Tips for Building a Sustainable Business Model from Tanihub

When a founder build a startup, of course he wants to form a business that lasts a long time. To achieve this, a sustainable business model is needed. However, in the process there are many factors, both internal and external, which then influence. Especially in the country's technology industry which has high dynamics.

In the ULTRA DSLlaunchpad session, Co-Founder and CEO Tanihub Pamitra Wineka shared his experience from the initial process of establishing TaniHub to the current business model.

Starting from a social mission to help farmers sell their goods, TaniHub has now become an aggregator for farmers; and is now connected to thousands of users.

Departing from pain points

Five years ago, the figure of Pamitra who is more familiarly called Eka started a social project with the farmers. According to him, the agricultural sector plays an important role in the Indonesian economy. He started by helping farmers to be able to sell their crops. From there he found some pain points, namely the lack of farmer education related to production and access to capital.

"Many Indonesian farmers are still planting without having any future calculations for where their production will be sold. As a result, they are not trusted to access capital loans. I see technology can help solve this problem." he said.

In addition, Eka also touched on the issue of the agricultural industry in Indonesia, which is still fragmented, there are many small players selling similar products. Then came the idea of ​​a marketplace which brings together farmers and buyers. In this case, the challenges came from several sectors that were not yet mature and the timing was not right.

After considering many things, the company decided to switch the concept of being an aggregator, making divisions, providing warehouses and inventories. This business model requires a large amount of capital or asset-heavy, but Eka is sure as long as he can print traffic and revenue, then the business will continue to run. "Sometimes, some business models just have to be asset-heavy as the market matures and users are more educated," he added.

Business model canvas

In planning a business model, strategies, management, and systems are needed that make it easier for the people in it to work effectively and according to the goals of the company. One thing that is important to implement is business model canvas, a concept that relies on images of ideas so that everyone has the same and real understanding of the types of their customers, expenses, how the company works and so on.

As previously mentioned, every solution created must be able to solve pain points that exist in society. Temporary demand from a growing market, from there it will be easier to determine a strategy to launch revenue. Therefore, it is very important to start observing market needs before starting to map out a business model. "We have to be painkillers instead of vitamins,' said Eka.

Related sources revenue, he also said that in determining the strategy there are several things that must be considered. One of them is pricing, the strategy of taking commissions from marked up prices are common. However, don't let this strategy make the product uncompetitive and fail. Companies must be able to form a single entity, so that the price disparity can be shortened.

Ongoing review

Learning from TaniHub's business journey, business models can change at any time or are often referred to as pivot. There are always external and even internal factors that affect the overall business operations. Eka herself admits that her company has a special team for testing existing business models on a regular basis.

There are several ways to know if a business model is still effective or not in the market. When a product is launched but there is no enthusiasm from the market it is one of the most common in early stage startups. Therefore, adjustments must be made. With the high dynamics in the startup world, this must be done quickly to avoid inefficient time and cost consumption.

A company should not only be about products, but how to execute and carry out meaningful marketing activities. A founder must also be able to think realistically about distribution, product promotion, and communication.