"One of the most important things is leadership gives direction. It directs a company or a team where to go. No matter how good your execution or how fast the company goes, if you're going in the wrong direction, then the company, the team is not going anywhere, right?" - Jeffrey Andika
Jeffrey Andika is CEO & Co-Founder of OtoSpector, Indonesia's #1 online platform for used cars inspection, certifications and warranties. In one of the world's largest car markets, OtoSpector has conducted the most retail and B2B vehicle inspections, and is currently building the largest dealer network of certified used cars with warranty protections. Their strategy is similar to rapid-growth startups like SureSale in the US and AutoInspekt in India, which is to organize and standardize independent dealers via the certification of their inventory to increase profitability and customer experience. They are backed by Plug and Play Tech Center, an accelerator and early stage investor headquartered in Silicon Valley, with portfolio companies such as Google, PayPal and Dropbox.
You can find our community discussions on this episode at https://club.jeremyau.com/c/podcasts/21-jeffrey-andika-on-building-indonesia-s-largest-car-inspection-platform-seizing-opportunity-in-untapped-markets-securing-tech-talent-in-southeast-asiaproduction-in-a-pandemic-and-engaging-socio-political-discourse
Jeremy Au: [00:00:58] Hey Jeffrey. Good to have you on board.
Jeffrey Andika: [00:01:56] Hi, Jeremy. Thanks for having me
Jeremy Au: [00:01:58] You're doing some incredible work in Indonesia and the used car market. So very interested in hearing you share your journey to everyone.
Jeffrey Andika: [00:02:08] I would love to. Yes.
Jeremy Au: [00:02:10] I've seen you pitch. I've seen you wheel and grow your business over the years. Tell us more about who is Jeffrey and your journey to being the CEO.
Jeffrey Andika: [00:02:24] Maybe I would start way back when I just graduated high school. I graduated high school in 2004. At that time, I didn't know what I was going to do. I just knew that I wanted to do something in business, and I went abroad to get my degree. At the time, my thought was, computer is getting important. You need to understand computer and you need to understand business. The combination of those two is basically information systems, that's the major that I went in college.
My first internship was at Dell and it was an IT project manager. I didn't like it, to be honest. It's basically a lot of meetings a lot of you have to manage these developers, programmers. I had a chance to do another internship and I was an IT forensic at Ernst & Young. It's about the same, it's not a technical role.
After those two internships, I thought, well, I want to get into a more technical IT job, because if later on you want to become an IT project manager like a CTO, or something, you need to at least understand what the developers or programmers are doing, right? I went back, took some more computer science classes.
After I graduated, I got my first job as a technical IT consultant at this company called SunGard. It's based in Dallas, Texas. And what they do is they build custom applications and one of the clients that I worked, I built an application is Auction Company. It's the second biggest auction company in the US and I built an inspection system for them. After SunGard, I decided that it's time for me to go back and look for other opportunities here.
Jeremy Au: [00:04:13] After coming back to Indonesia, what did you do?
Jeffrey Andika: [00:04:18] The story was, I didn't go back to Indonesia for about five years maybe. After five years, I decided to go back just to check out, and know what's going on, and see my families. During the vacation, at that time, I was watching TV in the family living room with my brother and my parents. I saw this ad come on TV and it was an ad for a talkaboutus.com. It's the first classified in Indonesia.
I didn't know that at a time. Right. When I saw the app, I was like this is interesting website, right? And then I go to my laptop and check it out. And it's an online classified, it's basically Craigslist. And in the U.S Craigslist would never even think about putting an ad on TV. And based on that, I thought, wow, this is interesting. Maybe the tech industry in Indonesia the startup industry is going to get hot in the coming years. And based on that I went back to the U.S and I told my boss, hey, I quit. I'm going back to Indonesia.
And my ex-boss, he actually already went back to Indonesia maybe like a year earlier. I contacted him and he said, great, you're coming back. I have this software house company it's an outsourcing company. You can help me out, build the developer team. And that's what I did for the first, like maybe six to eight months in Indonesia. So, I didn't have any idea that I was going to start a company at the time. I just go back and see what happens.
