ChapterIVResultandDiscussion Inthischaptertheresearcherwillprovideanalysisaswellasanswerstothe3research questionsthatwerediscussedintheprevioussection.Theoutputofthisanalysisis confirmationoftheanswertothecausesofdibimbing.id'slossesoverthelastalmost2years, thendevelopingastrategyforanewprofitablebusinessmodelforDibimbing.id,and implementingaplanaswellastestingseveralfeasiblesolutions. IV.1UncoveringtheFoundationalofBusinessChallengesfordibimbing.idspecifically relatedtocoststructure Financialproblemsforstart-upsarequiteabigthreat,especiallystart-upsthatneedto scaleupattheproductlevel.Financialproblemsareofcoursecausedbymanythingsranging fromuncontrolledcosts,lowgeneratingsales,topoorcashflowmanagement(Sapirietal., 2022).Inthecontextofdibimbing.id,financialproblemsareanuisancethatisquitean obstacletoitssurvival,perhapsatfirstglancefinancialproblems,especiallythoserelatedto losseslikethoseexperiencedbydibimbing.id,areanormalthing,especiallyforstart-ups whichhaverecentlybeenabletoburnmoneyontheplatform.beginning.However,the prevalenceofburningmoneythatweoftenhearaboutdoesnotapplytowhatdibimbing.idis dealingwith. Console'sProfitandLossReportfor2022andsemester12023showsthat dibimbing.idexperiencedquitesignificantlosses.In2022dibimbing.idexperiencedalossof 4%oftotalrevenuethenin2023semester1thelossincreasedto40%ofrevenue January-June2023(2022-2023dibimbing.id’sfinancialreport).Thisconditioniscertainly quitedangerousfordibimbing.idwhoinfacthavearunoflessthan4years(Financereport, 2023). Dibimbing.id'sfinancialdataalsoexplainsthattherearevariablecostswhichare quiteinflatedbytherevenuegeneratedbythecompany.Someofthecostcomparison revenuesthatcanbeseeninthe2022financialreportincludeCostofsalesat20%,then marketingexpensesat30%,salaryandwagesat40%,andothercostsat14%.Thenfor2023 thecostofsaleswillbe30%,thenmarketingexpenseswillbe40%,salaryandwageswillbe 55%,andothercostswillbe15%(dibimbing.id’sfinancialreportby2022-2023).This conditionisactuallynotinlinewithdibimbing.id'sbudgeting,whichstatesthatsalaryshould 38 beamaximumof30%,thenmarketing20%,costofsalesnomorethan25%,andothercosts amaximumof5%,sothatwecanachieveaprofitof20%. Table4.1PercentageCosttoRevenuein2022and2023 2022 2023 Classification Revenue Percentage costto revenue ClassificationRevenue Percentagecost torevenue CostofsalesIDR24,578,765,42120%CostofsalesIDR28,753,299,38730% MarketingExpense 30% Marketing Expense 40% Salariesandwages Expense 40% Salariesand wagesExpense 55% OtherExpense 14%OtherExpense 15% Total 100% 104% Total 100% 140% Lookingagainatthepercentageofcosttorevenueabove,itcanbeseenthatthereare differencesinallcostcategories,butthemoststrikingisthecostofsales,thenthecostof salaryandwages,andfinallythemarketingcost.Dibimbing.id'sfinancialdatafor2022and 2023alsoshowsthattheincreaseinthecostofsalesliesinthehighcostofmentoringor teachingincohortclassesprovidedbydibimbing.id. Financialdatafor2022and2023showsthatmentorfeespersession(2hours)are1.9 millionforcodebootcampproducts(datascience,frontenddevelopment,business intelligence,anddataengineer)and1.7millionpersession(2hours)fornon-codebootcamp products(Digitalmarketing,UIUXDesign,andproductmanagement).Thisprovisionoccurs becausealltheclassesdeliveredareliveclass-basedbymentorsinquitealargenumberof meetingsin1cohort.Anotherreasonalsoliesintheclasssizewhichhaslimitsineachcohort (FGDwithproductoperations,2023). “gakmungkinbisabanyakkak,kitatetepjagakualitaskelaskanpokoknyamaksimal 30-35dehlebihdariitupastikelasudahgakmaksimaldantimoperationgakbakal bisaachievetargetquality”(InformantVe-BootcampManager) "It'simpossibletohavealotofclass(quotas),westillmaintainclassquality,the maximumis30-35,morethanthattheclasswilldefinitelynotbeoptimalandthe operationsteamwon'tbeabletoachievethetargetquality”(InformantVe-Bootcamp Manager) 39 Thelimitednumberofstudentsinthebootcampcohortandcombinedwithrelatively largeteachingcostsmeansthatdibimbing.id'scostofsalesisnotinidealconditions(FGD withfinancemanager,2023). “akuudahbilangberkali-kalidisyncmeetinginiproporsicostkitaudahgakbener expenses-nyagrowcepetbangettapirevenuenyaagaklambat,banyakyangover budgetjadikitahampirselalurugisetiapbulan”(InformantN-FinanceManager) “I'vesaidmanytimesatthissyncmeetingthatourcostproportionsarenolonger correct,expensesaregrowingreallyfastbutrevenueisquiteslow,manypeopleare overbudgetsowealmostalwaysmakealosseverymonth”(InformantN-Finance Manager) Furthermore,regardingthecostofsalaryandwages,inprinciplenocompanycanrun withoutemployees,butsalarycoststhataretoolargealsoindicateconditionsthatarenot goodforthecompany.Inthecontextofdibimbing.id,salarycostsandwageswillreach40% ofrevenuein2022and55%in2023.Thisfigureiscertainlyquitedangerousfor dibimbing.id'sfinancialcondition.(Interviewwithfinancemanager,2023). “inibahayalohkakzakyharusadayangperubahanmajor”(InformantN-Finance Manager) “ThisisdangerousKakZaky,youhavetomakemajorchanges”(InformantN-Finance Manager) Takingadeeperlookatthegrowthincostofsalaryisduetoservicecompanies requiringquitealotoftouchpointsinanefforttomaintainservicequalityandstudent satisfaction(FGDwithCPOdibimbing.id,2023).Furthermore,CPOdibimbing.idalso explainedthatinlinewiththeadditionofstudents,theneedformanpowertofillthesetouch pointsisalsogreater. “Iniudahconcerndarilamakalocohortkayakginipastirequirebanyakorang, gimanalagikaloserviceindustrykayakginihumansepentingitubuattetepjaga kualitaslayanan”(InformantAl-CPOofdibimbing.id) “Thishasbeenaconcernforalongtime,ifacohortlikethisdefinitelyrequiresalotof people,whatelseiftheserviceindustryislikethis,peoplearethatimportantin maintainingservicequality”(InformantAl-CPOofdibimbing.id) 40 ThiswasalsoconveyedbytheHRmanageratdibimbing.idduringtheFGDthatas newproductswereadded,hiringusuallyneededtobedoneandintermsofportion,the operationsteambecamethelargestteam.Furthermore,CTOdibimbing.idduringtheFGD alsoexplainedthatseveraltimesthetechnologyteamhadtriedtoreducehumantouchpoints andreplacethemwithautomation,butthecurrentautomationwasonlyabletoreducethe workoftheoperationsteambutnoteliminatethehumans.Thisisbecausestudents' preferencesinusingtechnologyarestillverylimited,buteffortstoreducemanpowerwill continuetobecarriedoutbythedibimbing.idtechnologyteam.Anotherimplicationofthis ideaistheadditionofmanpowertothetechteamwhichofcoursealsoincreasesthecostof salary,especiallyasthetechteam'ssalarytendstobehigherthanthesalaryofotherteams. (FGDwithHRmanager). “pokoknyakaloadalaunchingpastivegilangsungkirimrequesthiringmakanyaporsi timoperationteamselalubanyakkak……………….menyambung kakWildantadimakin kakakpengenmengurangijumlahoperationdengantechsecaralangsungkakakjuga