Wilson Yanaprasetya: Warung Tech Deep Dive, Bridging Social Gaps & A Different Kind of Happiness - E328

· Indonesia,Start-up,Founder


“​My experience at Northstar gave me the ability to know what's working and what's not working. You know what you need to look at when you're running a business you know what to do when you are actually building a business or even scaling a business. Being on the investment side, when you run, it's very different. You can only see it from the above. You're not really doing things, running things. Right now, being in the operation, we actually have to drive the goods ourselves and talk to our customers ourselves. We have to negotiate. We have to figure out what happens if let's say the company cannot meet the demand that is out there. There are many different moving pieces that are not just theoretical, but it’s actually very different, especially in Indonesia, where there are 83,000 villages, 83, 000 different personalities different cultures, and different behaviors. You cannot just put one bullet that fits everything.” - Wilson Yanaprasetya

“We know what's the problem, we just didn’t know how to solve it. It has been there for many years. So, we did trial and error. Initially, we were not doing daily necessities, we started selling electronics and we found out that it didn’t work. More than 90 percent of the spending of the people in Tier 3, and Tier 4 areas are actually on dairies and shelves, and mostly fast-moving consumer goods, and the issue is that the supply of those goods was not consistent. I couldn’t find my mocha-flavored ice cream in Banyuwangi. We wanted to solve it. We wanted to increase the availability, and when you do that you’re not really cutting the value chain of the supply chain, of the way things are already running, but you're actually getting a new market. You're helping people to be able to get what they need fast, easy, and cheap. So that's basically how we do it.” - Wilson Yanaprasetya

“If you want to build a better business model that can attract or go into the rural area on its own, from the financial perspective, it’s good because it's sustainable. We talked to customers, and to the suppliers, and heard them say that without Dagangan, they wouldn’t be able to be where they are today. We’re able to provide not only cheaper goods, but we’re also able to keep it sustainable, closing that demand gap and helping in the area’s economic growth and well-being. Not many of us actually have the luxury. I have to admit I'm privileged to be able to go to school abroad even though I'm from Banyuwangi, but at the same time, when you look into the people in the rural areas, if you can actually give them something more than just income, like the ability for them to provide for their families and to increase the number of production that they have in the field, it gives me a different type of happiness.” - Wilson Yanaprasetya

In this discussion, Wilson Yanaprasetya, Cofounder of Dagangan, and Jeremy Au talk about three main themes:

1. Motivation Behind Dagangan: Wilson narrated the striking disparities between supply and demand he witnessed when he moved to a different city and discovered the same ice cream he couldn’t buy back home was more affordable and accessible. His upbringing in a Tier III city played a crucial role in the building of Dagangan with his cofounders who hailed from similar backgrounds. They realized the pressing need to address inequity and wanted to bridge the gap, ensuring that people, irrespective of their location or socio-economic status, had equitable access to products.

2. Warung Tech Deep Dive: Wilson shared a comprehensive overview of warung tech’s varied approaches from radical, disruptive innovations that aim to overhaul traditional systems to more nuanced models designed to enhance and integrate with existing supply chains. He highlighted the importance of tailoring strategies for cities ranging from Tier 1 urban centers to the often overlooked Tier 3 and Tier 2 towns to ensure warung tech’s solutions are relevant and impactful. He also elaborated its financial aspects, emphasizing the nuances of contribution margins, gross margins, and Gross Merchandise Value (GMV).

3. Experiencing a 'Different Kind of Happiness': Wilson elaborated on how his tenure at Northstar Group equipped him with a foundational understanding of building sustainable businesses, emphasizing the importance of relevant metrics that ensure business health and longevity. He discussed the essence of “a completely different happiness”, or the joy derived from creating, leading, and scaling a startup that’s different from the satisfaction of investing in one. As a founder, the happiness stems from the firsthand challenges faced, the teams built, the culture nurtured, and the tangible impact made, whereas as an investor, the contentment arises from identifying potential, nurturing growth, and witnessing a startup's journey from infancy to success.

They also discussed the importance of cultural adaptability in the tech industry, the evolving consumer behavior in Southeast Asia, the vital role of technology in bridging societal gaps and promoting inclusivity, leadership in times of uncertainty and the power of mentorship in nurturing the next generation of tech leaders.

