Recently, Dr. Arief Setiawan, S.T., M.Eng., or popularly known as Bro Kiming, has been named the youngest mechanical engineering doctor across Indonesia. For his success in completing the doctorate programme in Japan at 25 years of age, Kiming was granted an award by the MURI that was presented in mid-August in Grha Sabha Pramana Hall of Universitas Gadjah Mada. But it was not only his academic titles that withdrew our attention, but also his tenacity in building his business kingdom up until the international level. During his busy schedules completing his master and doctoral degrees in Japan from 2010-2014 he initiated the founding of the company.
According to Kiming, to work in business does not only take the ‘follow your money’ principle, but passion is also a necessity. He has proven that. Prior to completing his undergraduate degree at UGM, he was a 18 year old student, the man from Semarang had to bear the burden of some 300 millions in debts. By the age of 22, Kiming’s debts reached as high as 1 billion. How could he get up from hitting the rock bottom? Below is an excerpt of interview done by Gusti Grehenson from UGM Public Relations Office.
How did you start the business?
It’s economic reason, but may be it’s more of passion. Near my graduation, I tried to apply for a post at some multi-national corporations. I knew I was not going in that direction. Then I tried to open a business since semester seven.
Why didn’t you like working in a company?
I did try to apply, but it appeared that I didn’t like it. Everything was regulated and became a routine while I did need challenges every single day. In business, if we have profits it’s because of me, if not, it’s my own responsibility. So, that’s pretty challenging for me.
Prior to graduation, you made the “squeezed” banana menu. How much was the capital?
It took me only Rp700 thousands, which I had borrowed from my parents. The cost for making a pushcart was that amount at that time. It was a time of booming franchise and there was no clear regulations on franchising. One outlet was running well, so I added another one. Then I started to make the SOP.
Where did you open the first one?
Initially, it was in front of the Merah shop on Gejayan street. Another one was set up nearby. That was when franschise was not the rule. I also opened an outlet in Semarang. Many people were attracted. People wanted to invest there. When I graduated at the age of 19, I already had 32 branches across Indonesia.
Where were all the branches located?
In Batam, Medan, Bekasi, Bandung, almost all parts of Indonesia.
How much was the cost of the franchise?
Around 4.5 millions. We sell licences, SOP and brand.
How did you get the idea selling the “squeezed” banana?
There was no such things as franchised “squeezed” banana at that time. If people wanted to have the banana, they had to wait until the night as no people selling them in the day. What if people wanted to have it during the day? So, I thought this would be unique if this could be franchised.
How come you went bankrupt?
It was because I moved to Japan getting a scholarship. The management was not ready. I made a business that could not be abandoned by its owner. So, it was not going auto-pilot. When I was studying in Japan, slowly those branches had to shut down and the minus was very huge.
How much was your lost?
It was almost 300 millions.
How did you compensate for that amount of debt while you had just graduated from university?
The mistake was that I made the expansion too fast. At 19 years of age you cannot take a credit from the bank, the minimum age is 21. Eventually, my parents’ house in Semarang had to get pawned to the bank. I got 150 millions in return. Then I opened a grocery in Semarang. But I opened it in the place where people didn’t like buying and hanging out. So, in 2011 this had to close down, too. The debts were getting even bigger.
When you departed for Japan, were the two businesses already running up?
Yes, they were pretty good, but they were closed in 2011, too. The profit from these had been used to fund other business. When I moved to Japan, I opened a grocery shop with the name using my nickname. I had wanted it to be like Alfamart or so, but eventually this was shut down as well.
I also made a business selling etawa goat type. I was stupid, making the business that was booming. I opened this in the borders of Semarang and Demak, not only goat but also eels and catfish. Thank God, this too had to close in 2012. So, when I was 22 and 23 years old, I already had debts amounting almost 1 billion.
Why did the three businesses go bankrupt?
Formerly, I had no passion. In business it has to be follow your passion. I did the opposite: follow the money, no passion. All went bankrupt eventually.
At 22 years of age, you had 1 billion of debts. How did you overcome the problem?
The first one is usually family. Due to the big debts, my parents were upset, I had not finished my graduate degree, either, and the debts were getting bigger. My parents told me, “Don’t just boast youself, study properly, get a decent job,”. Which parents were not upset in that situation? But I told them to give me five more years. If this produced nothing, I would be willing to do anything. Let me find my own identity in those five years. I told them that knew I could get back on my feet again.
What made you get back on your feet?
