With Indonesia’s SMEs sector getting wave after wave of digital solutions, it’s important to have focus and direction, and disruption isn’t always the answer. Gabriel Frans, the CEO and co-founder of Credibook, goes on call to answer: why enablement through software for financial and operational management, why digital bookkeeping as the go-to-market product, why the focus on wholesale retailer SMEs, why build the Faire for Indonesia through Credimart, why Y Combinator, among many other why’s.

Highlights and Timestamps

1. (00:59) Paulo introduces Gabriel;
2. (01:41) Credibook’s origins; “We saw the opportunities that [financial] management [and bookkeeping] is something really painful for these SME business owners. And I had my background also in the SME [segment]…and [my co-founders and I] saw this opportunity…”
3. (02:58) Why bookkeeping?; “…this is something that needs to be changed. It’s just about the momentum and who will do it…I didn’t want to just see the world changing [before me], especially in this SME [segment].”
4. (04:11) How has bookkeeping as an entry point built up Credibook’s momentum?; “This is a common problem that we see everywhere across Indonesia, not to mention also regionally, but we see [that] everyone loves to be good at their financial reporting, but sometimes, or most of the time, business owners just don’t know how to do it.”
5. (05:02) Why did Credibook venture into B2B wholesale solutions through Credimart?; “Most of them said that bookkeeping is not their main problem. Although it is a pain point for them, their main problem usually revolves around transactions during the pandemic…we [realized] that we need to help them on [these] transactions too, and a lot of our users are also wholesalers. That’s why Credibook is centered around wholesalers.”
6. (06:56) How does Credimart impact Credibook’s product trajectory and growth?; “…not only do we help them with accounting, but we also help them with transactions, and these two are also integrated. If you can handle the order it will automatically [be recorded] in your bookkeeping…It just automates the whole process.”
7. (07:43) Why the YC admission process is already valuable for founders and Gabriel’s biggest learning from the program; “We talk to our users a lot and we really listen to them. And that’s what YC [teaches], and the program fits really well with what we value.”
8. (09:19) Gabriel’s advice for founders looking to get into YC; “Usually many founders, I can say, are searching for confirmation to the investors. Well, I can say that you must be the only one that has a full vision or full understanding of your products, your company, and your users.”
9. (10:04) What is Credibook’s impact on the Indonesian economy?; “The good sign [that you are] delivering a good product is that your users love it to the extent that they will give you feedback on how to make your product better.”
10. (12:03) How Credibook stands apart from other Indonesian SME enablers; “There are some other products that try to cut the supply chain and try to source themselves and sell directly to the consumer or retailer, but we are different because we tap into our wholesalers…We don’t want to cut the supply chain.”
11. (13:15) How and why Credibook works with Fazz Financial; “…to penetrate the market, it takes collaboration.”
12. (14:24) Credimart as the Faire of Indonesia; “Faire’s success in empowering local wholesaler retailers represents how powerful they are. Local businesses and transactions are huge and active in Indonesia alone, [where] we have over 200K wholesalers.”
13. (15:30) What makes an effective leader at Credibook; “…what makes a great leader incredible is not only that they live these five Cs values and culture, but they also enable others to be able to breathe these values and culture…”
14. (16:34) What are the biggest gaps for wholesaler SMEs that have yet to be filled?; “For these traditional SMEs, we still see that cash is the biggest chunk that brings a lot of inefficiencies…on the financial literacy side, I can say that access to loans and also informal credit in the transaction also is still the gap that needs to be filled.” 
15. (17:58) Credibook’s role in driving Indonesian SMEs into the future; “We have 16 million SMEs onboarded on digital platforms. It has grown [twofold] since the pandemic; the number was 8 million before the pandemic, and we are seeing a really, really huge growth.”
16. (19:12) Rapid Fire Round;

About our guest

Gabriel Frans is CEO and co-founder of Credibook (YC W22). He built his career in product management in tech companies including Traveloka and Kudo, leading multifunctional teams, managing entire product line life cycles, and driving product expansion. He received his Bachelors in Electrical and Electronics Engineering from ITB. 