Supported by Ringkas

Ringkas is a digital mortgage platform aiming to solve the access to financing problem for home seekers in Indonesia and Southeast Asia. Ringkas currently collaborates with all major Banks in Indonesia and the largest Property Developers across more than 15 cities. Ringkas vision is to democratize home ownership and create more than 100 million homeowners. Don't just dream about owning a home. Make it a reality. Explore more at www.ringkas.co.id

(01:57) Jeremy Au:

Hey, Wilson, really excited to have you on the show. We had a quite a set of wonderful panels together and I just thought incredible story to share about about the space, and obviously your own personal story. So for you, Wilson, could you introduce yourself real quick?

(02:10) Wilson Yanaprasetya:

Definitely. Thanks a lot for having me, Jeremy. So my name is Wilson Yanaprasetya. I am the president and cofounder of Dagangan. We are basically the trusted rural commerce platform that tries to revolutionize access to affordable daily necessities for rural communities in Indonesia. So our approach is that we utilize localized hub and spoke approach. We reach even the most remote areas of Indonesia and deliver daily necessities within 24 hours. So, I was born and raised in Indonesia and been doing this for the last three years.

(02:38) Jeremy Au:

Yeah. So how did you get into being a founder, because you were a consultant at KPMG? You were an associate who became a VP at Northstar. So how did you become an entrepreneur?

(02:48) Wilson Yanaprasetya:

I mean, it's a long journey, honestly speaking. I come from a working-class family both of my parents didn't even go to high school, honestly speaking. So, you know, when I had the privilege to study in Canada through a scholarship, I immediately took that opportunity, right? Basically, my background, I'm an engineer. I'm actually a software engineer by training. I did a few years of software engineering back in one of the largest telcos in Canada called Telus. Basically after doing that, I was planning to look for new opportunities whereby I get myself trained with Six Sigma and move more into the operation side. And after doing that, I feel like, hey, this is actually a good learning for me. I did a lot of projects related to cost-cutting, basically, corporate governance related to process improvement, and so on. And then after a while, I feel like, hey, I think, it's time for me to move back to Indonesia, to Southeast Asia, where I'm from, and look for an opportunity there. I spent my childhood just going back a little bit. My childhood was actually from a small town called Banyuwangi. Basically, it's a nice, beautiful Tier 3I city in the far east end of East Java. The population is only like 100,000, right? So, looking at that, basically, I feel, hey, is there anything that I can actually go back to Indonesia and improve, mainly the Tier 3, Tier 4 areas, mainly where I'm from in general? So I thought, going into finance would definitely help me on that. So I switched my career to finance. I joined Northstar, one of the leading private equity in the region.

It gave me definitely exposure, to a lot of different business models, a lot of what's working, what's not working in general, especially in the countries. And I was looking at what can I do to help basically the lower Tier cities. I still remember back in the days, I was holding 5,000 rupiah to buy ice cream. In Banyuwangi, I can only get a few of them. I think two or three pieces. That's it, and a lot of times my favorite ice cream flavor, which is like the mocha flavor is. It's never available in Banyuang i just because it's just not popular at all. So when I moved to Surabaya, my family moved there. So I had to move there as well during my elementary school basically it's the second largest city in Indonesia, it's a Tier 1 city. I'm quite surprised that 5,000 rupiah can actually get me double the number of ice cream. And I still can get some changes on top of that.

So that starts to realize that, hey, there is a problem. There is definitely a problem where the price of goods in the Tier 3, 4 5 areas of Indonesia is a lot more expensive than in the big cities. So, I always want to look at how I can add value using my tech know-how, corporate finance background, and business skills, and then basically look at 'what can I do to improve, especially creating some sort of a social impact in the area? And I thought, hey when I met all my cofounders who are in Dagangan, they are all coming from Tier 3 and rural areas. We all have like-minded, and we all have the same vision and the same goal. So let's jump on it because doing something for rural Indonesia is not for everyone, and you cannot just go bit by bit. You have to go either really rural or you're not really adding value at all, right? So, you know, having lived in these places, comparing where I was in Banyuwangi and then in Surabaya and then moved to Canada, just feel like basically there is a big digital inequality in there, lack of infrastructure, or even from the government spending. I would say it's not efficient in terms of the government spending that creates all these issues for the supply of goods in the area.

So that's pretty much the reason why we all decided, let's do this. We don't know what's the business model at that time yet. We have to do a lot of trial and error. At the same time, we all know that we want to improve the rural areas of Indonesia, especially from the supply chain side.

