Q&A: Tokopedia's William Tanuwijaya

Q: Getting Tokopedia to launch was a two-year process. What did you do during this period?

A: Raising money from friends and family was not an option at that time. My father was also sick, and as the only worker in the family, I couldn't leave my job to bootstrap a start-up. In 2007, I went to the only person I knew who had money - the boss of the company where I was working. I pitched the idea of an online marketplace and he introduced me to people in his network but unfortunately no one bought into the idea. People were skeptical, asking me to name one person in Indonesia that had set up a successful internet business. They thought it was only a matter of time before eBay, Rakuten and Alibaba took over the market. Not coming from a well-known family and with no industry track record, I failed to raise money. I carried on with my job and then in February 2009 my boss finally decided to back the idea.

Q: How did you get traction?

A: The first challenge was convincing talent to join us. Working for a start-up wasn't considered cool at the time; people wanted stable jobs with multinationals. We hired friends, starting with a team of four. It took six months to develop a viable product and we involved merchants in this process, asking them what functions they needed most. We got about 70 merchants on our beta platform. Then terrorists bombed the Ritz Carlton and JW Marriott hotels in Jakarta. An internet movement started called Indonesia Unite and people were asked to wear T-shirts saying, "kami tidak takut," which means, "we are not afraid." Many of our merchants were selling these T-shirts and we wanted to support the movement, so we decided to launch the platform on August 17, Indonesia's Independence Day. The first order came within 12 minutes. The following day a journalist came to our office and asked to do an interview. We hadn't issued any press releases but I had written a blog post about our journey and an editor saw it. They wrote a two-page feature on us and that is how we got our initial traction.

Q: At what point did you perceive competitive threats?

A: Six months after our launch Telkom Indonesia announced a joint venture with eBay. Rakuten entered the market the following year through a joint venture with MNC and then Naspers acquired Multiply, moving the headquarters from Florida to Jakarta with a view to becoming the marketplace leader in Southeast Asia. On paper we had no chance. But we are lucky to live in the internet era, where even the underdog can challenge the status quo and somehow eventually win.

Q: After the seed round, you were supported by several VCs. What has been their impact?

A: I didn't speak English particularly well until 2010, but I was fortunate to meet with several Japanese investors who tolerated my broken English and helped me improve. Continuous learning is part of the Tokopedia culture. I raised money every single year, from 2009 to 2014, and each investor taught me something new. They plugged me into their networks and provided exposure to China, Japan and South Korea.

Q: And what do SoftBank and Sequoia offer?

A: I want to build something for the long term so I need shareholders with deep pockets that will support me. SoftBank and Sequoia are a perfect fit - they have amazing track records in helping entrepreneurs build companies. I want to learn about technological innovation in the US and business innovation in China and India. They can help me do this.

Q: What similarities do you see between China in 2003 - when Alibaba set up Taobao - and Indonesia in 2009 and today?

A: One similarity between the two markets is a lot of individuals were earning small amounts from their main jobs and so taking on second or third jobs. Open marketplaces like Taobao and Tokopedia enable these people to start their own online businesses at basically no cost and with no risk. Through our platform, one stay-at-home mom turned a self-run enterprise into a small business with 40 employees. College students with no jobs and office workers who want to find second jobs are also among our top merchants.

Q: Do you want Tokopedia to expand vertically or geographically?

A: We will look at verticals first. Tokopedia is not an e-commerce company; it is an internet company that helps people to do e-commerce safely and easily. We want to expand our ecosystem within Indonesia before we consider entering new geographical markets.

Q: What message does the investment send out to local entrepreneurs?

A: Tokopedia is not a product of a joint venture between two giants, like most internet companies in Indonesia. The investment shows that it is possible to build a world-class company from scratch here.

Q: What are the biggest challenges facing these entrepreneurs?

A: Talent and knowhow. Indonesia is no Silicon Valley, China, or India where they have the education and ecosystem to support innovation. Building a company is one thing; scaling it to global level is huge challenge given the lack of talent available.

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• Topics
• Technology
• Consumer
• Southeast Asia
• People
• Indonesia
• Southeast Asia
• Consumer
• TMT
• Sequoia Capital
• SoftBank Capital