Transcript

The Doors Digital Bookkeeping Have Opened

Paulo: So, maybe you can start first by sharing with our audience. What were the circumstances for you and your co-founders to actually start this company?

Gabriel: As you mentioned previously, we started [Credibook] in early 2020. So we saw the opportunities that [financial] management [and bookkeeping] is something really painful for these SME business owners. And I had my background also in the SME [segment]. I had familiarity with this and [my co-founders and I] saw this opportunity and [we thought] why don’t we build a product to solve these pain points, and that’s where it all began.

Paulo: Yeah. And maybe you can share a little bit more about your co-founders as well. Exactly how did you meet each other or were you the one who recruited them and convinced them to join? 

Gabriel: So I have two co-founders. The first one is my COO Christian Lie. And the second one is my CTO Dekha Anggareska. I met Christian in Kudo, and he was back then working with distributors in kudo also, and he was also a wholesale business owner himself. So he’s so familiar with this SMEs business. And he’s the one currently who handles sales and operations.

I recruited him when I came up with the idea.

Then I met Deska in my college Bandung Institute of Technology. He was taking computer science while I was taking electrical engineering. We worked back then [on our] final project. So we also had some background [working] together, so that’s why I trust him a lot. 

“We saw the opportunities that [financial] management [and bookkeeping] is something really painful for these SME business owners. And I had my background also in the SME [segment]…and [my co-founders and I] saw this opportunity…”

Paulo: You mentioned bookkeeping and you observed that it was a really big pain point. But talking about SMEs in particular, there are so many pain points you guys could have addressed. And so why bookkeeping in particular — was that something that you had worked on previously or — what was behind that decision to [work on] bookkeeping and digitizing financial data of these SMEs as an entry point?

Gabriel: I was born and raised in Indonesia and when I was young [and I would] go to the warungs or the [neighborhood] corner stores, I saw that they usually used papers and books [for their finances]. [The] funny thing is that after I [started] my career [in] product management five years ago…when I [went] back to the warungs again, I still [saw] the same pattern.

I still see that [they use] papers and books, and that bugs me, because after all these years they still do the same thing [as] they did when I was a child. We saw that this is something that can be improved, similar [to] email. Back then, everyone used formal letters with the envelope, but now we don’t see that anymore.

So was I seeing that this is something that needs to be changed. It’s just about the momentum and who will do it. So that’s [why] we took part [in this]. I didn’t want to just see the world changing [before me], especially in this SME [segment]. And that’s where we decided to look…

“…this is something that needs to be changed. It’s just about the momentum and who will do it…I didn’t want to just see the world changing [before me], especially in this SME [segment].”

Paulo: That really makes sense, given that your background has been working with SMEs. And so you already have that on-the-ground experience. And clearly you guys were obviously up to the task but the thing I’d say is that Credibook, even if it started with bookkeeping, you guys aren’t just doing bookkeeping [now]. So I’m just wondering how has this go-to-market of digitizing financial data set you up for growth and expansion?

Gabriel: So we saw this problem happen [for] a lot of SMEs. That’s why we choose this, I can say, entry point. So this is a common problem that we see everywhere across Indonesia, not to mention also regionally, but we see [that] everyone loves to be good at their financial reporting, but sometimes, or most of the time, business owners just don’t know how to do it. That’s where we come in and that’s where we help them to grow their business, by having this accounting or bookkeeping [product]. 

“This is a common problem that we see everywhere across Indonesia, not to mention also regionally, but we see [that] everyone loves to be good at their financial reporting, but sometimes, or most of the time, business owners just don’t know how to do it.”

Building the software layer for wholesalers in Indonesia

Paulo: That leads me to my next question, which is about CrediMart, which is one of the newer launches that Credibook has done. Maybe you can talk a little bit about it specifically, and then [share with us] what was the decision process behind getting into this area specifically?

