Sedapur CEO: We Focused Too Much on Merchants, We Didn't Think About the Buyers

Last week Sedapurannounced that it was shutting down its services from 1st of August after two years in operation. The online food marketplace for individuals and small businesses will maintain its website until the end of the year to allow for its merchant partners to update their details and keep their customers informed.

We sat down with Sedapur co-founder and CEO Soegianto Widjaja last week following the announcement to talk about the fate of Sedapur and why he decided to shut down the service instead of running it alongside his new company, DapurMasak, a recipe sharing site, or even as a feature of the new site.

"I started Sedapur by going to food merchants", Soegianto told DailySocial last week. He had approached a number of individuals who had been selling home made foods and convinced them to try out, if not join, his venture by offering them market access and additional value to their products.

The site launched in alpha in early 2011 and opened to public in May of that year. The aim was to provide market access to these sellers and enable them to become successful entrepreneurs.

Several months prior to the launch, we had a chat with Widjaja who explained what Sedapur aimed to become. "Our focus, which is also our mission, is to connect home industry in the field of food and beverages with customers by providing a service which adds value to the seller's product".

During the testing period, Widjaja and his team realized that they were focusing too much on the merchant side of the problem but the system was far too engineered towards the sellers that it became difficult to retool it to accommodate buyers so they shoehorned the necessary features into the website and launched the site in May 2011.

Despite the difficulties, Sedapur managed to win Nokia Fellowship during the International Young Creative Entrepreneur event in 2011 which earned the company IDR 200 million, enough to further the development and continuation of the service.

Widjaja told DailySocial that the investment and effort in building Sedapur far exceeded what they needed at that time. "If I were to rebuild Sedapur I wouldn't have spent so much in adding features to the service so early".

Sedapur was close to running out of capital in mid 2012 and suffered from a serious lack of traction despite strong support from the registered merchants. Realizing this, Widjaja began work on DapurMasak, an online recipe site which he claims to be better managed and built from his experience with Sedapur.

Looking back to the early days of Sedapur, Widjaja said, "I saw the problem from the merchant side of things, never the buyers. I assumed the buyers will accept whatever the system offers".

While the company had dozens of merchants and thousands of orders on a regular basis, the traffic to Sedapur wasn't enough to generate the revenue that the company needed to survive. Widjaja's last ditch effort to prop up revenue through partnering with LivingSocial earlier this year did not deliver the expected outcome.

As he explained in our extensive conversation, he had managed to correctly identify the problems that the food sellers had been facing. Most of the sellers were happy to join Sedapur and Widjaja's personal approach had earned him great reputation among the merchants, some had even offered to help fund the company, but Widjaja said he had to decline the offers.

Sedapur had to be shut down because Widjaja and his team had built the system with such sophistication in terms of technology and features that they forgot the fundamentals of the problems that they were trying to solve.

Sedapur's fate is certainly not what Widjaja had in mind when he started the company, but he said that there was a lot to learn from his first failed company. "My mistake was I ran the validation only against the merchants but not the buyers. I didn't seek to find out whether people will buy". Features and perfection were also things that he said were not necessary to chase early on.

The perspective that Widjaja had taken from the beginning had been a flawed one. Even though building a marketplace is about being able to sell products and making it easy to sell them, it was also about people's willingness to purchase. People needed to be convinced that food from Sedapur were worth buying and the team didn't do enough to address that.

While it was difficult for Widjaja to accept that he had to shut down Sedapur, he's excited at the prospect that DapurMasak is bringing. "In developing and building DapurMasak, it's not that difficult to rebuild what I had in mind with Sedapur within the new site. I'm building DapurMasak as a platform upon which communities can interact and when you have a strong community, commerce will happen".

[correction] previous version of this article had mentioned Didik Wicaksono as a co-founder of Sedapur. He is not. We regret the error.