Business model in Africa – The East Africa Business Podcast

The opportunities and challenges of making affordable socks in Kenya

Overview

This week we’re talking with two friends who have set up a business making socks in Kenya.

Both Vidyesh and Bishell grew up in Nairobi to entrepreneurial families, and after education in the UK returned home to begin a business.

They are also friends with Sumit, who featured in the board game cafe episode.

Vidyesh and Bishell decided on socks, as they felt there was a gap in the market and that by starting with a relatively discrete market (school socks) they could grow the business.

It’s a very interesting conversation that goes through the practicalities of building a manufacturing company in Kenya.

One of the challenges they state is, for example, the high cost of electricity, and its unreliability, but also the opportunities that come from getting a loyal customer base in an emerging economy.

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Transcript

Sam: 00:07 Intro.

Sam: 01:51 So we’re here today with Vidyesh, Vidyesh welcome to the show.

Vidyesh: 01:54 Alright, thanks.

Sam: 01:56 So to get started, can you tell us a bit about your business?

Vidyesh: 02:01 Yeah, so it’s a manufacturing business. We manufacture socks and hosiery products. We started the business about two and a half years ago. We sort of looked into the market and identified a sort of gap in the quality of products that were manufactured locally. And we thought we could do it a lot better than what was actually being offered in the market. And then we sort of went ahead and did a bit of market research and found that this is something that’s, something we can get into, something where there’d be a decent return for us and where we could do something better than the, our competitors are currently doing.

Sam: 02:39 Very cool. Okay. So mainly socks, is the thing you’re doing, like why did you choose socks of all the things?

Vidyesh: 02:46 I think it’s one of those products that everyone will always need so they’ll, I don’t think demand for it will ever die down. So yeah, but although that being said, we manufacture mainly for schools. So 90% of our production is catered for all of the schools in Kenya.

Sam: 03:05 90% of your production is for all of the schools in Kenya?

Vidyesh: 03:08 Basically the schools.

Sam: 03:10 Okay.

Vidyesh: 03:11 Based in Kenya, yea.

Sam: 03:11 Cool. How difficult is it to make school socks?

Vidyesh: 03:15 It’s not, I wouldn’t say it’s like the hardest thing. It’s just finding the right recipe or raw materials testing them and then offering that to the market obviously taking into account the price sensitivities. So of course you can go for like the most expensive raw material, but the market locally, domestically is very price conscious. So then you’ve got to turn around and find something that works and is affordable by the local people, by the local parents. So we went around and, you know, got a bunch of different raw materials, tested them, you know, checked out the qualities, found the one that we were happy with but also was affordable by the local market. And still we are, we do manufacture the highest quality product currently in Kenya.

Sam: 04:03 Perfect. Cool. Okay. So if we take a sort of step back. So have you always had an interest or have you had experience in the textiles industry? How did this come about?

Vidyesh: 04:13 Personally, you know, I mean, as a family, we’ve had businesses in textiles, we’ve had a, we had a textile mill early seventies, and then we then sort of as competition grew, became harder against you know, China and imports coming into Kenya we found that we weren’t competitive, so then we switched from, you know, manufacturing the fabrics into, and then we went into garments. And when I say we, this is, I guess my family. My dad and his brothers and then we’ve been in retail for garments and we did a lot of export back in the day as well.

Sam: 04:56 When you say garments, what does that mean?

Vidyesh: 04:56 You know, shirts, trousers. Yeah, yeah. And then Bashil’s family was also involved heavily in distribution of garments. So there is that background of being in sort of the textiles, garments industry. But in terms of personally, between the two of us, not really. We, I think both of us have always had an interest in manufacturing, in setting up business in East Africa. So we actually were, we both studied in the UK and then you know, I worked out there for a couple of years. Bashil, he studied there further on and then we moved back and we set the business up basically. But yeah, for us, I mean I think there’s a strong interest in manufacturing and not just specifically within textiles and garments but there is a wider interest within manufacturing.

Sam: 05:48 I should note we’ve got Bashil in the room as well and whose sat next to us.

Bashil: 05:53 Hi.

Sam: 05:53 Cool. So, that’s interesting, so you’re sort of, both of your families have had this heritage in producing garments in Kenya. Just out of interest, what were you, what were you doing when you’re in the UK? Were you in…

Vidyesh: 06:05 Yeah, so you want to go first?

Bashil: 06:07 I studied economics, university of Manchester after finishing, I lived in London one year. Did a bit of work experience Vidyesh came up with the idea. So we did both the research on it yeah, I decided to move. He moved a few months earlier. I moved after, three months after him. Yeah.

Sam: 06:32 Alright, so the idea for it came…

Vidyesh: 06:34 Once we were there.

Sam: 06:35 When you put, you weren’t living in Kenya at the time?

Vidyesh: 06:38 No.

Sam: 06:38 Interesting. Okay.

Vidyesh: 06:39 So yeah, for me, I was I went to school in the UK. I had been in the UK for almost 12 years. And then of course after school, went to university of Nottingham graduated. So I studied finance and then I was in banking for about four years. So I used to work for one of the big banks in the UK. It was fun. It was good experience. It wasn’t something that I was going to be doing indefinitely. It was, for us we’ve just always had an interest in going into like entrepreneurship or, and specifically manufacturing so…

Sam: 07:13 You’re like, let’s go ahead and make socks.

Vidyesh: 07:15 Yeah. Pretty much. You know, everyone’s going to need socks. No one’s going to stop buying socks. I mean actually socks are the most common Christmas gift in the UK. So you know, like it’s just one of those things that people won’t ever stop buying unless, you know, we start wearing alternatives. But yeah.

Sam: 07:34 Okay, cool. So let’s perhaps sort of talk a bit about the Kenyan sock market and so what’s the, what’s the current state of play in terms of producers here and yeah, let me just talk on the supply side first, what’s the current situation in terms of producers?

Vidyesh: 07:50 So I guess we can break that down into two segments. There’s the importers and then there is the manufacturers. Importers is a huge diverse sort of there’s many players and the businesses that import socks and hosiery products into East Africa with that, I think the biggest is something called ‘Mitumba’ which is basically second, yeah, second hand clothing. So the Kenyan government many, many years ago formed an agreement with the United States government where we would export garments, finished fabrics to the US but you know, as a bilateral part of that agreement, we were to import secondhand clothing from, from the US and then that slowly grew into Europe, China, India, Dubai. Actually Dubai, funny enough, is one of the biggest exporters of secondhand garments into Kenya and it’s not necessarily that there’s an agreement with Dubai, but it’s more, it’s a, as you say a hub of consolidation from all over the world and then it’s a good tap and it’s comes into West Africa and East Africa and Kenya. So we’ve got a huge secondhand clothing market and there’s a lot of socks there and then of course there’s the importers of socks that are then targeted at the middle class market. The middle, I think I should just…

Bashil: 09:15 Also, since many Chinese have moved here, so now instead of secondhand, there are many replicas coming from China as well.

Sam: 09:24 So for example, like if there’s a Ralph Lauren brand…

Bashil: 09:28 So they’ll be much cheaper than the second hand ‘mitumba.’.

Sam: 09:34 Really? The Chinese socks will be cheaper than secondhand?

Bashil: 09:36 Yeah.

Sam: 09:36 Really? Why is that?

Bashil: 09:36 They’re not paying duties or anything on it. It’s brought in illegally basically.

Vidyesh: 09:49 They’ll just fill up their suitcases when they come here and then offload everything.

Sam: 09:54 I see. And that can undercut?

Vidyesh: 09:57 Yeah. So for people who then bring it in legally playing, all paying all the duties, VATs you know, all the freight charges of course they can’t compete against something coming in as a second hand product or also illegally. So there is a, the market is restricted in that way, but yeah, there’s again, like I said, so there’s importers of all sorts of socks. So happy socks are in Kenya, there’s importers of people bringing in happy socks.

Sam: 10:24 What’s happy socks?

Vidyesh: 10:24 Happy socks is actually one of the, I’d say in the last four years it’s become a very big brand. They do very funky, colorful designer, not designer as in like labels, but you know, cool designs, lots of animation and very bright and bold and loud. So it’s actually a Swedish company which gets it socks manufactured in Turkey, but it’s a huge, huge, huge…

Sam: 10:54 So currently they are exporting them to Kenya?

Vidyesh: 10:57 Yeah, so not in a big way because there’s a very limited market. You know, like I said in Kenya you’ve got the low income, the middle market, and then the high end. So there’s a lot of price sensitivity. Those socks would typically be targeted at the high end and then the upper end of the middle, middle class market.

Sam: 11:14 So that’s the imported, what about in terms of local manufacturing?

Vidyesh: 11:20 So there are at least, I’d say a handful of manufacturers five to six of us. We, very few of us will be doing socks for the mass market and that’s because it’s very difficult to compete against the ‘mitumbas’ they are, you know, there’s stuff coming in illegally and also the very cheap, very poor quality products and that’s because of course there’s challenges with logistics. We’re bringing in our raw materials from a country that’s far, far away and then you’ve got a lot of bureaucracy in Kenya, which sort of makes it harder for us. And I guess the other biggest, the very huge important factor for us is the cost of our electricity. So if you compare Kenya to Ethiopia and Uganda and Tanzania our costs are almost double relative to Ethiopia. Yeah. It’s higher than Ethiopia it’s higher than Uganda so for us to then manufacture and compete against some of the varying low cost socks which are coming in is almost impossible.

Sam: 12:38 What percentage of the cost of the sock is electricity? Is it, I mean, is it like 5% or is it, is it relatively significant?

Vidyesh: 12:46 Again, it varies based on the capacities of the factories that are the scale of the factories. But you know, typically I would say actually it’s way high. It’s about 15%.

Sam: 12:59 15%?

Vidyesh: 12:59 Yeah.

Sam: 13:01 The cost of electrricity?

Vidyesh: 13:01 Yeah.

Sam: 13:02 And so if you were in Ethiopia, that would be 7.5%.

Vidyesh: 13:08 Yeah. Or less even. But yeah, a lot lower than us. And you know, that for us is a huge thing. Again the other challenge, and like I said, you know, the logistics side of it historically you could import a container of your raw materials from, you know, anywhere in the world and it would dock at, the ship would dock at Mombasa port, and then you can put your container onto a truck and bring it directly to your factory, which was, it was done within five days. So five days from landing at the port, it would be in your factory, whereas now, yeah, three to four weeks.

Sam: 13:49 Three to four weeks? Why is that?

Vidyesh: 13:49 Yeah. So it’s a double edged sword, this one. But basically, there was an SGR that was built.

Sam: 13:58 This is the train?

Vidyesh: 13:59 The railway. Yeah. And of course for it to become feasible, there needs to be volumes moving on it. And so there was a blanket rule that was placed by the government that said any importers what not. Yeah. Any importers outside of Mombasa. So Nairobi, any other place outside of Mombasa, have to put it on the SGR. Now the SGR is, you would think that it would be cheaper than, you know transporting the containers on a truck but it’s actually a lot more expensive. So because of these certain factors we are slightly uncompetitive relative to manufacturers, you know, based in Asia other parts of Africa.

Sam: 14:47 I mean, I imagine that would have been, they would like the government or whatever would have known. Okay. If we’re going from a truck system to a train system, there’s going to be a bit of a shift in prices, is it always going to be the case or is it that there just needs to be other infrastructure?

Bashil: 15:07 They’re trying to recover the cost of building the SGR.

Sam: 15:09 Okay. So they’re just saying regulation, you must do this and the price is as is so they can recoup the cost. The people who are feeling the pinch are…

Vidyesh: 15:20 Everyone who’s importing anything and yeah, because for us, again a lot of the raw materials that we use are not manufactured locally in Kenya so we don’t really have an option so we have to import it, and then we obviously manufacture here, but I think for us, the two biggest, those are like our…

Sam: 15:42 The two big challenges.

Vidyesh: 15:43 Yeah. Of course with the delays, drops in production in the factory and…

Sam: 15:54 Yeah. Is this a bit more unpredictable?

Vidyesh: 15:57 Yeah, I think, like I said, the bureaucracy and red tape that is, it’s kind of the…

Sam: 16:04 Yeah. Right. Well, those are some fairly significant challenges. Talk about talking about the upside, like what’s the, what’s the positive thing?

Vidyesh: 16:12 So of course like doing business anywhere in the world I think is fun. It’s exciting, there’s a lot to learn you know, it’s always it’s nice to kind of make changes in other people’s lives. So, you know, we’ve got a staff of 35 people and they, they have families that depend on them. So it’s always nice to know that, you know, you’re kind of indirectly improving other people’s lives and of course for us, you know, started from where we are and we’ve grown and grown and grown. So it’s actually a very exciting journey for us. And along that journey we’ve learned a lot and understood the market and you know, understood how to get better at what we’re doing you know, of course without compromising the quality of the product. So for us it’s always we want to manufacture something that’s going to be very, very good, if not the best but always sell it at a very affordable price to the, to the mass market, to the local market, our target market basically.

Sam: 17:08 And how, how big do you think this market is?

Vidyesh: 17:11 I wouldn’t say it’s very big because like I said to you, our we have, we don’t have a very big factory, but 90% of our production is purely for schools.

Sam: 17:20 I’m not quite sure what the best way to like gauge capacity, but like how many socks are you producing in a year. What’s the, what are some of the ways in which you…

Vidyesh: 17:30 In a in a day we do again, it depends on the type of socks that we manufacture, but typically we could potentially do about 2,400 pairs of socks a day.

Sam: 17:44 Okay.

Vidyesh: 17:44 Yeah.

Sam: 17:45 Right. And those are, then maybe we’ll get more into that, but okay. You’re current 2,400. Is that after the, my impression of manufacturing is that sort of capacity goes in steps rather than in a straight line. Is that, is that kind of your capacity or is it something where you could quite easily?

Vidyesh: 18:06 So for us, we’re almost running at 95% of our capacity on those numbers. We would, we are looking at bringing in new machinery and then of course we’ll be able to do a lot more, but also that helps us because then we get economies of scale. So the more machinery we have, the more output we get and therefore our unit costs also drops. So again, I wouldn’t say it’s like, it’s a simple equation where the bigger you grow, the lower your cost becomes. It does kind of stagnate at some point before us were acquired, you know we’re in the infant stage so to speak. And so we’re finding that sweet spot where the more output we get, you know, the more we can split our costs across that and become a little bit more competitive, but not enough to still fight the illegal imports and the imports and all sorts of stuff.

