I couldn't imagine doing something like this in the Philippines, which I'm guessing is much like Indonesia.
Nobody has credit cards to buy anything online. Credit card alternatives haven't gained traction. People use cheap alternatives to Western Union to send money.
Nobody surfs the web except at internet cafes. And at internet cafes it's either FB or homework. Nobody aimlessly browses when they are dishing out money every hour.
Nobody uses apps. Even those with smart phones only use FB, Instagram, games and a handful of other messaging apps. Even if they did want to use apps, cheap smart phones are out of resources after installing FB and the rest of the above mentioned.
No matter the phone, everyone uses SMS.
The postal system is shady. I never order anything online. I don't even have a proper address. I don't know how the postal system is able to deliver anything.
There are exceptions to all of the above and these are likely your target market since they likely have money. But this is a small percentage.
And speaking of money. Nobody has that either.
I noticed the post mentions there are tons of Instagram shops. I have no experience with this, but the number of shops seems irrelevant to me. Anyone can start an Instagram shop, post pictures once in a while and largely be invisible. It seems that much more important would be the above logistical issues which would also be important in Indonesia.
I imagine people selling through Instagram are much like the street vendors. They see no problem with being the 4th guy within an hour trying to sell you the exact same things as the 3 guys ahead of him while you are trying to eat a meal and drink some beers. They just don't try very hard. But any money beyond whatever income they have is better than nothing.
A place like the Philippines is all about improvisation. I don't see how you could improve much on the Instagram / FB shop model. In the vast majority of cases, there is probably nothing there to improve because there is no activity. For those who do get it to work, it's probably good enough.
It's definitely super hard, but not impossible. You should read [1] how Rocket Internet expands in developing countries: they hire their own couriers who go out, deliver and take cash at the door. This way they solve both the distribution and the payment problem. This is similar to how many of China's biggest ecommerce players operate, they all have their own distribution/payments systems. If the infrastructure doesn't exist, you need to create it.
> they hire their own couriers who go out, deliver and take cash at the door
Yeah, that's what people in the US did before everyone had credit cards. Cash on delivery. Growing up, I remember hearing ads on TV that said "no COD" when that service was being phased out. More and more people were using credit cards.
You're right, many countries could use trusted couriers in order to spur local markets and economic growth.
Here in Taiwan you can have something sent to 7-11 or Family Mart and pay for it there. There are tons of these shops everywhere, and with the receipts lottery, the government guarantees it gets enough taxes even in a cash-based society. It's a pretty cool system and often feels funny how convenient 7-11s are here. In the US they're just a snack shop. Here you can have packages sent, do laundry, pay bills, ...
> You're right, many countries could use trusted
> couriers in order to spur local markets and
> economic growth.
Ok, so that seems like the next startup right? You don't really want couriers that are carrying boxes of cash back to headquarters but it sounds like reducing friction in payment would achieve good results. Where is the SMS payment system equivalent? Have the courier bring the item, send the SMS payment, and when that is received the courier hands over the item.
Sure. Any country that doesn't have the supporting infrastructure can be considered the next startup.
Cambodia doesn't have any public postal delivery workers, for example, so I think couriers or a system like Taiwan's with trusted shops could work well there and get more of an e-commerce market going.
There are some other hurdles there but I don't think it's insurmountable.
> Where is the SMS payment system equivalent? Have the courier bring the item, send the SMS payment, and when that is received the courier hands over the item.
Was that rhetorical? You seem to have answered your own question. Anyway, yeah, SMS systems exist, and a little more legwork is required to make them successful. WING is one I remember seeing advertised there. I'm not sure how much it was used but I don't remember hearing about people buying things online too often. Technology doesn't do its own PR, unfortunately =)
One of the annoying things about Cambodia is delivery of packages from outside the country is so expensive. I think only DHL and UPS deliver there, and for a small box it can be $100+ from the US. If a more competitive local delivery system were implemented first within Cambodia, then I imagine that cost could come down, marking more wins for the purchasing power of locals there.
