The startup process in Indonesia has received serious attention from various parties, including the government.
One of them is Startup Studio Indonesia, an initiative of the Indonesian Ministry of Communication and Information since September 2020 to support the advancement of the Indonesian startup .
Its activity is to provide access for early-stage startup activists to develop their business potential.
In the process of growing a startup, one of the most crucial stages is the achievement of Product-Market Fit (PMF).
So important is the role of PMF in the sustainability of startup businesses, Professor Thomas R. Eisenmann from Harvard Business School revealed that 90% of startup businesses end up in failure.
The main reason is because the products/services developed are not in accordance with market needs.
This is in line with the findings of CB Insights, where 42% of startups failed because they failed to find PMF.
Therefore, during the implementation of the Startup Studio Indonesia (SSI) incubation program held by the Ministry of Communication and Information (Kominfo) RI, the PMF stage became the main focus.
veterans Indonesian startup , such as Dimas Harry, Co-founder and CEO of Dekoruma , and Arip Tirta, Co-Founder and President of Evermos .
Dekoruma itself is one of the largest home & living needs platforms in Indonesia, which was established in 2016.
Dekoruma's main business lies in retail interior offerings, with more than 100,000 SKUs, more than 5,000 designer partners for customization.
Meanwhile, Evermos is the largest reseller-based social commerce platform in Indonesia that connects local SMEs with individuals who want to have their own business (as resellers).
Until now, Evermos has more than 500 thousand productive resellers spread across 34 provinces throughout Indonesia.
In the last two years, Evermos has recorded an increase in Gross Merchandise Value (GMV) of more than 60 times.
Dekoruma and Evermos represent two startups that successfully passed the PMF stage smoothly and expanded further to develop their business to an advanced stage.
Both also provide tips and tricks on things startup founders need to know about how to achieve PMF, both for B2B and B2C:
1. Don't depend too much on marketing and subsidies
Most startups think that growth rates – such as growth in the number of users or transactions – are the only indicator of PMF achievement.
At first, Dimas also experienced this.
He feels that he has achieved PMF when Dekoruma recorded significant growth in various aspects.
However, in 2018, he began to carry out more in-depth calculations regarding the structure of fixed costs and variable costs.
He found that the company's revenue was too dependent on marketing and subsidies.
"At one point, we have to be realistic and make the business model more sustainable, so we shouldn't rely too much on subsidies or discounts alone."
When the company has reached PMF, the growth rate may be lower, but it is more stable in the long term.
"We have been able to retain old customers, and get some new customers in an organic way," explained Dimas.
2. Explore various channels to reach users
At first, Dimas only used one marketing channel to increase Dekoruma's , namely through social media advertising.
Despite getting high returns in the early period, he realized the importance of exploring other marketing channels, including non-digital ones.
Moreover, marketing costs increased sharply in line with the company's goal to expand its reach base.
“Operating in the furniture & home furnishings sector, we are trying to be present in another way.”
"For example, building a Dekoruma Experience Center that can reach new customers, which so far have been very difficult to reach only through online advertising."
"As a result, we were able to get more in-depth feedback from our customers, and our marketing costs dropped significantly, by more than 50%."
"Therefore, it is important for B2C startups to 'get out into the field' and explore various channels to reach new customers," he added.
3. Look for collaboration opportunities for growth-hacking
After really understanding the needs of the user, the next step is to market the startup business model to the target audience in the right way.
Evermos itself managed to achieve PMF in its second year of operation.
To increase the amount of supply, the Evermos team directly visited Indonesia's main supply chain, namely the Tanah Abang Market.
They work closely with market management, so they can incorporate related brands into the Evermos platform.
"From the demand side, we are collaborating with representatives of local governments and Islamic boarding schools for a fast growth-hack in the number of resellers."
"We present an initiative called Evermos Village which recruits resellers in villages that take advantage of our partnership with various BUMDes and Santree which targets resellers in Islamic boarding schools," said Arip.
4. Focus on education to increase user loyalty
Arip admitted that achieving Product-Market Fit for Evermos was a long process.
Mainly because the target market is individuals who mostly have never had a business before.
Therefore, instead of focusing on transaction targets and incentives, he and his team strive to provide comprehensive education at the beginning, so that resellers who have joined continue to actively transact on the platform.
“When resellers join Evermos, from the outset we make it clear that they have an active role to play in participating in the mission of building a better economy.”
"This explanation is important because in reality, many people want to have their own business, but they don't necessarily realize how hard the effort is," said Arip.
Because of this, Evermos itself invested heavily in creating the right curriculum, training, and orientation process.
So far, Evermos has provided 15 thousand minutes of training to more than 500 thousand individuals through online platforms and face-to-face meetings.
Given the importance of the PMF stage for startups, SSI hopes that this year's training can contribute to creating 150 digital startups that are able to develop their business scale.
Both in terms of the number of users, the amount of income, employment, and funding from Venture Capital in 2024.
Since it was first launched in September 2020, the SSI incubation program has been followed by a total of 65 early-stage startups in Indonesia up to batch 4.
This year, through a rigorous selection process, there were 15 early-stage startups from thousands of applicants who were finally selected as Batch 4 participants.
The list of startups are: Wilov, Envio Logistics, Transporta, MUFIT, Allure AI, Ternaknesia, Oke Garden, Paygua, Kendali, Surplus Indonesia, Friendchised, Seryu Cargo, Universitas123, Kibble, and Aksel.
The fourth batch of the Startup Studio Indonesia program will take place from April to July 2022.