With her two partners Muhamad Lukman and Yun Hariadi, Nancy Margried created Batik Fractal, a Bandung-based company that produces both groundbreaking news software that can create batik motifs, as well the batik cloths designed by this innovative software. The global creative industry immediately fell in love with Batik Fractal and its potential, bestowing awards and grants upon the small start-up. Margried recently talked to The Indonesia Network about the entrepreneurs’ next challenge: how to obtain more government support and international investment in order to help the business meet its true potential.
Indonesia Network (IN): You were working as a marketing consultant, and your partners are a mathematician and a graphic designer. How did three very different people get together?
Nancy Margried (NM): I think it has something to do with Bandung, which is a melting pot. Bandung is a small city and you can meet people easily. I met Lukman first, when he was presenting his architecture and mathematics exhibit. I said to him, No one is going to understand your exhibit if you don’t explain what it is. So we started talking, and he introduced me to Yun, who is a mathematician. I would get confused when they talked, so we would bring our laptops. Luki (Lukman’s nickname) was working on his dissertation then. While talking to us, he drew some flowers with a mathematical equation. I said, this is pretty, it looks like Batik. And he answered, Maybe there is a mathematical equation for this, let’s do a research on it. I told him, this can become a big project, even though we didn’t know how to go about doing it.
So we started talking to the experts. We gathered hundreds of batik samples; some we photographed, others we scanned. Then we applied a Fourier analysis. We thought at the time, how great it would be if a software program could make batik designs. None of us were software programmers, so we asked some friends from ITB (Bandung’s Institute of Technology) to help us design the software.
Shortly after, on a whim, we submitted our software program to the Generative Art Conference in Italy — and they called us! We were in a tailspin. So we started consultations with traditional pattern experts, with mathematicians, because we needed to make it valid, that batik Indonesia has a mathematical basis.
At the end of 2007, Lukman went to Milan. When he returned, we continued our work towards making this a business. None of my partners knew how to sell anything, so I am the one who does the business part.
We are now raising more funding so that we can produce more sophisticated software. The software we presented in Milan was not even the beta version, but the alpha version, so it was very simple but difficult to use. Now we have more advanced software, and we are always improving it.
IN: Technology giant Intel chose Batik Fractal as its ‘ambassador’ in Indonesia. How did that happen?
NM: Intel has a worldwide campaign, and in Southeast Asia, it is Indonesia. It is a marketing campaign and the theme is: visualize. So they made a video about Batik Fractal, which will be shown on youtube, and at Intel road shows.
IN: Why didn’t Intel invest in Batik Fractal?
NM: Because they do not invest in Indonesia. They are here only for marketing and selling.
IN: And how much investment do you need?
NM: I have 2 proposals: one for software, and the other for batik products. We don’t need a big investment, about USD $100,000. Because the software can be used for other products, we are not just making batik cloths, but also shoes, even leather shoes, with a laser application. We can also produce furniture. Wood furniture, which is then designed with a batik motif by laser application.
Now, our motif is being used at the Jakarta Stock Exchange. They want to build an information center, and the motif is used for their interiors and for their digital art. Our motif is also used for seat covers on trains, produced by PT KAI. So there are so many things we can produce with this software because we have the technology. The software can also be licensed overseas.
IN: Are there companies licensing this software overseas?
NM: Not yet. That is the difficulty of running a business in Indonesia. We really have to start from scratch, because we have no money. There is no venture capitalist culture yet in Indonesia — only Mekar is doing it. There is so much money in Indonesia but we don’t know where it is and how to access it. The government has so much money for micro-credit, but we can’t access it. And the banks also don’t have very many programs for small businesses. They have a credit program but they still demand collateral. They ask me, how much land do you have for collateral? So if you are a business that starts from scratch, and you don’t have any other capital other than a cash deposit, they just won’t talk to you. Now the government is saying, they are encouraging entrepreneurship, so all the departments have a vision of entrepreneurship development. But we don’t know if this is really happening. Just like how every department supposedly has a creative industry department, but we don’t know what direction they are taking.
Last October, I was invited to go to Paris for the G-20 Entrepreneurs Summit. They appointed me as a delegate. So I contacted the government and asked, can you support us? They answered, we don’t have any money. The Trade Ministry, the Industry Ministry, the Small and Medium Business Ministry, even the West Java Governor’s office — they all said no. The Deputy Governor gave me rp. 5 million (USD $580). That’s not enough for a plane ticket.
