1) Many startups fail due to premature scaling by hiring too many employees and spending too much on marketing before proving their business model. This leads to a high cash burn rate and difficulties changing course. 2) Successful online companies are lean with a small team in the beginning and focus on being profitable from an early stage rather than rapid growth. 3) Examples of successful Indonesian startups include Detik.com which pivoted its business model and is now profitable with 200 employees, and Dinar which is profitable with only 4 employees despite daily transactions of over $1 million.

1. Lean and Profitable Startup
Presented by M Fajrin Rasyid (CEO of Suitmedia)

2. Do you know...
Among 10-20 ...only 1
startups... succeeds?
Source: HBR

3. Main reasons why they
fail?
Premature Scaling!

4. Sounds familiar?
• Hire big team very fast because tons of
plans you want to do
• High burning rate for unproven and undone
business model
• Put a lot of marketing effort to gain strong
user base with questionable ARPU

5. Why premature scaling
cause failure?
Use up Difficult
your cash to change

6. Now what do successful online
companies have? Either ...
Big
capital
First
comer
Costless
Source: A survey in
Japan

7. Key 1: They
are Lean

8. Key 2: They
are
profitable

9. Key 3 : Sometimes, they
do Pivoting

10. Examples?
• 1995, Started with Web
Development, 8 people, 800K
USD revenue
• 1997, Pivoted to Magazine,
Collapse
• 1998, Pivoted to online portal
only with 3 reporters since then
• 2011, Detik.com has 200
people with IDR 100 billion
revenue and IDR 30 billion
profit

11. Examples?
• Started with 3 people
• Almost no cost from 2000
to 2008
• Profitable since 2008
• Largest Indonesia internet
web with IDR 48 billion
revenue

12. Examples?
• Dinar (4.25 grams gold
based coin) commerce
• Daily transactions ~600
dinars (IDR 1.2 Bn)
• Daily profit IDR 50 Mn
(with 4% margin)
• Operational? Only 4
employees

13. Examples?
• Started in last
Ramadan and it’s
profitable since its first
month
• Having thousands of
loyal and repeat
customers
• Operational: 3 people

14. • Be lean, always pursue
profitability, and never fear to
pivot
Thank You