Sam: 19:00 Okay. What sorts of startup capital was necessary to, to get this going? You don’t, you don’t need to sort of say specifics, but just rough figures.

Vidyesh: 19:12 We put in about, I think $750,000 into the entire project. Yeah. And then of course now it will be, as we grow, we’ll be putting in more and more. Yeah.

Sam: 19:23 And so you’ve sort of said you’ve got the double whammy of high quality and affordable price. Does that mean your margins are quite thin?

Vidyesh: 19:35 Yeah, right now our margins are thin because we’re still you know, our brand is still quite new in the market, so we’ve got to stay lean. We’ve got to keep our prices low so that people, you know, sort of accept the product. And then with time, I think once it’s been accepted, they will turn around and say, okay, we’re confident in the plan will buy it. So the price sensitivities will remain, but our penetration will be higher basically. And, and then there’s a knock on effect into the neighboring countries of Uganda and Tanzania.

Sam: 20:11 Okay. How do you brand yourself?

Vidyesh: 20:14 H and F.

Sam: 20:14 H and F?

Vidyesh: 20:15 H and? F, yeah. So we’ve got a couple of other brands in the pipeline as we’re growing, we’re bringing in new machinery. We are going to be launching a couple of new designs, different types of socks. Like I said, predominantly right now we’re just doing schools. So our school brand is H and F, but you know, when we do launch our new products in the pipeline, they are going to be new brands coming in for those. Yeah.

Sam: 20:37 How did you land on H and F as your?

Bashil: 20:40 It’s our grandparents initials.

Sam: 20:42 Your grandparents are friends as well?

Vidyesh: 20:44 They might’ve been, we’re not too sure, I don’t think so. I don’t think they are. Yeah, we are. We are at some, there is some connection between the two families but yeah,

Sam: 20:54 But why did you choose your grandparents initials and not your initials?

Vidyesh: 20:59 So again, okay, now I guess it’s an important point that we, like we discussed earlier, our families have been in business in Kenya for, you know, mine since the 1940s and yours around about the same time before that. Yeah. So because of that there is people, I wouldn’t say people, but a lot of businesses are aware of who our families are. And so we wanted to capitalize on that from the marketing point of view, from sort of market penetration point of view because it’s easy to leverage on that and you know, and get cross sells and new introductions. So that was kind of the thinking rationale behind…

Sam: 21:47 Anytime your grandkids will be using your initials. Okay. So what, so you’re currently making 2,400, you have the ability to make 2400 pairs of socks a day. What happens when they leave the factory? Where do you…

Vidyesh: 22:09 Yeah, mainly it’s retailers and distributors and wholesalers and then they turn around and sell it on to, so the retailers of course and customers, but the wholesalers will then, it might go to another wholesaler or another distributor by the time it gets to retail, but ultimately we’ll end up at a retailer.

Sam: 22:31 Retail is just like a shop?

Vidyesh: 22:31 Yeah.

Sam: 22:35 Has it been straightforward to get into these retailers?

Vidyesh: 22:39 It was difficult in the beginning. The market in Kenya is not one where, you know, if you offer something that’s cheaper at a lower quality, sorry, at a better quality it’s not necessarily that they will go for it. So like I was saying to you earlier, our product is the cheapest in the market right now and it’s the best quality. So we’re offering a Mercedes Benz at the price of a Toyota but you know, the market here is a bit different in the sense that they’re skeptical. So it takes time to sort of assure them. And it’s not necessarily that it’s the owners of the businesses that we’re selling to. It’s more the end market user.

Bashil: 23:24 The reason why is because it’s very seasonal. When school starts, parents by socks for their kids for school, so when they go to shop, the process of them going to that shop and it’s really hard for the shopkeeper to explain to them that this is a better quality. It the one that’s at the shop I get at that it’s really difficult for them to explain which one to go for.

Vidyesh: 23:51 They’re used to seeing a particular brand, which they’ve seen there for years, and then they’ll just pick up that brand and go with it. The other thing is also, you know we use materials that are a lot nicer, a lot nicer to feel, they’re more comfortable to wear, but like Bashil said, you know, they don’t always have time to showcase or explain that, but equally, you know, when, when they might pick up our socks, again and compare it to someone else’s but it’s not, it’s, it’s the decision. The thought process is in, you know I’d say a very normal one where you know, you see something that’s, it feels nice if cheaper and you’d go for it. So because of that, it was very difficult for us in the beginning. We also did contract manufacturing, which meant we couldn’t launch our brand immediately after we started the business. So we did a contract manufacturing for about a year.

Sam: 24:54 Why did you decide to do that?

Vidyesh: 24:55 So for us it was good it was one of those things where anything and everything that we made, we’d sell it to one buyer and they would pick up everything that we made in our factory. So it was a good sort of start, a good boost for us. Of course then we faced our own internal challenges and we said we need to get our brand recognized as well you know, customer concentration, there’s all sorts of risks that come along with them having one big customer. So we wanted to just diversify our risks and we said that it’s now, we’re now ready to sort of go in with our own brand and sort of hit the market hard.

Sam: 25:36 How did your buyer take that?

Vidyesh: 25:38 They still buy from us, but they, it’s now just on a purchase order basis as opposed to, yeah.

Bashil: 25:45 Theres a lot of product awareness.

Sam: 25:49 Yeah, I’d say it must be a difficult one because as well, I mean even though the socks are going to be worn by the kids, that’s right. It’s still the parents who are going to making those decisions. I mean, stressful, buying uniforms and stuff for your kids, I imagine is very stressful experience and your side, Oh my God. Just like make this as easy as possible. I’ll have what I had last year, get in, get out. I’m interested in how you try and break that, how you try and break that mold. Like can you go in and do like demos at schools or like what, what’s what are some ways to try and break that?

Vidyesh: 26:27 I think, I think that is one of the ways that we could do it or anything is then we are, we’re kind of limited with time and we’d be too stretched out if we went to individual schools trying to sell the product, we will be sharing the products to the students who may not necessarily have a say but with time what’s happened is that the, like I was telling you we’ve leveraged on our network to give that assurance of a very good quality product. They will then turn around and push our product. So the historic way of kind of selling the product without, you know, really taking time to teach or educate the parents on what, what, what’s available. They starting to do that slowly. And then, you know, the first time a parent buys a sock you know, they’ll see that it lasts a lot longer. It’s a lot more comfortable. So then they’ll buy it again. And what we found then is that the more shelf space we were getting, the more people would, they’re getting, they’re warming up to our brand.

Sam: 27:41 Signals?

Vidyesh: 27:42 Yeah. It’s still difficult, you know, having said that, you know, even though we’ve got now bigger market share than we had last year, it’s still difficult for us to then fight the big guys because their brands are very strong in the market. They’ve been in the market for 20 years or so. So you know, it’s, there’s always that challenge when a newbie comes in to sort of persuade the consumers to shift but with time and with a bit of education that will change. The thing is, as a, as a new business, we don’t undertake any marketing, you know, adverts or commercials it’s quite expensive. We try and stay as lean as possible. So we’re just letting the brand and the quality speak for itself but yeah, it’s like Bashil said people are accepting it. It’s getting better and we’re seeing that and it’s, it’s, it’s getting better.

Bashil: 28:42 The main season in December, January, so about, I think two, three seasons.

Sam: 28:46 School socks were you’re sort of first thing, do you think you’ll soon start going into other types of socks?

Vidyesh: 28:58 Yeah, I mean we’re definitely gonna try it wouldn’t be a big market for us.

Sam: 29:03 What would it be?

Vidyesh: 29:05 So socks for the mass market. So for if you go to like you know, high end retail stores, we might have a couple of very high quality socks in there, but we won’t be able to manufacture something that will be bought by the mass market, you know, anyone that needs socks, we’ll be like, Oh, we’re going to buy H and F socks. No. That’s going to be very difficult, purely just from a price point of view you know, even a difference of 10 shillings for a buyer here is, it’s a game changer.

Sam: 29:38 Is the plan to sort of do do socks until we’ve nailed it and then go into other product lines or we begin to look at other product lines before you’ve…

Vidyesh: 29:49 Yeah, we’ve actually already started looking at other lines. It’s just the thing is we don’t want to jump too quickly. We want to make sure that this business is doing as well as it can and then it’s kind of becomes a cash cow for other businesses that we invest in.

Sam: 30:08 What’s you don’t have to disclose, but you, how do you think about what you do next? Do you think about growing trends in fashion or do you think about the types of products that people buy as incomes rise or similarities in the production process to socks?

Vidyesh: 30:26 Not really, actually. It’s just for what the market requires.

Sam: 30:30 How do you gauge that?

Vidyesh: 30:32 Just understanding the market. So market research, basically speaking to people, how they’re spending the monies. I mean simple things. Just like us last week I was speaking to a couple of guys who were painting a property ours and yeah. It’s like asking them, you know, where do you spend most of your money and how much do you end up saving? And from what you save, what are you spending your money on? So just understanding the, what striving consumerism or and if there’s a better word to use, yeah.

Sam: 31:00 Aspirational?

Vidyesh: 31:00 Yeah.

Sam: 31:03 Okay. So you basically based on that, we think that…

Vidyesh: 31:06 If there’s a gap in the market somewhere where we can do something a little bit better than what is being offered, then that’s something that we would, yeah.

Sam: 31:14 Okay. In terms of what makes a better sock, like what are the, what are the characteristics you mentioned, you mentioned raw materials.

Vidyesh: 31:24 Yeah. So I mean when you wear socks, you, for anyone that wear socks, you know, you don’t want to wear socks that get sweaty. Yeah. You want something like, yeah. And it’s gonna last, no marks on your legs.

Sam: 31:39 I hate marks on my legs, yeah. How many sort of distinct processes are there to go from raw material in to socks out, is it like first you do this then this then this then you’ve got sock, like how many of those things are there?

Bashil: 32:00 So first the machine spins the yarn to produce the product.

Vidyesh: 32:05 Knitting.

Vidyesh: 32:07 And, and it goes, so, Oh yeah, it’s all open. Then it gets linked with another machine, after that it gets checked, if there’s any coils or like if it’s perfect, the yarn is perfect. And after that, it gets boarded and steamed and after that it gets packed.

Sam: 32:32 It gets steamed?

Bashil: 32:32 Yeah, for the shape.

Sam: 32:36 Oh, okay. So the same idea.

Vidyesh: 32:37 So the fibers in the socks then basically you get sort of glued together and this improves their elasticity and also the life of a sock. So it doesn’t loose shape very quickly. So yeah, there’s a…

Bashil: 32:54 Many companies have this process.

Sam: 32:56 Many companies do you have that process? And that means that they are…

Vidyesh: 33:06 Say cheaper.

Sam: 33:07 Elastic. And what is the raw material? Is it wool?

Vidyesh: 33:11 No. So you’ve gotten many different types of raw materials. You can have, wool is one that you couldn’t use. You can use cotton, you can use nylons, you can use polyesters, you know, you can use acrylic yarns. So there’s a lot of synthetic yarns, which are the polyesters, nylons, acrylics, and then you’ve got the natural ones, which are cottons and you know, you’ve got bamboo and you’ve got…

Sam: 33:37 Bamboo?

Vidyesh: 33:38 Yeah.

Bashil: 33:42 It’s like really, it’s one of the best right now.

Vidyesh: 33:42 Yeah. So we are, we’ve actually just trialed bamboo socks and we’ve got some really nice socks that we made for the two of us with bamboo yarn.

Bashil: 33:50 It’s expensive.

Vidyesh: 33:52 But it’s also more…

Bashil: 33:53 Really good quality.

Sam: 33:54 So they just sort of take, cause bamboo’s quite hard, do they sort of soften down?

Vidyesh: 34:01 Yeah, yeah. Yeah. So they break down they pulp it up and then they from fibers, then they spin it into yarns. The thing is with bamboo, you get very short fibers. Whereas like with cotton you can have really long fibers. So harder to make bamboo socks. It’s not necessarily the shortest, but it’s just it’s a harder yarn to make.

Sam: 34:25 Okay.

Vidyesh: 34:25 Yeah.

Sam: 34:26 And what are the advantages of bamboo socks?

Vidyesh: 34:27 So, you know, like the world is becoming more and more environmentally conscious. So for example, cotton requires more water to cultivate. So the same amount of cotton if you take a kilo of cotton yarn and kilo of bamboo yarn, bamboo yarn requires less land and less water.

Sam: 34:48 Okay.

Vidyesh: 34:50 Yeah.

Sam: 34:50 In terms of the, the wearer,

Vidyesh: 34:54 It’s just like cotton, if not better. Yeah. You can’t really tell like, if you give it to someone.

Bashil: 35:00 It absorbs sweat much better.

Vidyesh: 35:00 Yeah.

Bashil: 35:00 It’s breathable.

Vidyesh: 35:04 Yeah. If I gave you a pair of socks between cotton and bamboo and I didn’t tell you what was what, I don’t think you’d be able to tell the difference. But they both nice. They both feel good on the feet breathable, comfortable. One’s obviously more environmentally friendly than the other.

Sam: 35:22 And so, just a few more questions, if that’s alright. That’s interesting, since you, so you said you’ve been going for about two and a half years, what have been some of the biggest insights you’ve, you’ve had since starting?

Vidyesh: 35:37 Wow.

Bashil: 35:38 When we got feedback compared to our competitors, they tell us that the customers like, now just want to buy our product. It’s like a good feeling.

Sam: 35:50 Yeah.

Vidyesh: 35:51 Yeah, I think, I think like again, with the insights, you can break it down into two parts. Yeah, you can for us as a learning experience and you can, I can segregate that into a silo of doing business better. And then also on the other side where we get customer feedback. And so like Bashil said, we’ve got very good product and everyone buys it, Will buy it again and keep buying it. And there’s not a single person that’s ever given us negative feedback on our socks not one that we can recall, like that’s said that to us directly and that’s why we’ve been able to grow year on year. And then on the other side it’s learning about the business and learning about the economy. Cause like, you know, the two of us, we had no experience of running a business in Kenya and so that was a lot of fun. It can get very frustrating at times as well. So I would say that, you know, we discussed well like being in Rwanda, being in Tanzania and being in Uganda, being in Kenya. And if you look at the sort of data which is available on the internet, you know, Rwanda is easier to do business in than Kenya and it’s not necessarily that Kenya is a bad place to do business. It’s just, it has its own challenges. So for us, like there was a lot of learning, you know, how to deal with the bureaucracy, how to get the best out of our people of all of our staff, you know, how to motivate them better.