Every place is different, the GP was talking about Indonesia where the folks were in fact shopping online and the challenge was the payments system. In Cambodia with poor package delivery then that might be the place to start. What I was alluding too is that one of the things that makes startups successful is that they seem to be "right place, right time" but sometimes it is simply that they are designed to mesh well with an existing infrastructure.
The trick here is to take something which is is known to work and try to think about what changes would make that thing work where you are. In a country where everyone has a smartphone, you can look at things that you can do with a smartphone you couldn't do with a 'dumb' phone. In a country where there are extremely inefficient transport, mail, or payment systems, then working within what you can there can be a winner.
> they seem to be "right place, right time" but sometimes it is simply that they are designed to mesh well with an existing infrastructure
Mmm there can be other elements such as "right person" and "right way to solve the problem". Sometimes the keys to success aren't easily condensed into soundbytes, so they aren't widely known. Air B&B wasn't the first home sharing website, but there were probably some ingredients in their secret sauce that fall under the HN definition of "execution". We don't know all of those ingredients, but they differentiated Air B&B from the pack.
So, I'd argue there is a right solution for Cambodia's e-commerce, and any problem really. It may not become a billion dollar company, but there is a way to make it profitable. There simply is not a model that's easily copyable from the US. Conditions are very different. There are definitely people working on this problem. Adoption rates appear slow to me. Time will tell when they're successful.
> The trick here is to take something which is is known to work and try to think about what changes would make that thing work where you are
An SMS payment system doesn't seem possible. Just end-to-end encryption for SMS will be much be bigger than a Facebook app. Without encryption consumers will be conducting wire transfers over cleartext to the merchant.
They are used a lot in countries with dysfunctional banking systems. They aren't encrypted, they use the fact that you're sending a text from your phone to validate that it's you.
Which brings up a caveat that I didn't mention. If you want to hit the Philippines market, you probably don't need to go much further than Manila and Cebu. Manila could be among the top 5 largest cities in the world soon. Couriers could work in this case, assuming they could get through the insane traffic. But with wages so low here, you could employ an army of them.
Credit cards may or may not be relatively hard to get for most people, but anyone who wants a debit card can simply open a bank account, with an ID and maybe a few hundred pesos.
If you don't want Paypal you can pay cash on delivery.
> Nobody surfs the web except at internet cafes.
Surfing the web in internet cafes is about as dated as the term surfing the web; your proverbial "nobody" does it. Internet cafes are for gaming or getting stuff printed or photocopied.
"Everyone" has at least one mobile phone, often a smartphone, and that is how they 'surf the web', or at home, with an overpriced internet connection or pocket WiFi, or at "PisoNet" cabinets.
> Nobody aimlessly browses when they are dishing out money every hour.
Who anywhere aimlessly browses in an internet cafe? And "money" in this case is about 30 US cents (per hour).
> Even those with smart phones only use FB, Instagram, games and a handful of other messaging apps.
Isn't this most people, everywhere?
> I don't even have a proper address.
Why not?
>I don't know how the postal system is able to deliver anything.
Don't most countries use courier services for delivering packages, rather than the standard postal service? So presumably products are delivered using the likes of LBC, Air21, DHL, UPS.
>And speaking of money. Nobody has that either.
And yet "everyone" has the usual brand name products and gadgets and packed shopping malls are everywhere.
You are right that prepaid debit cards are relatively easy to get. My region is still mostly cash though, so you don't use the cards much locally. Bank accounts are less common because of minimums to start one (though I haven't checked this lately.) Credit cards are even less common.
My earlier statement still stands. You would still probably be targeting people who could get a credit card or a card from a bank account. Most of the rest is a difficult market to run an e-commerce platform funded by outside investors.
Why would you specifically target a relatively low number of people who have credit cards, when you can accept credit cards, debit cards, Gcash, Smart Money, Paypal, cash on delivery, payment via ATM or bank deposit or online transfer, or even through pawn shops; methods that online stores are using already.
Philippines has Cash-On-Delivery (COD) shippers like LBC. When I buy stuff from Lazada, I usually have to do COD and I get the package within 2-3 business days delivered to the office.