Gabriel: So this must be an interesting one. We started [CrediMart] in February 2021, actually. So before then, when we [were growing] Credibook, we [were talking] to users frequently. So we talked to them: what are your pain points? What is your main problem? And most of them said that bookkeeping is not their main problem. 

Although it is a pain point for them, their main problem usually revolves around transactions during the pandemic, especially [when] they [make] orders or receive orders via WhatsApp or online, and they need to capture that because their sales have already dropped by 20% on average. 

We talked to them and we [realized] that we need to help them on [these] transactions too, and a lot of our users are also wholesalers. That’s why Credibook is centered around wholesalers. We are giving them capabilities to handle orders online, providing pay-later and also logistics support for them, so they can [remove] their long lines, manual stock management and [lack of] customer management. 

In the beginning, we give [these services] to them. We empower them so that they can grow their business by helping them [with] their operational [needs for their] business. 

“Most of them said that bookkeeping is not their main problem. Although it is a pain point for them, their main problem usually revolves around transactions during the pandemic…we [realized] that we need to help them on [these] transactions too, and a lot of our users are also wholesalers. That’s why Credibook is centered around wholesalers.”

Paulo: The way you describe it [is that it’s] sort of like an OMS or order management system [as well as] a lot of these other layers of services to really help these wholesalers, as you mentioned, to manage SKUs and all these orders from other SMEs as well. How does this fit into the bigger picture for Credibook? 

Gabriel: [Credimart] fits into broad verticals, I can say, but how it fits into the picture is that not only do we help them with accounting, but we also help them with transactions, and these two are also integrated. If you can handle the order it will automatically [be recorded] in your bookkeeping. [It makes things work easier]. It just automates the whole process. 

Paulo: And I think the key is that interoperability between Credimart plus the bookkeeping services and all this like financial management as well. And so maybe you can share with our listeners how the progress has been.

You mentioned you launched this in 2021 and then obviously Credibook, the first product initially launched in 2020. Maybe you can share with our listeners how it’s been so far?

Gabriel: For now Credibook is growing steadily. So we let it grow organically because we know that users love it. We receive really good feedback for Credimart, since launching in February 2021, currently it’s available in more than 40 cities across Java and Bali…

And we are also serving a broad spectrum of product deliveries, such as not only daily goods, but also cosmetics, stationeries, construction materials, and even [products] like automotive spare parts. 

“…not only do we help them with accounting, but we also help them with transactions, and these two are also integrated. If you can handle the order it will automatically [be recorded] in your bookkeeping…It just automates the whole process.”

The Y Combinator Experience

Paulo: So it’s not just the FMCG space, but really a lot of different other [types of products], which is pretty interesting, and again, that’s because you tapped into a really common pain point that’s shared by a lot of SMEs. And that growth hasn’t just been attractive to ourselves, as a regional investor, but also Y Combinator. We’d love to get to know what was the process for you guys getting through the global startup accelerator, and what has been your biggest learning so far?

Gabriel: Y Combinator has a very interesting admission process. So a lot of YC founders mentioned that in the process itself, you can [already] reflect on your company or your product. So we also experienced that. We learned a lot about our product and company [through the] admission process and the interview process because of the questions that they bring up and so on, but it has been a really good experience for us, [even just] the admission. 

I can say I’m a real product guy at heart. So [I share] the same values with YC, where they really focused on product, on assisting your users, on listening to your users and their pain points. And that’s [why] I feel that I really fit into the program. 

Paulo: That’s how you guys started [Credimart] pretty much right. 

Gabriel: Definitely, definitely. We talk to our users a lot and we really listen to them. And that’s what YC [teaches], and the program fits really well with what we value. 