nambahcostsalaryditimtechapalagigajimerekakanpalinggededari(standart) semuadivisididibimbing”(InformantM-HRmanager) “Basically,ifthereisalaunch,Vegiwilldefinitelyimmediatelysendahiringrequest, whichmeanstheoperationsteam'sportionisalwayslarge........continuingWildan,the moreyouwanttoreducethenumberofoperationswithtechdirectly,italsoincreases salarycostsinthetechteam,letalonetheirsalariesarethelargestof(standard)all divisionsatdibimbing”(InformantM-HRmanager) “kitaselalunyobabuatreducehumantouchpakesystemkitacumansomehow orang-orangdiindoitutetepmaunyaadakehadiranoranggitujaditechgueitu sekaranglevel-nyacumanbisangurangisedikittaskmereka”(InformantW-CTO dibimbing.id) “Wealwaystrytoreducehumantouchusingoursystembutsomehowpeoplein Indonesiastillwanttohavehumanpresence,somytechlevelisnowonlyableto reducetheirtasksalittle”(InformantW-CTOdibimbing.id) 41 Thethirdproblemismarketingcosts.Onethingthatcanbestdescribethissituation canbeseenfromthetypeofproductsthatdibimbing.idhas.Theproductthatcontributesthe largestrevenueatdibimbing.idisbootcampusingaone-timepaymentsystem,thismeans thatalmostalluserswhohavepurchasedthedibimbing.idservicedonotrepurchase.The dibimbing.idbootcampisdesignedtohelpstudentslearndigitalskillswiththehelpofajob connectorprogram,meaningthatwhenstudentsgetajobafterattendingthebootcamp,you canbesuretheywillneverbuytheproductagain,becauseoncetheygetajobthe dibimbing.idproductbecomesirrelevant. Thisconditioncertainlymeansthatdibimbing.iddoesnothaveacustomerbasethat allowsforretentionandrequiresittoacquirenewuserseveryday.Sons(2023)inhisarticle publishedinForbesexplainsthatcustomerretentionisusuallyawayforcompaniestosave onmarketingcostsoruseracquisitioncostsbecausetheyalreadyhaveexperiencewithour products.Likewise,useracquisitionissomethingthatcarriesariskoffluctuatingmarketing coststhatneedtobespent.Thehighmarketingcostsherearecausedbydibimbing.id's producttypewhichisnotdesignedforrepurchasingsoitrequiresacquisitionsinstable quantitiestomaintainthecompany'ssustainability.Dailyuseracquisitionforallproductsis certainlyveryriskyinreducingcostsforthecompany. Anotherproblemthatisalsoreflectedintheanalysisaboveistherevenuefigures whichtendnottoincreaseandareevenverysusceptibletodecreasing(2022and2023 financialreports).Thisstagnantrevenuecanbeexplainedintwoways,firstlybecausethe numberofuseracquisitionstendsnottoincreaseandsecondlythestudentlife-timevalue (LTV)isshortandlow.Lifetimevalueisusuallyusedbycompaniestomeasurehowlong usersstayontheserviceandhowmuchourcustomersspendwhentheystayonourproduct (ButtleandGroeger,2015).Thisshowsthatthehigherthecompany'sLTV,thehigherthe revenuethatcompanycangenerate.Inthisregard,theCOOofdibimbing.idalsoexplained thattheLTVatdibimbing.idiscurrentlyonlyat4-5monthswhichisdeterminedalongwith thelengthoftimetheBootcampprogramlasts(FGDwithCOOdibimbing.id).Therefore,the shortLTVhastwoimplications,namelyrevenuestagnationandthepotentialforhighuser acquisitioneveryday. “programkitakan4-5bulankalodibootcampyakira-kiraLTVkitasegitusama kayakprogramnyasetelahorangdapetkerjayaudahselesai”(InformantAl-COOat dibimbing.id) 42 “Ourprogramlasts4-5monthsinbootcamp,soourLTVisroughlythesameasthe programso,afterpeoplegetajobthenit'sfinished”(InformantAl-COOat dibimbing.id) IV.2BusinessSolution:DevelopanewprofitablebusinessmodelforDibimbing.id, includingchangestothebusinessmodel,valueproposition,andclasssetup. Continuingthepreviousexplanation,thepointoftheproblemisthebusinessmodel