Sam: 37:22 I mean, have you found any interesting ways to motivate people?

Vidyesh: 37:25 I think for us the main thing is just treat them that the way you want to be treated. I think we just keep them happy. We keep them you know, when there’s something good we can talk about it.

Bashil: 37:40 Of course add some incentives like once they hit theior targets, they get their bonuses.

Sam: 37:43 Okay. And so would you say when something’s good it’s in like we nailed production today, there were no difects.

Vidyesh: 37:48 Yeah. I mean, you know, the more you talk about something that goes well, then everyone just naturally feels better about it. They feel motivated.

Sam: 37:58 And in terms of the incentives, that’s what are some of the targets or metrics that you…

Vidyesh: 38:04 So we’ve got targets that they have to hit every day for each department, you know, packing, plating trimming, linkingknitting itself. So, you know, it can be as simple as giving them a kilo of flour. So either as simple as that.

Sam: 38:26 And is that explicitly made known as in if you beat your target today, you’re getting a kilo of ‘unga.’

Vidyesh: 38:33 It’s not on a daily basis, but yeah, we, they are aware of it. The thing is…

Bashil: 38:39 You can’t just do it for one day, you know, if they hit their targets at least 80% of the month, then they’ll be rewarded with the ‘unga’ or bonuses.

Vidyesh: 38:53 Yeah. They get bonuses, end of month bonuses, all of that sort of stuff.

Sam: 38:58 So that sort of gets them.

Vidyesh: 39:00 Yeah. Yeah.

Sam: 39:01 Has there been anything that surprised you in running the business?

Vidyesh: 39:05 I think for us it was just more how we managed to get into the market and like we’ve hit it really hard and then, you know, we were bullied when we started, you know, there were people who discouraged us from starting, like, why you’re putting up a socks factory. You know, you won’t know. You don’t know what you’re doing you, you won’t be able to last. You know, this is not a job for you guys, but all of those things. And it happens, you know, even with our customers, you know, at one point they said, you know, don’t buy these guys’ socks but we overcame that and, you know, we hit that, we passed that hurdle. And I think for us that was quite nice. The others, I think the other positives, I mean, there’s a lot of course, like the growing the business, you know, seeing our turnover grow year on year that was naturally enough forecasts anyway, but you know, to see that as a tangible result and that’s also quite satisfying.

Sam: 39:59 And if we were to come back, let’s say that again a couple of years time, well, what do you think H and F would be looking like then?

Vidyesh: 40:05 So, yeah. Socks. We want to be the market leaders in East Africa we’re kind of making big strides in…

Sam: 40:11 Just how many songs do you think is, is possible to sell in a year in East Africa?

Vidyesh: 40:17 In East Africa? I mean, I wouldn’t be able to give you a…

Sam: 40:19 Maybe 13 million pairs.

Vidyesh: 40:22 I guess to put this into perspective, right Primal across the whole of Europe sells, there’s a number that I read about 200 million pairs of socks.

Sam: 40:37 200 million across Europe, okay. So imagine, I’m trying to think.

Vidyesh: 40:42 So that’s one company.

Sam: 40:43 Yeah. How many pairs of socks do you buy a year?

Vidyesh: 40:46 So on average people will have like 10 to 15, well, I used to buy 10 to 15 pairs of socks when I used to live in the UK and that generally lasts you. But yeah.

Sam: 40:56 And then there’s, what the general population?

Vidyesh: 40:58 So in Kenya there’s 44 million people. 48 million.

Sam: 41:01 So across the region, you’ve got 150 million?

Vidyesh: 41:05 Across the region. Yeah, probably about a hundred million. Ethiopia, I mean, you take that Ethiopia, so you just look at Uganda, Tanzania.

Sam: 41:12 Kenya and Rwanda.

Vidyesh: 41:14 Yeah. Yeah. Easily Over a hundred million I’d say. But again, you have to remember that not everyone wears socks. Yeah. So you’ve got to, it’s different market segments that you need to then kind of break down into.

Sam: 41:33 Is this the sort of thing where people buy, they buy it fairly regularly so everyone buys more than that on buys. So it’s potentially hundreds of millions of pairs of socks. Obviously you kind of reduce that down, but it’s not like you’re selling some niche products which people are going to buy once and they never buy it. I can see how if you have that brand, it’s something which gets…

Vidyesh: 41:55 It’s something that will keep growing. I think for us more it’s like we want to really get into the export market getting into like shops in the UK, Europe, US, Australia. For us that would be great. I think that’s where now we can really hit volumes. I mean, we can do it in East Africa but it’ll, it’ll be a lot more difficult than…

Sam: 42:18 Yeah. If you’ve got your export markets so cool. And people who are listening, how can they learn more about H and F and sort of the journey that you’re on?

Vidyesh: 42:28 Okay. We was just in the process of developing a website but coming by social Kenya. Yeah, we’ll have a website up in a couple of months. I mean, I’ll share that with you at we don’t really, like I said we don’t really focus heavily on marketing but we relying on just brand awareness and the customer loyalty. Now the customers that we have they’re going to keep growing, but yet in with time we’re going to invest in, you know, social media marketing, have our website up. Just right now our market is quite small in terms of the specific market that we’re focusing on and they don’t necessarily use the avenues that we’re discussing. Where in the future we will have these things. Yeah.

Sam: 43:18 Cool. Well, Vidyesh, Bashil, thanks so much.

Vidyesh: 43:21 Yeah, thanks.

From Uber to call centre: why Flare decided on the human touch for emergency dispatch in Kenya

Overview

In this catch-up episode, I chat with Caitlin who runs Flare.

Caitlin and I first spoke in late 2016, and you can listen to the original interview by scrolling down to the episode named Ambulances.

The premise then was that Flare would become a technology platform to connect people with ambulances much in the way that Uber has developed the model of hailing a driver through their app.

Whilst the vision of providing world-class emergency dispatch services remains unchanged, the company has developed more of a human touch.

As Caitlin and I discuss, a core offering they now have is a 24/7 dispatch hotline where trained medical professionals consult with callers before dispatching them to the appropriate provider.

We also talk about other things that have come from running the business over the past three years.

How they’ve been cautious to not scale too quickly, how large corporates are signing up to the Rescue.co service, and their considerations for international expansion.

The interview takes place in the garden of the Flare house (you may notice a number of companies such as Lynk and SunCulture operate from residential homes) and so there may be some background noise, not least from Koko – the office dog who comes over halfway through.

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Social Media Links

Website: http://flare.co.ke/

Facebook: fb.com/RescueByFlare

Twitter: @RescueByFlare

LinkedIn: https://www.linkedin.com/company/flare-emergency-response/

Transcript

Sam: 00:07 Intro.

Sam: 02:37 Cool. So we’re here today with Caitlin from Flare again. Caitlin, welcome to the show.

Caitlin: 02:42 Thank you so much.

Sam: 02:43 So we first chatted nearly three years ago, would you believe it, and we went through bit of an overview of what Flare was doing, what you were sort of getting set up to do. But yeah, just for people who perhaps haven’t listened, could you just give us a bit of an overview as to what Flare is and what your doing at the moment?

Caitlin: 02:59 Absolutely. So at Flare we are building next generation emergency response systems. So what that actually means is that we’re building 911 for the 60% of the world that currently does not have an existing system.

Sam: 03:13 Very succinct. And that was pretty much, that vision has not changed?

Caitlin: 03:17 That vision has not changed. Definitely, the way that we’ve gone about it has changed. And how, you know, we operate. But as it relates to what we focus on, the vision has been the same since beginning.

Sam: 03:30 Fantastic. And it started off sort of version one, I seem to remember was talking about was there’s a real problem with ambulances, like calling an ambulance in Nairobi in particular and that you’ve got I think it was 43 private ambulance companies. And then if you need to call an ambulance you’d need to go through in theory all 43, and it could be that there’s one around the corner but you don’t give them a call and you are basically looking to aggregate them all together, so that you can call, I think the dream was that you could call one number and then the one that was closest would be dispatched to you. How did that go in building that out, is that basically been built out?

Caitlin: 04:09 Yeah. So from three years ago to today, we’ve actually made that a reality and have today responded to thousands of calls and dispatched thousands of ambulances to patients in Nairobi and also across Kenya. Our fastest response time is four minutes, which was amazing. And it was the exact same scenario that I described where someone calls us distressed and we knew that there was an ambulance around the corner, based on our technology and were able to dispatch. The part that’s changed is that we actually today operate the 24 seven dispatch center. So when someone has an emergency, they do call one single number, that single number routes to our dispatch center. It’s picked up by a paramedic or nurse who triages the call, provides care over the phone and uses our technology to dispatch. So I think the change is that we realized the value of a human in emergency response and that there is absolutely and was opportunity to digitize a lot of it, but there’s still is that value of having a voice at the other end of the call to calm you in some of the worst moments of your life.

Sam: 05:14 Got it. Because the initial awareness was that it was, you know, Uber for ambulances and you’d kind of press a button and, you know, so and so is on his way. So you’ve sort of tweaked the products in such a way that there’s now, when, when you say they call a number, do they call Flare?

Caitlin: 05:33 Yeah, so they call us, our consumer product is called rescue and so they call rescue. So we have a number that is…

Sam: 05:41 Is it like a 07…

Caitlin: 05:43 Yeah, incredibly easy to remember.

Sam: 05:45 What is it?

Caitlin: 05:45 So you are provided it once you sign up as a member.

Sam: 05:47 Okay, very good, so I’ll sign up first.

Caitlin: 05:49 So you should sign up at rescue.co and then you’ll be given the number, but you make that single call. And what we realized again, in the moment of emergency, you don’t necessarily need to download an app or press a button is you just want to call instantly that one number and hear someone at the other end of the line reassure you that you’re going to be okay. That other individual at the other end of the line needs to be enabled by technology such that they can quickly make the right choice. And that’s where our technology is built in, is that it’s on the back end. And it allows our dispatchers to, you know, quickly find the right resource and get that ambulance moving towards you.

Sam: 06:26 Got it. Okay. So when somebody signs up to rescue, they save the number in their phone?

Caitlin: 06:33 Yep. It’s as simple as that.

Sam: 06:35 Alright, very good. And then the dispatch team, so these are employed by Flare or employed by rescue. So you’ve got like a team and it’s 24/7?

Caitlin: 06:44 Absolutely. So we have a team that works 24/7, 365 and is there to pick up your phone and phone call in seconds. And they’re all medically trained and so that they can provide directions over the phone. So if you’re having a heart attack, they can give the caller the step-by-step directions in layman terms such that you can actually provide that care over the phone while they’re also dispatching the ambulance.

Sam: 07:07 Really? So 4 a.m. On a Wednesday morning, you’ve got a trained paramedic on an end of the phone?

Caitlin: 07:12 Absolutely.

Sam: 07:13 Is that quite expensive? To like, I’m thinking, if I’m a trained paramedic, would I want to be at work at 4:00 AM on Wednesdays? Do you have to pay them quite a lot?

Caitlin: 07:21 I mean, we make sure they’re taken care of, but I don’t, I think one of the things is medical professionals here are a little bit more affordable, but at the same time, like we saw the actual value of having someone trained at the other end of the call. Also, because the system here is so fragmented and chaotic, there are more medical decisions to make. In the US or the UK, it’s pretty straight forward. You call 911, they dispatch an ambulance and they know exactly what hospital you’re going to because it’s based on your location. Here, there’s a lot more that needs to be decided, so they need to decide at 4:00 AM on that Wednesday, if you have a heart attack, where do you go? And you don’t know that there’s only one 24/7 facility that has a cardiologist, our dispatchers do. And they can make those decisions using our technology, which helps guide them, you know, to make the best decision. But otherwise, you know, if you just have a nonclinical person, we believe that you wouldn’t have as meaningful of a service.

Sam: 08:18 Makes sense. So is there like a big sort of database of hospitals? If I click this button, click, click, click, click, click, cool, here’s your list of three.

Caitlin: 08:26 Exactly. So it’s based on proximity and then what we say appropriate. So appropriate means does the hospital actually have the service that you need or we suspect you need to provide you that care. So some of it is pretty straight forward. Like if you think about it’s a woman who goes into emergency labor or has obstructed birth, does that facility have the ability to do emergency C section or you’ve broken your ankle, does that facility have an x ray machine so they can actually see whether or not you know, you have a fracture. So it’s some really basic stuff, but all of that is in our system such that our dispatchers are enabled by that technology.

Sam: 09:04 Yeah. I can’t remember if we spoke about this on the podcast or at another time, but you basically had to go out and build that database of categorizations of everything. That doesn’t exist.

Caitlin: 09:14 Exactly.

Sam: 09:14 That sounds like a massive headache if you’re, not headache, but that’s quite job to get around to.

Caitlin: 09:22 It was quite a job, but I would say now because we have a lot of throughput, meaning we have a lot of calls, we’re validating that information every single call, in the sense that if today Nairobi hospital has a functioning CT scan, but tomorrow when we call them for a dispatch, they don’t have a CT scan that will be turned off in our system. So we’re constantly revalidating that information. So once you’ve built out the system, we were able to kind of quickly adapt and kind of adjust. But it is an unbelievably like powerful set of data that no average individual will ever know or understand.

Sam: 09:53 Are you utilizing it just for Flare? Or could you, I don’t know, sell access to that database to another organization?

Caitlin: 10:01 Maybe if the price tags is big enough.

Sam: 10:03 Yeah. Alright. I was thinking like it’s quite a lot of work that you’ve done. And I’m just wondering if there are other ways, if you’re sitting on it, like are there other companies like, I’d really like to be able to tap into this and yeah, maybe you could start like medical equipment leasing or something where you could, if you notice that these particular, sorry, I’m getting off topic.

Caitlin: 10:20 I think for right now, our focus is on just making sure that we provide an unbelievably lifesaving service and that we do that in seconds and we make sure that not only do we save your life by getting you an ambulance, but that we also make sure that you get to the right hospital. That hospital is ready to actually provide you that care.

Sam: 10:36 And you’re also doing fire engines?

Caitlin: 10:39 So we are, so the kind of longer term vision meaning longterm in startup land is like six months, is that we build out our service capabilities such that we can provide, you know, not only medical emergency support but fire as well as security, police so that you can call, just like in the UK where you call 999, they then, you know, triage the call, is this, you know, police matter is this medical. Sometimes it’s both, you know, and so you need both resources. And so that’s the kind of future that we’re working towards is bringing all of those services together.