(06:27) Jeremy Au:

So you shared about how all of the founders had that shared experience of being in a Tier 3 city growing up and thinking about that problem. But how did you land on the idea, first of all, of meeting up and building something together? And two, how did you come to making a decision that this is the approach that you want to build?

(06:43) Wilson Yanaprasetya:

Sure. So basically there are five people who are actually the cofounders of Dagangan. So myself, Ryan, Willy, Andika, as well as Adi. All of us have worked together, basically in some way or form past. I was in Qerja prior to Dagangan. Basically, I work with Anika, who is actually our CTO right now, and cofounder Ryan, on the other hand, I've worked with him in the past through some consulting experience, as well as basically doing something together, and Willie and Adi have worked together with Ryan. So all of us are coming from Banyuwangi the biggest city among the five of us, honestly speaking, everyone else is really coming from either the rural, even one of us actually comes from East Nusa Tenggara, which is actually one of the islands with only a thousand people in terms of population.

So. It's quite I would say we know what's the problem, we just don't know how to solve it. That problem has been there for, like, many, many years. But at least we all know that there is an issue and we know that, you know, there are, these challenges that can be solved if we really focus on it. Right, so, doing trial and error. Initially, we were not doing daily necessities. In fact, we were doing some electronics. Initially, we were selling electronics. As it's not even on Java Island, we were actually selling electronics somewhere on Sulawesi Island, right? So that's, that's basically how we started initially. And then we find out that, no, it doesn't work. 90 percent of the spending, more than 90 percent of the spending of the people in Tier 3, Tier 4, are actually spent on dairies and shelves, and mostly. Fast-moving consumer goods, right? And we know that there is an issue related to fast-moving consumer goods whereby goods are not coming properly. The supply of goods is not consistent. I can't find my mocha flavor ice cream ever in Banyuwangi. So it's actually a big problem right there and we want to solve it. We want to increase the availability and when you do that you are not really cutting the ice cream. The value chain of the supply chain of, of the way things are already running, you're actually getting a new market. You're actually helping people to be able to get what they need fast, easy, and cheaper. Right? So that's basically how we do it.

(08:48) Jeremy Au: Yeah. So there you are, you're building this business model. And the truth is, there have been many teams that try to solve this, right? At different verticals, right? So sometimes looking at maybe dry goods. Some people are looking at it in terms of cold chain. Other people are looking at it in terms of like, you know, last-mile delivery.

So lots of different models. But I think the crux of it is like, how do we make the experience for the end consumer? Have good stuff, high quality, larger range, maybe easier in terms of either price or convenience. So there are a lot of different models here. And unfortunately, a lot of them have not done so well, right?

Especially over the past year, right? So Wilson, what do you think about that? I mean, you mentioned a little bit about how you're approaching it differently, but I'd love for you to kind of explain more about it.

(09:27) Wilson Yanaprasetya:

Sure. Sure. Sure. I'll, I'll do what they're gonna do first, basically in terms of the business model, right? We have what we call a hub and spoke model, which is basically a very I would say traditional way of doing things. Honestly speaking, people in Indonesia, the conglomerates have been doing this for the last like 20, 30 years. This hub is typically an asset-based model. However, the way we do it is an asset-light in our case. So we leverage unused properties, or we leverage the local key opinion leaders in the village, their properties basically to be used as our drop-off points, our demand aggregation point, which is what we call the hub. Typically this location is located deep inside the village, sometimes inside the forest, sometimes nearer to the beach, sometimes up the mountain. But once the hub is set up, then we will just plug in our software, our system, our warehouse management, all the way that is linked directly into the brands and the distributors.

So when we are able to do this, brands will deliver directly to this location. While we take care of the delivery to our customers in the rural areas. I would say it's traditional in a way. Where's the tech component of it? Basically, we leverage the human connection and a combination of network effects to acquire these customers. We work with the local head of village in the area. For example, the wives of the head of the village in the area, we help them. They are actually the ones who helped us to acquire these customers to make sure that we get the trust that is needed. To go into all this village creates a very different approach immediately as compared to the typical, I would say, what you call a warung tech business model.

There is four different business model that I'm seeing. And again, I'm not trying to know what other people are doing, but at least that's actually what we personally box up into four different things.

(11:11) Jeremy Au:

Oh, I see the hand signals. Is this a 2x2?

(11:13) Wilson Yanaprasetya:

Correct. 2x2.

