This small business owner interview comes from Indonesia, home of Tim and Diana. As the founders of KayuConnection, they provide customers worldwide with custom wood furniture from small furniture makers in Indonesia. While this interview was conducted over email due to time zone differences, Tim took my advice to "not be boring,", so here you go. Enjoy!
Who are you?
I would have thought that before doing this interview you would have at least done a little research to figure out who I am?! Just kidding, I realize that I’m not that famous (yet)!
All jokes aside - I’m just a regular guy that gets a kick out of coming up with concepts that people are willing to pay me money for. The feeling fulfillment of coming up with a product, concept, or idea that solves someone else’s problem to the extent that they are willing to part with their hard-earned cash for it is simply unmatched. There’s simply no better compliment than that and this is the feeling that drives me every day and defines what I do.
It’s not because I’m greedy, but it just gives a wealth of satisfaction knowing that you came up with something all by yourself that other people enjoy. Really!
I’m originally from the Netherlands, but spend most of my childhood moving from country to country and have since developed somewhat of an unhealthy addiction to moving which is a habit I’m finding hard to kick. At this point I have lived in 7 different countries (including several places in the US), and have visited close to 40 different countries, while right now spending around half of my time Singapore and the other half in Indonesia.
I feel that the exposure I have had to all these different places has helped tremendously in opening my eyes to the world around us, and being able to prioritize the most important things in life – which is to just enjoy each and every second and spend as much time with those that are important to you.
I’m currently engaged to my lovely fiancé Diana, who helps me out with my business and we are due to marry in May of 2015. Exciting times!
While many small business owners fully dedicate themselves to their businesses, I still have a full time job also as a General Manager for a business unit at a large food ingredients company – which is a job that I enjoy thoroughly and which I’m able to draw many life lessons from on a daily basis. I’m a firm believer that as long as you’re able to keep on challenging yourself, and as long as you can continue developing yourself as a person, that it’s time well spent.
What business are you in?
Let me start off by giving you a little bit of background on how I started my business. I already mentioned that I spend a lot of time in Indonesia. Some of that would have been work related, and some of that would have been pleasure related.
Every time I went there, no matter where it was, I always noticed there were a lot of little shops that sold and displayed all types of wooden furniture. More importantly, most of it appeared to be put together by hand and appeared to be of very good quality using high quality wood types. Some of it was in unique Indonesian / Balinese style, but there were also pieces that could fit in anybody’s home, anywhere in the world.
There was so much of it, it almost seemed in oversupply. Then it hit me – why can’t I help these guys get access to a broader market and give them the means to tap into markets beyond just their local towns and villages? I can help them sell their products in developed markets like Europe and the US, while establishing controls to ensure that quality is of an exceptional standard, and even offering a service where customers can request a customized piece of furniture built exactly how they want.
In my eyes this was a win-win. The small furniture makers in Indonesia would see increased sales through gaining access to broader markets and the customers would receive high quality and customized furniture exactly suited to their homes and exactly how they want it.
The only issue was going to be trust. People tend to be extremely weary when ordering expensive items online, let alone if it’s from a foreign country. You need your customers’ trust and I felt that I was in a unique position to deliver that by showing my face on my website, creating a connection with the visitors through our blog, and building relationships with key people in the industry.
The process of gaining trust is a concept that already executed very well in the online marketing niche, but I have seen very little of it in the furniture industry which I feel is a great opportunity for us. That trust, in addition to helping out small business owners in Indonesia, is the unique selling position of Kayu Connection versus other furniture exporters, and that’s how we intend to set ourselves apart from the rest.
Gaining trust: Can you dig a little deeper into this idea? What obstacles have there been, or still exist, between you and your customer's trust? Have you gained any insights into overcoming these obstacles?
There's a number of issues as far as trust is concerned. When you look at a purchase of furniture, it is typically a relatively large expense in terms of financial value. Generally, the more money that is involved, the more difficult it becomes to have someone part with those hard-earned dollars and the more that you as a supplier will have to do to win that customer’s trust. There’s simply more at stake for the customer.
The best way to earn a customer’s trust is for them to see your product physically. To be able to look at it from up close, touch it, try out it, sit on it, you name it. There’s simply nothing that beats that. The customer will know exactly what he gets once he parts with his money and there’s no surprised. It’s a pretty sure bet.