Sam: 11:13 Yeah. How have the government been, I tend to say, are they sort of aware of what you’re doing? Have you had to like go through some regulations and things if you’re doing this or is it as a private company, are you perfectly legit? Is it perfectly legitimate for you to offer these services which could in other places be done by the States?

Caitlin: 11:31 Yeah, I mean I think that’s an interesting question. I think a lot of countries, actually you think of it as a public service, but it’s actually offered by a private provider. So I’ll give you one European country, Denmark. And it’s, actually the largest providers called Falck and they’re a private provider. So I think there is actually a lot of historical precedents across the globe…

Sam: 11:50 That’s a medical or fire?

Caitlin: 11:51 Ambulance.

Sam: 11:53 Ambulance, ok.

Caitlin: 11:53 And so they do that. I think here we have engaged the government at a national level. So as probably most are aware in January there was the terrorist attack. And so I think another big use of our system is that during a mass casualty or a natural disaster, this was not obviously a natural disaster, but if there were to be a landslide or something like that, the need for emergency services is heightened. Like, you know what only need one ambulance, you might need dozens. And so from that level we’re starting to work with them to figure out how do we plug into that system because we are the largest provider and network of ambulances. And so we’re actually best able to provide that support. So at a national level, we’re working on that. And then Kenya is divided into 47 counties. And every single County manages their own emergency response. We’re starting to work on a pilot basis with some governments to understand how we could best work with them.

Sam: 12:51 They’re basically saying, we’re currently trying to do this on our own, but we could just use Flare, and that basically take that problem away from us.

Caitlin: 12:58 And it would, yeah, help optimize their services, make them more accountable, give them the data that they need and be able to provide a service back to their constituency.

Sam: 13:06 Okay. So who are the main customers of Flare at the moment? So is it mainly just consumers, you know, individuals that are paying for flare?

Caitlin: 13:20 Yeah. So the individuals pay for it through the rescue.co membership. So you can sign up at rescue.co.

Sam: 13:25 Yeah.

Caitlin: 13:25 And it’s 2,400 shillings per year per person. It gets cheaper as you add on additional family members, but that includes everything. If you ever have an emergency, you never pay for the ambulance. And so the brilliant part about that is…

Sam: 13:37 We never pay for that? Cause you were saying before, it’s like anywhere up to a hundred dollars.

Caitlin: 13:41 Exactly. So we lowered the price so that a membership, because we know that every year you’re not going to experience an emergency and you should never think twice about having our product, you should always have it.

Sam: 13:52 Yeah.

Caitlin: 13:53 And so when you have an emergency, we don’t want to ever have to collect or ask you for money. Cause if you can imagine that you’re like choking and we’re like, “and our paybill number is 500134, put your account name as your name,” you know, or whatever. Like we don’t have the time to deal with that. And so it’s just a super simple product, highly affordable, meaning that you know, most can actually afford it. Today we sell to big corporates or small corporates. A lot of our clients are schools, factories, taxi companies, anyone who has the likelihood of experiencing an emergency tends to be a good client of ours. But we also sell direct to consumer online so you can buy it as a family or as an individual to make sure that you’re covered.

Sam: 14:33 Okay. So, how did you land on 24, to 2,400? How did you, did you, is there a spreadsheet somewhere of like, Yeah.

Caitlin: 14:45 There is a spreadsheet. So it’s basically a calculation of risk. Meaning how often will you actually need an ambulance?

Sam: 14:51 How’d you get that? How’d you get a gauge for that?

Caitlin: 14:53 Well, so every country is different. And the amazing thing is, is no one has that data in emerging markets or places we’ve never had 911 system. So we’re starting to build that up. So there so our membership prices, you know, may become cheaper or may become more expensive as we get smarter about the actual data. But generally you need an ambulance more likely in the first five years of your life and then in the last 10 years of your life. So there’s a big spread of like little babies and kids and then once you’re, you know, in the last 10 years of your life.

Sam: 15:23 Yeah. Okay. And how many people have signed up?

Caitlin: 15:29 So in total we have over 30,000 members.

Sam: 15:31 Really? 30,000 members.

Caitlin: 15:33 Yeah.

Sam: 15:33 That’s incredible.

Caitlin: 15:34 Yeah.

Sam: 15:34 How have you done that? What have been some of the successes? Have there been any, I’ll rephrase. Have there been any things which like worked surprisingly well or things which worked surprisingly unwell or didn’t work surprisingly well or anything that you were like, this is going to be dead set and it didn’t work. And other things where you’re like, Oh, we’ll give it a go. And it ended up being really good.

Caitlin: 15:54 I think the one strategy that we had is just said, who are the corporates that potentially have the greatest risk? And actually focused on that, which is opposite of what you think of insurance or insurance-like products, it’s usually they want the lowest risk people. But what we realized is that that was a captive market. These are, you know, companies that have experienced an emergency before and maybe it has, likely has not gone well.

Sam: 16:20 Yeah.

Caitlin: 16:20 And so if you look at what are the greatest reasons why you would need an ambulance you would realize that a majority of it is because you’re on the road. So car accidents and so focusing on taxis or mobility companies are a huge, you know, opportunity or factories or schools cause kids are more prone to injury and accidents and things like that.

Sam: 16:42 And does your coverage apply only when they’re during work hours? Was it also when they’re back home?

Caitlin: 16:47 It depends. Depends on like how the corporate would like to structure it. We’re pretty open to like structuring it in whatever way they like. Ideally we would like it to be again, simple such that no matter where you are, whatever time it is, you’re covered. So the ideal is that it covers you 24/7.

Sam: 17:03 Yeah. I imagine also from your perspective you’ve got to factor in, you know, if you’re kind of looking at it from a factory perspective and then someone goes home and like falls over. Exactly.

Caitlin: 17:15 Yeah. So some of it, and it depends on are they casuals, are they full time employees, all that kind of stuff. So we’re, I mean we’re very open to customizing and kind of working with the corporate to find what the best plan is for them.

Sam: 17:26 Yeah. Sounds great. Now, note that we’re currently in the rescue garden and your dog has come over. So if there was any sort of panting or anything in the background, it’s not me, it’s just the dog.

Caitlin: 17:36 It’s the Coco. She’s doing an internship.

Sam: 17:38 Is she? Yeah. Is she gonna get the job. Do you think, what’s your sense?

Caitlin: 17:41 You know, she’s got a couple more months left, but we’ll see.

Sam: 17:43 I’m positive on it, I think. Okay, cool. So you’ve got rescue. Got the fires. Okay. what have been some of the things where you’ve been surprised that the company’s taken this direction? Why, actually I’ll rephrase, what have been some things where you’re like, I really would’ve thought we would’ve been doing this, but actually we ended up not doing it?

Caitlin: 18:06 Yeah. I think one of the things was that, when we talked three years ago, we thought very much we were going to be a SAS product in the sense that we were going to offer this technology and charge our ambulance companies and that was going to be kind of our strategy or that we were going to use kind of like an Uber like model where we take a commission and things like that. And I think that was a big shift for us, just realizing that in emergency the last thing that we need to deal with is money, is that that actually creates an ethical quandary in the sense of do I help or do I not? And just how important that was for us to make sure that no matter what, we always help. So I think that was a big shift and kind of reason that we went to that process.

Sam: 18:48 How did you land on that conclusion? Like was there like a series of team meetings? Was it like you were doing a company away day and you were like Oh my God, this is what it needs to be, how did that sort of…

Caitlin: 18:58 Yeah, one of our, so we’d been stewing over it for a while and one of our ambulance partners was just like, you need to launch this, like it’s time. We actually launched officially during the Kenyan elections in 2017 so the first elections during August. And then between then and the second election, then we had launched the membership product. So we just realized that there was a huge need for it. And that, you know, we had built this amazing network of ambulances and it was time that we finally launched

Sam: 19:25 Get into the world. Okay. How do people react to it? Was there, do people get it or they, did it take a bit of time for people to warm up to what’s going on? Like I’m paying this money but I might actually use it. Was there any sort of behavior changes or things we can say?

Caitlin: 19:43 I think less so. I think that it’s hard to sometimes understand, especially even for myself growing up in a country that has 911 and you never even think twice. But I think that every time we go into a sales meeting or we have a conversation, if you ask anyone, have you ever had an emergency personally or a friend or relative, where you need to get an ambulance? And the question, the answer is always yes because it might feel very rare at an individual level. But at a population level, it’s not rare at all that someone needs an ambulance. And so I think that just the power of like having that experience and knowing what it feels like to not actually be able to get an ambulance really sits with people. And so it’s not a hard product. Most people are like, why didn’t I think of that? It’s, you know, it’s not a thing that you have to really, you know, sell. It does not take a lot to sell, to be honest.

Sam: 20:35 OK.

Caitlin: 20:36 I think that interestingly though, a lot of people have a lot of questions about it cause you know, now that they’ve started to think about it and they have a lot of experience of what didn’t go well when they tried to get an ambulance. So there is some kind of cynicism of like, Oh my God, is it going to really work? But I think the incredible thing is, is like we’ve gotten past that we’ve done thousands of calls and dispatches and there’s tons of proof points and testimonials and stories. And so if you didn’t believe it before, you do now.

Sam: 21:04 Yeah. I was once with my so my friend works for a company that did online surveys and part of their sales pitch was cool, I’ll just right now go on a platform and ask the question and then suddenly be like demo like there and then. I guess you can’t really demo your products in a Live way. You can’t really say…

Caitlin: 21:25 We can do it. But we do a lot of drills. So a lot of times like for some of the corporates they want to do a drill because I mean like a fire drill, you know, it’s always best to plan or like we work you know, with the US embassy to do drills as well. So drills are a good way, but yeah, you can’t really test in the same sense. But I think a lot of it just comes through having the testimonials and having a number of big corporates that have signed up. And so therefore the kind of confidence that if someone else bought it, then, you know, we must be okay.

Sam: 21:57 What would you say is your like sales cycle, the typical sales cycle for let’s say, let’s say you’ve got a pretty big customer. How long would you expect it would take?

Caitlin: 22:05 You know it’s so different. Our biggest thing right now is that we focus just on like really big corporates that we know will be kind of game changers and so.

Sam: 22:12 Yeah.

Caitlin: 22:12 It’s hard to say. It’s not.

Sam: 22:15 I suppose each one’s different.

Caitlin: 22:16 Yeah,

Sam: 22:17 Isn’t it? Okay. And does it basically involve, you going on for meeting, you have a series of meetings. Figuring out the decision makers.

Caitlin: 22:24 Yup.

Sam: 22:25 Yeah.

Caitlin: 22:25 Exactly. It’s pretty straight forward as it relates to that.

Sam: 22:28 What are some of the objections that people have or think maybe not, you sort of mentioned a bit of cynicism around whether it works. Are there any of the parts which people find they need clarification or they’re not clear about?

Caitlin: 22:41 Less than that. I think that sometimes people get confused about us and insurance and so they may say like as a company we have taken out a health insurance policy with Jubilee resolution or whomever and don’t they cover ambulances and that’s the only thing that people sometimes scratch their head on. The incredible thing is, is like sure they do technically, but they have no connection to those ambulances. So there are no more able to get an ambulance than you are yourself.

Sam: 23:08 Yeah.

Caitlin: 23:08 Which is kind of frightening. So a lot of times what we do is we double insure someone in the sense that we’re giving you access to our services that maybe you technically have access to anyway. But the insurance is never gonna help you.

Sam: 23:21 Could you partner with insurance companies?

Caitlin: 23:23 Absolutely. That’s part of the plan.

Sam: 23:25 Very good. Have you had any of those conversations yet?

Caitlin: 23:29 Of course. Yeah.

Sam: 23:30 Are they, are they open to it or do they see it as, why would they, why would they not be open to it?

Caitlin: 23:37 I don’t know why they would not be open to it. I think the only thing is then insurance generally don’t have such a strong touch on the actual service provision. They’re more a financial instrument. And so I think that getting closer to the actual services maybe is just something they’re not used to.

Sam: 23:54 And if, would they, would the dream be take out Jubilee insurance, comes with Flare.

Caitlin: 24:01 Exactly. Yeah. The dream is is that like everyone literally has access to our service that it becomes a national number. It’s recognized by all and whether it’s embedded into, you know, a product, you know, sold by this company or your car insurance, it doesn’t matter. Is that you have access to our system.

Sam: 24:19 Yeah. So last time I was here, I think I mentioned Flare house everyone was around one table and now you sort of spread out a bit. So how many people have you got now?

Caitlin: 24:28 We have a total of 23.

Sam: 24:30 Okay.

Caitlin: 24:31 About a third dispatchers, third kind of general ops strategy and then a third that are software developers.

Sam: 24:38 Got it. Okay. Which is the most difficult section, which is the most difficult thing in terms of like this is the bit which is causing me headaches. Not in terms of the actual employees, but in terms of like the way the workers are?

Caitlin: 24:51 I think the hardest part about the team is just that constant evolutions that we make and is how do you hire the right people that can grow with the company and at the pace of the company? Cause you can’t always foresee all of the needs that you need. So all of the needs that you will have. And so just having that foresight of someone’s like potential and allowing that individual to continue to morph into new roles and positions. And I think that’s a big piece of it because it’s not, every company does it differently. Some people like automatically hire a CFO and COO and all these kind of things. For us it’s very much about emergence of those leaders and that talent. And so how do you hire people with that potential and that are open to also constantly changing their responsibilities and roles.

Sam: 25:40 Have you defined the rescue culture. Have you defined the company culture?

Caitlin: 25:46 It’s a work in process. You know, it’s a lot of, I think, you know, initially, where you could choose, you know, several adjectives or tenants, but ultimately it’s something that evolves over time and it’s more that, you know, what you don’t want to be. And.

Sam: 26:02 So what do you not want to be?

Caitli: 26:05 What we don’t want to be is we don’t, we want, well, we want to remain human is that at the end of the day we’re doing incredibly lifesaving work and to always kind of remember that. So yeah, to keep that kind of passion in us incredibly collaborative is that, you know, that we realize that what we’re doing requires multiple, you know, partners and stakeholders and companies and everything that we do so that we’re never trying to just section ourselves off, is like, it’s always about kind of the power of many.

Sam: 26:40 Okay. And that’s been quite easy to do. Or like how do you kind of test for some of those qualities in people, when you interview them?