Jeremy Au: [00:06:00] That's amazing. Now that you've grown this company to where it is today. How and why do you find leadership important?
Jeffrey Andika: [00:06:08] I think leadership is very important because it's many things. But one of the most important things is leadership gives direction. It directs whether it's a company or a team where to go and no matter how good your execution or how fast the company goes, and nowadays companies are pushed to go fast.
But if you're going in the wrong direction, then the company, the team is not going anywhere, right? The analogy would be someone like who's driving a car. If you're driving a car, you want to get somewhere, you need to get the correct map first. Once you get the correct map, then you can get to your destination. I guess a good example would be something that Otospector.
Early last year, we partnered with one of the biggest used car classifieds in Indonesia, the partnership went very good for one year. In June this year, they decided to cut us off and start their own inspection service. Then the team at the time they really panicked they were like Oh my God, what are we going to do? Should we study how they do inspections, study their pricing, et cetera. And the direction that I give to the team was that we have more experience in this field. And we should just keep focused on our direction, which was to develop our warranty program and get more dealer partners, build our own certified dealer network. That actually helps the company to be where it's at now.
Jeremy Au: [00:07:56] Awesome. And how did you first get started on the used car market as a problem to solve.
Jeffrey Andika: [00:08:03] So back to the story of when I went back to Indonesia. When I went back, I didn't have any car. I need to have a car to go to my office because it was really far. And if you've been to Jakarta the traffic is really bad. And the public transport is also bad. So, you need to have your own car pretty much, or motorcycle. So I thought, well, I'm going to get a car, but I don't want to buy a new car. Because I bought a used car in the U.S and I thought, it's the car. Because car is not an investment, right? It depreciates. So, buying a used car I thought this was a smart move. And I thought the process was really horrible. The process was horrible. I did get a crappy car when I bought my first car here.
I only took the car to a repair shop to get it checked. and even after that, the car broke down in just one week the car broke down in one week, it stayed at the shop for, I don't know, maybe two weeks to a month. Went back to the dealer and the dealer said, well I cannot do anything. It's all there is, there's no warranty. So, I said okay, good to know you, and just went on. So based on that, and my partner, which is my brother, he told me the same thing. He's been in Indonesia, he's six years older than me. And he told me he never buys used car, because he's afraid that the car is not reliable. And I saw an opportunity here. There is this trust issue within the used car market that I need to solve. And I want to help people not to get a crappy car, basically.
Jeremy Au: [00:09:46] Amazing. I mean, it sounds like I would have a terrible time buying a used car. I would definitely use your service instead of trying to buy a used car in Indonesia. So, kudos to you for helping so many people. What hurdles have you personally overcome?
Jeffrey Andika: [00:10:04] Hurdles? When I started Otospector, there's definitely many hurdles. I didn't think it's going to be this hard when I was going to start Otospector. One of the examples would be when you just start company, your bootstrapping with own money. I mean some people do get investors’ money without even instructions, but that's unheard of nowadays. But for Otospector, we bootstrap. So, we need to save basically every penny that we can. Right. So, when we started Otospector, we know we want to do a lot of digital marketing. We cannot hire an expert in digital marketing because that's going to cost a lot of money. So, you have to do it. I had to learn it by myself with YouTube as the tutorial. And then after we did a marketing, you have to learn how to fundraise.
That was my first time experience fundraising. They didn't know what a term sheet is, how it works what are the terms. You sort of learn it, building your own sales team, recruiting. Yeah, so you have to learn a lot. And that's fortunately opportunities, definitely. But that's one of the hurdles I would say.
And another thing would be hitting a plateau. let's say if you did something for the first time, let's say you did something last year. You did a marketing campaign and let's say it doubles your sales. If you did the same thing this year, for the second time, you will not get the same result. For instance, when we just started Otospector on Instagram, we hired an influencer to endorse Otospector. And the followers at the time was 7,000. And when we hired the influencer it doubles to 15,000. Once we hit 85,000 followers and hired another influencer, it only adds like 2000 or 3000 followers. So, you have to keep thinking, be creative, be innovative, and just find different channels, different ways to grow your business because that's the holy grail to grow the company.
