We can never get enough of Indonesian digital coffee chain Kopi Kenangan –and we are not just talking about their cup of iced coffee on a hot, busy day.
The startup has made headlines with their high-profile funding rounds, the latest being their US$109 million Series B funding round in May 2020. Following these updates, Kopi Kenangan has never been shy about their ambition to continuously expand.
“What if we can open, not five to 10 new stores each month, but one each day?” says Co-Founder & COO James Prananto in an interview with e27.
While the goal might sound ambitious, the results that the company made has been showing great promise. According to Jumpstart, Nielsen Company has named Kopi Kenangan as the number one in top-of-mind awareness in the milk coffee category and second only after an established multinational coffee chain in the general coffee category. This is an achievement that the magazine dubbed as “notable” given that Kopi Kenangan has only been operating for less than two years at the time.
To make that goal comes true, there are practical steps that the startup is implementing. In this deep dive series, Prananto spills the details on how Kopi Kenangan plans to open one new store each day.
In this article, you will learn:
– The importance of brand-building in scaling your business
– Using tech in scaling your business
– Why founders should always have a Day One mentality
Also Read: Kopi Kenangan snags US$109M in Series B funding led by Sequoia Capital
A brand is not built in a day
Before we can touch on the topic of scaling up, first we need to learn how Kopi Kenangan builds their brand. They are certainly not the first coffee chain to ever operate in the Indonesian market, so to have a distinctive feature is a must.
According to Prananto, there are two ways the company intends to achieve it: through its brand identity and brand promise.
“What we believe is that winning is all about how you can be different from your competitor. Of course, with branding, there is a brand promise as well … the commitment from us to our customer,” he begins.
Kopi Kenangan does it by doing something that their competitors avoid. They adopt what Prananto describes as “cheesy” and cringe-worthy themes into their company’s brand, down to the names of the beverages on the menu. For example, their signature beverage is called Kopi Kenangan Mantan or “memories of the ex-lover” coffee.
“Back then in 2017, most coffee brands were really serious … It’s not approachable,” he says.
Once that brand identity has been established, the company starts to nail down its brand promise which is the use of high-quality coffee beans and machines.
“Branding is more than just graphic design or having a nice video [of your company]. It’s a whole experience that begins when you enter our store … Whether its the cashier greeting you good morning, whether they are smiling or not, whether we are using the proper machine,” Prananto points out.
“If you do [these] things right, you are creating brand awareness to your customer without having to spend so much on customer acquisition. I believe this is the biggest mistake that founders make, spending so much on customer acquisition without thinking about building their brand,” he continues.
Prananto also states that by the time Kopi Kenangan was developing its brand, the company did not have as much funding as they do today. The brand creation was done by the founders themselves.
Even though the company now has its own creative director, Kopi Kenangan continues to see the brand building as a responsibility of every team in the company –not just the creative team. This is why Kopi Kenangan launched its own employee training centre Kopi Kenangan Academy to ensure standardised service quality.
What it takes to scale a business
Now that the brand identity and brand promise have been established, Kopi Kenangan moves on to the next steps that it take to realise its expansion plan. Prananto lays down the details on how the startup uses tech to help them launch one new store per day.
“First of all, we need to find a location, right? That is where we start on building our proprietary heatmap technology, where we try to identify where our customers are. Once we have identified [their location], we need to know whether there is already a particular store over there or not,” he explains.
Once a new location is secured, the company needs a method that will enable them to build a new outlet in a timely manner. To achieve this, instead of going to location one-by-one and build something from zero, Kopi Kenangan prepares a system that Prananto likens to a puzzle. With an existing blueprint of all the elements that should be in a Kopi Kenangan outlet, contractors only have to use these references and adjust to the needs of the locations.
This step is followed by preparing the human resource that will run the outlet –the part where their SOP and training programme come in.
But even this tidy mechanism comes with its own challenges.
“So, the biggest challenge will obviously be operational consistency, when you are aiming to open one store per day. In December 2019, we opened 42 new stores when most brands in Indonesia would open 40 to 50 outlets in a year,” Prananto elaborates.
“To overcome the challenge, again and again, we invest even more on our learning and development (L&D). On top of that, we try to use tech to tackle those challenges. I believe that as a tech-enabled company, you don’t just use it for your consumer-facing app. You use it to help you create a robust backup inside your organisation as well,” he continues.
Prananto also adds that the company is currently working on a smart management system that will allow the outlets to operate without the need of a manager. They expect to launch this system by mid-2021.
Also Read: Startup of the Month, June: Indonesian tech-enabled coffee chain Kopi Kenangan
Every day is a brand new day
While the use of tech is crucial in helping Kopi Kenangan expand its business, there is nothing that can ever replace culture.
For Prananto, it is all about implementing a Day One mentality which enables the startup to see every day as the first day they operate. They choose to adopt this mentality as there is a tendency for business operations to slow down after operating for a long time; they have to remain agile and excited for the work as the day the business was launched.
“This Day One mentality also means that you should always be customer-driven … Because the moment we become complacent is the day we become irrelevant,” Prananto says.
To unite the company into a single goal, Kopi Kenangan also implements the use of OKRs in its operations.
“Once again, branding is not just about graphic design. It’s all about the sensory experience,” he stresses.
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Prisca Akhaya T. also contributed to this article.
Image Credit: Kopi Kenangan
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