Caitlin: 26:48 I don’t know. So that’s what I’m saying. Cause I don’t know, I think that’s the hardest thing is like sometimes I think the easier thing to do is to hire, well, to make sure that you check off the boxes of like, it’s easier to check off technical skills like Kevin A, are they analytical or can they compose, you know, nice emails and texts and stuff like that. Some of those, those skills, it’s easier to test for, but I think the culture is like, you gotta almost have a trial and see, and…

Sam: 27:18 So did you do that? Did people come in for like a week?

Caitlin: 27:22 Yeah. And I think that that’s how you actually see, do they fit and jell. Cause I think what I’m saying is there’s not like a check box of like, do they have this, do they have that, and it’s also like, we’re so complex as individuals. Like it’s really hard to understand all of those things and the dynamics and a lot of it’s also the other people on the team and how do they fit in, and I don’t think we’ve totally figured that out, except that you got to try.

Sam: 27:47 You got to try and just, if there’s a fit.

Caitlin: 27:48 Yeah, yeah.

Sam: 27:50 What are the next employees that you’re going to be, or the next positions you’re going to be hiring for?

Caitlin: 27:56 So I’ve kind of, across the board, we need to increase on all fronts from dispatchers to developers to more people on kind of our ops side to scale. So we definitely believe the lean kind of team. But yeah, we need to kind of add in all of those three spaces.

Sam: 28:14 Get a little bit more fat.

Caitlin: 28:15 A little bit more skim, skim milk,

Sam: 28:19 And the company, funding wise, you’ve obviously stayed afloat and things. Have you, and it sounds like you’re making some good revenues if you’ve got 30,000 paying customers. How’s the company sort of looked from the sort of fundraising perspective?

Caitlin: 28:39 Yeah, so we still, I mean, we’re still growing much faster than you know, our revenue, but at the same time, but our revenue is growing really quickly as well. But we continue to raise from private investors VC funds, have gotten some grants and awards along the way. So externally funded to be able to support the kind of rapid growth that we’re seeing.

Sam: 29:01 Yeah. What were the grants for? Was it just like, here’s some money to keep going? Or was it like, oh, we’d like to do these specific projects, we would like you to do so…

Caitlin: 29:10 Like general funding, not specific.

Sam: 29:12 That’s quite handy, yeah. And then I remember you mentioning that there is a company in India or a couple of companies in India that have been doing something similar and so they’ve been quite useful. It’s been quite useful. Like barometer, barometer is the wrong word, just like idea of what could be going down the line. How have those Indian companies been doing?

Caitlin: 29:34 I have no idea.

Sam: 29:35 Yeah.

Caitlin: 29:35 I’ve totally lost track to be honest. I think one of the things that we’ve just done is like focus on what we’re doing and yeah. Who knows? Yeah.

Sam: 29:43 Nice. I just felt like that kind of makes some sense isn’t it? Like you focused on your own.

Caitlin: 29:50 I think it was like I was curious in the beginning to understand because we were all sorting out some of the same decisions, but I have no idea if like we reconnected and if they’re one, still operating or two, what their business looks like. I’m sure that we’ll cross paths at some point, but I really have no idea.

Sam: 30:08 So I’m just wondering, I can imagine that might be something that an investor asks is you’re doing this quite innovative business model, like has it worked elsewhere? Or are they not really that concerned?

Caitlin: 30:19 No, because I think what we’re doing is we’re building a basic infrastructure that everyone understands is required for growing cities, countries. And that’s not innovative in the sense that 911 and 119 and 999 exists in parts of the world that had the resources and could put that system up. So I think that that’s never a question. That’s the cool thing is we’ve gotten past that stage is everyone recognizes the invaluable resource of having that three digit number to call upon. And regardless of how, what we’re doing of how we did it is we’re using, you know, cloud based technology and we don’t need landline phones to build 911 any longer. And so that’s what we’re doing is innovative as on the tech side. But the actual businesses itself is not the innovative part.

Sam: 31:05 Got it. You say at the moment, currently Kenya or all across Kenya. Views to go elsewhere?

Caitlin: 31:12 Yeah, we’re trying to identify where that elsewhere is. There’s tons of opportunity. I mean 95% of the continent is without 911. So there’s no lack.

Sam: 31:23 Where’s the 5%?

Caitlin: 31:23 The 5% is Egypt, and then Botswana and then parts of South Africa.

Sam: 31:28 Only parts?

Caitlin: 31:28 Only parts.

Sam: 31:29 Why is that? Like local government?

Caitlin: 31:32 Some of the local government outside of the cities, it’s pretty hard to get access to the provincial ambulances. And there’s not like a strong central system, and the cities, it tends to be privately run.

Sam: 31:44 So it will be Africa, it won’t be anywhere else in the world?

Caitlin: 31:49 I think that makes, proximity-wise, the most sense.

Sam: 31:52 Yeah.

Caitlin: 31:52 But there is definitely opportunity elsewhere. But I think for right now we’ll stay closer to home.

Sam: 31:57 One of the things that kind of shocked me, on our last interview, was you saying how like the system you’re building is much better than, or has the potential to be much better than elsewhere in the world, where it’s built on a landline system. I was wondering if there’s going to become a point where countries like Denmark or the UK or Germany are going to pick up the phone and say, can we just use your system even though they already have it, that 911provision.

Caitlin: 32:26 Yeah. I mean that would be incredible. But yeah, I don’t think we’re that far off from being at a place as it relates to our technology that that would be a conversation that we could start.

Sam: 32:35 Yeah. Because is the premise that everyone has a smart phone when they make the call. Is that what is necessary to get the location or kind of, can you get a lot of the benefits from Flare on a smart, on a feature phone?

Caitlin: 32:50 You could, I mean there’s some creative ways to get location information. It depends on how precise you want that location information to be. If you have a smart phone, it’s obviously much better. But even for places like Denmark or the UK that have landline based technology, it’s very difficult for them to get any type of geolocation information from your smart phone. So we’re already kind of lept over that.

Sam: 33:13 Yeah.

Caitlin: 33:13 Because we’re able to pull your geolocation.

Sam: 33:16 And so people, the 30,000 users in Kenya, they are all using it on a smartphone?

Caitlin: 33:22 No, no. So we have a hotline, they just call a number. If they don’t know where they are, we can then ask for their location.

Sam: 33:28 Yeah. And you can identify them.

Caitlin: 33:30 Yeah.

Sam: 33:31 Very cool. Okay. What have been some of like the big lessons you’ve learned, you think over the last few years? Like in terms of either things, which on reflection you’re like, Oh, we should’ve figured that out more. Or just, yeah, just generally things that you’re like glad that you know now, from the last few years.

Caitlin: 33:54 I think one of them is to stay lean and that, as a founder, is to try to do everything in a little way in the sense of really understand the business from start to finish because you can quickly, in the beginning you’re always in the weeds and then you need to quickly get out of the weeds to be able to pitch to investors. But to always have your hand deep in the business as well because I think you could easily lose touch with what’s actually happening because you’re just changing so quickly. And so I think being lean has helped us do that, such that we don’t have a ton of layers, we don’t have a massive team, is that we hire highly skilled, experienced individuals and we try to always kind of stay at the high level but also stay in the detail. I think the second lesson is just that everyone scales in different ways. And I think sometimes the focus is always on one metric and realizing that a business is so multidimensional and just making sure that you confidently, or we confidently kind of tell the story that we want to tell because we ultimately know our business kind of better than anyone. And so making sure that yeah, that you understand how your business is going to scale, but that it doesn’t need to follow the same path as say for example, Uber and that it can follow a very different pathway. And I think for us being in healthcare or preventing an emergency service quality is everything. And so just making sure that you scale at the right pace to show your potential but also don’t ever compromise the actual service that you’re providing.

Sam: 35:27 Yeah. Do you have like some high level metrics that you keep an eye on each month or each week?

Caitlin: 35:33 Yeah, we look at a lot of different things from, you know, number of ambulances on the system to number of memberships to number of dispatches to response time. So it’s quite a complicated number of different metrics to really understand like how are we performing, but definitely something that, you know, we look at regularly to kind of understand are we scaling too quickly, are we not to be able to kind of readjust.

Sam: 35:58 Yeah. Okay. And so just a few more questions, if that’s all right. You said that a long term, for startups along the longterm view is six months. If you were to extend it a little bit further, 12 months, what do you think Flare could be doing?

Caitlin: 36:15 Ideally we’re operating in multiple countries. We’re offering a more holistic emergency response. So beyond medical and yeah, I sleep a little bit more. Yeah.

Sam: 36:34 Okay. All good goals, And at the moment we’re, we’re here in the Flare house. Would you need, are you kind of at capacity here or would you need to, would you need to move to a new location?

Caitlin: 36:46 I think we’ll be good for the next like 12 months. I think if we operate in another country, we will open, you know, an office there. But for right now, I think we’re good.

Sam: 36:55 Yeah.

Caitlin: 36:55 We’re going to try to stay lean as long as we can.

Sam: 36:58 Yeah. Okay. I’m sure your investors love to hear that.

Caitlin: 37:00 Yeah.

Sam: 37:00 Yeah. What would be like a dream customer for you to get at the moment if you were to sort of just like think about it, what would be like, what would the characteristics be to get a dream customer? Like what does the dream customer have to have?

Caitlin: 37:20 I think it always helps to have a customer that has, you know, high visibility or credibility in the market and whether they’re kind of a leader in whatever field, whether it’s a premier school or premiere factory or also any international company tends to be high profile. So I think,

Sam: 37:37 Yeah,

Caitlin: 37:38 Some of those.

Sam: 37:38 Okay. I imagine it’s, yeah. What is your, cause is this, from their perspective? Is this just a cost which they didn’t have previously or an internal account whose budget this comes from?

Caitlin: 37:53 Yeah, that’s not really the question. I mean like people, it is a cost, but it’s also on the other end, there was another cost if you lost an employee’s life on the job, someone was paying for that.

Sam: 38:05 Yeah.

Caitlin: 38:06 Whether it was PR and your image, your reputation that you were actually paying out an insurance claim for death and disability. So it’s not such that we’re just adding an additional cost. Oftentimes it’s offsetting a huge risk that you actually had.

Sam: 38:21 I say that like I’ve sort of had, sometimes I’ve experienced yes. Sounds good. Sounds good. Sounds good. But, you know, budgets, are fixed and yeah, I’ve, like, this department, yeah, it can’t come from this department. And so I’m just wondering, is there, like, do you need to speak, do you need to be speaking to, yeah, who do you speak to when you go to a corporate? Who’s the, who’s the agent? Who’s the sort of decision-maker that you talking to?

Caitlin: 38:45 You know, it highly varies whether or not it’s like the CEO or the HR person or a managing director or there isn’t, I wouldn’t say there’s a rubric.

Sam: 38:56 Okay.

Caitlin: 38:57 It’s really understanding that company understanding why they would want the product and also making sure that we’re quite strategic about how and who we sell to.

Sam: 39:04 Okay. And after that they’ll just make it happen.

Caitlin: 39:07 Yeah. Or if they don’t, we try to get them to push to a yes or no quickly.

Sam: 39:10 Okay. That makes it sound like you’ve had a few experiences where a no has been dragged out.

Caitlin: 39:18 Yeah. But that’s what, I mean, I guess that’s okay. It’s like you kind of learn. I don’t think that, to be honest, that’s not, our issue is not about selling. That’s which most people don’t, I guess have that luxury. Our issue is how do we maintain quality and how do we scale in the right way such that we don’t overextend ourselves and we provide that service. The same service that we provide to the first a hundred customers that we provide to our current customer base that we can provide to the next hundred thousand, to the next million.

Sam: 39:44 Yeah. Fantastic. And people who are listening, they can sign up rescue.co and that’ll just take them through the whole process.

Caitlin: 39:53 Yeah. It will take no more than five minutes, hopefully even less to sign up here. It’s integrated directly with M-Pesa or credit card. Yeah. And you can sign up. It’s 2,400 shillings per annum and it covers everything. Once you start adding households and family members, it becomes even cheaper

Sam: 40:09 When you say everything like any ambulance?

Caitlin: 40:13 Any of those.

Sam: 40:13 Yeah. Very good. And in theory, not you would want to, you can take six ambulances a year and it was still getting covered.

Caitlin: 40:21 So technically it covers you up to two ambulances, but the chance that you need two ambulances in a year is pretty rare. Yeah.

Sam: 40:27 In the spreadsheet, it’s like not point, not.

Caitlin: 40:29 Yeah.

Sam: 40:29 Very good. And so rescue.co. And if they want to learn more about the company, perhaps sort of understanding, see if they’re a fit with the culture, et cetera. What’s the best way to learn more about you?

Caitlin: 40:40 You can go to also rescue.co or you can visit us on Facebook or Twitter or any of our other kind of communication channels.

Sam: 40:49 Fantastic. Cool. Well Caitlin, thanks so much.

Caitlin: 40:51 Yeah, thank you.

How a Kenyan couple captured the Japanese market in Kenya, with Wangari Wachira

Overview

Near to where I live in Nairobi is a Japanese cafe.

Whenever I’ve been the food has been delicious, and the small place is full of people from Japan, enjoying Ramen bowls and cold imported beer.

I thought it would be interesting to interview the owners to learn about how the business started.

It turns out that the owners Wangari (the other, her husband) have cornered down a niche market in the city.

Both were born and raised in Kenya, independently decided to learn Japanese as kids and ended up getting married after a mutual friend introduced them so they could connect on the shared love for Japan

Today they run a diverse portfolio of businesses to serve Japanese consumers in Kenya.

In the interview we discuss how their businesses came to be, the interplay of owning a safari company, supermarket, cafe and farm all geared towards the Japanese market, and practicalities of, for example, selling Bento boxes in Nairobi.

It’s a really interesting example of finding a business area that’s aligned with your personal interests and skill set, and then occupying that niche to very high standard.

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Social Media Links

Website: https://jinya-foods-ltd.business.site/

Facebook: https://www.facebook.com/japanesestorenairobi/

LinkedIn: Wangari Wachira

Transcript

Sam: 00:00 Intro

Sam: 01:43 Cool. So we’re here today with Wangari from Jinya, Wangari, welcome to the show.

Wangari: 01:49 Thank you very much. Welcome to Jinya.

Sam: 01:50 Thanks. So we’re currently sat drinking Japanese tea in your Japanese supermarkets. Did you call it Japanese supermarkets?

Wangari: 01:58 Yes, yes, we do.

Sam: 01:59 Fantastic. And then there’s the cafe just around the corner as well. In the same sort of block.