Jeremy Au: [00:12:11] So what support or resources are available for others looking to build a startup in Indonesia?
Jeffrey Andika: [00:12:18] I would say the ecosystem is not, mature, but there's definitely support for startups. Like for me, for instance, after six months, I get into an accelerator program called plug and play accelerator. It's based off Silicon Valley. they're not the first one, there are many accelerator program and incubator program. So, there's definitely support and community around startup.
The challenge in the startup in Indonesia I would say, would be the human resource, because in order to build a good startup, you need a good human resource in the tech industry, and good developers, programmers. And I would say at the moment it's getting better, definitely, but it's not there yet. So, you see a lot of in the Indonesia startups they use developers from Vietnam or India, because it's hard to get a good IT developer here.
Jeremy Au: [00:13:23] What's the state of technical talent in Indonesia? How does one go about building a startup, like the way you have done?
Jeffrey Andika: [00:13:30] Since I had a technical background. So, I did everything myself, when Otospector started. As we are growing, we're at the stage where we're trying to hire technical talents. And that's where I found difficulties here. Hiring a good technical talent because you're competing with all these unicorns, right? You have Gojek, you have Tokopedia and they're paying huge salaries to the programmers, technical talents.
I think one of the options is to go abroad. I know startups that use developers in Vietnam for instance, or in India. That's one option. Another option is there is a lot of coding boot camps in Indonesia right now. And that definitely helps add to the supply of technical talents here. another option is to hire a fresh graduate. So, you probably get one of very experienced IT talent. And once you get that first one, then you build a team using fresh grads and try and train them you grow the company. Those are the three options usually. And for me, I was lucky because when I worked for eight months here, my coworker was a very good experienced Android developer. And he's my CTO now.
Jeremy Au: [00:14:57] Better, to be lucky than all other things. Right. So, you've had the opportunity to live and work in both Indonesia and in America. How would you compare the two markets for the technology and startup landscape? You talked a little bit about the maturity of the ecosystem. You've talked about the differing services being launched in the market.
Jeffrey Andika: [00:15:22] When I was in the U.S I was not in the startup scene. I was working as an IT, technical talent. I was working at this company that builds custom apps for these companies. But I was actually far from the Silicon Valley startup scene, I would say. But the major difference is back to the human resource, the talents.
Let's say for instance, in Indonesia, if you say, okay, I'm building a blockchain industry with AI power, et cetera, et cetera. I would think twice about is this true or not? Right. It's really hard to find that deep high-tech talent in Indonesia, whereas in the U.S it's something very common.
Jeremy Au: [00:16:07] What common myths are there about the Indonesian used car market?
Jeffrey Andika: [00:16:13] Common misconceptions, which is something that I had before I started Otospector was every used car dealer are scammers. They're trying to sell you a crappy car and basically scam you out your money. And after running Otospector for four years, we have started to partner with all different dealers. And I found that to be actually not true. People in Indonesia, for instance, they prefer to buy from a user instead of dealers, because they think, Oh, dealers, that's what they do, they sell cars, they now how to cover up the damages without even repairing it. After running Otospector for four years, I didn't find that to be true. There is a small percentage of used car dealerships that do that. They sell cars that has been in accidents or flooded, et cetera, but it's a small percentage. And this small percentage, I believe gives a bad rep to the whole used car dealerships, because there are many dealerships that are trying to build their reputation. They're selling good cars. They won't try to scam you. They're doing good, honest business.
Jeremy Au: [00:17:24] How do you think the Indonesian car market compares to the U.S car market in terms of history? Is it like, you'd look at it as Indonesia is going to catch up with the American car industry in the next 10-20 years?
