Mike Walsh, our best Futurist speaker was quoted in this month’s Forbes magazine about Yahoo’s acquisition of Koprol and social networking in emerging markets.
Here comes the Forbes article:
It Takes A Village
Forbes Asia Magazine dated January 17, 2011
Three friends in Indonesia start a social network called Koprol, and now Yahoo is taking it abroad.
Three friends, not long out of college and bored with their day jobs, start an Internet company. It’s a quick sensation, and soon a big tech company comes around and buys it, making the founders famous and well off. Common enough in the fast-moving world of social media and technology. Except in this case the setting is not Silicon Valley but Jakarta.
The company, Koprol, developed a social-networking platform less than two years ago that passed the 1-million-member mark in November. For many Indonesians it’s become as integral to the vibrant street life here as a sidewalk vendor’s nasi goreng. Koprol people become friends, business partners, roommates and more. Meantime, the three founders have become hotly followed rock stars, role models for hundreds of other local entrepreneurs tinkering with tech ideas.
Last May Silicon Valley giant Yahoo snapped it up for somewhere between $2.5 million and $4 million, according to close observers. (Yahoo would not comment on the deal’s terms.) Just as Facebook and Zynga were inspired by Asian forerunners such as CyWorld and DeNa, some say the Koprol concept may lead Yahoo’s penetration of emerging markets from the Philippines to Latin America.
Koprol, unlike Western social-networking platforms such as Facebook, doesn’t focus on people’s profiles–it’s more concerned about what they’re doing, where and with whom. When you join Koprol, creating a profile is not the first thing. Instead, since Indonesians are most likely to be accessing the site on a mobile phone, when you log on you “check in” to a location such as a bar, health club or mall to see who’s there–including members you don’t already know–and read about what they’re doing. You can have online discussions with them, compare notes on shops and restaurants and make plans to get together. You can also create your own community of shared interests in everything from coordinating children’s play dates to raising money for victims of Indonesia’s recent volcanic eruption.
It is this aspect of Koprol–the spontaneity, and the openness to people you don’t know–that has made Koprol catch on so quickly in a fast-growing country where many cherish the social values of the extended village. Indeed, people in emerging markets use social networking in very different ways, according to Michael Walsh, a Hong Kong social-media strategist who runs a consumer research lab called Tomorrow. “Koprol is conceptually different from Western platforms because it is mapped to an East Asian style of socializing. It’s no surprise it might exert a great deal of influence all over the developing world, and soon.”
Koprol, which says it has already earned a profit, is expected soon to make its first foray outside Indonesia, rolling out in Thailand and Vietnam under the brand Yahoo Koprol.
Today the company’s founders still run Koprol, working for Yahoo, though they no longer hold a stake. The three–Fajar Budiprasetyo, 35, chief executive; Satya Witoelar, 35, chief creative officer; and Daniel Armanto, 31, chief technology officer–draw crowds at conferences and hobnob with venture capitalists to plan their next move.
That was far from the plan when they started Koprol early in 2009. They were running a small software-application-development company called SkyEight, but they felt restless. Budiprasetyo and Armanto had gone to college in the U.S., and all three were connected to the global tech world. But they felt they were part of something exciting right in Jakarta, which was becoming a launchpad for entrepreneurs bootstrapping dozens of firms with names such as Tokopedia (see box, p. 32).
Dissatisfaction with the world’s largest social networker, Facebook, fed the desire to create something better. Most Indonesians are not far removed from the rural homes of their parents and grandparents, and the gotong royong, or community spirit of sharing and togetherness. So Facebook is popular in Indonesia, which boasts the second-largest number of users in the world, behind the U.S. But the partners felt it was not especially well suited to the Indonesian lifestyle. For one thing, mobile devices account for more than 70% of Indonesian Web traffic, but Facebook at the time had no geolocation service. “Indonesians are a very outgoing and spontaneous people,” says Rama Mamuaya, founder of Indonesian tech-blogging platform, the DailySocial. “When we want to go to the mall, we want to know who’s going to be there.”
Koprol, the Dutch word for “somersault,” was a bracing change from Facebook, and what many young people saw as its static nature and its emphasis on protecting profiles, making it harder to connect with other users. After an early blast of publicity, advertising and even television spots, Koprol was gaining thousands of members a week. One of them, Widianto Muttaqien Mukhodim, says he loves to use it as an ever evolving, always up-to-date city directory service. To Hanindyo Notohatmodjo, Koprol is simply his “life hack,” boosting the efficiency of his day-to-day routines.
But the company was not prepared for this early popularity, says Mamuaya, and it almost brought Koprol to its knees. “The servers went down again and again,” he wrote in his blog. “It was too slow to catch up with an increasing amount of users.”
Buying new servers and hiring more staff would be the easy fix, but the company hadn’t found an adequate way to make money from its service. SkyEight was supplying funding but could not possibly keep up with the demands for more operating capital. Meanwhile, the founders were spending more energy nurturing the tech movement they had inadvertently spawned: meet-ups, conferences and such. Deals with business sponsors were in the works, but Koprol needed cash now.
Help came from an unexpected quarter. A Yahoo business-development executive had been lurking in the corners of the roiling Indonesian tech scene. Yahoo, a laggard in its traditional markets of North America and Europe, had long viewed East Asia as a sweet spot where it has a hip, with-it reputation, a high market share and potential for growth. Yahoo had just been thwarted in its high-profile bid for geolocation-based social networker FourSquare and was looking for another candidate. “I knew there was a lot going on, and it had a significant potential,” says Michael Smith.
He sponsored a series of tech events to help people learn and share–and also to coax out prospective talent. The Koprol founders attended. “Koprol has found a way to make social networking technology capture the richness and spontaneity of life the way it is lived in Indonesia,” says Yvonne Chang, managing director of Yahoo Southeast Asia, suggesting that it plays a key part in her company’s drive to penetrate emerging markets.
Now business sponsorships are finally generating significant revenue for Koprol. One marketer, Nanisha Effendy, says Koprol members responded to her local campaign for soft drink Isotonic in “just a minute.” Others say the same for products as different as broadband services and music festivals.
The money that Budiprasetyo, Witoelar and Armanto collected–probably $1 million each–is not the pot of gold often claimed in Silicon Valley, though it is a lot in Indonesia. But in the Internet world fame is as good as gold: It leads to connections with technology gurus, strategists, dealmakers and venture capitalists who are critical to the next startup. “They are inthe great position,” says Hong Kong strategist Walsh. “This gives them instant credibility, not only in Asia but also worldwide. There will be thousands of opportunities opening up for these guys, and for them, the second act will be the main act.”
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