Wangari: 02:05 Yes, that’s right.

Sam: 02:06 Yeah. Just to get us started, can you tell us a bit about Jinya and a bit about yourself?

Wangari: 02:12 So Jinya is I started to run Jinya about five years ago after the original founder retired back to Japan. She had been doing this for around 10 years and she wanted to retire and go back to Japan. And so she was looking for people who would either take on, take it on and continue as a way of having continuity and also taking care of the Japanese community that was in Nairobi. At the same time I had sort of also established that I wanted to start a food business and through my husband who has interests in the Japanese community where he runs a safari company that handles Japanese tourists. He had known this lady Reiko for many years by giving her business of the Japanese Bento box. And so when they had known each other for a long time and she mentioned that, you know, she was going back to Japan and she needed to, to get somebody else to continue with the business. And at that point David knew that it will be very suitable for me first because of my love of Japanese culture, Japan, the Japanese people. And he knew that you know, this is something that I might want to try. And so he came and asked, would you be interested to do this? And and I jumped at it and I was like, this is a wonderful idea. Let’s, let me go and see what it is. So I went into her kitchen for around two months just to intern with her and learn about the cuisine and what she was doing. And spending time with her, you know, as I saw that, you know, I could do this I can challenge it and learn more. And and that’s how it started.

Sam: 04:15 Very cool. Okay. So Reiko so she started maybe 15 years ago.

Wangari: 04:21 That’s right.

Sam: 04:22 Yeah. So she was in, she was based in Nairobi as well?

Wangari: 04:24 That’s right. Yeah.

Sam: 04:26 And did she have the same premises that we’re sat in now?

Wangari: 04:29 No. So she’s been in several premises. So the last premise that Jinya was, it was on Riverside drive.

Sam: 04:37 Okay.

Wangari: 04:38 It was a house that was, she used it, a multipurpose, it was a geo house. She lived in it and downstairs was the shop. So when she left I also had the same, I didn’t have a premise to set it up in. So I sort of set it up also in my house for a short time as I tried to get a place to position it or a little store like this. In one afternoon when I was doing a delivery and I was on Lenana road I saw the sign of shops to let, and now I, I jumped at the, at the opportunity because in this area that’s where a lot of the Japanese people and Southeast Asians there’s a big number of them who live in this area. So it was the area that I was looking for. And so when this came up in 2015I jumped at it and then I got the space.

Sam: 05:37 Very cool. Okay. Well there’s going to be lots of things sort of for us to talk about with the business, but I think, you know, the thing which I sort of struck with at the beginning was you said that you’ve always had an interest in the Japanese culture and where’s that, where’s that come from?

Wangari: 05:52 I’m not sure. Sometimes I say, I think in my past life I must have been Japanese, because I studied the Japanese language when I was studying for college. I was it was an added advantage to have an extra language. So I studied French and I thought to myself, I want to do something different from everybody else. And I think a crazy idea came to my mind. Why don’t I study Japanese? I often ask my mom, so when I said I want to study Japanese, why did you even respond? Because she responded instantly came to the Japanese embassy and asked, is there a place where if somebody is interested in learning Japanese language, they can get? And the funny story is that this I always try to think what an interesting story this is. My Japanese language teacher, the first person who told me about Japan and anything about it is actually was married to Reiko who ended, who I ended up 25 or 20 odd years later buying her business as, so I learned language and culture from Weda Sensei and I learned the food from Reiko Weda interesting cycle.

Sam: 07:16 I know it’s a very influential family.

Wangari: 07:17 Yes, yes. They have had a very big influence on me. So back then I just studied the language, a bit of culture, then went into work as work happens, I really did not use…

Sam: 07:34 What did you do?

Wangari: 07:34 So I was in the safari business. So I worked in a, I actually ended up in the hospitality section of the safari business where I worked for several camps in Maasai Mara. And a few years, maybe 13, 13 years ago, I left that to come and join my husband in his safari business. And we set up a camp in Maasai Mara also. But,,or everyday work, that does not, didn’t involve me every day. So for, I needed something that I would do something everyday. And being based in Nairobi, hat’s why the food business sounded like a good thing to do. But also, he safari business over the last couple of years has been facing a lot of challenges from terrorism to drop maybe I think a difference of interest in tourists around the world. Having more options to go to, aybe a little bit of under development of our tourist product. So the, the safari business changed and the numbers of tourists that we would receive several years ago really dropped. And so we were thinking that we needed to diversify because we were 100% in that. And that’s where we depended on. And we needed, we felt that we needed to diversify into something that’s not affected by terrorism, that’s not affected very much by political, different political incidences. Something that we could have a little bit more control or predictability to. So we needed to diversify into that area. But with our strengths being in the tourism and hospitality business, e still wanted to be, some way, in that sphere. And also, he investment that we could afford to put in felt, you know, the food business in Nairobi sounded, ooked like, you know, the low lying fruit that we could be able to harness. So we, yeah, so basically that’s how, how Jinya has evolved to where we are today.

Sam: 09:53 Very cool. Okay. So you sort of always had this interest in, in Japanese culture and then various turns and luck, you’ve sort of ended up being here. Is, I mean, the businesses you’ve got, you’ve got the sort of supermarket, which we’re sat in now and the cafe as well. Who were the main customers at in both and did the base sort of differ as well?

Wangari: 10:21 So we, we started with, the first people who knew about Jinya was the Japanese customers. They depended on Jinya for certain things. A lot of the handmade foods. Before we did not have the fresh produce. And this is something that I started. Reiko did not have fresh produce. Being business people, we had also ventured into agriculture, agribusiness growing local vegetables, trying to grow flowers for the European market. So we have a farm that we’ve always said we are hobby farmers, but we wanted to end up being a commercial farm that actually works. And we tried various things that didn’t work. And so, the way Jinya was when I took it over, it was also facing challenges in its structure, because there was a lot of influx of supermarkets that were bringing a lot of things that, you know, the Japanese could depend on.

Sam: 11:27 So previously, was it sort of a, a specialists store and so that it would import particular Japanese products?

Wangari: 11:36 Yes, there was a little bit of import and very targeted just to the Japanese community. But for it to survive, it needed us to go more beyond just the Japanese community and we needed also to give them more than what was being offered then. So, we still have pretty much a number of things that Reiko used to, used to supply, you know, the sliced meats, the miso, the miso paste and the tofu and various other things. But we then added the fresh produce. So I just went onto the internet and I asked myself, you know, do the Japanese eat other things, other vegetables that are not available in Nairobi. And I went to the Internet and I saw, wow, there was a whole list of other vegetables that I could grow.

Sam: 12:32 Alright. So someone had made a list of these are the main vegetables eaten in Japanese cuisine?

Wangari: 12:38 Yeah.

Sam: 12:39 And you could then sort of go through them and see if they were already being grown in Kenya?

Wangari: 12:44 Yes. So that’s what I did. And then we started to, to try, so growing different things.

Sam: 12:56 What did you grow?

Wangari: 12:56 You know apparently the Japanese have their own radish, a particular radish that is predominantly used in Japanese cuisine. The Koreans have their own radish. So I started to grow the Japanese radish. I started to grow some of the, some bottle cruet. I started to grow some different salads that we have them here. But one of the things you know, the Japanese are very particular about what they eat and they prefer a lot of highly good quality, highly well grown food. So when, when I grow the food on my farm I’m able, they are able to get the traceability of what they eat and then they can trust what they eat because it’s all been grown on one farm. We use good. We are not, we’re not an organic farm, but we use good agricultural practices. You know, we do a lot of positive things like that are in organic farming, like using organic manure pesticide control through pest control, through plants like different plants that that keep away pests. There’s one Japanese vegetable, the Chrysanthemum greens, which is very, a very good pest controller. And so we now grow it on the farm as a vegetable and as a pest, pest control. So we adapt those kinds of things. We have a good water source, so we were able to offer them, we are able to offer our customers, good fresh vegetable, which we bring every once a week from the farm, and we sell on our Saturday vegetable market. And that changed immediately that changed the trajectory of the business. Just bringing in the vegetables because now the Japanese people who are in Nairobi and even others who came to hear about it and they, you know, once in a while they like to eat southeast Asian food or they change a little bit of their food. I mean, you can also get cabbage or lettuce, things that are in continental cuisine, but because of the freshness and the, where they come from and all those guarantees, we’ve grown outside of just the Japanese market. And then we have more.

Sam: 15:18 Alright. So have you, have you always had this farm?

Wangari: 15:20 Yes. We’ve always had it.

Sam: 15:22 And before you were saying you were just growing sort of local foods that…

Wangari: 15:26 Yeah.

Sam: 15:27 But now you’ve, now you’ve got this shop that’s, yeah. That’s a great synergy where you’ve had this, this farm before and now you’ve got the supply on the and the vehicle to deliver it.

Wangari: 15:39 That’s right.

Sam: 15:39 Yeah. You can now you’ve got this, this market’s delivering suit. Yes. Sounds really great,. Okay.

Wangari: 15:44 Yeah. So, it was a struggle to get a consistent market when we grew just for the local market because the local market has a lot of other external influences that you cannot be in control of. So for example, you can plant lots of cabbage and everybody else planted lots of cabbage, so when you come in the market, nobody needs your cabbage. So I started sort of stopped farming first to, to be able to understand which direction that I wanted to take it to. I tried various things like I had, I had had a little stall in one local market, but it was still very difficult to predict what to grow, when to grow it and all that. But then now when we created our own market here that had a specific kind of food that you would find I found that now that made sense and we have gone, we can continuously now plan based on that. And even our growth, we can easily plan based on that because we have seen the trends that has been said.

Sam: 16:51 Alright. So, the Japanese community that was there before you, where they unable to get Japanese radish?

Wangari: 17:01 Yeah. You know.

Sam: 17:03 How many people, roughly how many Japanese people are roughly living in…

Wangari: 17:06 I understand that about probably 800 of them families, many children and adults and children.

Sam: 17:14 Yeah.

Wangari: 17:14 Not very many, but we expect you know them to increase because, you know, Japan is increasing its, position in Africa and interest in Africa and Kenya being it’s hub for a lot of this. I have seen you know, increase in Japanese companies, so I expect that the growth shall continue. Yeah.

Sam: 17:38 Okay. So roughly 800, is it roughly 800 people?

Wangari: 17:43 Yeah.

Wangari: 17:44 Okay. Doesn’t sound very many, does it? No, no. It’s a very small number. How many have you, how many different Japanese people do you think have come to your cafe?

Wangari: 17:58 When we said the cafe, I have seen Japanese people who were never customers of the shop, the supermarket come to the cafe, which has been wonderful because they mainly, they were local. They know how to survive here with, without necessarily their Japanese favorite ingredients. They have figured a way to survive. But somehow the cafe has brought them out. And I’ve got to meet the new, new Japanese people that have been here. You know, some telling me they’ve been here for so long and I’m like, I’ve never met you before. How come? So I mean we, we’ve gotten a good number of them coming through. The goodness about the thing about the cafes that we are doing home home-style cooking and, and that’s very close to a lot of Japanese people’s heart,so.

Sam: 18:57 What are some of the popular dishes? Yeah.

Wangari: 19:00 Some of the popular dishes they keep changing because I keep changing the menu but you know I have a lot of, a lot of Japanese people are our bachelors. They haven’t yet come with family. Some, some don’t have families. We are seeing also very many young, younger Japanese coming. And one of our most popular is Katsudon. So katsudon is a, dong is a bowl of rice with something on top. So this one has a cutlet, a pork Cutlet and it has an egg sauce. So that’s real home cooking and it’s comfort food. There’s also shogayaki. Shogayaki is pork in ginger. Also very easy to make at home. And probably eaten a lot. There’s a Japanese curry and we can have various twists to the curry. We can have a cutlet in it, we can have a curry soup. So there are many other options. And, and the good thing that I’ve also found out is that when I introduced them to non-Japanese people also, because one of the aims of creating the cafe was I realized that my store might not have a big influence or a big impact if I do not reach out to more of the local people and they would come to the store and, you know, they would look at all these strange things to them. And I would tell them, I know this, I mean, you could cook this at home, you can eat this at home. It’s not complicated. You can adopt a Japanese meal once a week in your menu, and they would look at me and say, well, okay. And they would walk out of the store. And so I thought to myself, you know, if I could only cook this food and get people to taste it then they would see the, you know, when I was talking about and so to take care of people who asked me for Bento boxes and, and food in general, and also to take care of growth for us. We thought, you know what, let’s put up a cafe. So when the space came available, just here, you know, it’s perfect to have it just here. So if somebody enjoyed something at the cafe, they could come and pick it up from the store and then they could try it at home.

Sam: 21:30 So who does the, whose the chef, who does the cooking at the cafe.

Wangari: 21:36 I have a team. I have a main chef who, we, we searched for with our history, knowing there was a Japanese restaurant several years ago that was run by a Japanese chef. He was a chef and he ran the business. And so we, it was shut a few years ago. So we went out all the way to Kitengela, to go and look for some of the people that he had trained. And we had one, my husband had one.

Sam: 22:08 What were they doing in Kitengela?

Wangari: 22:08 They, you know, they would, now they’re doing different things. So we tracked them down through one waiter that was in one of the Japanese restaurants and he was a colleague to one of their chefs and we asked him, so where is so and so, do you know where so and so he was there. He was their manager at the it was called Nihonjin club. Nihonjin club means a Japanese people club. And so he was the manager at Nihonjin Club. And we were told that you can find him in kitengela. That’s where he has a school.

Sam: 22:44 Kitengela is like, maybe an hour drive from…

Wangari: 22:46 Yeah. Or towards Athi river. So, you know we got his contact and we met and we went and met him there. And, you know, so we asked him, you know, do you have contacts of the people who you worked with who could be young, who are younger then, who had been trained how to make Japanese food and where could they be and what are they doing? And he had the contact of two of them. Unfortunately one was not interested in coming back to Nairobi, he had already settled in his rural life. And I think we didn’t entice him enough. But his specialty was also making Sushi and we really were not geared to making Sushi because Sushi is not Japanese home food. It’s also for special occasions, even in Japan. So we were not very keen on having a Sushi, just a Sushi chef. We wanted somebody who was more, who wouldn’t be, who knew more about the Japanese traditional foods. And then, that’s how we ended up with the chef John. The other rest of the team was the junior team, so we used to do Bento boxes.

Sam: 24:00 What was a bento box?

