An honest story about the hardships and team

In this conversation, Indra Gunawan of Bobobox shares his story. Indra, in his early years, had to venture into the business world to support his family due to his father's sudden stroke. After establishing his business, he developed a passion for startups. Just as he decided to start a new startup, he learned about the capsule hotel industry. After thorough research and contemplation, the new startup began to gain popularity. However, joy was short-lived as the COVID-19 pandemic struck, putting pressure on him to downsize the company. Indra candidly shares his story about his hardships and his team. Please enjoy his reflections and thoughts in the video.

Hi, I'm Indra Gunawan. I'm the CEO and co-founder of Bobobox. We are the next generation of sleeping lifestyle company. We have two products: Bobopod, for those frequent budget travelers, and Bobocabin, for those who love nature and want to get away from the hustle and bustle of the city. Our pods and our cabins are tech-enabled, and they are modular, so it's very easy for them to be assembled.

We got selected as the Endeavor Entrepreneur, and today we have more than 1 million registered users. We have raised more than $30 million, and we are doubling down our expansions in Indonesia and beyond.

As a kid, I was quite a nerd, I would say. I really liked studying. I had that ambition to go to the best university in Australia, the University of Melbourne. The ambition at the time was to be a lawyer.

But then in 2005 I received a call that my dad had a stroke, just to realize that he was also facing bankruptcy. Our family was buried in debt, and at the time I realized that if I were to return to Indonesia, there was no way I could pursue my law career. So I had to drop law. Being a 19, 20 year old boy at the time, I had to jump into the business. I asked myself, why is this happening? I'm supposed to do law. When you hit rock bottom, you just have to figure out and bounce back stronger.

The first thing I did at the time was continue the printing shop that my dad had. I did a lot of things to immerse myself in the offset printing world, asking a lot of people, a lot of printing players. And at the time I was fortunate enough to spot an opportunity. Back in 2005, there was no printing company that had ISO certification. So that's what we did. We became the first one to get that ISO certification and started getting all these big companies. And that's how we turned around the business.

After that, one thing led to another. One of our clients at the printing company was Telkom Indonesia. I was introduced to the tech landscape. It was during that moment that mobile gaming was growing really fast. I thought, this is something Indonesian people can actually build. I had an opportunity to set up a game studio, and by that time I would say I was still really young. There were so many fundamentals that I overlooked, we went ahead and launched a product, not even knowing that it had a really good chance to achieve product-market fit. So I'd say that's the first lesson that I learned: making sure that whenever you want to build something, it has to be well thought through, something you need to give a lot of research, deep dive into it, not only about the product but what the go-to-market strategy will be as well.

So the company got acquired. Reality kicked in. I had just had my first daughter, and my partner, Antonius, had just gotten married, so we did a consulting job. I got really bored. You can't really do much when it's not being executed. So I told my partner, Antonius, hey, let's do another startup.

I came across an article that says, if you want to create a legendary product, it has to be able to tap into everyone's lifestyle. So we discovered that sleep is a very big part of everyone's lifestyle, and it has been jeopardized because the world is moving faster and faster. To my surprise, I found that the number of travelers in Indonesia has multiplied 9x in the last five years. The rise of these travelers are dominated by budget travelers. I realized that pricing points should be something we needed to break down. That's when I got to know about bunk beds and capsule hotels.

I decided to take some time off and travel for six months trying all these capsule hotels. I went to Japan, Singapore, Malaysia, Amsterdam, and New York, and to my surprise, they all had one thing in common. All of them had more than 90% occupancy rate. So the business was doing really well.

I tried to find some time to speak with the owners: why don't you scale the business faster? And they said that it's a location they have from their parents or from their grandparents. The CapEx intensity becomes a blocker for this business to grow. But what I realized was that the product-market fit is there. That's when I started to think, how can we increase the space so that it is comfortable for most people, so it can tap into the mass market as well. So after that, I figured out how I could grow the business without owning the property, and that's when modularity came into mind.

Coming from a manufacturing background, where I used to create signs, I thought: what if we made a modular capsule? What if it could be assembled in any type of building, converting any building? I started doing the unit economics to make sure that with this it can generate more revenue per square meter compared to conventional hotels. It was something I got obsessed with.

In the meantime, my sister was running a small hotel in Bandung. I told my sister, hey, can I tear down one of your hotel rooms and convert it into a capsule? That was in December 2017. I bootstrapped and managed to get the founding team, people who believe in the idea. We basically tore down one room in my sister's hotel, converted it into a capsule, and for that particular month, our occupancy rate was 99%.