Taking this further. If you do own a smart phone, FB is the one connection you can get free over the mobile networks.
When I walk into a bar here, I pay 45 pesos (approx $1 USD) and the waitress who hands me my beer might make 140 pesos for a 12 hour work day. She should make more in tips, but not always. Down the road, the major grocery store also pays its workers about the same. Minimum wage is supposed to be something like 350 pesos per day depending on industry (domestic helpers may not even make the 140 pesos because they are live-in and get food. But they work like slaves). Businesses get around minimum wage by employing for six month contracts, which is a probationary period.
Internet cafes charge around 15 - 20 pesos per hour. An all day mobile data connection (700MB cap) costs 50 pesos. The locals will get an SMS promo for around 20 pesos per day. Getting to work and back in my city costs 20 pesos minimum. We haven't got to rent and food yet. The math is grim.
You carry a cell phone as a shiny object to show off. You dress remarkably well with this small budget (probably a good reason to sell cheap but fashionable clothing). Somehow you may even be able to buy a scooter.
That's it. That's the economy.
NOTE: The big exception is the occasional splurge for those lucky enough to have relatives sending remittances.
Not far off if you throw lunch in there as well. It's growing fast though. The area I'm living in went from relatively quiet with few cars on the road to serious traffic problems in probably 5 years (pulling from memory). Some of that might be increased shopping options in the city pulling in regional shoppers who previously didn't have as much of a need to be in the city. It's hard to say without real numbers though.
Maybe I'm just hanging with the wrong crowd, but pretty much everyone (locals) I know has bare bones possessions. The head of the household has a T.V. and a fridge as an addition to my list. That's friends, family and neighborhood.
There is a lot of money coming in through remittances. Getting money coming in as a basic income (not work) doesn't seem to do much for the work ethic from my experience. Often these remittances are covering a large family with basic living expenses.
I don't have much more than anecdotal evidence, but the profile of a typical person here is way different than that of where I came from (US).
If you're living in an area where having a fridge and TV is rare or unusual, if I understand you correctly, then I'd say you're living in a very poor area, not a 'typical' or even average place.
I'm not saying it's rare or unusual. Just that it's on the short list of what people own. People here aren't big consumers. Not the typical household like in the US where people have houses overflowing with crap (and much of that crap being things you can't even get in the Philippines.)
My friend who lives in Manila says $1,000/month for call center manager, $2,000/month for programmer, $3,000/month for eng. manager. Any of those people can afford to buy an iPhone, car and house in a few years, and they use Uber and ecommerce like a digital native.
This seems about right. The tech industry is one of the few industries where you can break out of the ceiling of the local economy.
Otherwise, what might be (or once was) considered a solid middle wage job back in the U.S. is probably closer to what the call center manager is making.
As somebody who previously was in charge of a large (tens of thousands of staff) finance company's Asia Pacific IT workforce, I looked at dozens of Filipino CVs for new remote hires (we were moving away from India).
The salary the worker was expecting was often written in the resume directly ("Expecting no less than 40,000 peso a month"). All of the figures were higher than what they would net, because of the overhead of the remote office in Manila that acted as local HR and a place to work).
Only one resume I looked at didn't have a photo insert on the front page. Only a few didn't mention religion and hobbies. These are asides. Salary was $400 US per month for programmers working full time (we paid $1200 including the "HR/seat/office fee" - we were to look at coworking spaces in the future).
All the staff travelled roughly 70-95 minutes each way - we offered remote (at-home) work if their conditions were ok, but most didn't have a decent computer, had no aircon, had noise issues and couldn't guarantee an unoccupied room for six hours per day at least, so the risk was too high, given that we were tipped off that any worker could eventually try to incorporate something else on the side [part-time remote job] and do both at once, appearing present on IM but half-assing two jobs). We decided that an office with a roaming/snooping manager was a necessity in our early testing stages.
From speaking with many people in that country, average wage is definitely lower than you might even think. Management is the way to earn better money over there in IT. Salaries, if they exist, for non-corporate staff are probably abysmal all over Manila. There will always be somebody willing to work for less, fresh out of university.
