From Zero to PMF: Bobobox

A deep dive conversation with Antonius Bong, Co-Founder of Bobobox.

I had the pleasure of meeting Antonius Bong at the Stanford Executive Program, where we were classmates during the 2024 cohort. Our shared experiences and mutual interests quickly fostered a strong friendship. Recognizing his remarkable journey, I invited Antonius to share his insights and experiences in finding Product-Market Fit (PMF) for his startup, Bobobox. For many entrepreneurs, achieving PMF is one of the greatest challenges, and I believe Antonius' story will provide invaluable lessons and inspiration for others on this path.

First, what is Bobobox and who is Antonius?

Bobobox is a hospitality startup based in Indonesia that offers tech-enabled sleeping pods fully integrated with smart booking and check-in/check-out systems, IoT control systems, and integrated payment solutions.

Inside a sleeping pod.

Antonius Bong is the Co-Founder and President of Bobobox, overseeing product development, business strategy, accounting, financial planning, treasury, and investor relations. Before co-founding Bobobox in 2018, he co-founded and served as CEO of Cantik.com, Indonesia’s third-largest women's fashion e-commerce portal, and was the Finance Director for Artoncode, an award-winning Indonesian animation and game developer company. With over 14 years of experience in finance and business leadership across various industries, Antonius has a proven track record in managing complex operations.

The sleeping pods.

Let’s dive in ⚡️

Antonius, to start, could you give us a bit about what led you to co-found Bobobox?

In 2017, after closing my second startup, I was in a tough spot, figuring out my next move. I spent six months consulting for a Chinese social media company that wanted to create a new vertical in e-commerce, leveraging my expertise in the field. However, I always wanted to run my own business, and after a while, the consulting role didn't fulfill my ambitions. It was around this time that my first child was born, which added to the pressure of deciding my next steps. I felt a strong need for stability and a sustainable venture.

My co-founder and I explored various industries, from agri-tech to health tech, but none resonated as much as hospitality. The idea of creating a hospitality business was appealing because it wasn't just about finding product-market fit; it was something I enjoyed and felt I could excel in. Hospitality is a sector with a proven track record and stable unit economics from day one. It’s an industry where you see real, tangible results and can measure success immediately, unlike some other tech ventures where the metrics of success can be more abstract and long-term.

How was the initial process of founding Bobobox, and what were the biggest challenges you faced in the beginning?

The initial process of founding Bobobox involved a lot of ideation and market research. We started by breaking down various ideas across different sectors and eventually zeroed in on hospitality. One of the significant advantages was having a co-founder whose sister ran a budget hotel. This gave us firsthand insight into the pain points faced by budget hotel operators and guests. The biggest challenge at the beginning was that there was no existing product like ours in the market. People couldn't visualize our concept of tech-enabled sleeping pods. We had to rely heavily on our intuition to develop the first prototype.

We destroyed one of my co-founder’s sister’s hotel rooms to convert it into two sleeping pods. This prototype allowed us to gather initial feedback. It was a leap of faith because there was no direct market comparison. The key was to solve the identified problems - affordability, convenience, privacy, security, and cleanliness - in a standardized manner that could scale. Our first prototype’s high occupancy rate and positive feedback were crucial in proving the concept. It showed that there was a demand for our solution, even among guests who could afford more expensive accommodations.

How did you approach the initial validation of the business idea, and what were the most important pieces of feedback you received?

We focused on understanding the 5 problems in the budget hotel segment. We aimed to provide a solution priced at $15 per night, which our surveys indicated was the sweet spot for budget travelers in Indonesia. The key feedback we received was from guests at our prototype rooms who typically paid $50 per night for 3-star hotels. Despite having the means to afford more expensive rooms, they chose our $15 pods, highlighting the value and appeal of our offering.

This early validation was critical.

For instance, in the first three months of launching the prototype, we had an occupancy rate of 97%. The guests included walk-ins from the existing 3-star hotel, indicating that our product appealed to a wide range of customers. The affordability was crucial as the average income was around $300 per month, making $50 hotel rooms too expensive for many. We knew we were on the right track when we saw that our solution addressed a significant gap in the market.

Was there a specific moment when you realized you were on the right track?

The specific moment came when our prototype rooms maintained a 97% occupancy rate. This led us to raise our seed round and build our first flagship hotel with 62 rooms. Achieving an 85% occupancy rate in this larger setup, without any significant marketing efforts, confirmed that we were on the right track. It showed that our business model was scalable and that there was a strong demand for our product.

What was your main strategy for finding PMF, and how did you measure progress in that direction?

Our main strategy for finding PMF was to iterate based on user feedback and ensure our solution addressed key pain points. We measured progress through metrics like occupancy rates, returning guest rates, and Net Promoter Scores (NPS). We knew we had PMF when we saw high returning rates and NPS, indicating strong customer satisfaction and loyalty. Our focus on providing consistent value by controlling the infrastructure allowed us to maintain high standards across all locations. By standardizing our offering, we could ensure that every guest had the same positive experience, regardless of the location.

What were the most significant changes made to the product or business model during this journey towards PMF?

The most significant change was deciding to control the infrastructure variables. We realized that to provide a consistent experience, we had to invest in and manage the physical spaces ourselves. This meant building our own facilities rather than relying on existing hotel infrastructure. We redesigned the concept, drawing inspiration from capsule hotels in Japan, and iterated on the design to meet our value propositions. This approach allowed us to maintain high standards of affordability, convenience, privacy, security, and cleanliness across all our locations.

When did you become certain that you had found PMF? What signs or metrics confirmed this?

We became certain we had found PMF when our returning rate exceeded 45%, compared to the industry standard of 12%. This strong customer loyalty, along with high NPS, confirmed that we were on the right track. Additionally, achieving an 85% occupancy rate in our flagship hotel with 62 rooms proved the business model's scalability and profitability. These metrics were crucial as they demonstrated that our solution not only attracted new customers but also retained them, which is a strong indicator of product-market fit.

What were the key learnings during this journey of finding PMF, and what advice would you give to other entrepreneurs?

The key learning is to start with the problem, not the solution. Use frameworks like 'jobs to be done' (JTBD) to understand the customer's needs and create solutions that address those needs effectively. In our case, we interviewed 180 customers during the initial tests. It's crucial to ensure that the problem you're solving is high on your customers’ priority list and that they are willing to pay for it. We discovered the importance of addressing real pain points and ensuring our solution was indispensable to our customers. Additionally, maintaining flexibility and being willing to pivot based on feedback is essential. Don’t fall in love with your initial idea; be prepared to adapt and refine it based on what you learn from your customers.

What are the next steps for Bobobox?

It's no longer about trying many different things and seeing what works. Once your organization reaches a certain level, it becomes much more costly to do things. When you are a team of 6 or 7 people, you can try different things with little money. Now, with a team of 230 to 240 people, it costs a lot to develop a new product, enter new verticals, or enter a new market. So, we have to be very careful. We are doing a lot of due diligence on our next growth strategies. This can come in two formats: adding new verticals in our existing product or market, or entering new markets with our existing product and doing minimal localizations.

In terms of new verticals, we are introducing food and beverage (F&B) options and activities or experiences to help people build their itinerary during their travels. We now have two products: the capsule hotels and the cabins for leisure purposes. By offering these new activities, we aim to increase our guests' transaction size and basket size.

The cabin.

Entering new markets is more difficult as it involves understanding local regulations, finding strong local partners, and growing our brand from scratch. We are currently doing due diligence in a few countries to ensure our next market entry is successful.

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To stay up to date on the latest with Bobobox, follow them on X and learn more about them at Bobobox.

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