(11:14) Jeremy Au:

Oh, I want to hear I'm all, I'm all for two by twos. Just feel free to explain it.

(11:17) Wilson Yanaprasetya:

Sure. Are you sure? Sure. Of course. Of course. So, so basically, we split it, right? Like one is those guys who are really trying to make the existing supply chain more efficient, existing, right? So that means typically they look at how the process today and how they can actually make it more efficient.

(11:34) Wilson Yanaprasetya:

So one model is basically what they call a pure marketplace model. They don't have any inventory at all. They're just focusing on being an asset line. They are a marketplace, a B2B marketplace that connects typically like suppliers into the demand side. But the problem with this is that when you start going into cutting the supply chain or basically trying to make it more efficient, typically you will not work with brands directly. Typically, you just look at what's available in the market, and mind you, sometimes the price of the goods in the market is cheaper than what the brands are selling, right? But at the same time, that's because of an infrastructure issue that's happening within the country.

Those guys are focusing on that. And as a result, the customers are buying from this company because of one main reason, which is basically price. And because it's FMCG, fast-moving consumer goods, such a low margin, they have to buy in very, very big volumes to make it worth it to buy it from that platform. And then you end up focusing on only the bigger ones, because, for the smaller ones, there's no reason for you to really go into that platform, trying to figure out the logistics, trying to figure out the hassle, just to get a little savings all together.

(12:44) Jeremy Au:


(12:45) Wilson Yanaprasetya:

That's actually the marketplace that we call a 3P model. Then there is another one that is actually focusing more on 1P. So this 1P model is basically when they actually take inventory when they actually focus a bit more on the supply, they try to control the whole supply chain system, but they are still focusing on trying to fix that basically process between the, the supplier all the way into the customers. When they try to do that, obviously you go into the one that has the highest density population wise, you, you want to look for places whereby there is enough demand in the area so that you can try to try to make it more efficient. Typically this is located in Tier 1 sometimes in the Tier 2 cities, sometimes it's in the greater area of Tier 1 right?

It's still the same watertight model. The problem again, when you go into this, the customer tends to go to you because you provide a cheaper cost. You can always go into another alternative. Technically speaking without that specific platform, they still can do it without any issues. Just because the process has already running for the last 20, or 30 years. So that's pretty much the price sensitive or the price focus type of the customers. And then there's another one that actually likes us and this other model whereby we try to increase or look into the demand of the underserved market. We try to look at the market whereby it's not really served by the brands today. So, other than Dagangan as a model, which is the hub and spoke there is another one called the social commerce, community group buying model. There are many different social commerce models out there, but specifically for the warung tech model, we go into the community group buying, which is pretty much what people are using.

So they typically leverage agent to sell their goods. They typically acquire the customers using these agents and then give this agent a commission. Based on whatever they're selling now, the problem with, I mean, like, the problem with this model is that basically when there is, so when they're trying to sell fast-moving consumer goods, especially when we are looking into expanding the market into places whereby brand does not cover, technically those will be the Tier 3 Tier 4 When you try to serve Tier 3 Tier 4 using an agent model whereby they're actually having to give some commission FMCG, we all know it's a single digit margin. It might not be economically feasible to pay a commission to make it sustainable. Maybe they can do it for the first few times, but is it sustainable? Somebody has to pay for that commission and the loyalty, the loyalty of the customers is typically towards the agent, not to the platform because of the commission structure that has been going on. Right. And then there is us, right? So we are still focusing on the untapped market. Underserved brands need us more because we are focusing on Tier 3 and Tier 4 We don't provide any commission model because it's not really through the agent model. We use the community model. We leverage the head of the village, for example, the local key opinion leaders, for example, to really help us acquire and build that trust. We go into places where it's not really dense in terms of population. So wise for brands to go there will be too expensive. They would rather use us as a platform because we manage multiple brands at once rather than focusing on one or two brands. So that kind of like helps us to reduce the cost a lot in terms of reducing our cost of acquisition, making sure that basically it is sustainable. Those are kind of like the four different business models that we are seeing and how we are actually quite different as compared to them because our model is mainly serving the supplier rather than really focusing on trying to break the chain.

(16:07) Jeremy Au:

So can you please just at least tell me the axes so the Y axis is for sides?

