00:01:24 · S5, S4, S6
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00:01:42 · Edward Tritanata
[00:01:42] S7: I was kind of failing in school. You'll see me often at Internet cafe playing game. It was really an ordinary life of a slacker. Somehow, miraculously, I got accepted at Northeastern University and even graduate magna cum laude because I had one phone call that changed my whole life. My mom called me to tell me that actually our family is going through a potential bankruptcy. Since then, my attitude to life changed completely. It really brings a lot of fire into my life. I wake up 5.3zero am every day. I'm always at the library or at the gym, but never anywhere else. I told everyone that I want to be bigger than Starbucks. Everyone thought, are you dreaming? Are you high? Right now, we are bigger than Starbucks. In 2020, it was the pandemic. Everyone told me that it's the end of Kopi Kenangan. Throughout COVID, we actually grew by 3x in terms of store count. Nobody can tell you what you can or cannot do. Every day, it comes down to you, your will, your conviction, your hard work, whether you can make something happen or not. Hi, my name is Edward Tritanata. I'm the CEO and co founder of Kopi Kenangan. Kopi Kenangan itself right now commands around 900 stores in two different countries, even though we are only six years old. In total, we have raised around $270,000,000 ranging from Jay Z, Serena Williams, Sequoia Capital, several others reputable investors. Right now, we are selling approximately around 5,500,000 cups per month. Hopefully, in the next two to three years, we will be able to sell even more, not just to Indonesian, but then to Malaysian and beyond. I learned that there is such thing called Starbucks stall latte index. It's actually the price of Starbucks latte compared to your daily income. US is around 2%, whereas in Indonesia is actually more towards like 30%. There is no way everyone in Indonesia is drinking a cup of latte where it consumes close to 30% of your daily wage. Most cafe back then always thought of making a cafe to be large, with very comfortable sofa, with very fast WiFi. A lot of people like myself don't need that comfortable sofa. I just want a good cup of coffee with affordable price. Of course, that means a higher COGS. But I realized if I make the space really small, what is there to think about?
00:03:49 · Edward Tritanata
My hypothesis is that if I shift the rental cost to COGS, I can sell much high quality coffee at a much more affordable price. And that remains to be our business model to be grab and go, to be small. It doesn't need seatings, but we can attract a lot of crowd. We are trying to take customers from online as well. Because back in 2017, online delivery just started. I realized that whether your store is 200 meter square or 20 meter square, it doesn't really matter. In a business that has a big market, you always have a lot of competitor. I realized that we need to be differentiated. We need to look different than our competitor. A lot of people make their cafe to be a western name. But then I realized that, okay, why don't I use Indonesian name so that I sound different? That's why I named it Kopi Kenangan, a memory coffee. That branding actually makes people remember us. I do believe that with the recipe that we have made, with the pricing point that we have decided, we have a chance. First store is 2017. 2018, we try to expand. Because the thing about coffee is that your catchment area is usually typically within two to five kilometer radius of your store. Obviously, Indonesia is very big. If you want to get people in other city, other district, other sub district, obviously you need to open a store there. And when we expand, actually our logic was quite simple. We want to test for scalability, meaning that if I open nearby, the revenue still be good or will it be cannibalizing each other? That's why I intentionally opened this next store, I think within half a kilometer away from the first store. Interestingly, I intentionally picked a location where it already has a bunch of coffee chain near ourselves. For example, in our first store, there is Starbucks, Coffee Bean and Tea Leaf, and a bunch of street side vendors. On our second location, there's also Starbucks and Family Mart. We opened near them, and we were thriving even in the midst of
00:05:42 · S0, S1, S2, S3, S4, S5
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00:07:05 · S5, S4, S6
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00:07:22 · Edward Tritanata
[00:07:22] S7: Like competitors, well using that logic, we keep on finding where are all this coffee chain and we open near them. We did well near them, why not open more near them? That's when we were really able to attract fundings because we were able to identify opportunity to grab market share from existing larger coffee chain. If you are trying to get an investor to invest in your business, it's really as simple as how do you envision your company the next five years? Famous investor from Sequoia Capital once told me that a good company raise money when money is the only constraint to growth. And everyone, including ourselves and our investor, believed that it was the case for Kopi Kenangan when we first got our large investment. And that's how we were able to grow quite rapidly. First year, we only have one store. Second year, we have 56 stores. Third year, we have two twenty six stores. You can go really fast actually if you have that product to market fit. I think the biggest challenge that the organization has ever faced is obviously in April 2020, when our border was shut down. Our revenue literally dropped by close to 50%. All of our stores are usually in malls or offices. And then suddenly nobody goes to mall offices. What do we do? No revenue means I cannot pay my employee salary. But then I overcome the challenge with empathy, actually. How did I use empathy? I told all my employees that I will pay your salary. I won't miss your bonus, even if it means I myself not getting any salary. I actually took a Rs 1 salary along with my other co founders, because we want to show our employees that you have security. If they don't feel like they can fit their family, then obviously they won't be able to work well. They will just be worrying about their family every day. But back then, having spent a lot of times with the employees at the store, I realized that they worked hard for the company. It's just basic human element to actually show sympathy, to repay kindness with kindness. That's exactly what I am trying to give to our employees, helping them get on with their life, helping them work hard for us. I'm really glad that I did that. I thought it was logical as well because we need to build employer branding as well to make sure that people know that we are a company that is run by empathy, not by sadistic culture of like all about cost cutting.