Right, as you might expect, programming salaries would be all over the map. Somebody rock solid could get up to $2K and probably more. For many others, there isn't a floor and not much in expectations. You could land someone to be an "ass in seat" for whatever you could get way with in negotiating. The difference might be that the guy making $2K might be creating more than that in value while the others might just be costing you.
I had a buddy who was trying to build a start-up here running on the .Net stack. He was willing to pay $2K for the right person, but couldn't find anyone. The devs he did find he was paying around $1K for and he ended up letting them go through turnover and not replacing them (something would always come up where they would shoot themselves in the foot or just had to quit for whatever reason).
Blue collar labor jobs which may pay decent in the U.S. don't pay anything here. People expect labor and services to be super cheap.
Depends in which part of the country you live. Up in the north it's not as desperate. Down south, bro... I spent six months there fighting the secret war. Down there, it's the spittin' image of the third world.
In my region, call centers employ a lot of people and the pay is relatively decent. A good entry level call center job might pay USD $300 / month. A bit less for the fly-by-night types and a bit more for the best employer.
Otherwise, I don't know because I don't ask and I haven't been looking for a job.
> This just sounds so wrong to me. If you have a good product and it brings value, then others should be able to value it by paying you back for your product or services. Period.
I completely understand this philosophy, but an attempt at building a two-sided market place is very likely going to require outside investors. This opinion that you need to be profitable from day one has been proven wrong repeatedly and while some 'unicorns' will fail or become less than worth $1bn, their achievements are still very real.
It is 100% OK to want to build a business, but entrepreneurs should be flexible enough to understand when it is appropriate to raise money, or make a product that does not generate profit up front.
For the record, I also attempted to create a two-sided market and I also failed. It was super painful and I hope you move on quickly with some really solid lessons learned.
Bootstrapping is often the only practical way to run a business for numerous reasons. I think anyone who's been an entrepreneur can appreciate the good a few hundred thousand would do, but finding investors and keeping control of the operation after you have them are frequently intractable problems.
Taking startup investment begins to be impractical with something as simple as being older than 21 and thus, having external obligations, whether monetary or chronic. Anyone who is NOT your typical college kid willing to work 90 hours per week for $25k/yr usually can't get investors to look unless the business is already running and turning profit.
One day, it's my hope to open investment opportunities to the mature professionals that are capable of building our next generation of transformative software but are almost always overlooked merely because they've been doing something more prudent with their lives than pulling the lever on the startup slot machine.
We did raise funding it was around $100k-$500k (not going to disclose the real amount). We realized that we needed some boost to test the market overall, but after 1.5 year of using that money and got to 30-40k UV per day, the path of profitability from that point seems far away, numbers just don't add up.
It gets worse as I stated in the article that new startups in the same area are raising behemoth amount of funding. The funds were used to attract and subsidized sellers and buyers.
You understand the goal of any business, especially an internet business, is to become a monopoly right?
Look at Amazon, Google, FB, etc. They only became profitable once they became monopolies, and thus could set their own prices based on whatever metrics they chose.
The reason startups take outside funding is so that they can become a monopoly in a given market, and then charge customers whatever they want.
Don't fall for the marketing hype. Startups don't save the world. Scientists, doctors and inventors do. Startups just make a few people very, very rich at the expense of their customers by selling them mostly crap they don't need or want, using psychological manipulation (i.e. marketing).
Once you understand that this isn't some noble quest, you can finally begin to understand how to play the game (of thrones).
Startups just make a few people very, very rich at the expense of their customers by selling them mostly crap they don't need or want.
This is laughably false for at least two of the examples (Amazon, Google) you've mentioned in your own post.
Millions of people use these services everyday to make their lives better. Thousands of employees work for good pay at these companies. Is it all scam? Of course not.
I would have to disagree with the goal of any business is to be a monopoly.
There are lots of examples of successful business out there who did not monopoly the market.
I'd also have to disagree that startups sell mostly crap they don't need or want. Uber & AirBnB definitely provides something valuable that most humans would appreciate of.
If you're talking about products such as Snapchat or Instagram, that's a different genre of product. It's a vitamin type of product not a pain killer.