(16:12) Wilson Yanaprasetya:

Okay, the Y axis is really in terms of whether you're actually focusing on Tier 1, Tier 2 or Tier 3, or Tier 4. And then the X part is actually whether you're actually focusing on the size of the customers. Basically, whether you're trying to cut the chain or, or not

(16:26) Jeremy Au:

Okay, got it. In terms of enhancing the current chain, are you trying to kind of like, displace it? Yeah, and I think what's been interesting is that it doesn't feel like an easy space, right? So regardless of which quadrant you are in, I think one reflection I've had is that operational discipline is super key. I mean, no matter which quadrant, no matter whether it's one digit or barely two digits, I think it's barely two digits, right? You know, I think operational discipline is so key, right? I think that's one thing I noticed. The second thing is actually the definition of profitability. Has been a big problem.

And what I mean by that is, I think I step back and I've had a chance to meet different founders and I think one of the biggest regrets that founders often said is like, not agreeing on a definition of profitability with the board or what the goals are, right? So, obviously, the big one you can go for is GMV, right? That's a big, beautiful number. You know, it's always ten times larger than profitability, right? You know, so your GM. Then there's GM. And then, of course, I think a lot of people learn from the, you know, like, the Uber, the Grab, you know, like, GM gross margin versus CM1, CM2, CM3. So there's a rocket internet accounting kind of dynamic.

So I think there's a lot of fuzziness around what the number is. And obviously, you know, EBITDA, you can't, you know, you can't make that up. And cash flow, you can't make that up, right? But I think I think the float between GMV, GM, CM1, CM2, CM3, I feel like that has been the biggest problem. I don't know. I don't know what, and I don't know why it's so hard in some ways, but I also understand it's hard. So can you explain from your perspective how people should be thinking about it?

(17:52) Wilson Yanaprasetya:

I'm not the master of it myself, but at the same time, I come from a private equity background, so we are more conservative that way. It's actually quite simple. When you run a business, let's say you don't have a VC, or capital investor whatsoever, right? When you run a business, you know that you are going to lose money for the first X amount of time. Until then, basically, you start making money and covering your costs, the previous costs that you have actually spent. That's pretty much the general thing of how you actually run a business. And then when you actually look into that, you split it. What is your variable costs? What are your fixed costs? Can whatever you are selling actually cover your complete variable costs? And at what point in time can you actually start covering your fixed costs altogether? That is actually the general simple way of looking at things. But unfortunately, because of the negative scaling that has been happening in early 2021, 2020 or even before it, the nature of the business is like top-line growth as long as you have money. You can actually cover everything. You can actually become a market leader. And then basically you can actually win the market, especially in tech.

Yes, you're right. It happens for Airbnb. It happens for Google. It has been for many, many different companies that actually use that specific model and it works. However, it's only for some businesses, especially in Indonesia, where a lot of the businesses are mainly based offline. So technically the offline way of doing things is. The number one thing that you should know, which means we have to look at what is actually your variable cost. Are you actually losing money every time you sell something?

When we say variable cost, is sales cost your variable cost? Is logistic cost your variable cost? So it's not just the price of good salt, the cost of good salt, right? It, it is everything that is derived from that specific thing that you're actually selling. If let's say you need more people, you need to hire more people just to sell.

A certain good or thing then it's actually going to your variable costs. Now, the thing is, can you cover that? If you can't really cover that, obviously you have not met your product market fit. Obviously, you should not scale because the more you scale, the more you're actually losing money. We, for example, in Dagangan, are actually quite blessed that we are not doing it from the beginning.

You know, we are working with all the like-minded investors, like-minded founders, and stakeholders. We know that basically, you know, to do this, we have to do it properly. We have to do it right. You know, basically, we have a path for profitability, even from day one. You know, we know that there's three different things that we're actually focusing on. We know that we have to sell FMCG when we go into the rural markets. It generally has a lower margin as compared to fashion, beauty, et cetera. So your cost structure, your CAC, you know, your supply chain has to be super tight from day one. Your days of inventory have to be super low. Your cash conversion cycle has to be correct.

So all of these are actually metrics that are constantly being monitored, even if let's say you're doing this the offline way, without the tech investment whatsoever, right? Having a positive contribution margin from day one is something that we actually have. Achieve d from when we started, and that allows us, to be sustainable. And we know that as we go deeper into the Tier 4 areas, it allows us to have a logistic cost that's even lower and a lot more efficient, right? So, you know, there is a clear path towards that profitability, at least from that specific margin. Secondly, we have the community in the village. We work with the local key opinion leaders as you have this community to start growing in that area, in the village, there is actually a tipping point whereby customers start going to you without any physical assistance.