Wangari: 24:01 So a bento box is a traditional lunchbox in Japan. It’s very popular to have a boxed lunch for lunch. So it’s either from home or from the train station or from the convenience store. So when you go to Japan, you’ll see these lunch boxes all over the place and they are wholesome, very delicious. You know, it’s, it’s an everyday.

Sam: 24:24 What’s in there?

Wangari: 24:25 It will have, there would be, they have a variety of them. And you know, in Japan they see four seasons where, which they use to even change their cuisines. So because, you know, in different seasons you get differentdifferent ingredients. So they change, they sometimes change based on the four seasons, but you get the regular karare, which is the fried chicken, the tonkatsu, which is the breaded pork. You get the shogayaki, you know, so you get the daily kind of food, but you know, emphasis is into food that is not soupy, that will not leak, that will still be enjoyable cold because it’s enjoyed at room temperature. So a lot of emphasis is based on that. You will find a rice ball in it or a, or just some rice some vegetables. So it will be a nicely balanced boxed lunch that you can enjoy in different places in Japan.

Sam: 25:23 So do you sell bento boxes?

Wangari: 25:26 Yes, yes.

Sam: 25:29 Do people bring their own box and then you fill it up or do they do…

Wangari: 25:34 There’s disposable. So there are disposable boxes and we arrange depending on, so you, what you do is that you choose the main, the main that you would want to have. So let’s say you want to have fried chicken and then we choose the other accompaniments to go with the fried chicken. So there’s, we balance the textures, the flavors, the colors, you know, we have to pay attention to lots of details in Japanese, when you’re making Japanese food. There’s the rule of five, five colors.

Sam: 26:06 Five colors per meal?

Wangari: 26:07 Five tastes and five methods of cooking.

Sam: 26:10 Really? So five methods of cooking for every meal?

Wangari: 26:12 For every meal. Yeah. But somehow they get it. I guess you can, you could have about four, but you know, you can try. The five colors sort of help you to know that you have a balanced meal and that you have taken care of all your nutritional requirements.

Sam: 26:31 Did you do like a different lunch each day that people get?

Wangari: 26:34 So we have about, I think there are five, five different sets that we have made just to make it easier for lots of people to be able to order a bento box, and also coming from for the Japanese people they’re used to it. You know, whatever is in the Bento box, you look at it and they have a lot of variety in their convenience store. So you look at whatever you want. But here, because we don’t have already so many people, who are taking different, bento boxes, we tried to create about five. So you can get around five of them from our option, you just pick what you like.

Sam: 27:09 Do people come into the store, coming to the cafe everyday and pick it up and then go, or do they do the pre-order?

Wangari: 27:15 So they pre-order, you know, a bento box needs to be pre-planned because there are little other things in it that take time to be prepped. So, you know, it’s it’s always we say that you have to order your bentobox before 10 o’clock. If it’s for lunch if it’s for dinner, you have to order it before three o’clock. So that we can be able to make it a complete bento box.

Sam: 27:41 How much does it cost?

Wangari: 27:41 So they vary from I think our least bento box goes for 950. And the highest is about 1,500.

Sam: 27:49 Okay. So between 10 and $15.

Wangari: 27:51 Yes.

Sam: 27:53 Is that quite expensive?

Wangari: 27:54 Well, it I think it is, it’s reasonable.

Sam: 27:59 OK.

Wangari: 28:00 In Nairobi, it’s reasonable. What we’ve also done is that we’ve also, one of the things that I keep challenging at the cafe is to be able to have reasonably priced food that’s well balanced, that you know, where you get value for, for what you’re paying for. So we’ve, it’s something that I have that we have worked very hard on to try and make sure that, you know, it’s, it’s something that you can afford for a daily lunch. You know, like when you go to the other cafes you, you spend about the same amount of money and, and you don’t even get the variety that you can get, that you get in a, in a bento box. So yeah, it’s great value.

Sam: 28:41 Yeah. Cool. How does the, how do the businesses interplay with the safari business? You mentioned that you’ve diversified, but I think you said you still, you still kept the safari business. Is, is David having a lot of Japanese tourists?

Wangari: 28:59 So yeah, so we still maintain that. And that actually is David’s core business. The cafe and Jinya, he, he supports but his core business is the safari business and the comp in Maasai Mara and, and his business is still 95%, almost 100% Japanese clientele.

Sam: 29:24 How did he get into that at the beginning?

Wangari: 29:27 So it’s a very interesting story also. I mean, he also out of we hadn’t met, I hadn’t met him and he also went to study Japanese.

Sam: 29:36 Roughly how many people go to study Japanese in Kenya?

Wangari: 29:43 It’s not a big number, but it’s been growing. When we did it, we were very few.

Sam: 29:50 Yeah,

Wangari: 29:51 I know about, to this day, I know about five people who we went to school with around the same time. But it’s been growing. The numbers grow, slightly.

Sam: 30:04 Yeah.

Wangari: 30:04 I think it will grow even more because of the plans that the Japanese government has. And it would be an advantage to learn the language because there are opportunities there are big opportunities with working for Japanese businesses or even working in Japan or even going to school in Japan. So, yeah. So expect that to.

Sam: 30:32 You and David both, so I’ve got to ask, how did you guys meet and did you, and how soon did you realize that you both learnt Japanese?

Wangari: 30:42 I always, I think of our interest in Japan and Japanese culture is what brought us together because one of his friends or colleagues was talking to me on the phone and where I worked. And he’s, and you know, he told him, you know, there’s this girl that I know who also speaks Japanese. Like you. Yeah. Oh. And I think David, out of curiosity must’ve said I want to meet her. That’s, that’s unique. And I think our love and our passion for many things, Japanese brought us together. And the rest is history. So we’re, so it’s been a, it’s been a wonderful opportunity to be able to bring together that passion and it has brought us this business opportunity to also venture into.

Sam: 31:40 So the fact that David could speak Japanese, that kind of meant that he was a natural fit for yeah. Being, run safaris for Japanese tourists.

Wangari: 31:49 That’s right. Yeah. Yeah. So he was employed at the time. He worked for a safari company that had a lot of Japanese tourists but was not employed for very long because then he started his own company. And just last week, 1st of July, we celebrated 20 years.

Sam: 32:07 Wow!

Wangari: 32:08 Of his, of that company of Great Land. And so we have continued, so we, we still make Bento, so now we make Bento boxes for Great Land.

Sam: 32:18 Yeah.

Wangari: 32:19 And their customers, and other safari companies that have Japanese tourists. We still make the Bento boxes cause they, you know, when Japanese tourists come, sometimes they really miss their home food after being in in, out on holiday for maybe 10, 10 or so days. So it’s always a good opportunity for them to eat something that’s close to home.

Sam: 32:47 Yeah, definitely. So did you make them in the cafe and then sort of distribute them? No, no.

Wangari: 32:53 Yeah. So we make them at the cafe and then when the, depending on what itinerary the customer has, they either come and pick it up from here or we drop them, it off to some convenient place to them. So it all depends on, on the nature of the, of the safari. Sometimes we do them when they’re departing to, to the airport, you know, they’re like, oh, I’m so tired of this continental food. I would love to have some Japanese food on my way back out. So,

Sam: 33:24 Yeah. Okay. So you’ve got sort of like, you’ve got safari, you’ve got the farm, you’ve got the, the supermarket and the cafe, all sort of seem to have synergies with each other. Is there something which is missing? Is there, from doing this, are you like, oh, there’s an opportunity here. If we, I don’t know, started a tea company or your, or your something, is there anything that you can sort of, you can see how this trend might continue?

Wangari: 33:53 There’s lots of things, but we are also at a point where we, we want to focus our attention to developing the supermarket because there’s potential to develop that. The cafe we’ve just started and we can see the potential in that. So one of the, this, to take you back a little bit in 2016 as we were trying to, think we, you know, we could see the dangers and what was happening to the tourism industry and the way it was becoming unreliable and undependable. So we decided to take a trip to Japan to go and learn what were the Japanese trends for the safari business. We went basically for the safari business. And I also went on a, we also went on a culinary journey to try and get different tastes of the Japanese food and to understand the Japanese food better. But our main agenda was to try and go and understand where the Japanese tourists’ mind was. So that we could come back here and prepare ourselves for that. And but there had also been a lot of talk of diversify the tourists, the Kenyan tourist product, you know, that it was getting tired and same old, same old. So we weren’t, we constantly had this question, what does that mean? Diversify and different and because, you know, everybody was doing safari or a hotel or a safari company and now we could see where the challenges were. So we kept on asking ourselves, what can we do? We don’t have the kind of money to start an amusement park. That’s a diversification, that’s a product that can be put out here, but you know, that needs big money. So, so we went on this trip not knowing what we were gonna find. And so we went for Japan travel fair, one of the biggest in the world. And in that there was some side meetings and for love of food I picked one that had to do with gastronomic tourism. I was, I didn’t know what that meant. I didn’t even know what it meant until I attended the meeting, but it, you know, had food and it had tourism. So I was like, you know, that’s a good mix. Then we also attended an outbound tourism one and an inbound tourism one. We wanted to understand everything. And the gastronomic tourism side meeting is what inspired the cafes. We’re gonna do this. We always played with the idea, but, you know, we didn’t not, maybe have the thing, the drive, the push, the reason, the confidence to go for it. And, and in that meeting, I went and learned that food in Japan is their tourist product is the product that they sell. So every, every tourist around the world going to Japan, goes for food. And I was like, oh, there’s diversification right there. So let’s go and diversify the product and let’s make a restaurant. And maybe we shall attract the tourists to our restaurants also. But more so attract the local people. And then this is not dependent on terrorism. It’s not, it doesn’t get hurt by terrorism much because the locals, once they know to the Japanese food, they will still come to the restaurant. And so that’s how we diversify the tourism product that needed diversification and improvement and our own having another business that we could rely on for ourselves. So at that meeting we learned a lot. Then we came to implement more confidently that, you know, we were not just targeting the Japanese who are living here and that this is something that we could grow into various, into various directions. So in Japan, there’s so much good food, different kinds of food small restaurants. So, you know, we came from a background of you have to have big restaurants to make economic sense to make business sense and you know, we went and so very small, tiny restaurants with six seats or nine seats or 15 seats. So that really was helped us to be able to bring down our, to set up you know, at a point where we were comfortable. I don’t like big, I never imagined having a very big restaurant, but when I went to Japan and so that, you know, what I have in my imagination can actually work. I’m always afraid of mass. I’m afraid of mass production of especially food. So I couldn’t do, I think if I saw 50 people I would shut, I’d have a mental shutdown. But when I see a few people and I can control the product and the quality, that’s very important for me. And that’s very much the way they do it in Japan. So I was able to see firsthand how I could actually actualize something that was just in my mind or just in our mind and how we could do it at our scale. So the restaurant is just a 25 seater. In Japanese numbers, it’s almost two restaurants. So we are happy with that.

Sam: 40:03 Okay. Well, just a few more questions if that’s all right. I’m interested, since you’ve sort of started working on this full time what have been some of the surprises that you’ve had? So if you sort of compare what it was like when you started compared to what it is now, like what are some of the ways in which it’s different?

Wangari: 40:25 The surprises, can I think of some surprises some pleasant surprises from especially from our Japanese customers is they have said that our, in Nairobi, they think we are the most authentic. Even visiting Japanese people who will live in Japan most of the time and they’ll be just visiting, they’ve also made that comment and they’ve also made comments like some of the foods you get here is in Tokyo quality. So that’s, those are pleasant surprises. I don’t know. I don’t think that we expected too match that. I always wanted to do, my aim, I always aim for the best. So I always tell my staff we have to be the best Japanese restaurant. But that’s just saying it. Actualizing it is another thing and I didn’t know what that meant. And you know, the standards in Japan are so high that, you know, when the Japanese say that, then you know that you’ve started on the right footing. Other surprises is that not just Japanese people come to the restaurant.

Sam: 41:41 Yeah, myself included.

Wangari: 41:43 Yourself included. You know, I did. I was, I have been surprised where did this people, where were this all this people, but I know from having attended that meeting in 2016 that the Japanese government or the Tourism Department of the Japanese government about 30 years ago made this policy to make Japanese food known around the world. And so when you go to America, if you go to Europe you go to Asia Japanese food is slowly becoming very, very popular among the people not just Sushi. Even other different things. At that meeting we were showing how Japanese food names that are in Japanese are found in some of the haute cuisine, French restaurants in France or…

Sam: 42:38 What do you mean?

Wangari: 42:38 So, for example, maybe I remember one was hamachi, hamachi is a type of fish. So you would look at the menu in a French restaurant, fine dining French restaurant that is selling hamachi, but they don’t call it the French name or the English name, yellow tail. It is named in the French restaurant, whatever, hamachi something but in a French restaurant or different Japanese ingredients you would find being adopted in other cuisines. So they have successfully managed to get other people to adopt, other chefs around the world to adapt Japanese styling, Japanese ingredients into their restaurants. And so that’s the reason why everybody now they, they can attract around 2 million tourists into Japan and almost all those tourists are not going to see the temples and the old, and the other different cultures there. One of the biggest thing is that they want to go to all these ramen restaurants, tonkatsu restaurants, Japanese tea ceremony or the much longer kaiseki, which is a, you know, like the haute cuisine of Japanese food. So yeah.

Sam: 44:01 Alright. Any challenges?

Wangari: 44:04 Yeah. I think the farm is the biggest challenge of all of them. Farming is, has a lot of enemies. I think from the sun, the African sun you know, the heat.

Sam: 44:22 Is it too hot?

Wangari: 44:24 It’s too hot for some the vegetables. I have had to put infrastructure there to be able to help my veggies grow peacefully and happily. But slowly, we have overcome some of those, but I don’t think there’s anything like overcoming farming challenges because the different seasons present different challenges. Other challenges, just the strings of business, you know, when you have to, when you’re running the business yourself and you’re thinking everything and setting it up. So, you know, from start up of, I’m not Japanese so I have to read a lot, so that I do not make, any blunders or any obvious mistakes that would offend the Japanese people.

Sam: 45:18 Have you done any of those? Have you made like a little blunder or like something in the menu?

Wangari: 45:24 I think so, but they’re very gentle with me.

Sam: 45:28 They don’t take offense?