designwhichisnotscalableandquitedifficulttobeprofitable.Abusinessmodelisamethod ofhowacompanywillgeneraterevenue,identifyingitsproductoffering,valueadded services,revenuesourcesandtargetcustomerstosustainitself(StraussandFrost,2014; Turbanetal.,2012;Chaffey,2015).Abusinessmodelthatproducessustainabilityisquite difficultformostbusinessestoachieve,whichiswhyitisnotuncommonforacompanyto modifyitsbusinessmodeltocontinueprovidingaddedvalueforusersandofcoursegrowing asacompany. Inthecontextofdibimbing.id,theexistingbusinessmodeldoesnotprovidesecurity fordibimbing.idtocontinuetosurvive,someoftheimplicationsoftheexistingbusiness modelaspreviouslyexplainedarehighcustomeracquisitioncosts,lowlifetimevalue,high operationalcostsanduseracquisitionwhichislimitedbycohortsystem.Asmentionedby BalboniandBortoluzzi(2016),companiesmustadapttochangesinbusinessmodelsthat enablecompaniestobemoresustainableandrelevanttowhatusersneed.Reshapinga BusinessModelcanofcoursebedoneinmanyways,oneofwhichisthroughadesign thinkingframework.TimBrown,CEOofIDEOalsomentionedthatDesignThinkingisboth anideologyandaprocess,concernedwithsolvingcomplexproblemsinahighlyuser-centric way,Designthinkingisahuman-centeredapproachtoinnovationthatdrawsfromthe designer'stoolkittointegratetheneedsofpeople,thepossibilitiesoftechnology,andthe requirementsforbusinesssuccess. AdoptingtheDesignThinkingFrameworkutilizeselementsfromtheindividual’s toolkitlikeempathyandexperimentationtoarriveatinnovativesolutions.Ittransformsthe waydibimbing.iddevelopsproducts,services,processes,andstrategy,whilebringing togetherwhatisdesirablefromahumanpointofviewwithwhatistechnologicallyfeasible andeconomicallyviable. 43 IV.2.1PhasesoftheDesignThinkingProcessforNewBusinessModel Atthisstagetheresearcherwillanalyzethebusinessmodelproblemincludingits implementationplanusingtheDesignThinkingframeworkasexplainedbyBrown(2008) whichincludesEmpathize,define,ideate,prototypeandtest.IV.2.1.1Empathize IV.2.1.1.1NatureofReport Inthisempathyprocess,theresearcherdidseveralthings,includingobservingthe businessprocessesatdibimbing.id,theninterviewsviazoomwithexternalpartiesat dibimbing.id,namely2hiringpartners,2mentors,and2alumniandstudentswhichwere conductedprivatelyandseparately.Aftertheinterview,theresearcherconductedanFGD withinternaldibimbing.idwhichwasattendedbyBootcampmanager,productoperation code,productoperationnoncode,learningdesignercode,learningdesignnoncode,sales manager,performancemarketer,Chiefofproductofficer,Chiefoftechnologyofficer,Talent supportmanager,HRmanager,financemanager.Separatingthediscussionspacebetween internaldibimbing.idandexternalpartiesfromdibimbing.idtoavoidlimitationsin discussionsbybothexternalandinternalpartiesbecausetheinterviewcontentleadsto mattersthatareprivateandconfidential. Theselectionofparticipantsisbasedontherelevanceoftheirroletothebusiness modelthatisstillbeingimplementedbydibimbing.id.Mentorsactasteachersinbootcamp learning,studentsareofcoursepeoplewhoexperiencetheservicesprovidedbythecompany, thenhiringpartnersarethepartieswhorecruitdibimbing.idgraduatesaftercompleting dibimbing.idstudents'courses.Internalpartiesatdibimbing.idarepeoplewhoaredirectly involvedinprogramdevelopment,programoperation,salesandsupportteams,whichinclude therecruitmentteamandfinanceteam.