In 2010 I started trading spare parts of motor cycles through the Kiming Motor business. It was accidental, too. A friend of mine once contacted me, ‘Ming, you live in Japan, can you help find the spare parts of this motorbike? Why not? So, I tried to find them. If I’m not mistaken, my first order was gasket, packing, those simple stuff. Finally, there were demands for rims, suspension, piston, and so on, particularly for motor riders. The brotherhood was good. When one has bought something there and the spare part was good and cheap, then the news broke from mouth to mouth. This business eventually flourished. Then we turned into trading.
What trade did you do?
General ones. So, when people wanted something, I bought it for them. I offered what people have to buyers. I had a student visa in Japan, so I could not open a company. The PT Kiming Indoinvestama company was established back in Semarang. After I got my doctoral degree, I founded the Kiming International in Japan. I knew that trade was of a wider scope, not only in Indonesia and Japan, but also Australia, Germany, the U.K. and the U.S.
What stuff did you trade?
Now it’s more of high tech, robotic, motor spare part, watches, accessories, clothing, luxury fashion, wood, glasses, lenses, all those unique stuff. Formerly, for Indonesian handicraft, it was difficult to get buyers in Japan. After the Kiming International in Japan, the seaweed products, algae, wood, leather and bamboo craft, the simple stuff but it is selling. Now my company focuses more on imports. Exports are less than 30%. If we should do imports, the goods will not disrupt the segment of other products in Indonesia.
In Indonesia, how many trade partners do you have?
Under me there are 27 traders, mostly old friends, school and university mates, and neighbours.
Why did you choose close friends as business partners?
It’s trust. If I give them capitals, I trust them. No assessment needed, I aready knew them. So, those 27 friends are my old friends who had lived in Japan, too.
Have you been cheated?
Many times. Someone ordered one thing, telling me he would pay for it after it had arrived in Indonesia. He only paid the 10% advance. Since then, I took more precautions. Even if they’re a friend of yours, in business they can turn into enemies.
Now what’s your income per month?
It’s not certain. It could be 70 millions a year. Most of the commodities are not mine. Sometimes I earned a project worth 10-20 billions, sometimes 500 millions.
So you built the business in Japan whilst completing your doctoral degree. How did you manage the time?
That’s why people called me a ‘crazy’ doctor. Doing a doctoral degree is hard enough, let alone doing business at the same time. But nothing had been sacrificed, I love mechanical engineering, moreover lab works. I love that job. I did not feel pressured. While I was waiting for the tools in the lab, I did business.
When you did the business, when was that?
Anytime, through social media or email. If I can respond, I would. If I was busy, I would do it later in the evening.
You were named the youngest mechanical engineering doctor in Indonesia. After this degree, where would you go?
In the past when nearing my undergraduate completion, I had dedicated myself to business. After the graduation I was awarded scholarships by the Japanese government, I thought this was an opportunity to extend my insight, network, and way of thinking most importantly. I did not think that I would apply the mechanical engineering science as soon as I passed the doctoral exam. I did not want to compartmentalise the potential. Even if I have the expertise in the science and it goes well, why don’t we do other things at the same time as well? Sometimes my core science is still used, for instance when there is a product that relates to mechanical engineering, I could do it with much authority. If I sell this product, this is part of the negotiation skills. Just imagine, Kiming Motor, the seller has a doctoral degree, same price, and a guarantee.
Is any of your family a businessman?
No one. My father is a retired insurance staff, my mother is a housemaker.
Who had inspired you to do business?
My parents, too. I’m the younger of two. I did the business to make my parents prosper. Secondly, in business I had time freedom. That’s what I’m after. Despite my business in Japan, I go home every two months, so I can meet the family more often. I can spend one month and a half in Semarang each time.
Do you have any fears of losses at anytime?
The risk of losses was always in mind since the beginning. But I have nothing to lose. I believe that behind hope, there is disappointment. When I started the business, I did not think of how much I would make profits, even losses did not matter, either. I was on going. If I lost by 50 millions, I take that as passing entrepreneur undergraduate degree. A 500 million-losse means entrepreneur graduate degree, then 1 billion-losses is entrepreneur doctoral degree. People always see the losses in terms of financial matters. But actually, I always feel I earn the benefits. OK, financially I was lost, but in terms of knowledge, I got smarter. Knowledge is more expensive, so a loss is not feared .
I often experienced losses. When I was 18, I had it. Now if it’s 300-million-losses, I just laugh at it. What can you do?There’s nothing you can do about it. It’s at that point that I went to the next level. I would not repeat my mistakes. Maybe that’s what made me matured in this business. I suffered a loss financially, but I had profits physically and mentally.