Jeffrey Andika: [00:17:38] Compared to America, definitely were far behind. America is the first world country. It's very developed. I forget the number, but the car transaction in America, maybe twice, or even triple the car sales in Indonesia. I believe Indonesia is definitely growing. It's a growing economy, right? Our economy's getting better. There's definitely growing middle class and growing middle-class means more cars are going to get bought. And I believe the market will definitely grow to be the same as America, maybe 15 to 20 years maybe. definitely believe the motorcycle penetration is very high. The car is not there, but as income is growing, people are going to start to switch from motorcycles to cars. And that's what going to fuel the growth of car ownership.
Jeremy Au: [00:18:30] Indonesians love cars, right? I mean every time I visit Indonesia, it's a massive traffic jam. I'm always mind blown because the traffic jams are so insane, and people are still buying more cars. So, help me explain why the first thing you did when you got home was to buy a car. Tell me more. Why do people love cars?
Jeffrey Andika: [00:18:52] I would say it's two things, right? First one, Indonesia is not pedestrian friendly. It's hard to walk in Indonesia that's the first factor. And the second one is also the public transport. Public transport is not managed very well, I would say. Jokowi, he built the first monorail, LRT and MRT. It's definitely an improvement. But the culture, People are so used to driving their own car. That's another, I guess, hurdle that Jokowi has to overcome like how to get people out of their car to use the public transport. You know when I went back to Indonesia, I live in East Jakarta and my office is in the West Jakarta. Even with cars, it took me like two and a half hours, one way, if you use public transport, it's maybe like five hours. Two and a half is already bad.
Jeremy Au: [00:19:53] What trends do you see with Indonesians and urban mobility? I mean globally, you are seeing so many scooters we hear about staying at home and maybe people staying further away from work. Do you feel like these trends are impacting Indonesia or is it going to continue being car heavy in terms of the focus?
Jeffrey Andika: [00:20:16] I think it's still going to be car heavy in Jakarta. Like, let's say for instance the public transport is getting better. People might use that for their daily commute to work, but in Indonesia, I mean the mindset even until this day some people still think that their car is an investment. It's a luxury. It's an accomplishment in your life to buy a car. For instance, in Indonesia the used car sales always spikes up before the Lebaran, the Lebaran is like the biggest Muslim holiday and people, they go back to their city, to their country. And they always feel that I want to buy a car and show them. I own a car to my family back home. They considered it as a prestige. And I don't think that's going anywhere. And people are still going to own cars for that reason and for weekends, when they want to go with their families. They would prefer to drive their own car, instead of taking public transport.
Jeremy Au: [00:21:20] The middle class seems to keep growing, what do you see them buying more of in the decade to come?
Jeffrey Andika: [00:21:28] Cell phones, definitely cell phones. They will buy a car. They will buy property in Jakarta. And the property is very inexpensive it's definitely something that they want to buy once the economy getting better. People in Indonesia think family is number one I guess that's common in all Asian culture, maybe. So definitely more family needs.
Jeremy Au: [00:21:52] For so many founders, they're always being told, go look at Indonesia, 300 million consumers. You have to expand there. And so, I have American founders, looking at Indonesia, to expand as a market, Singapore and founders are being asked to go to Indonesia and you're on the other side. Right. You're watching everybody come in. What do you think about that?
Jeffrey Andika: [00:22:17] I think it's definitely interesting. Indonesian market it's definitely huge. I think lucky to be in Indonesian because being a local guy gives you a slight advantage. I would say, cause you know, the culture, how people operate here, I would say. But Indonesia is definitely unique. many people said that it's unlike any other market. For instance, Tokopedia. It's something that I would say unique. In America, you have Amazon. Amazon is like Bilibili.com it's an eCommerce, kind of like Amazon, but it doesn't take off as big as Tokopedia. And that's something that people probably wouldn't guess. For people from abroad they need to do some adjustments to the market here.
Jeremy Au: [00:23:10] I've heard a common warning by my Indonesian friends that Indonesia is not Jakarta. Indonesia is a big country. Could you explain a little bit more what that means?
