covered what it takes to run a regional business. In short, running a regional business in Southeast Asia is very complex. We took this slide out from our Southeast Asia investment opportunities: a fresh perspective report published last year (but still very relevant).
4. Super app is more than just a “tile” to an app home page.
Nanette wrote about this last week in her “Superapps are here to stay” article.
5. It’s okay if good people are leaving Grab…
We heard noise in the market that people were jumping ship, but we shouldn’t overinterpret that. When we talk about people and culture, we always share that some people who are part of the team may crave the challenge to create something new when their current workplace becomes big. And now that they’ve been trained by Grab, they want to start their own business. The Ken and Tech in Asia have written about both the Grab and Gojek mafias.
6. …Because new people are coming on board
An investor friend shared afterwards that this was something that is not talked about enough – the people and culture of a company. Grab is genuinely a nice place to work. Friends who work there tell us so. This is a culture that Grab has built, and they should be proud of it.
But now that they have gone IPO, it is a completely different ball game. Grab is bringing on-board new people into the management, and their culture will change. It is inevitable.
It could get uncomfortable, but they shouldn’t resist it. If Grab wants to do well in the capital market, they will need management who knows how to manage these complicated situations. What Grab needs to do is to hold on to some part of their core culture but be open to evolving other parts of their culture to take on new challenges. For all of us, we can never take on new challenges if we stick to the old ways of doing them.
What would you like us to share next at our next Academy talk for you and your team? Drop me a note at [email protected]. We would love to hear from you!