> I would have to disagree with the goal of any business is to be a monopoly.
> There are lots of examples of successful business out there who did not monopoly the market.
Such as? If you cannot eliminate competition within your given market, marginal profit will eventually be driven to zero. The internet amplifies this challenge because it is not geographically constrained (minimal transaction costs) and software amplifies this challenge because of zero marginal cost (creating massive economies of scale).
You can find more on this in the works of Michael Porter (http://amzn.com/0684841487, http://amzn.com/0684841460) and Peter Thiel (http://amzn.com/0804139296). Zero to One discusses how many seemingly successful non-monopolies are actually either monopolies pretending not to be one or non-monopolies that are not as successful as they portray themselves to be.
The hard part in building a two-sided market is getting users AND buyers on your platform. This generally means epic shit-tons of brand marketing to end users, which is where a lot of those millions of VC dollars go. There's really no way to get brand recognition otherwise -- you have to spend some ad dollars to inform users of your product. Ad spend is a zero-sum game from a competitive lens, so if your competitors are out-advertising you, they're going to win. And yes, this is why companies tackling two-sided markets focus on user acquisition over profitability.
You were also trying to fix the wrong problem. Focusing on the user experience is the right call, but your mistake was saying "fuck this, the distributor model is so fucked we can't do it". Ok, if the supply chain of a specific industry is super-expensive, your business model should be to streamline it by going direct and undercutting everyone else (this is what Uber did).
You needed to build a new distribution model. It's fair to say "I'm a college student and don't have time to fix this big problem" -- which is fair, supply chain problems like this are usually best left to people with experience in them or at least a passion for solving them.
Or you need to fix the supply chain issue yourself by holding inventory. This solves a problem that your producers have and provides better service to your customers. This is what Amazon does.
The real problem is when you have a bunch of producers trying to sell direct to customers and drop ship is that it's a very inconsistent consumer experience. If your selling point is a compelling customer experience, you need consistency in how packages are shipped and changes communicated. All of that leads to inventory, shipping, logistics, and something that looks much more like a traditional e-commerce store.
Once you lose control of the customer experience in this way, it can no longer be your competitive advantage. So you either need another competitive advantage, or you need to fold up shop.
Loved the article. I do not agree with the assessment that Silicon valley startups compete based on better products. In fact, it's quite the opposite. All the popular ones you have heard of have taken large amounts of money and subsidize their products a great amount. If you are a less funded startup, it is impossible to complete in such a scenario. In fact, you absolutely have to get lots of funding first, you have no choice.
So yeah, you have the same problem everywhere and not just indonesia. At the end of the day, all is fair in love, war and business.
> I do not agree with the assessment that Silicon valley startups compete based on better products. In fact, it's quite the opposite. All the popular ones you have heard of have taken large amounts of money and subsidize their products a great amount.
You didn't support your position at all that SV startups do not compete based on better products. That's a very large claim to make without supporting it at all.
Taking on large amounts of venture capital has no inherent correlation such that the product must invert on quality to the amount being raised. If that were the case, Airbnb would be an entirely unusable product, as would Uber. So far those products have functioned extraordinarily well, such that a mass-audience of average users has easily adopted them at warp speed. Uber overtook the entire US taxi industry in three years, if their product wasn't good that would have been impossible.
> If you are a less funded startup, it is impossible to complete in such a scenario. In fact, you absolutely have to get lots of funding first, you have no choice.
You're criticizing Silicon Valley startups for supposedly relying on large amounts of money to compete, then proclaiming that you can't compete without getting tons of funding first. You're outright stating that you can't compete on quality of product alone, then you hold it against Silicon Valley in your theory that companies there refuse to set themselves up for failure by taking on a lot less venture capital.
It really depends on what type of startup you are trying to create. If you are trying to create a high risk, high reward startup with million dollar cashouts (a potential 'unicorn'), then yes, you need a lot of capital.