Jeffrey Andika: [00:23:22] Even I have that faulty mindset because people said don't be Jakarta centric, because Jakarta when you see Jakarta, buildings everywhere, internet connection is I would say pretty good. It's quite different when you compare that to let's say Papua. last time I heard, I don't know if that's true now, the electricity is cut off every 12 hours or so I believe. I think up until maybe two or three years ago gas prices in Papua is like three or four times higher.
It's always good to think that is Java and Jakarta is definitely the center, but you have Sumatra you have Kalimantan, you have Maluku et cetera. And there's this untapped market that you need to think of. For instance, my friend, he owns a light bulb company. If you only think Jakarta, you're like, oh my God, the market is so saturated. You have these brands from other countries like Phillips and other well-known brands. Right. But he thought that, well I should go to East Indonesia where there's less well-known brands and he can conquer the market there. He gains a lot of success from that way of thinking. So definitely think about other parts of Indonesia. Because that's where the untapped market is.
And also, for Otospector used car seller from, let's say in Maluku or in they buy cars from Jakarta, because this is the center. They buy cars from the Jakarta and they sold there for a higher margin. And that's something also that we're thinking about, if we can create this trust and people from Kalimantan or Sumatra, they can buy car from Jakarta, knowing that it's been inspected by the inspector and it has the warranty protection. We can get the needs there for more cars and kind of streamline the process.
Jeremy Au: [00:25:31] Otospector is really doing something special to transform the whole used car experience for all Indonesians. What's your secret sauce in transforming this buying, inspection, and overall experience for Indonesians?
Jeffrey Andika: [00:25:48] What we're trying to provide, or what we're trying to do is give peace of mind. Basically, when buying a used car because when you see more developed countries like the U.S they have regular inspections mandated by the government, for instance a yearly inspection. It's not like that in Indonesia. And the UK, for instance, I talked to one of my friend in the UK and he told me if you buy a used car in the UK and the car broke down in like three months, there is a law that allows you to return it to the dealer. And there is no law like that in Indonesia.
The used car market is virtually unregulated. So, you need an independent and trusted company that helps you weed out the good car from the crappy car. We want to provide that. Like I told you, my brother, he never buys a used car because he's afraid. We want to solve that trust issue. And people think, Oh, this used car dealer it's scammers. And I found out that's not right. And maybe we can become the trusted bridge between the used car buyer and seller and make that transaction happen a lot safer and more convenient.
Jeremy Au: [00:27:07] What are you most excited to continue building at Otospector in the coming year?
Jeffrey Andika: [00:27:14] We're really excited because we have become the number one inspection service. And we are starting to gain trust from these used car dealers, independent used car dealers. And these used car dealers, they basically dominate the used car market in Indo. Based on our research it's around 80% comes from these dealers. Once we built our dealer network and we can build a platform where people can buy used cars, certified used cars and it's protected by warranty. And I'm really excited to build that platform and give people the insurance when they buy a used car.
Jeremy Au: [00:27:54] Could you share any success stories that you've heard or customer testimonials?
Jeffrey Andika: [00:27:58] There are many, and that's definitely something that kept me going at the start when it was really hard. One of the things that I learned was I watched this Jeff Bezos of Amazon interview was "when you build a company, you should focus on your customer, be customer focused and always try to build your product based on your customer feedback." And that's what I did.
So, even before there was no customer service staff, I used to do all the customer survey because I want to know how people what's their experience. And that definitely helps me, let's say one customer from Kalimantan, he bought a car from Jakarta without even looking at it. He just trusts the inspection service. And then he ordered Otospector, got the report on the email. Once they saw the report, it looks good. And he got the one-month warranty. He just had the car shipped from Kalimantan and it saves him. I don't know, millions of rupiahs. The time for him to fly back and forth and the money. And he, he got his dream car and that's definitely very, very satisfying.
Jeremy Au: [00:29:14] That's amazing. Well, thank you so much, Jeffrey for sharing your story. I think so many people are really lucky to have your service and help them de- risk such a risky purchase and also help them be able to travel between family and work