Running on less than $1m in funding, Tiket is Indonesia’s bootstrap rockstar

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Natali Ardianto, co-founder and CTO of Tiket, sits facing me in a small meeting room next to a koi pond, flanked by Tiket’s PR team. Launched in 2011, the travel booking site is a dinosaur in Indonesia’s young startup scene. It lets you book flights, hotels, train tickets, and event tickets. What makes it stand out among its Indonesian startup peers is that, so far, Tiket has never touched venture capital.

It’s built entirely on an initial angel investment of “under US$1 million,” according to Natali. In 2012, it won US$25,000 in a startup competition. Everything else comes from carefully balancing revenues and expenditures. And focusing on core things like good tech, solid financial planning, proper legal documents. “For us, it’s about the fundamentals,” he explains.

“We designed Tiket to be very corporate,” Natali adds. “It may not be the Silicon Valley way, but we want to show that our way can work in Indonesia.”

Marathon runner

Tech in Asia last visited Tiket mid-2014. Back then, Natali spoke of expansion plans into the region as the next milestone. He also said Tiket might look into raising capital in 2015. But now, one-and-a-half years later – an eternity in startup terms – not much has changed at the company. The team grew from 150 to 230 people, and revenues continue to “grow at a multiple,” but overseas expansion is off the table. He’s not currently seeking external investment. “Of course we regularly talk with VCs,” Natali says.

Tiket is simply not in a rush. “For us, it’s a marathon, not a sprint,” says Natali. The company realized there were many more opportunities in Indonesia it hasn’t yet explored. And its profitability isn’t yet as stable as he’d like it to be.

“Since early 2013, our net revenues surpass our operational costs,” Natali says. “But to be honest with you, it’s an up and down until now.”

So Tiket’s focus will remain on doing the things it’s doing now, with ever-increasing efficiency, inching forward to higher profits.

The key to getting there lies in optimization and automation, Natali believes. His obsession with the topic has won the site a conversion rate of 6 percent, which is better than the average ecommerce site manages.

With similar principles, Tiket was able to decrease spending on Google Adsense campaigns by 30 percent this year, simply because the team figured out what worked and what didn’t and cut out the inefficiencies.

Flights of fancy

So how big is Tiket’s business these days?

Unsurprisingly, Natali can’t share the company’s net revenue in hard terms. But the PR team nods yes to Natali’s question if he can share other figures.

The site averages about 10,000 daily transactions. The most popular category is flights, making up more than 50 percent of booking volume and revenue. Of the flights, 90 percent are domestic, another reason why launching overseas isn’t a priority. Tiket’s margin on flight tickets is at 4 to 5 percent.

Train tickets are the next highest in demand. But the margin Tiket gets from trains is so small that this category falls behind hotels in terms of revenue.

Hotels are an interesting category because margins have been increasing over the years. “It was 15 to 17 percent when we started, now it’s up to 25 percent or even more,” Natali explains.

One problem Tiket might encounter is that travel is seasonal, with spikes around holidays and lulls in off-season. Before the Islamic holiday at the end of the fasting month, for example, train ticket sales shot up to 17,000, Natali explained.

To be able to deal with such sudden surges in demand, Tiket spends on technology. It splurges on investments that will ensure stability and resilience in the long run. “90 days before the Lebaran holiday, train tickets become available and booking starts. We were the only site still up that day,” Natali says. “I can show you screenshots.”

In the same vein, Tiket subscribes to three different internet providers. Natali made sure that each of those providers operates separate fiber optics cables. “If one fails, we’ll automatically default to another.”

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Gunning for loyalty

Tiket is not Indonesia’s leader in terms of traffic volume in the online travel category. Traveloka, which is probably Tiket’s strongest local competitor, surpasses it significantly.

This fact leaves Natali unfazed.

“We don’t subsidize our tickets, that’s why we don’t compete in terms of price. Rather than attract a million customers that only transact once, our customers come back four times per year,” Natali states. “We are the best brand for the middle class, who don’t worry so much about pricing. That Indonesian customers have no loyalty and are very price sensitive, that’s not what we see here.”

Natali prefers traditional marketing channels like email, rather than spending heavily on commercials. “We did a TV commercial once, but we decided it was not effective for us,” Natali explains.

Its arch-rival disagrees. Traveloka – which runs on an investment of undisclosed amount from the Rocket-Internet affiliated Global Founders Capital – was the top ecommerce advertising spender in Indonesia this year.

Traveloka also takes a different stance on overseas expansion. It has launched in Thailand and is currently running commercials on Thai TV.

See: Why Traveloka could be Indonesia’s first startup unicorn

The corporate startup

“The number of online travel startups saw a lot of growth this year. Everybody wants to join,” says Natali. “It’s a bit like in 2010, 2011, with the daily deals sites, when Groupon started acquiring. There were 64 Groupon clones at that time! After two years there were only 12.”

Natali clearly wants Tiket to stay away from the uncertainties of a boom and bust cycle, even if it means slower growth and less brand visibility. In the startup community, he’s known as a voice of reason who continues to warn hungry startup founders not to burn money too quickly. He’s one of the initiators of a meetup group called Startup Lokal, which has been running for close to six years. “I like to share,” he says of his involvement in the group.

You may have been wondering why Natali, in his role as CTO, is speaking for the company instead of the CEO.

Natali explains that was another decision Tiket made which might make it seem more corporate than most startups. “Our CEO is 60 years old, he really knows how to run a business,” Natali says. “Think of it like how Google hired Eric Schmidt.”

But even if Tiket prefers long-term planning over spontaneous decisions, and sustained growth over a hockey-stick curve, it’s not all rigid corporate structure.

“We still do scrum, we have our daily stand-up meetings,” Natali laughs. “It’s just that we believe it’s long-term planning that lets us innovate, because that way we are a step ahead of others.”

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