If your plan is to create a sustainable small business, with a small number of employees and a reasonable but consistent rate of return, then you don't need a ton of capital.
well funded competitors you mean :-) ? To be clear, I don't think silicon valley products are any better/worse than other bootstrapped products out there (ie. I was just speaking relatively). It's just that given the massive amount of $$, lots of effort goes into giving things for free and great marketing.
I am a bit surprised that the article doesn't have any introspection about knowing the market (or not). It seems like the reasoning was: we want some money; women have money; women buy clothes; let's do fashion. It doesn't seem like there was much of a value proposition for the customer. Maybe the customer likes browsing Instagram. Maybe the customer asks all these questions (stupid questions as well as clarifying questions) to gauge how quickly a return would be dealt with if desired, to establish some info about company knowledge and responsiveness. (Buying clothes online is risky in terms of fit and fabric quality, especially with resellers.) How could a startup cater to the features of the marketplace instead of fighting them?
I think people really underestimate the value add from "easy, free returns" for clothes shopping.
I remember using ASOS 10 years ago and at that time most online retailers had poor returns policies. (Legally all must have a 14 day returns), but ASOS went further with free returns and even provided shipping labels and bags for returns with the original shipment.
I think my then girlfriend returned maybe 70% of everything ordered, it was just how it worked. You'd browse, impulse purchase then see how it looks and probably return it.
As a result they took almost all of her actual purchases. And because they provided shipping bags/labels/etc they no doubt reduced the turnaround time so they got stock back quicker and reduced the chance of lost or damaged stock they couldn't then sell on.
I don't know but I hope that most retailers have caught on and provide similar now.
My experience backs yours. While living in the Bay, my wife bought most of the clothes through Macy's online interface, and we brought them back to the stores (we kept more than 60%).
Moved out of the US, and we do miss the convenience of that kind of shopping, and would love to use similar services, even with premium.
The one I wrote was an over simplification. There are of course more than that.
The value proposition to the seller were clear, we wanted to give them more exposure outside of Instagram, make their store be discovered by style/trends.
The value proposition to the buyer is what I think is lacking. We tried to generate sort of a board as a form of style inspirations, but it seemed the market doesn't really care about the mix and match of outfits. I guess what i realized too late is developing country markets are prioritizing price over style way more than developed countries
To the author: I really respect you for building a startup back home but this article feels more like a rant all over the place though.
It also sounds like you don't really know the market in Indonesia and you're trying to replicate what you know about US/Silicon Valley market back home as-is and didn't achieve the result you were hoping for (I haven't seen anyone done that and be successful either).
I know an owner/co-founder of a startup in Indonesia and they have diverse channels.
Having said that, I wish you more success down the line.
> I really hate to say this, but I am quite disappointed with the startup scene in Indonesia. In Silicon Valley, you compete fairly with each other through creating better products and services. People highly respect good products and services. In Indonesia, you compete with each other through $$$. The one who has the most cash in their bank will most possibly win the competition.
All the hypergrowth startups are burning piles of cash with almost no sustainable way out.
Indeed, I remember the 90s being an era of random free shit for consumers, and I'm sure the cost of customer acquisition was high. Its not like that era was known for it's sound and stable business practices.
Thanks for your write up. After my own failed attempt I came to the conclusion that any product based primarily on aggregating products that others sell is a failed model. You are a middle man in an already thin-margin industry and are competing directly with shops (who are incentivized to have customers come directly to them and bypass you) and other aggregators. It would be better if you became a drop shipper and sold the products yourself. Much more control, and the audience you were building with ads would have stayed.
The point of having an aggregator is not to have a headache with stock keepings and shippings, on the other hand doing an aggregator leads you to have less control over the products and customer service. Each has its own drawbacks
Yes I understand the thought process, but as you wrote in detail, it was a failed model. The benefits to being an aggregator (lack of stock and shipping headaches) is far outweighed by the negatives (lack of control, competition, lack of loyalty, little money).
If you were building a shopping platform, and getting loyalty, perhaps you should have just sold the items yourself. The experience would have been much better, for sure.
There are lots of successful aggregators: NerdWallet and Credit Karma for credit cards and financial products, all the different car shopping sites, also Trulia/Zillow for real estate.