Being a business that largely operates virtually at the other end of the world in a country that many are unfamiliar with, we don’t have the luxury of having potential customers walk into our shop where they can see the product so we have to find ways of overcoming this. This is perhaps the most difficult challenge and still challenges us to date.
There is no quick fix for this, but we are doing a number of things to try to overcome this. It’s a long journey.
One way is by how we try to brand ourselves. We present ourselves as people with faces by putting pictures of ourselves on our website, and with personalities and opinions by sharing our views on our blog (which is still new at this point). This builds much more trust with people than a faceless organization and is still a relatively unique approach in our sector which we feel can set us apart.
We also try to build relationships with key players in the industry and in adjacent industries. One example is a recent expert roundup we conducted on home improvements where we interviewed 45 experts in the interior design and real estate industry to give their opinions. Not only did this give us a nice boost in visibility for our business, it also gave us a reason to publicly network with some key players in adjacent industries signaling trust to potential customers.
Last but not least, you can do all the networking and branding that you want but at the end of the day it’s about delivering on what you promise and ensuring that the quality of the product is what the customer expects. At the end of the day, nothing beats a happy customer as they are often the best promoters of your product.
Tell me about your favorite customer / client?
This is a hard one to answer because the majority of our customers tend to order online so there is little face-to-face interaction and as a result you don’t really establish an in-depth relationship with the customer.
In general terms, however, my favorite customers are those that know what they want and are clearly able to communicate that. That’s how we can best serve their needs and ensure that we deliver a product that they are happy with.
Having said that, it’s our job to make sure that happens and that we are able to guide the customers through that process in the most effective way possible. I have realized that the more you can help a customer decide on what they want, and help them communicate that, the more successful you will be. This goes for all business models in my opinion.
How does your business define success?
Personally I define success as having fulfillment out of what you do on a day to day basis while having enough financial means to maintain a good standard of living, and being able to spend your time with those that you love. This is a mindset that I carry with me on a daily basis, and is one that I transcribe to my business as well.
Having said that, it feels really good to win and I get an enormous kick out of coming up with concepts, ideas, and products that help others to the extent that they are willing to pay money for it, as I mentioned earlier.
We are doing this by being able to overcome the trust gap that currently exists with ordering products online therefore providing enough added value for us to be able to add a slight mark-up to the furniture that we export to customers globally. The more we can do this, the more I will define Kayu Connection as being a success.
What advice would you have given your younger self when you first started?
Just do it, because you only live once. I know those two are clichés mashed into one sentence, but so what? Over the past couple of years I have realized there’s nothing more important than simply taking action. Action is king.
I used to spend hours and hours philosophizing about what the right approach would be when starting my business, and ended up doing very little to nothing at all. I would have been much better off by only having a very rough idea of what I wanted, and just taking action and adjusting course as needed. You’re not going to get it right immediately anyway, no matter how much you plan.
I’m not saying that it’s not important to make a plan when you are starting your business, because it is. The problem is that there are some people that take too much comfort in the planning process and think that it is work. In reality it isn’t. It’s all about execution of plans and ideas that help you get from A to B and that move you forward, not the formulation of them. The hardest part is just to get out of your comfort zone and get started.
Not to get too philosophical here, but the same goes for life in general. It’s ultimately what you make of it. You are the master of your own destiny. If you don’t like your current situation, only you have the power to change it. That’s what makes life so enjoyable.
I realize that that’s easier said than done sometimes, but you always have choices to improve your life. It’s just about harnessing and executing on those choices that will ultimately separate those have what they want in life, and those that don’t. It’s taken me a while to come to terms with this concept, but I think that recently I have finally started to get it!
What do you consider your greatest success with your business?
Earlier I explained that success for me means doing something that I get fulfillment and enjoyment out of. There is no specific event or accomplishment that I would consider the greatest success, but rather the concept as a whole.
To that tune, the greatest success with my business is that I’m doing something that I love doing, which I feel adds value to others also. Even though it’s still early days with my business, for every additional order I receive I get pleasure out of the fact that I’m helping support small Indonesian furniture makers and therefore local communities depend on them. I’m helping them access a market that was previously out of reach.
What’s even better is that I’m able to make money in the process. What better way to than to kill two birds with one stone?
Have you ever wanted to quit, stick with a regular job? Why/why not?
As mentioned earlier, I have a regular job also at the moment.