People just automatically order from Dagangan from that area. So users start coming automatically will keep your keg low as well. But even before that keg, you are already contribution margin positive. So, your focus on this piece of towards profitability is just fine-tuning to make sure that you are actually making more profit instead of turning profitable, right? That's actually the difference. No three. Basically, you know, we know that today we are doing FMCG at the end of the day, we have to sell something else. We have to look into something that is higher in terms of margin, right? Again, that will only happen after the first two that I mentioned are actually covered, which actually we are doing from all right.

So keeping the cost low, keeping vitality high, basically balancing the margin as well as cash conversion cycle are basically the three clear, I mean, strategies that we are actually doing in order for us to be able to, to be, to turn profitable. And hopefully, we know what to do as well, you know, just to achieve that.

(22:25) Jeremy Au:

Yeah, I think that's why I was always impressed me is that I think you have always been sober over the past few years. I've known you, you were sober during the well, it's, it's always easy to be sober when it's the bear times, right? Because everyone's sober, but you were very sober during the bull times as well, which is why I appreciated this and why you're here on the podcast.

You know, I think what's very true is that, you know, I think you talk about the concept of blitzscaling versus negative blitzscaling. And I've met the co-author of Blitzscaling. And what's interesting is that a lot of people have read, and heard of the term. And so they say, oh, blitzscale, blitzscale. But then, you know, if you look at the book and what he's applying to, he's actually referring to technology businesses, right?

So he's primarily referring to SaaS, he's primarily referring even to marketplaces that have, they don't look at a GMV, but you look at the Highly profitable marketplaces, right? And I think like what you said in, in, in Indonesia, but also I think across obviously Asia, when you're doing primarily in some ways services and a logistics business, then your product market fit, you know, the margin is different, right?

And so you got to be very, very careful about when product market fit. You know, whether you have it or not, and when it's time to blitzscale or not, right? Because I think the issue, as you said, is at the end of the day, like a lot of people say like, okay, we hit GMV, we did this number, bought back the envelope, we've hit product market fit, our current board thinks that we hit product market fit, therefore let's blitzscale, but blitzscale is not for some definitions of product market fit, whatever you want to call it, it actually requires rigorous PMF, right?

So I think there's a reality, I think, that You know, I think a lot of people, Southeast Asia, like, you know, it's like we're reading Substack. Still, Substack is all referring to the American market, referring to American business models, referring to American margins. And it doesn't apply to, like I said, you know, Southeast Asia, the exact business we're working on. So of course, if you happen to be working in the right business, that fits, go for it. But not every business is the same.

(24:04) Wilson Yanaprasetya:

Exactly. I completely agree with you. I think you know, I'm not saying that blitzscaling is a bad thing, right? Like, you know, if let's say you are really into say, you know, building a platform, building SaaS, like you mentioned. Building an AI platform and so on, you might need to do that maybe just to gain the market share. And then you figure out later on how they actually attracted to you. But you know, in Indonesia, and many developing countries, a lot of it is offline, right? Like a lot of it is actually driven from the traditional I mean our digital penetration, yeah, it's growing, it's, it's growing very fast, but at the same time, you need that offline piece the, the, the human connection to help grow the business.

(24:41) Jeremy Au:

Yeah. Yeah. And I think when you think about this offline business, and then I think one thing you said was very interesting at the start of the podcast was you said, Hey, either you're working on urban areas, or you're working on really kind of like rural areas. And if you're not, then you're actually not really doing anything different.

So, I'm paraphrasing here, obviously, but what do you mean by that? You know, what do you because I think everybody feels like you start from urban, then you do the suburban, and then you do the rural, right? It feels like a very, I'm sorry to say this, a very consulting deck that, you know, you kind of like work your way down the, the ladder in that sense, right? But I'm so curious, Wilson, what do you think about it?