All of those companies have a clear value proposition for buyers (one place where you can get information instead of lots of scattered websites that might or might not be helpful). They also tend to have strategically strong customer acquisition channels that give them some degree of leverage with sellers (i.e. they can say, do what we want or else we'll stop passing buyers through to you).
I think it's interesting you mention real estate and cars, neither of which are impulse buys.
Aggregation makes sense in markets where the buyer knows that they have to buy, but don't know what/which/where to buy, but seems to do worse in markets where purchasing is done on impulse.
I don't think eBay is really an aggregation service; it's a platform on which people directly sell items. An aggregation service on the other hand goes out and finds shops already selling items through other platforms and provides one place where you can search all these shops. They would then presumably collect some sort of commission on sales.
eBay is not forwarding you to third-party websites in order to purchase products. They are listing products directly. The company the author was creating forwarded you to someone else. In return the store paid a monthly fee. Essentially this company was targeted lead-gen, and stores paid a fee for them to do the work and drive traffic.
It sounds like you were facing a really tough competitive landscape. Throwing in the towel sounds like a wise thing to have done.
One thing I didn't totally get from the post is what exactly you were trying to improve about the shopping experience? It seems like there is a lot of room for improvement for both buyers and sellers. Could you have vetted sellers and/or tried to answer inane questions from buyers yourselves (acting like a web cache for popular requests), saving both parties the pain of waiting for a response? What if you offered some kind of reputation service? I'm sure you thought about this stuff, and I'm not saying any of this is easy. I just would be curious to hear more about how you thought through finding real, sticky product-market fit.
From the buyer perspective we have made a special one-on-on online coaching session, where they can ask us anything for feedbacks on how to improve their shops. We gave a lot of suggestions to them but most just didn't take any action afterwards.
We do have a reputation service. We verified each and every store by taking in their personal government ID. We show case their customer testimonials in their own shop page.
Two crucial thing that we can't play with, price and quality of product :) Which is two of the most important thing needed for someone to make a purchase.
This is interesting to me more because it's rare to see a story about someone building products for the Indonesian market, which is very large. To the author: I'd love to see an article with more about some of the challenges and opportunities you see in Indonesia for startups.
Well done. It is better to have tried and failed than to never have tried at all.
If you want to have better odds next time, I'd advise you to read Zero to One. Think about what your secret is. What are you trying to do, what do you know about, that no one else knows? Then do that.
When you see lots of competitors, it's a pretty good bet you haven't found a secret.
"Fab" tried that. They were based in NYC, and blew through about $200M in venture capital before tanking. Did the author of this article know that? Did whomever funded him?
Nobody has credit cards to buy anything online. Credit card alternatives haven't gained traction. People use cheap alternatives to Western Union to send money.
Nobody surfs the web except at internet cafes. And at internet cafes it's either FB or homework. Nobody aimlessly browses when they are dishing out money every hour.
Nobody uses apps. Even those with smart phones only use FB, Instagram, games and a handful of other messaging apps. Even if they did want to use apps, cheap smart phones are out of resources after installing FB and the rest of the above mentioned.
No matter the phone, everyone uses SMS.
The postal system is shady. I never order anything online. I don't even have a proper address. I don't know how the postal system is able to deliver anything.
There are exceptions to all of the above and these are likely your target market since they likely have money. But this is a small percentage.
And speaking of money. Nobody has that either.
I noticed the post mentions there are tons of Instagram shops. I have no experience with this, but the number of shops seems irrelevant to me. Anyone can start an Instagram shop, post pictures once in a while and largely be invisible. It seems that much more important would be the above logistical issues which would also be important in Indonesia.
I imagine people selling through Instagram are much like the street vendors. They see no problem with being the 4th guy within an hour trying to sell you the exact same things as the 3 guys ahead of him while you are trying to eat a meal and drink some beers. They just don't try very hard. But any money beyond whatever income they have is better than nothing.
A place like the Philippines is all about improvisation. I don't see how you could improve much on the Instagram / FB shop model. In the vast majority of cases, there is probably nothing there to improve because there is no activity. For those who do get it to work, it's probably good enough.