Business unusual

• 500-backed social commerce company Dagangan is approaching growth through positive cash flow, culture, and sustainability. With 50 hubs and expanding across Java, the team covers over 17,000 villages, serving more than 30,000 customers.
• To get to where they are today, Co-founder & President Wilson Yanaprasetya views fundraising as a finite resource and instead, focuses on creating an operationally-efficient business.
• “More money doesn’t mean that you’re actually winning,” he explained. “We avoid burning through our runway and create negative blitzscaling. It’s important to focus on product-market fit before you scale and make sure that you are creating positive cash flow.”
• Finding a product-market fit in an economical way meant experimenting. “We are dealing with rural communities, providing same-day delivery in areas 20 kilometres into the forest, jungle, and so on. We figured out that offline currently is the best way to acquire customers. And so we focus on offline customer acquisition which takes more time but is more stable,” Wilson shared.
• That’s why the team created the hub-and-spoke model — using warehouses that may be located deep inside the forest and the villages — and the network effect — working with the head of villages in the area, the local key opinion leaders, and so on — to ensure they gain the trust of the very people they want to serve.
• This formula has enabled Dagangan to deliver at 95% cheaper than the nearest alternative and achieve a 10x deeper footprint than their nearest competitor.
• Experimentation also helped the team successfully localize their approach from village to village. “Nowadays, you cannot just look into China, India, and the US and think: ‘this will probably work in this market’,” Wilson concluded.
• Read the full story on e27.