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Coffee Chat: The Entrepreneurial Story Behind Kaskus, and its E-Commerce Future

andrew-and-ken-kaskus

Andrew (left), Ken (right)

Indonesia’s Kaskus was started up way back in 1999 as a BBS and news portal. Its metamorphosis into a local web giant, more recently expanding to e-commerce and online payments, can provide a lot of lessons for entrepreneurs in the country. To get such insights, we’re chatting to Andrew Darwis (pictured above left), the founder and CTO.

#13:57: Andrew starts out by joking he should just change his name to Andrew Kaskus, as that’s how he tends be seen. He says the site has grown a lot in its more than 12 years online, created for a mere $7 for the domain name, and is now “worth more than seven dollars.” Cue audience laughter. “OK, the same as Facebook.” More laughter. “Maybe the same as Indonesia’s Facebook!”

#13:59: Willis asks if Andrew has a girlfriend. This is getting personal pretty quickly. The answer is: no. “My girlfriend now is Kaskus. On Friday and Saturday nights I get programming error calls, especially after changing to the new ‘.com’ domain.”

#14:00: Do you have a boyfriend? “No!”

#14:00: OK, down to business. Now Kaskus has more than four million users, but it gets 28 to 29 million unique visits each month, which is close to pretty much everyone who’s on wired internet in Indonesia.

#14:02: Can you find a girlfriend on Kaskus, asks our Willis? More audience laughter. Turns out that kaskus matches do happen, and then Andrew will get invites from the couple before they marry. So a proper match-making service might be coming on Kaskus. Any beta tester takers?

andrew-kaskus

See the signatures on the background? It is a custom to sign your name on one of the tiles when you visit Kaskus. (Click to enlarge)

#14:04: Going back in time, Kaskus started out doing news, sort of like Detik, but initially there was not much traffic and the founder had trouble finding news. And all they could find was bad news about disasters and demonstrations, so it initially sucked, and being in school at the time, Andrew and his friends nearly shut it down.

#14:06: But being a BBS offered hope. At the time, lots of people were using IRC – an early chat protocol (which we at TiA actually use everyday to organize stuff!) – and so a discussion board was a natural progression from that. Then people started posting photos. But lots of them were pornographic images. That made the site “a bit NSFW,” says Andrew, and so an adult section was made. But by 2008, with a company established to run Kaskus, that porn section had to be shut down if they were to become a legal entity as a business.

#14:08: ANDREW KASKUS PORN, suggests our Willis as a new name for the founder!

#14:08: Now with one billion pageviews and a whole lot of clicks, advertisers are coming in, but can still be tough to persuade them to pay to advertise on such forums. But what kind of fee do these advertisers pay? Andrew admits it can be a lot. Pushed for a revenue figure, Andrew says it can be as much as 5 billion rupiah a month – that’s US$530,000.

#14:12: Kaspay has a self-serve ad platform, so advertisers can easily scale up or down and pinpoint very specific campaigns within the site. It’s also backed up by its KasPay online payments platform.

#14:14: “We charge 0.5 percent per purchase” made on KasPay, says Andrew.

#14:14: November 6th this year will be the Kaskus 13th birthday.

#14:14: Now the site is “evolving” into e-commerce, after users started selling stuff on the site anyway. Sort of like the users are also the business developers of the site, explains Andrew.

#14:15: Kaskus will be C2C, enabling regular folks to sell stuff, following the Taobao model of Alibaba’s successful site in China. And so it won’t be like Rakuten or Blibli with their B2C stores.

#14:18: Why change the domain, we ask? The original site got infected by zombies, and so it became easier to move to the ‘.us’ domain which people quickly got the hang of. Now they’re heading back to Kaskus.com – and it’s their goal to start using that, to help build the brand as well.

Did being forced to change domains in this odd way cause a lot of traffic? Andrew says it went pretty well, but they failed to notify Google about this, causing a lot of links to direct to the old Kaskus.us site. They’re working with Google to focus on using only its ‘.co.id’ or ‘.com’ domains.

#14:20: Why choose GDP Ventures for its recent acquisition? He says that GDP’s Martin was a former moderator on the Kaskus sports section, so they agreed to meet. There were “more than 10 VCs and investors” also interested, but Andrew felt that VCs demanding ROI stats would mean starting to charge users back in 2009, and that, he says, would’ve been vrtual suicide. Martin, in contrast, was keen to grow the site in the way Andrew felt was right, and so “the perfect match” was made, especially as GDP’s links to banks would help Kaskus in its e-commerce and online payments plans. “After one year of negotiations, we married in December 2009.”

#14:24: How about three years later? Andrew says they’re “building Kaskus for iPhone, BlackBerry and more” as well as focusing on the C2C site and KasPay.

#14:25: Andrew seems to have no plans for other ventures. “So many other things we can do with Kaskus … like the match-making, car listings” etc etc.

#14:26: AUDIENCE QUESTION: Darius from Singapore asks Andrew what he’s most worried about? “Electricity power … blackouts … and the Kaskus servers going down!”

This is a part of our coverage of Startup Asia Jakarta 2012, our startup event running on June 7 and 8. You can follow along on Twitter at @startupasia, on our Facebook page, on Google Plus, or via RSS.



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