Now our business is running, but it can run better with more investment. We have a customer base now, but we are going to enter a new stage where we will need investment to go to the next level.
IN: What are the reasons for the obstacles with the government?
NM: The infrastructure is not quite there yet. In order to establish a company, it took us almost two months.
IN: Is there any interest overseas in Batik Fractal?
NM: If I was able to promote Batik Fractal overseas, surely there would be interest, especially in the technology. The software is not expensive; the license is only USD $450, and that’s for forever! Even at that low price, it has been tough selling it in Indonesia.
IN: Why is it hard to sell?
NM: Because Indonesians don’t want to pay very much for any software. So the next step is commercializing and patenting the software. We have to patent the software for the overseas market. In Indonesia, there is no patent for software, no copyright. What we patented in Indonesia is the process of creating batik motifs with fractal equations. And that’s still pending — the process takes three years.
IN: Do you think Indonesia will eventually adopt software patenting and copyrights?
NM: Well, Indonesia’s economy is still based on natural resources, not on ideas. Intellectual property is still undervalued here. But that’s what we are selling: intellectual property.
IN: Legendary batik artist Iwan Tirta criticized you, saying that it is bad for the batik tradition.
NM: The function of this software is to design. We still produce the cloths in the traditional way, with a canting. We do not mass produce batik. We still work together with batik artisans from the villages. The difference is, I show them how to work with computers.
IN: Why was Iwan Tirta so upset, then?
NM: Batik Fractal creates new motifs in batik. Before, artisans created batik with intuition. A traditional artisan would think, oh let’s make a batik cloth with flowers. Then they contemplate about the process, and sometimes meditate, before drawing the flowers. With this software, you bypass this process. If you want to create a batik cloth with flowers, you just click, and out comes the flowers. That’s when the complaints arise, because when we use technology, then the whole mysticism of batik disappears. We are saying, you don’t have to do all that meditation — just click on the patterns and they come up.
Iwan Tirta thought, this software is only for printed batik. And it can be used for that too. But this software can also strengthen traditional batik tulis, because it can enhance competitiveness. You don’t have to copy your neighbor’s prints anymore. Right now, that’s how it works. If one artisan decides to make a batik of butterflies, then all the batik producers design batik with butterflies.
A long time ago, some artisans created batik with a Cinderella motif, even though it’s not a traditional motif — but it’s still batik.
IN: And how do the artisans feel?
NM: Many of them feel, it is easier to print batik. But then what happens to the traditional artisans, the ones who create everything by hand and not by machine? They change professions. That’s happening a lot in the traditional arts.
IN: How many clients do you have?
NM: We have sold around 200 licenses.
IN: How big is the potential market?
NM: The potential is enormous, because the technology is always changing. Photoshop is now at Photoshop 12. Meanwhile, we are only at jbatik version 3. Now that there are iPads, we want to make a software for iPads, because the language is different. So just from the technology viewpoint, our market potential is enormous, because we are constantly updating. And if we talk about the pattern aspect, the potential is enormous too. We can use the software for the paper industry, or for the wallpaper industry. The market is huge, but we have to execute our business well.
IN: Is your market mostly in Jakarta?
NM: No. For the software, a lot of our clients are the artisans in Central Java, East Java, West Java, Jambi, Bengkulu. For the batik cloths themselves, our market is mainly Jakarta, because that is where the high-income people live.
IN: Do you have a lot of support from the United States.
NM: Other than Intel, USAID has been supportive. They gave us a considerable grant, and with that we were able to produce quite sophisticated software. Some people joke, we’re an American small company. But to be honest, we were winning awards because of our ideas, not because of our software.
IN: And your relationship with Intel?
NM: They help us promote our software, and we promote their software.
IN: Are your partners still excited about the venture?
NM: Yes. Now we actually have 7 people in the company. The batik production is out-sourced to the traditional artisans.
IN: How can the government help more?
NM: Well, for one, the regulations seem to always be changing. Or the Director General of a department is always changing. So sometimes government assistance is not very smooth. And they don’t seem to understand what the creative industry needs. For example, if we, as part of the creative industry, needs to contact our government counterpart, we don’t know who to contact or whether that person exists. Another example is that the creative industry needs an actual physical space for joint exhibitions. This does not exist yet either, or if it does exist, we don’t know about it. So the government does not yet understand what the creative industry needs. But hopefully that will soon change.
For more information, check out www.batikfractal.com.