Having said that, there are advantages and disadvantages to each. I would say that the biggest advantage to running your own business is that you have more say in how you allocate your time. If there is some down-time, you have the flexibility to take some time off at your own discretion. On the flip side, if for any reason your customers need you, they need you. It doesn’t matter what time of the day it is, where you are, or what you’re doing.
In a job setting, as we all know, the hours are more defined and more predictable. Of course, with smartphones and other technology this line is becoming grayer and grayer also, but generally this is the case. This can be a plus for some people and a negative for others. At this point in time, I personally don’t mind either, but who knows, that may change in the future.
Tell me about your typical work day.
I always have difficulty answering questions such as these, because there is almost no such thing as a “typical” work day. Let me try and answer as best as I can.
My existing full-time job requires a lot of travel around South-East Asia so generally speaking I’m on the road. I would say that 4 out of the 5 working days I’m travelling to various countries in the region, while I’m generally home in Singapore or in Indonesia during the weekends which is when I do most of the work on my business in addition to some work in the evenings.
I juggle most of the time that I spend on my business either linking with our existing suppliers in Indonesia to ensure that our orders are progressing as planned, scoping out potential new suppliers, communicating with our customers through email and telephone, or trying to improve our online presence through internet and content marketing. I would say that this occupies around 90% of the time that I dedicate to the business at the moment.
It’s a pretty packed schedule as it stands at the moment, but I’m loving every minute of it. Who knows that may change at some point which means I’ll have to choose between one or the other, but in the meantime I’m enjoying both.
Favorite part of being a small biz owner? Worst part?
As I mentioned earlier, I get extreme enjoyment from being able to solve a problem through an idea of my own and being compensated for it. I would say that feeling is what I enjoy the most about being a small business owner.
The part I enjoy least is that you have to do everything, and I mean everything, yourself. This means anything from doing all your own administration, keeping track of the finances and ensuring there is enough stationary to last for the remainder of the week. The worst part of it is that it’s probably my own fault. It’s something I’m aiming to get better at. I read about many small business owners being able to outsource large chunks of work through the internet, so this is something that I definitely have to start looking into more so that I can spend my time more wisely.
What’s next?
At the moment the business is growing nicely, but I have started to realize that having that accepting customized furniture requests is a lot of work. There’s always a lot of going back and forth with the customer to make sure you understand exactly what they want, and that they end up with a product that they are satisfied with. As a result of this, the scalability of a business model where you do just customized furniture is limited.
I’m currently working on developing a standard furniture offering that I would like to add to our site as well. Given that we are working with a number of furniture makers, we have to make sure that each of them are comfortable with the designs that we put forward so that is a process we are going through at the moment. It may be a little while before all is finished, but I think that it will improve our process significantly, and allow us to scale up to the extend where we can accept more orders.
Aside from that I’m also currently working on a number of little projects on the side also. For example, I also recently invested in a piece of land in Indonesia which I eventually plan to develop and I hope to start covering that process on our blog as well, so stay tuned for that. I feel there’s a lot of opportunity out there in Indonesia, and that the underlying fundamentals look pretty bright for Indonesia to see a lot of growth within the next 2-5 years, so I’ll likely be doing more of that in the future.
In 2004, Andy Keller, now ChicoBag president, took a trip to his local landfill after spending the day landscaping his backyard. He was horrified by what he saw. Single-use bags were visually the dominant article at the landfill that day, blanketing the landscape in a thin mix of white and beige plastic. On his way home he began to notice plastic bags everywhere, caught in trees and on fence posts, half drowned in gutter puddles and blowing in the streets like urban tumbleweeds.
That day Andy vowed to stop using single-use bags. Inspired, Andy dropped a few bucks on a second hand sewing machine and began sewing what would ultimately become the first ChicoBag® brand reusable bag.
In this interview, Andy and Nate discuss ChicoBag and Andy’s journey from starting a business to running a successful B-Corp.
-Seth
The Big Idea – Cliff Notes version
Nate: Give me the Cliff Notes version about how you got into the business you’re in now.
Andy: I used to sell software—enterprise-grade software. The company got bought, and I got laid off. I was telecommuting from Chico, and job options in Chico were a little bit limited. I was trying to figure out what I wanted to do with my life and ended up doing some yard work, ended up at the landfill.
That’s where I saw all the plastic bags that this community throws out in a single year—or in a single day, rather. There was a mountain of them. Really, visually, that’s what it looked like. There were things wrapped in plastic bags… I never really thought about it before then, and it just kind of hit me, “Oh, my gosh.” I use plastic bags, and I thought, “I should stop using these.”
