It is no secret that doing business in Indonesia is not easy. A business consultant once told AmCham that in Indonesia, you sometimes don’t even know whether you can start a business, given the complexity of the bureaucracy.

William Tanuwijaya, founder of Tokopedia, one of Indonesia’s biggest online marketplaces, is one Indonesian techpreneur who has built his own (successful) business from scratch.

Born in the small town of Pematang Siantar in North Sumatra and from a modest family, William came to Jakarta when he was only 16 years old.  “My father and my uncle dreamed of seeing me have a better life, so they sent me to Jakarta to pursue a degree,” he said.

The family bought him a one-way boat ticket and he arrived safely in Jakarta after a three night/four day trip from Belawan Port, North Sumatra.

William first encountered the Internet when he was in his second semester at a private university in Jakarta, studying computer science. His father became sick, so in order to survive, William needed to find a job. He found work as a zombie-shift Internet café operator, working from 9pm to 9am for the remaining three years of college.

He also enjoyed free Internet access and that changed his life. “I can say that I have a degree from an Internet café,” he says now.  
William launched Tokopedia in 2007 with his business partner Leontinus Alpha Edison. Both have gone through difficult times in the years since, especially in regard to finding the capital to grow the business. But in 2014, Tokopedia hit the news when it raised $100 million from Japanese companies Softbank Internet and Media Inc (SIMI) and Sequoia, paving the way to enlarge the business.

In the last year, Tokopedia has actively coached talent and created brand awareness; it now employs 400 people, up from only 80 people a year ago. It also has 500,000 merchants and ships 7,000 different kinds of items a month.

At 34, William has proven that success is a matter of hard work and a good idea. He shared his thoughts with AmCham on e-commerce, Indonesian entrepreneurs and much, much more.

AmCham: How did you start Tokopedia?  

William Tanuwijaya: I fell in love with the Internet. When I graduated in 2003, I dreamed of working for an Internet company like Google or Facebook but none of those companies had an office in Jakarta at that time. So instead I worked from one place to another. In 2007, I saw an opportunity to build a marketplace in Indonesia. This country is huge and needs a trustworthy marketplace that connects buyers and sellers. Besides, there was a big demand to sell and promote products by individual producers through the Internet.

I had the plan but not the capital to start the business. Even worse, my father became sick, he was diagnosed with cancer and I was the backbone of the family, so I had to be very careful with every penny I had in my pocket. I went to the only person with money I knew at that time, my boss, who was kind enough to introduce me to his friends, local rich people, potential investors. I spent two years, 2007-2009, trying to sell my idea to anyone, but with no success.

What was the most interesting experience you had while selling your idea?

The most common question I got from people then was, “William, tell me one person in Indonesia who has become rich because of technology or the Internet?”  Some people asked me what would happen if, when I started my own business, big players like eBay, Rakuten and Alibaba would come to Indonesia. How was I going to compete with them? Other people asked, ”What is your family background? Which university did you graduate from? What business did you ever start and build before this?”

From those questions, I realized that technology-based businesses were still uncommon in Indonesia, and that starting a business in Indonesia was about credibility – your family background and university degree. I only have a degree from a local university, in fact I can say that I have a degree from an Internet café. I had never run a business before. The highest career position I had was as a manager with only one person reporting to me. All that experience taught me that it was not easy to start a business in Indonesia.

One moment that changed my life was when I met with a potential investor who told me this: “William, you are young once, therefore you should try to find something more realistic. You want this Silicon Valley dream. Larry Page, Sergey Brin, Steve Jobs are all special guys. You are not special.”

At that moment, I promised myself that I would never give up.

In October 2014, my dream came true. I met with both SIMI and Sequoia in Japan who both agreed to my proposal. My third proposal in Japan, which was directed to my girlfriend whom I had been in a relationship with for seven years, was also accepted.

What is the potential of e-commerce in Indonesia? And what is your strategy to gain market share?

We always believe that Indonesians are actually very entrepreneurial. Ninety percent of businesses in Tokopedia are new businesses. Many of them started because they need to provide a better life for their family. We are very lucky to grow together with the dreams of our merchants. We have a stay-at home mother who now employs forty people, an ex cleaning service that has become a toy entrepreneur and employs three people and a college girl who now runs her own brand.

