Pitching For Over a Decade Before Finally Scoring Investment: Indonesia-Based SITTI’s Founder Shares His Story

During my stay in Jakarta, I met Andy Sjarif, the founder of three-year-old Indonesian startup SITTI. Andy is a friendly, opinionated, and eloquent guy and is the father of two young daughters. In his early forties, Andy’s passion and energy matches that of any other younger entrepreneurs I know. He is frequently invited to speak at entrepreneurial events and has a firm opinion of what Indonesian startups should work on. His startup, SITTI, is an intuitive ad network that serves relevant ads to sites and searches according to keywords used; in short, it is a Google Adsense that’s proficient in the Indonesian language. It currently has a team of 47 staff, and is invested by thirteen angel investors in Indonesia

Andy’s description of his journey in SITTI so far:

SITTI is not all a story of success, let’s be clear on that. It is a roller coaster ride. SITTI is an idea that is highly radical technologically, but it is a boring ad network business. There is no book to teach us how we should go about starting this. Nobody can teach me on how to do this right; on fundraising, creating the technology, getting the right people and other startup issues. As a result, we made many mistakes, took many wrong turns; but at same time, we also achieved many exciting results that no one told us we could.

Andy’s entrepreneurship dates back to 1997 when he was in US. He started a CRM analytic consulting firm that helped companies with segmentation and analytics of databases of customers. This startup did not last long as Andy found the business not scalable and decided to pursue his other startup ideas. But this first startup was not all failure. Through doing it, Andy learned the ropes of running a company and it opened his eyes to the opportunities of doing an ad-serving technology that serves related ads when you visit websites or search for keywords. This is similar to Google Adsense but he had the idea earlier. And this is what eventually become SITTI is today.

The central idea was to create context out of a webpage. If a page is about shoes or fashion, the ads served should be fashion related. That’s simple logic. But back then, Google’s Adsense didn’t exist so it was tough to pitch this idea to potential investors, nobody understood. As such, I couldn’t get funding for it.

Moving on to 2010, Andy was finally able to launch SITTI in its fourth iteration after amassing investments from thirteen angel investors in Indonesia. Considering the year he wrote the first business plan, he took more than a decade before finally launching SITTI. So what took him so long? Andy shared that it was a mixture of market readiness for such a product and unfortunate events such as the dot com bubble burst, the Asian financial crisis and 9-11 that delayed him. Nevertheless, this wait made him hungrier for success and his belief in the product grew.

SITTI got off to an explosive start, serving up to 22 million of ad impressions a day in its first year and being an ad network, it could monetize well. However, into the second and third year, the monetization stagnated and the team was dumbfounded as to what caused it.

At 450 million impressions a month in the first year, we were massive, we were big. We could monetize as well. At second year, we found that we had huge inventory but couldn’t monetize as it should be. This was one of the first learnings. The formula seemed to be right, to create a contextual ability to produce targeted advertising based on Indonesian language, superior to that of Google in Indonesian language. Everything seemed to be right, so what went wrong?

Actually nothing went wrong. What we failed to consider is that in the US, 74% of Google’s income comes from SMEs. Economic Impact for Google 2010 says that over 60 billion of dollars of transaction in SMEs happened because there’s Google. Google did it, why can’t’ we? Here’s what happened in the US. A tire store in a rural area of Iowa (a state in US) has a website and uses a credit card to advertise on Google Adwords; it is a natural extension. We have 52 million SMEs in Indonesia producing more than 55 percent of the country’s GDP. But how many of them are online? So what are they promoting online? And what can SITTI do for them when they are mostly not online?