The unemployed side of my brain kicked in, and I started thinking about, well, I can come up with a bag that I would like to use, one that I’d remember. An issue that I saw immediately was come the time to shop—or you just don’t think about going shopping; you just end up at a store.
So I figured if I could have a bag that I could keep in my pocket, I can solve my problem. If I can make a business out of it, I can also solve my unemployment problem. So the thinking that happened that day—and I bought a sewing machine that day, got some fabrics, sat down in my kitchen table and started sewing prototypes for a bag that I can keep in my pocket.
Nate: Okay. So how long ago was that?
Andy: That was in December of 2004. Then I launched with the sales of the first bags on Earth Day in 2005.
Andy’s Arrival
Nate: So over the past—close to a decade, what would you consider your biggest success? Try to be specific. Tell me about a moment during your life as a founder and a business owner, an entrepreneur, a moment when you felt, maybe even for a second, that you had arrived?
Andy: Well, the first thing that comes to mind is the big lawsuit by the plastic bag industry. I don’t know if you’re familiar with that. Are you?
Nate: No. I did my research—probably 45 minutes of research into ChicoBag, but I didn’t dig that deep into it. I’m seeing mention now, but I’m just not sure how it rolled out or what happened.
Andy: Back in 2011, three of the largest plastic bag companies in the United States filed a lawsuit against ChicoBag for “irreparably harming” their product or their business by essentially disparaging their product. (laughs) My friends in the business community here in Chico were like, “Congratulations, you’ve arrived. (laughs) You’re officially now a real business because you’ve been sued.”
Nate: Wow. (laughs)
Andy: So when you asked that question, that’s really what came to mind because I’ve had a number of people say that to me, like, “Oh, congratulations. You’re now a real business.”
My whole mission when I started the company was to “help humanity kick the single-use habit”—back then, specifically, the “single-use bag habit.” It has evolved a little bit since then and turned into “Bag the single-use habit,” because ultimately, I think the single-use bag is really the “gateway” plastic, a disposable item that leads to all others, and if you can kick your plastic bag habit, your other habits are easy to kick after that.
Anyway, that was my goal. So to have three of the plastic bag companies sue me was almost a tribute that I was actually making a difference. ChicoBag and all the work we’ve been doing here is actually making an impact that we got the attention of the plastic bag industry.
Epic Fails
Nate: What would you consider, on the flipside, your biggest failure?
Andy: I can talk about my first failure. That’s the first thing that came to mind. I sat down at the kitchen table and designed a prototype, and I found a factory to help me produce the bags. I received the bags from the factory the day before Earth Day. Then on Earth Day of 2005, I went out and set up at the local natural food store in their little parking lot Earth Day celebration. I started selling the bags. The first big failure was that every single bag came wrapped in a plastic bag.
Nate: Oh, God.
Andy: I didn’t realize that that’s just standard for many factories. Everything that you buy essentially comes in a plastic bag. So that was the first failure.
The second failure was that over 40% of the first production run was defective. I didn’t realize it till after I had started selling it, when people were like, “Hey, the pouch just broke.” (laughs) I was there stuffing the bag back into the pouch. I realized that day, “Oh, my gosh. About 40% of these things ended up being defective.”
So that was my first big lesson on really understanding the supply chain and getting really close relationships, which led us to where we are now, being a B corporation and really pushing the envelope on testing compliance and safety. A lot of companies out there really don’t understand all the bits and pieces that go into the products, or in some cases, how it’s even being made, and by who. So we are very diligent about that. That first lesson—I had that lesson early, which was good. It really put me on the right path, and it’s led to who we are today.
Andy’s Mission
Nate: Who are you today?
Andy: Well, we’re still on a mission. We’ve expanded our mission from “helping humanity to kick the single-use bag habit” to “helping humanity bag the single-use habit.” We offer a variety of reusable products on our website that are sensible and convenient solutions to help people reduce single-use plastic in their lives. That’s our mission. Everything we do, we are doing to support that mission.
Nate: How did that happen?
Andy: Well, a couple things. A good part of our business is working with organizations that want to use our products as promotional items. So giving something away as a gift to a donor that gives you money—donor gifts, for example. Our customers do that. They’ll give their donors bags one year and maybe some other form of a bag-like product, like our Snack Time bag.