Paulo: I really liked what you said about even in the application process, you guys are already learning something, so regardless if you get in or not, the application process itself already, you start to, as you said, reflect on… 

Gabriel: Yeah. What I can say is that as you mentioned, regardless if you get accepted or not, you can always use that admission process to reflect on what you are doing and how you are doing with your product and your company. 

“We talk to our users a lot and we really listen to them. And that’s what YC [teaches], and the program fits really well with what we value.”

Paulo: And so what advice would you give to fellow Indonesian founders who are looking to get into YC, especially considering Credibook, I think, has a unique case of having been around for like two years before you guys eventually applied and got into YC?

Gabriel: Their tagline is really good, right? Make something people want, if I’m not mistaken. So my advice to fellow founders in Indonesia is always to make something people want. Usually many founders, I can say, are searching for confirmation to the investors. Well, I can say that you must be the only one that has a full vision or full understanding of your products, your company, and your users. So instead of getting confirmation from external parties, you need to know your users. You need to know your product in the back of your head. That’s the main thing that founders do actually. 

“Usually many founders, I can say, are searching for confirmation to the investors. Well, I can say that you must be the only one that has a full vision or full understanding of your products, your company, and your users.”

Economic Impact of Digitizing Wholesaler Operations and Finances

Paulo: Yeah, I really love that advice. And so speaking of serving people and knowing pain points and building something people want, I also want to talk about the impact that you guys have, especially considering the broad range of customers that you guys serve.

How would you describe, especially to somebody who’s not familiar with Indonesia, the impact Credibook has on the [Indonesian] economy at large?

Gabriel: Speaking a bit about the impact that we bring, [the] financial literacy index in Indonesia is quite low; it’s 38% or only one-third of our society. So we aim to increase this financial literacy. So financial literacy and digital literacy is our main homework. 

And Indonesia has over 65 million SMEs across the nation So that’s where we want to tap. And on the ground, we found that Credibook’s digital bookkeeping app helps wholesalers, retailers, and SME business owners to speed up micro loan approval through their neat or tidy financial reports. In 2021, let’s say we have provided workshops on financial and digital literacy for more than 8,000 business owners [across] Indonesia. 

So we really care about that. That’s [why] we do our best to increase that. And speaking about Credimart, because in the first place, we want to help them grow their business, and one year since launch, we saw that even our Credimart wholesale partners can grow their business up to 50% by leveraging our services and increasing their unique customer base by around 55%. 

Currently, the Credimart ecosystem has gathered more than 60,000 wholesale retailers since launch. And they also are giving us feedback on how we should build the product and what improvement we need to do on our product. That’s a good sign based on my experience. The good sign [that you are] delivering a good product is that your users love it to the extent that they will give you feedback on how to make your product better. 

Paulo: They become part of your product team almost… 

Gabriel: …they become our shadow associate product manager. 

“The good sign [that you are] delivering a good product is that your users love it to the extent that they will give you feedback on how to make your product better.”

Paulo: And it’s really a feedback loop that you just keep giving them what they want. And that retention obviously. Given that you guys service a lot of different SMEs across different verticals, and then also provide all these services that are not just financial operations, covering all aspects of the business as well. How does Credibook stand out amidst all of these — we see an emerging rise in a lot of these like SME enablers, especially in Indonesia? 

Gabriel: I’ve mentioned a lot about wholesalers; we are a wholesaler-centric [company]. So there are some other products that try to cut the supply chain and try to source themselves and sell directly to the consumer or retailer, but we are different because we tap into our wholesalers. We want to empower them. We don’t want to cut the supply chain. That’s the first one. 

The second one is that it’s an easily replicable model or easily replicable product across vertical industries. So that’s where we are [strong]. That’s why we don’t only focus on one vertical, but we also have a broad spectrum of it. 

“There are some other products that try to cut the supply chain and try to source themselves and sell directly to the consumer or retailer, but we are different because we tap into our wholesalers…We don’t want to cut the supply chain.”