You’ll get a glimpse of Indonesian entrepreneurship even on rainy days. You see kids offering umbrella services to people, musicians performing at traffic lights, the 3-in-1 jockeys. In the office, some of your colleagues might sell homemade meals or handmade products. The Internet has helped boost people’s creativity and entrepreneurial spirit. Tokopedia comes with a mission to become a platform of opportunity. We have 500,000 merchants but only 70,000 who already have a “business.” They are people who have regular transactions. Tokopedia wants to grow the 70,000 people who already own a business.

At this moment, Indonesia’s e-commerce is still contributing less than 1 percent of total retail in Indonesia, compared to 13 percent in China. In short, we still see big potential for e-commerce in Indonesia, especially given the fact that Indonesia is an archipelagic country where e-commerce will actually bring real value to help distribute goods and services in a more efficient way, cutting middleman fees.

What have you done with the capital you received from SIMI and Sequoia?

Tokopedia has been using the capital to develop talent. Finding talent in Indonesia is difficult as there’s no legacy of technology companies here, but I take this as an opportunity to breed talent. So we’ve brought mentors who have seen the big picture [of the technology business], who have worked with companies whose daily transactions hit millions per day. Tokopedia is going in that direction so I need people who have done that before and they are professional expatriates. I have four mentors so far. I match those mentors with fresh local talent. I work with local universities, seeking talent. Every month I receive 3,000 applications, but unfortunately Tokopedia can only accept up to 50 applicants every month. I am preparing the talent who will be the future digital leaders.

Our second focus is brand awareness. When we started Tokopedia, we had no marketing officers at all. Now we are able to expand the team. Our campaign is “Create your opportunity,” which is actually based on the Tokopedia experience. We have also added more employees. Last year we had only 80 employees, now we have almost 400.   

E-commerce is still listed in the government’s Negative Investment List. What is your view on this?

The Internet is borderless. Since the first day you start an Internet based company, you actually start to compete globally, and now entrepreneurs can choose to set up a company anywhere in the world. I understand that the idea of including e-commerce on the Negative Investment List is to protect local players. But again, the Internet is borderless, so the idea to protect local companies by limiting their access to global capital while at the same time they need to fight globally doesn’t really make sense. I can understand if this is to protect domestic retailers, but for a marketplace of classified ads that becomes a 100 percent technology player, they should not be included on the list.

Other than funding, what other benefits are there for Indonesian players to engage with foreign partners?

As an Indonesian entity, Tokopedia will always comply with the law. Our merchants are either individuals or businesses. We will only accept local Indonesian merchants.

As a technology/Internet company, it is very important to be open to accepting foreign investment. It is hypocritical if we are against foreign investment while perhaps 90 percent of the apps installed by Indonesians are not Indonesian apps. We can’t force Indonesian users to install only Indonesian apps. To increase the number of Indonesian apps for Indonesian mobile users you have to increase the quality of the apps. Access to capital, know-how and global talent are keys to boost that quality.

What is the most challenging thing in running a business like Tokopedia?

Finding the talent, as there’s no legacy of a successful Internet company in Indonesia that has produced leaders for the next generation of Internet companies. Silicon Valley was not built overnight. I am happy that this has recently been changing. We’ve started to see the Indonesian diaspora returning to Indonesia and joining the rising tech business here. This all started to become possible with the flow of investment to the Indonesian tech industry.

If you had the authority to make Indonesia a better place for e-commerce, what would you do?

Embrace it. Support the rise of homegrown entrepreneurs. Make sure that Indonesian entrepreneurs have enough access to capital [both domestic and foreign]. I would not over-regulate the business as business models change rapidly. In the Internet era, consumers are the best regulators because customers can leave your platform in the blink of an eye, and choose your competitors if they find yours irrelevant.  

You joined President Jokowi’s trip to the US in October, and the team led by the communications minister on a visit to Silicon Valley. What did you learn?

I am mostly surprised by the new administration. With other selected techpreneurs, we were lucky to join some of the ministers in meeting with top venture capital and tech companies in Silicon Valley. I was very surprised to be with Minister Rudiantara and Minister Tom Lembong who are very open minded. The Indonesian tech community has high hopes that the new administration will understand and will give more support to the industry in order to build a digital Indonesia.