(25:15) Wilson Yanaprasetya:

Sure, sure. So, so, you know, I think the definition of rural, suburban, urban, people actually going to rural, but not sure what's happening in the operation and so on. All those are actually for stories. And you need to scale, you need to increase your valuation. Hence you have to come up with new growth drivers in terms of how to scale the business and so on. Being in this business for the last four years, we all know that at the end of the day, who is actually your real client? Your real client actually is the supplier. On the demand side, in terms of the people, I know I was in Banyuwangi. I experienced a problem where it's very difficult to get things. Can you get things if you want to? Yes, you just pay more. The problem is basically, do you want to do that? But how can that happen? It's just because there is a lack of supply. So when you go back into finding out, just building any business, you have to talk to your customers. Sometimes people think that the customer is just one side, which is actually the customer, the demand side. There is also the supplier side. They are actually your customers as well. And when you talk to them, you know, basically their main problem is gaining market share, trying to understand why after spending all this marketing budget to grow into a new market, it is still failing because of the distribution, because the product availability is not there. I put advertisements on TV, people watch it, and people see my products. However, when they look for it, it's not available because of the infrastructure. So we look into that, and we go back to the drawing board. We see that if we are just going into a suburb, let's say the areas around the Tier 1 city, for example, are still covered by the brands. There is enough distribution chain at that level that allows the people, the users in that area to get their goods.

Yeah, it might be a little bit harder, but you still can get it. But if you go up into Mount Merapi in our area, if you go into the Parantritis Beach in, in Southern Yogyakarta, if you go into like, basically Gunung Lawu for example, there's no way you can get those goods easily. Sometimes they just. It's so limited and is the demand there definitely? I mean, the people are actually like, you know, they're farmers. Yes, I know it fluctuates. You know, sometimes there's a good moment. Sometimes there are bad moments in terms of their income. However, they're spending, right? They need their, their, their, their spending is also growing and, and they need it for their daily necessities.

And unfortunately what happened today is that they're making a lot less money. At the same time, they're paying double the amount just to get what they need. And that's actually a problem that even the brands want somebody to solve it. They cannot solve it by themselves because if you're just selling one single brand, it's too expensive.

But if I say we have, we are there and serve them you know, going all out. Going into really rural areas, I'm talking about places where all these brands do not want to go, then you are actually providing values on both ends, not just on one end, on both ends, on both supply sides, as well as the demand side.

And that's basically why we have been growing in the last, even during this time, we are still growing, we are still doubling every year or more for example. The reason is simple. It's just because we are really providing value to both. Customers as well as the suppliers and when, when I say going all out means you really have to go out and really try to solve what the customer needs.

(28:29) Jeremy Au:

Yeah. And on that note, could you share about a time that you personally have been brave?

(28:33) Wilson Yanaprasetya:

Yeah, I think, well, there's many different times that, you know, I feel that way, right? But I think, you know, honestly speaking doing this. It's not really going into entrepreneurship It's something that I think later and I have to push myself a little bit. Initially, I was more of like basically a corporate guy.

But now that I do this, I feel like, Hey, this is actually a real good thing that I'm doing. I'm actually not only just solving that problem. We are all the founders and are not just solving the problems in that rural market. But also basically adding social impacts to the lives of the people in the rural. And that on its own is actually giving you a completely different happiness I would say what you have been doing in the past. And you know, I, I've. I didn't come from a wealthy family. I come from a basically working family. So, going and trying to take that risk initially was tough. But at the end of the day, it's something that I feel if I were to do it again, I would do it even earlier at my age.

(29:34) Jeremy Au:

You use a phrase, a completely different happiness. Could you share a difference in the happiness?

(29:40) Wilson Yanaprasetya:

So basically I think. So when you actually add value to what you are doing you have a personal goal. This is actually what you want to do. Let's say you want to build a better business model that can attract or go into the rural that on its own from the finance, financial perspective is good because basically it's sustainable and so on. But when you actually ask and talk to the customers, when you actually talk to the suppliers, When you actually hear them saying that, Hey, without Dagangan, I would not be able to be where I am today. Without Dagangan, for example, we talked to a few customers in our Yogyakarta village or even places in the village around Pati, for example.

They tripled their income within one year because of Dagangan. There, we are able to provide not only cheaper goods but also. Having to be able to keep it sustainable, making sure that the goods are always there when they look for it keeping or, or make closing that demand gap in, in a way so that on its own, you know, makes me feel like, you know, we are not doing this just for a financial, but we are also doing this. Basically for something that is more to grow the economy in the area, right? To help the people in the rural areas to increase their well-being. Not not many of us actually have the. the luxury right? Like, I have to admit I'm privileged to be able to go to school abroad, right? Even though I'm from Banyuwangi. But at the same time, you know, when you look into the people in the rural, like, if you can actually give them something more than just income, right? Like the ability for them to provide for their families and their extended families. The ability for them to provide jobs is the ability for them to increase the number of production that they have in the field. Something that gives you a different type of happiness that I mentioned earlier.