Paulo: I really liked what you mentioned about, instead of this intermediating, you just digitalize, not having to stand in as one of the players in the value chain, but just really providing that software that helps them do things better, so to speak. 

And another thing that I’m interested in is the fact that, when Insignia first invested into Credibook, we co-invested with Fazz Financial, and you guys also work closely with them. So maybe you can talk a little bit about that and how this fits into your own growth trajectory as well.

Gabriel: Yeah. So I worked with Hendra back then in Kudo, and [we had] a good time; we share the same values and I can say that we support each other. So they have a full-fledged FinTech stack, and they support us on all the FinTech stack that we need, for example, if it’s a loan or the NPL or the payment itself, and so on. 

So we have a really good experience working with them. We also share struggles [being] in the same industry or same areas targeting a similar industry, although [with] a little bit different approach and different product deliveries, but we sometimes share our strategy because to penetrate the market, it takes collaboration.

So if you penetrate [the market] alone, it’s harder, but if you can collaborate with other players in general, it is easier to penetrate the market, especially a bigger market, like SMEs itself. 

“…to penetrate the market, it takes collaboration.”

Paulo: So with regards to what you’re doing in Indonesia, have you seen similar success stories in other emerging markets or more developed markets and what have you learned from those trajectories and stories?

Gabriel: As for the case of Credimart itself, we have seen that the business model has proven successful in other countries. We are seeing Faire in the US and global market, which provides  a wholesale marketplace for B2B commerce. 

So Credimart has its own uniqueness based on business owners and the supply chain landscape in Indonesia. However Faire’s success in empowering local wholesaler retailers represents how powerful they are. Local businesses and transactions are huge and active in Indonesia alone, [where] we have over 200K wholesalers.

Paulo: Would it be correct to say that you guys are really building this operating software or OS for wholesalers?

Gabriel: Yes. That’s one way to say it. Credimart itself is our wholesaler center and we want to give them some sort of operating system [to] handle all [their] business operations. 

“Faire’s success in empowering local wholesaler retailers represents how powerful they are. Local businesses and transactions are huge and active in Indonesia alone, [where] we have over 200K wholesalers.”

Leading the Digital Revolution for B2B Wholesalers in Indonesia

Paulo: [You’re building] the full stack of tools, so to speak, but again, I’d like to emphasize that you guys aren’t giving them the whole system right away. You start with learning as you go and try to get it straight from them what they need as you guys grow. 

So now I’d like to shift gears a little bit and talk about the team and you as a leader. I’m sure over the past few years you’ve been [bringing] leaders into the company as well. So what would you say makes a great leader at Credibook?

Gabriel: That’s interesting. So because our company’s name is Credibook and our product’s name is Credimart, our culture also has five C’s which consist of care, communicative credible, competent, and collaborative. I personally care about values and cultures in the company. I believe that’s [what] makes the company big someday. And what makes a great leader incredible is not only that they live these five Cs values and culture, but they also enable others to be able to breathe these values and culture, what we called five Cs. 

Paulo: And would you say it’s really important for the leaders in Credibook to have similar backgrounds to the founders, that experience having worked with a lot of SMEs? 

Gabriel: Definitely. So caring about our users and [caring] about the growth of SMEs is in our DNA. It’s something that we can’t compromise. All of our team members or all of our Credi-crews, that’s what we call them, have this DNA. 

“…what makes a great leader incredible is not only that they live these five Cs values and culture, but they also enable others to be able to breathe these values and culture…”

Paulo: And looking towards the future and looking towards where wholesaler SMEs are now in Indonesia, what are the biggest pain points that have yet to be addressed that maybe you’re looking forward to tackling as Credibook?

Gabriel: I’d structure them into two pain points: digital literacy and financial literacy. In digital literacy, we are seeing that the cash payment is still the biggest chunk in this scene while on the consumer side or on the more modern merchants we are seeing that payments have become cashless now, supported by the government. But for these traditional SMEs, we still see that cash is the biggest chunk that brings a lot of inefficiencies. 