But there comes a point when they want something more than just a bag. So we decided to start offering other types of products, like Klean Kanteen, and to go where—reusable bottles, reusable utensils and other types of items that complement the bags and also help people reduce their single-use plastic habit.
So that’s why we’ve changed our mission to cover all those options. It’s always been that way because we always felt like once people kick their single-use bag habit, the other habits are at least easily identified (laughs) and could be dealt with. Once they’re aware that they actually have the single-use plastic bag habit, they’d want to do something about it. They notice when they’re using a plastic water bottle, like, “Oh, my God. Why am I—? Do I need this?”
Building Habits
Nate: Describe your routine to me. Like your average work day, from the second you wake up till the second you crash out. Andy: Well, recently, my days changed. I’m a new dad. I have a nine-week-old baby.
Nate: Goodness gracious. My daughter just turned 13. (laughs) I can barely remember when they were that little. So tiny. (laughs)
Andy: Yeah. (laughs) It’s very, very clear for me. My day now is, like, I try to sleep—I set my alarm for 6:30, hit snooze until 7:00, take a shower, change the baby’s diaper, grab some breakfast, hop in the car, I’m at work by 8:00. I usually start with some emails, check my calendar, and then if I have any meetings that day, I’ll do prep work on the meetings. Then typically I’ll have a couple—depending on what day of the week it is—like Wednesday is my product development day, and I’ll just prep for product development most of the day. Tuesday is my managers’ meeting day, and before the managers’ meeting, I’ll normally a number of action items after that I’ll kick into.
Typically, there’s a number of projects, and I’ll just try to tackle a project or check up on people and update. We have one-to-one meetings with each of my managers, and each of my managers has one-to-one meetings with each of their employees.
Nate: How many employees do you have now?
Andy: 25.
Nate: That’s a good size.
Andy: Well, 27, actually. So I update the meeting agendas. If there’s anything on my mind, I’ll stick it into the agenda, and we can talk through it.
Managing the Growing Team
Nate: Actually, I first encountered your brand when I was interviewing interns when I first moved to Chico. One of them was interning with you, and she told me quite a bit about it.
Andy: Who was that?
Nate: Colby, I think.
Andy: Yeah. Okay. Yeah, I remember Colby.
Nate: Have you always hired interns, or is that a newer development?
Andy: Yeah, since the beginning, I’ve had interns. It’s a nice way to try out different potential employees and give them some experience in the process. It seems to work out well. My marketing manager started as an intern. She’s progressed up. It’s nice.
Nate: The reason why I want to dig into this a little bit more is that for the most part, I work with the “scrappy business owner” type—folks that are starting up or folks that are getting ready to fail years into it. A lot of them are clearly overworked, and non-profits and for-profits alike will ask me, “How did you do that awesome intern program?” My intern program—they usually end up getting good jobs after working with me, or they end up getting hired, or end up starting their own businesses—which is, of course, selfishly, what I want them all to do.
So have there been any things that you’ve learned over the years as far as recruiting interns, managing them, or any horror stories (laughs) and how you fixed it?
Andy: My first intern couldn’t spell very well.
Nate: (laughs)
Andy: We had him doing sales emails and stuff like that, and he was just making horrible grammatical errors. I kept him around. I really should have just let him go. (laughs) I guess that was the first mistake, just because I tried to help him. I gave him a sheet of common spelling and grammar mistakes. I tried to coach him. But at some point, you just have to realize that if you need someone who knows how to spell and the person can’t, it’s not something you can really correct easily—especially if they don’t realize they can’t spell, which was the case.
But other than that, we’ve had some really good intern people come through. We used to do non-paid or do a stipend, and we ended up converting to just paying minimum wage for the internship instead of doing the stipend. That’s because I know that some people can argue that they’re an employee, and I know, especially in California, there’s been some issues with…
Nate: I’ve gotten the evil emails before. “Do you realize that you can’t do this?”
Andy: So anyway, we do paid positions now, which actually is nice because you have the expectations there. There’s a little bit more accountability because they get paid, which helps.
Nate: It also makes it easier to fire them. (laughs) That’s what I discovered. “You’re getting paid. It’s not like you’re working for free. My money is more important to me.” It becomes a factor in the decision making.
Andy: Yeah. I’ve had other people on more of a stipend situation, and the accountability isn’t as strong. They don’t want to show up one day for some reason. It’s like they have greater option to do that when they’re on a stipend. So basically, our interns are essentially treated as employees. It’s been good for us.