Long story short, we got that funding and we built the first capsule hotel, and to our surprise, it went really viral. We got our first customers. Things were getting super exciting, but we also made a lot of mistakes. We didn't know what the expectations were, who these users were. We built the whole technology within less than six months, and we still had a lot of bugs. Some guests couldn't enter their own pods. It was really hard, but it was really rewarding at the same time when we got great reviews from some of the guests who actually tried it, and this kind of feedback really gave us that extra push to better iterate the product.

So since we launched it, until Covid, our occupancy rate was more than 85% across every location, and our repeat rate was at 48%. That was really promising, and we were growing really fast at that time. I still remember, early 2020, we were still very excited about expanding our locations, getting so many inquiries from property owners who wanted their assets converted into our hotels.

Then in January, we started hearing news about Covid happening in China. Occupancy rate declined rapidly from 85% average to 40%. Most other conventional operators were reaching even single-digit occupancy rates.

Everyone was just telling me that I had to slow down, save as much money as possible, and basically downsize the company. We only had less than two years of success with the pods, and everyone was so excited. Everyone was so pumped. We had people who had already worked at much bigger hospitality brands take a 50% pay cut and stay with us. We had so many of those team members in the company. It was overwhelming.

We tried to brainstorm to find the right solutions. That's when we discovered a new opportunity. We realized that after staying home for six months, a lot of people couldn't take it anymore. People just started going out, hiking, going to the forest. That was very interesting, because it was happening all across the globe.

That's what we did. One day my wife asked me to go to this forest that I'd never been to. We decided to grab some snacks and just chill with our friends and our kids. It was 8 a.m. in the morning. Amazing weather, amazing, breathtaking views, something I hadn't seen in a while. We thought we were going to be there until lunchtime. What happened was we ended up having a great time until 6 p.m. He said before Covid, it was 500 per week. But now it's only like 700. So it didn't multiply as much as the number of people who were visiting.

So I thought, if we were to create a lodging solution here, we might be able to tap into this market. After that, I invited our team to discuss this idea and we all got super excited. After several months we had something that was promising, and something that was still related to what we were passionate about, which is building a lodging solution. So we decided to go even further into Ranca Upas Forest, which was 1.5 hours away from Bandung. Our expectation was only to get 50% occupancy rate on the weekend, and to our surprise, the occupancy rate was 100%.

So I wanted to try another two cabins installed in Cikole. Now we had two different locations, and I wanted to find out how big the market was. When we launched the cabins in Cikole, I still remember we posted on Instagram on a Tuesday afternoon, 3 p.m., and by 6 p.m. one of my friends called.

Hey, Indra, I couldn't book your cabin in Cikole, I think your app has some bugs. So I called my CTO: what happened with the app, my friend couldn't book the cabin. Indra, we're sold out for the whole month. In three hours since we launched it, it was sold out for the whole month.

After that, it's all the great story about the cabin. The cabin saved the company within months. The growth of the cabins actually matched the growth of the pods in two years. Not only did we sustain and keep every employee we had, we were expanding. The moment we knew it worked, the first thing that crossed my mind was being able to support all these people again, people who believed in us from day one. I love what Eric, the Zoom founder, said: your product will evolve, but you've got to figure out your culture from day one. And that was so true. For me, that was one of the greatest blessings. I've never seen the team have so much fun and be so connected to each other, because during those difficult times, that's when you're being tested, and that's when trust was built. That was just purely beautiful. I did ask these questions a lot to myself as well as I grew.

When you were faced with bankruptcy and when you were buried in debt, you tried to do whatever it takes. You've got to be ruthless. You need to be able to fall hard and pick yourself up again, and basically keep on pushing at the time. The younger version of me is all about results. And then you realize that if you were to make it even bigger, you get to meet a lot of people. That's when you start to know more about empathy. Those are the things that will make you wiser. That's when you start having wisdom in your leadership. There will be times when people are actually giving you second chances, when people are helping you out even though you already failed.

So I guess those are the stages I went through. And now it's come to the stage where, after empathy, what's next is self-control. Because when things are moving really fast, you have so many opportunities, so many distractions, how can you make sure that you remain that authentic leader who still carries integrity and values to your team members, who remains a good role model? So I guess that's the phases we have to go through.

Being an entrepreneur is a lonely journey, and it's a very long journey. So the most important thing is to figure out what really matters most to you. For me now, it's to keep on iterating the product that we have. At the same time, we're looking at the international market. We strongly believe they can work in many parts of the world. It can create value the same way we did in Indonesia.