(31:22) Jeremy Au:

When you think about this, you are on both sides of the table, right? You were at Northstar on the private equity and tech investment side, and now you're on the founder's side. What do you think about that past life? Was it happy? Was it unhappy? I'm just curious from your perspective, how do you compare it?

(31:38) Wilson Yanaprasetya:

It's different, but you know, I think without one, I wouldn't be able to get into the other. I think being at Northstar, gives you the ability to know what's working and what's not working. You know what you need to look at when you're running a business you know what to do when you are actually building a business or even scaling a business so that you stay sober, for example, and so on. There are a lot of things that actually you're learning from that nature, right? Being on the investment side of things, obviously, when you run, it's very different. Being on the investment side, you can only see it from the above. You're not really doing things. Running things right now, being on the operation, now we actually have to drive the goods ourselves We have to talk to our customer ourselves We have to negotiate, we have to figure out what happens if let's say the company cannot meet the demand that is out there. There are many, many different moving pieces that is not just theoretical but it’s actually very different, especially in Indonesia, where there are 83,000 villages, 83,000 different personalities different culture, and different behavior. You cannot just put one bullet that fits everything. But at the end of the day, we are all doing this because we want to keep learning. You just want to be a better person whether you are actually, whatever you are doing, whether I'm at Northstar or whether I'm actually doing.

This today with the rest of the cofounders you know, at the end of the day, we are all learning in here and, and, through all this learning you have your personal goals that you want to reach at the end, at the end of the day, basically after you, you know, throughout your life, you want to ask yourself, like, what do you do? Are you just doing things for yourself or are you, or are you actually adding value to other people? And basically, that's basically where I'm, I think. You are as good as if you are able to provide that to everybody else around you.

(33:13) Jeremy Au:

Amazing. On that note, I'd love to kind of like summarize the three big takeaways I got from this. First of all, thank you so much for sharing. I think The story behind why founding Dagangan was such a powerful one, right? I think you shared about how you grew up wanting to eat mocha ice cream and it was, you can't find it or it was too expensive. And you went somewhere else and you realized it was more available. But I thought it was just an interesting story about like you said, you grew up in a working-class family. You grew up in what you describe as a Tier 3 city. And so you had a good idea of what the disparity is. In terms of demand, but also more importantly, in terms of supply, right? I thought that was kind of a beautiful story about sharing how the rest of the founding team also had a similar background. And I thought it was just nice to hear I think the articulation of what the problem is, but also why the problem matters to you.

And the second, of course, is thank you so much for sharing. I think I'll say an operator's perspective on, you know, all the different things, right? Like we talk about Warung Tech. We talk about the different business models and approaches from disruption to enhancing the current supply chain, about which cities are targeting from Tier 1 all the way to Tier 3 Tier 4 But also I think sharing a little bit about, you know, contribution margins, gross margins, GMV, as well as blitzscaling and when do you put a market fit. So I thought that was a really in-depth masterclass, honestly, because I think it's a very rare perspective about, you know, What works and what doesn't work, because if I read the tech news, everything works, until something goes wrong, and everyone's like, boo, boo. And I'm like, you know, it's a bit imbalanced, right? It can't be like, everything's amazing, then suddenly this person's horrible. I mean, the truth is we're all trying to figure out how to make it work in Southeast Asia, right? So we're all learning from each other and we're all helping one another. And so I think it's good of you to share the advice because I think you'll help other founders who are building. Similar businesses are exploring that vertical in different countries in different areas to be really helpful.

And lastly, I think thank you so much for sharing about what a completely different happiness means, right? I thought that was a very nice phrase because, you know, you're one of the few folks who have done both sides of the table, right? Both are on the investing side. As well as the founder side. I guess I'm the opposite. I've done both sides of the table as well, but now it's the other way around. From the founder side to the VC side. But I thought it was just nice of you to kind of share that there is a kind of different happiness. And I think you were very thoughtful about sharing that. Yeah, I think there's a lot of meaning and purpose that you get. But also, you know, I think it was very nice of you to share that actually your experience at Northstar helped you understand what type of business you need to build and what the metrics you need to hit for a healthy and sustainable business. So on that note, thank you so much, Wilson, for coming on the BRAVE show.

(35:28) Wilson Yanaprasetya:

Thank you. I really appreciate you for having me.