And on the financial literacy side, I can say that access to loans and also informal credit in the transaction also is still the gap that needs to be filled because it’s hard for them to grow their business if they are doing the same thing everyday. 

Paulo: What’s interesting there is that [there] isn’t [one player] really going to solve every single problem of all [wholesalers]… 

Gabriel: Definitely. Definitely. It’s not our main job. 

Paulo: And that again goes back to what I asked earlier about working with Fazz Financial, where you guys are focused on the wholesalers, their operations and their digital tooling. And then that enables them to access hopefully more formal and more institutionalized financial services. 

Gabriel: I can say it’s not solely our job and that’s where it needs collaboration because there is a lot of homework and also the market is really huge to be solved by just one [player]. 

“For these traditional SMEs, we still see that cash is the biggest chunk that brings a lot of inefficiencies…on the financial literacy side, I can say that access to loans and also informal credit in the transaction also is still the gap that needs to be filled.” 

Paulo: And with that in mind, imagine the next five years, what does a successful Credibook look like? What kind of landscape in terms of wholesalers would you want in the next five years that you’re able to say to yourself, “We were able to do some really great work over the past five years”?

Gabriel: Looking back a little bit, before looking onward to the future, so currently we have 16 million SMEs based on government data. We have 16 million SMEs onboarded on digital platforms. It has grown [twofold] since the pandemic; the number was 8 million before the pandemic, and we are seeing really, really huge growth.

And the government mentioned that they want to aim for 30 million SMEs to be onboarded in 2024 if I’m not mistaken. So within the next five years, we are seeing the growth or the technology adoption in this SMEs industry will be very, very massive. That’s why we are here to provide them with the technology solutions. And we are seeing the adoption of technology solutions will see very, very great growth within the next few years.

“We have 16 million SMEs onboarded on digital platforms. It has grown [twofold] since the pandemic; the number was 8 million before the pandemic, and we are seeing really, really huge growth.”

Rapid Fire Round

What are the top 3 traits a startup CEO should have? 

Gabriel: Grit, fearlessness, also integrity. 

What digital technology/innovation or sector (apart from the tech you are working on) excites you the most today? 

Gabriel: [I’d say] NFTs because I’m a musician too but I haven’t minted any music yet, but I hope to.

What’s the most memorable class you’ve been in?

Gabriel: Maybe the class in my college, actually, it was computer architecture class because I was an electrical engineering [major], but back then the class talked a lot about the plane and the technology behind the chip. And that amused me back then. And now I’m seeing that that is happening. I am seeing the new chip of Apple and that one is something that my lecturer talked about back then. Now looking back in hindsight, I’m taking every [class / learning] more seriously because maybe what they’re saying is the future. Be careful about scientists or someone who is talking about a future, maybe that is the future. 

Most memorable day/moment at work? 

Gabriel: I have a lot of [moments]; but I value family a lot. So I think my most memorable day was in the early days of building a company, when I got a lot of rejections and a lot of failures, but [whenever] I had dinner with my family it comforted me a lot. 

What’s your favorite go-to destination in Southeast Asia? / What trip are you most looking forward to taking? 

Gabriel: Thailand. I love the food. The vibe is kind of similar to Jakarta.. I can say I also love Singapore, the hawkers and so on. 

What’s your favorite activity to de-stress?

Gabriel: So I have a lot of hobbies. Two things that are the go-to hobbies for me to de-stress are music and games. So I play a lot of musical instruments like guitar, piano, and bass. And I play games seriously too, [mostly] FPS online, competitive, and also single RPGs. I play Valorant; I main Chamber and sometimes Jett. 

I haven’t [published any music] but I usually write some of my songs on the weekend and plan to do maybe some EPs, not albums, within this year, hopefully fingers crossed. And usually music connects people, and I talk with some of the SME owners, they usually also play [some instruments] maybe some guitars and some music and it just connects us.