Matthew Donohue came to Indonesia to work as a teacher. But he saw a bigger opportunity in the market and founded English Today, an agency for native English teachers.
In this interview to Indosight he explains his unique business model and what makes customers come back to him.
How was English Today started?
I came here in 2000 and started working for English First (EF). I knew that I wanted to stay here and that is why I was looking for opportunities to start a professional body of teachers.
I kept my independence from EF and was contacted by many companies to teach English and when my schedule was full, they kept calling. That’s when I decided – I’m an agent! So I started introducing other teachers to the companies that were contacting me. That is how I made my network of teachers and started English Today.
If you would start your company in Indonesia now, what would you do differently?
Probably nothing! I came here as a teacher so I was at a very low level. If you want to start a business here, you have to understand Indonesia from the ground up. So that’s why I wouldn’t do anything differently – I would start from the ground and slowly build up, step-by-step. That will guard against growing pains or going bankrupt.
Personal appeal of Indonesia
What was your first experience with Indonesia?
My first experience with Indonesia was learning Bahasa Indonesia in Australia. I surrounded myself with Indonesian people, found Padang restaurants, found Indonesian students to practice my Bahasa. I realized I could not live in Indonesia without knowledge of the culture and the language.
I even listened to Slank (ed. local rock band with cult status) and Iwan Fals (ed. local equivalent to Bob Dylan) before I even came to this country.
What made you decide to move to Indonesia?
The first time I came to Indonesia was for traveling. My Bahasa Indonesia was already on a level where I could communicate and travel around by myself.
That was in 1999. It was a time of change and I thought it would be an interesting time to come and start a business. Suharto went down and there was this big transitional period, which is still going on in a way.
How long do you plan to stay in Indonesia?
Sampai mati [until death]. (smiles)
My wife is from Sulawesi and we have children here so I will stay… until the end, I guess.
Hopefully I will get more opportunities to travel between Australia and Indonesia in the future as the business grows, but I’ll be living here.
A unique business model
How has the market evolved over the years?
The market is getting more professional and more customer-orientated. That is the biggest trend here.
Changes in the industry have made it more difficult to hire teachers because they have changed the regulations and made it a lot stricter. While the demand is growing very quickly, the ability to find good teachers is not growing at the same speed.
The biggest issue by far is the legislative obstruction. If we go to Japan or Korea, it is very easy to get a working visa and start working in these countries as an English teacher, but in Indonesia it is far more difficult.
So how do you counter this issue?
We have a unique business model.
Most companies work on what I would call an 80-20 principle. Which kind of means – very roughly speaking – 80% goes to the company and 20% to the teacher. So the teachers’ salaries are much lower in comparison with their own countries.
In order to get the best teachers I had to reverse that model. I pay the teachers almost 80% and take 20%. That is the only way I keep the talent and word of mouth works from there.
There is a high demand for native speaking English teachers and we actually put the names and profiles of our teachers up on our website. Putting them above the brand, so to speak, is a big advantage. People know what and whom they are getting as opposed to signing up and hoping for the best.
Where do you see the market in the near future?
I see it possibly going towards the Korean education market. In Korea, they have a unique system where teachers become almost celebrities. They are very well respected in their country. An English language academy will actively recruit the best teachers and offer them various packages.
As opposed to Indonesia where they get told ‘this is your salary – take it or leave it’, over there it’s ‘let’s negotiate’. It is almost like a soccer team where they constantly try to recruit the best players.
I see it going in that direction in the future. A system where teachers become more sought after and the companies will have to chase them.
So it is going to become a very competitive model?
A very competitive model, yes. You have to attract the best teachers and if you cannot – your brand will fall down.
Future and dreams
Where do you see English Today in the next five years?
I hope to see English Today not only focusing on language training but also more on soft skills such as sales skills and English for marketing.
What are the biggest challenges for your company?
The biggest challenges are marketing and brand awareness because our business model is the reverse of everyone else’s. We have to cut down on some budget areas that we cannot fund.
We focus on internet marketing and word of mouth. Because our model gives us good teachers, the word of mouth does come back and we get re-signings continuously. It works out well.
The best promotion is our performance itself.
What would you advise foreign investors to look out for prior to investing to Indonesia?
I would advise them to understand the culture very well. Work on personal relationships, be as fluid and flexible as possible, and understand that they have to adapt to their environment. You cannot force change in Indonesia – you might be able to influence change but not force it.
If you could choose any other industry besides your own, which one would you choose?
Customer service industry combined with technology.
The rise in internet speeds and problems of traffic in Indonesia means delivering products using the internet you could provide a superior service. It would provide better customer service at lower prices because we would not have the same expenditures as bricks and mortar businesses.