Wangari: 45:30 They don’t take offense, some are very nice. They come back and they tell me, you know, that’s not the way we do it. You could try this or the other. And so they if you go to the cafe, you will see, I have another second menu that I’ve never really printed on the proper menu. And that second menu has been developed by our customers and they came and suggested different things. And so they would come and say, what I did is when I launched the cafe, I sent a message to all of my customers from the store. And I told them there’s a Japanese drama series that I love to watch and it’s based on a little restaurant. It’s called midnight diner. And the story behind Midnight diner is that the chef does not have a menu. And what you do, you come in, requests whatever you want and provided he has the ingredients, he’ll make it. And so I told my customers I’m going to have a simple menu, but please come to the restaurant and if you see, if you want something just request it and if we have the ingredients, we’ll make it. And so the second menu has actually been developed out of that. Because I wanted to you know, when I opened the restaurant I wanted I was not very sure what to put in. You know, if you think about all the Japanese food that you could put in a menu, then you would not be able to run a restaurant. So I needed to start with some of the favorites, some home favorites and also some not so home favorites because people go to restaurants to eat some of the things that they can not enjoy at home that you know, are only made in restaurants or are best made in restaurants. Not necessarily that not made at home. And various other things. So my, I’ve been fortunate that the customers have come forward with different suggestions and they think about it, you know, they come and tell them, you know, you can make this, it’s not so difficult and everything is available and people love it. And then I’m also very responsive to my customers because that’s actually how we have grown the store. By listening to them and talking to them and asking them lots of questions about what’s, what don’t we have, what do you need and what can’t you find and we can provide it. And so we’ve developed the many that way.

Sam: 48:05 Fantastic. Very cool. And people who are listening at home, how can they learn more about Jinya? How can they, where can they find you in Nairobi? What’s sort of the best way for people to try and sort of learn more?

Wangari: 48:16 We have online presence. You can find us on the social media. We are on Facebook, we are on Google maps. I have, I’m not very tech savvy, social media savvy. I have an Instagram that I don’t remember to upload photos on. My daughters tell me I don’t know how to do it. So I think I’ve lost the confidence to do it at all. So yeah, but we are here on Lenana road both the restaurant and the, and the shop. So you can easily find us there. I love to cook and I, and I want more people to adopt one or two Japanese recipes in their menu. It’s really it brings variety into your weekly dinners or weekly meals. If you could adapt a few Japanese tricks, you could be much more healthier and you would feel very good.

Sam: 49:16 Well actually, I mean I’m, I need, I need to decide what I’m going to have for dinner tonight. So what, what would you recommend that I could bare in mind. I don’t eat meat, so what would you recommend? What’s a good Japanese which I can mate. I can make my sleeping.

Wangari: 49:30 Yeah you know, Japanese food is very, very healthy. Actually, you asked me about challenges at the cafe. Taking care of vegetarians in Japanese cuisine is a very big challenge because the Japanese are not vegetarian. They are, they have a very healthy cuisine that knows how to consume the red meats and the meats and all but they don’t have much emphasis on vegetarian. But you can get various vegetarian options. You know, tofu is very healthy and very nutritious. And you could do so many things with tofu. You can have it for a meal, you can have it for a snack you can have it with your salad. And it can be a very good source of your protein. If you stir fry with mushroom and then just add the teriyaki sauce or just soy sauce to it, you, have a good vegetarian, well balanced, delicious meal.

Sam: 50:34 Right. It seems we stopped recording. I’ll go buy that.

Wangari: 50:37 Yeah,

Sam: 50:38 Very cool and well Wangari, thanks so much.

Wangari: 50:40 Thank you very much for coming.

Sam: 50:41 Cheers.

Relocating top African software developers to European tech teams, with Caspar Coding

Overview

An interesting heuristic you can think about when considering companies operating in East Africa is where the demand comes from.

There are lots of businesses you can see where the product or service is developed in the region and ultimately is consumed in East Africa.

Through the lens of this podcast, just look to some recent episodes on Tissue Paper, Bottled Water Franchises, and Surveys.

Whilst there is certainly a strategy in serving the growing local market, there is certainly a limitation on its size.

There’s a whole different set of companies, operating from East Africa but whose end customer is outside the region.

Caspar Coding is one of them.

They work with European clients to place East African senior software developers directly in their teams.

It’s one area where there’s a huge imbalance. In Western Europe alone there are 5 million openings for senior software developer jobs and lacks the supply of local talent to fill them.

Caspar started off solving this with developers working remotely but now relocate ambitious developers directly to the European country.

Sebastiaan, the CEO, is Dutch and so the early clients have been from there.

This is a really great episode that touches on various themes in the region, such as demographics, finding product-market fit, and ultimately the power of gaining a modern skillset to grow your career.

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Dutch digital nomad

Did marketing automation for a FinTech company, then built a startup called [Tempr] until he lost interest/ challenge.

What struck me about Kenya?

1. Demographics: so many young people
2. English: everyone speaks it
3. Time difference: very similar to Europe

The company has evolved

Started off as building remote teams for tech teams, however, pivoted into relocating developers directly into relocating experienced developers directly into European tech teams.

NGOs train people in tech

Caspar doesn’t focus on generating the skills (there are enough doing that). Instead, it’s about connecting experienced developers with end roles.

Working remotely didn’t work out

Experienced developers were used to working remotely. They were often tasked with bug fixing/ testing which was further from the cutting edge of innovation that they could do. There were also instances of developers being oversold.

Focus group is mid-20s

Not people with families. Instead, those who have a couple of years experience but are at the limits of what Nairobi can offer.

Incentivize people to return

The idea is that with experience, people will then return with more knowledge to start their own work back in Kenya. The finder’s fee for the placing a developer would become the seed funding for their idea.

Who is the buyer?

Remote teams: CTO/ co-founder. Relocation: still figuring it out!

Caspar represents the developer community

There’s a huge demand for senior software developers, but Europe can’t supply it. Caspar helps with unlocking this pool of talent in East Africa.

Why is it called Caspar Coding?

The name of the brother of my co-founder. It was originally InterCode but there’s a company in Kenya called that already.

Corporates are into outsourcing already

The tech teams often work with firms in India etc. Though they’re struggling to compete with innovate startups taking a more agile approach.

Adopting the Spotify agile approach

Caspar’s client (ING Bank) is adopting a more modern approach. More information here https://www.mckinsey.com/industries/financial-services/our-insights/ings-agile-transformation

A Dutch candy is our secret weapon

Stroopwafels. “Would you like to come to the land of this candy?”

Key lesson

Remote work? Experienced developers have more growth opportunities from relocating to the Netherlands.

Key insight

Western Europe has 5 million job openings for senior software developers. We have to think about where this is going to come from.

Links etc

Website: https://casparcoding.com/
LinkedIn: Sebastiaan Tan
Access their Telegram group for the developers through their Instagram: https://www.instagram.com/wearecaspar/

Entrepreneur and author Sean Keough explains the need for a different financial model in developing markets

Overview

This is an episode which I really hope you stick with.

As you’ll have seen from some of the other episodes, I find that often the “unsexy” aspects of doing business in East Africa are the most interesting and important.

Financial modelling is not necessarily top of most people’s lists to think about, however, in this episode, Sean Keough puts forward a pretty compelling argument why you should.

Sean has worked in Ethiopia for many years and has been building up businesses in the country which haven’t previously existed.

He began with advising other companies on their growth and found that it was difficult to forecast what the impact would be of different business decisions.

Entrepreneurs knew the ins and outs of their business, but couldn’t run through scenarios of how external factors affect their business, and as such were running blind, and also not having the rigour to attract foreign investment.

Long story short, Sean has now written a book which takes entrepreneurs through how to model their business.

It’s available on Amazon by searching for the somewhat cryptic title of “Financial Modelling in Developing Countries”. You’ll also find a link in the podcast description: Financial Modelling for Developing Countries

The interview also allows us to speak more about the nuance of doing business in Ethiopia, one which is fundamentally different to others in East Africa owing to its closed economy legacy.

There are tons of insights here around the different dimensions of working in Ethiopia, as well as the life aspect of running a business in the region.

For more episodes from Ethiopia search for Ride Hailing and Takeaways in the archives, but now, it’s my great pleasure to introduce Sean Keough.

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It all started trying to attract capital

Helping foreign investors to invest in Ethiopia. Not possible to answer questions on the business in a way to satisfy investors.

Sean works on different

90% with EQOS (Ethiopia’s first business outsourcing business)
10% with EIL (Ethiopia Investment Limited)

Entrepreneurs know the ins and outs of their business.

However, they had difficulty in giving answers to why certain decisions were being made.

Example of wheat processing.

The root of the issue comes from foreign reserve currencies.

Ethiopia is different

Because it’s been a closed economy since the early 2000s there are certain business practices that are unique to the country.

The foreign currency reserves are key

There were lots of infrastructure projects (dams, railroads etc.) which require the use of foreign currency because there isn’t enough local currency to fund the projects. As a result, the rate at which Ethiopian burr is traded with, say, USD is much higher.

12 step financial model

The book helps you build and maintain your financial model.

Sensitivity analysis is the most interesting

Starting there helps Sean explain to the entrepreneurs how something like switching from a local to international distribution will affect their margins. Power of your decisions that you didn’t have before.

Net working capital is key

Is much more expensive than elsewhere. These are big hits on the cash.

Why?
1. More inventory needed
2. International payment terms take longer

Scale my own business slower

We didn’t have the processes in place to build up that quickly. More patience is required.

Message to investors on delays

We thought it would take X, in fact, it took Y, here’s what we’re doing to rectify. We generally half the project profit and expand the timelines by 3-5 times.

Our investment philosophy

Build businesses that will generate cash flow rather than to exit.

What’s changed the life perspective?

Harder, you work, the harder you need to rest. Getting quiet, getting solitude is really important to avoid burnout. The most stressful aspect has been managing the people. They’re counting on you to make the right decision. This comes from having enough.

One for One on the book

For every copy sold on Amazon Sean will give it to an entrepreneur in East Africa.

Lessons & Insights

Biggest lesson: should have scaled outsourcing business more slowly

Biggest insight: Ethiopian currency dictates how businesses should be modelled

Memorable quotes: Insights from a financial model will help you dominate your market

Links etc

Book: Financial Modelling for Developing Countries

LinkedIn: Sean Keough

Other podcasts on Ethiopia: Ride Hailing ( Localised Uber version – Ethiopia ) Takeaways – Food E-commerce Platform ( Ethiopia )

Big retail CEO Daniel Githua explains the role of supermarkets formalising the East African economy

Overview

Some of the biggest and most visible players in any country are the supermarkets.

They employ thousands of people, have a wide geographic presence and interact with many aspects of the economy through supply chains and products sold.

Tuskys is one of the biggest in Kenya, and East Africa, and in this episode I interview Daniel Githua the CEO.

The interview was pencilled in to take 30 minutes, but there ended up being so much interesting stuff that we continued recording, meaning it’s one of the longer episodes on the show to date.

I think part of the reason was the depth of insights that Daniel had, and the frankness with which he spoke about both opportunities and current downsides in running the business.

Some highlights from the interview include: the macro trends in formalising the retail sector in Kenya and how reaching new towns transforms the local economy, the biggest opportunities he sees for retail products across different categories, and how the market may change in the coming years, with the introduction of large international retailers like Carrefour and Shoprite

If you’re interested in other interviews about food and retail, look to episodes on Cooked Beans, Invoice Financing and especially on Coconuts which talks a lot about the struggles manufacturers have with payment terms when selling to supermarkets, something Daniel recognised that the retail industry has to address.

At times there might be a bit of shuffling, and sips of tea (the Tuskys staff were very accommodating) and so please excuse and slurps or shuffles which exist at the beginning – or at least when the tea was still hot.

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Accountant by background

Daniel started as an auditor with Deloitte. He then wanted to look at entrepreneurship, and considered the two companies Nairobi Women’s Hospital and Tuskys.

Tuskys is a mass-market supermarket

Furniture, clothing, amenities and fresh food. Currently 63 stores in the region, looking to grow to Ethiopia and the east of DR Congo.

My Mum is a milk farmer

She sells her milk to a local processor which then has it appearing on the shelves in Tuskys. For this, you need advanced IT systems and processes.

Tuskys began with a small grocery store

A few hours from Nairobi in Nakuru. The focus was on training local people, his sons joined and they grew from there.

We open shops to empower communities

Many times Tuskys becomes the largest employer in town – it transforms the local economy.

What determines opening a new store?

1. settlement patterns 2. trade routes. A high volume of traffic is what makes a new site attractive. This was helped by Kenya’s devolution of power, which gave greater power to local government, such as with Narok.

How Tuskys transforms a town

By creating jobs for 300-400 employees there are ancillary services (such as housing) which need to be met.

Increasing demand through availability

In the case of Narok, there historically wasn’t the option for premium products such as, say, mouthwash. By Tuskys opening there is some simple switching from the informal sector (fruits) and others are products which previously only existed in the capital Nairobi.

We don’t have many own label products

This loses our focus. Our main objective is to create the market where consumers meet the manufacturers. Whilst the market is yet to be exploited we don’t wish to conflict with our suppliers. When you have your own product, you begin limiting what the consumer has.

Listing as a supplier

Quite simple really. Starts with having government approval. Then want clarity on the types of customers that you want. Can you show in your product that you’re going for. How does this compare with the competition? How do you match with them?

Gross margin on foodstuff

Is roughly 16-18%. The time it spends on the shelf differs by category. Fresh is for 2-3 days. Dry foods 14 days. Clothing 45 days.

“The best yoghurt in town”

This is how a Dutch Private Equity investor sold his vision of creating one of the leading brands of yoghurt in Kenya. He said it’s going to be expensive, but it’s going to be the best. He’s doing very well.

Other opportunities lie in…

Processed meats (bacon, sausages), cooking oils (premium olive oils are now on every table), premium pasta, fruit jam, personal care items (shampoos, lotions)

Human capital gap

It’s impossible to find a good buyer locally. The skills to negotiate with buyers are low. There isn’t the experience, and so Tuskys have decided to train them, often on projects abroad.

Pilferage

This is a big issue for retailers as there are no established processes in place. How inventory moves around is still quite informal.

International retailers are coming!

This brings a different kind of competition to the market. The biggest effect is that payment terms needs to be more disciplined. Manufacturers no longer tolerate the long payment terms and so retailers need to get better at paying on time.

Consolidation in Kenya retailers

There are likely to be “Tier 2” retailers in the sector who will merge to get better buying power with manufacturers.

Self-regulation

Certain standards for being good retailers: payment terms, transparent payment terms, treatment of workers, CSR etc.

e-commerce opportunities

Electronics, personal brand items and textiles are moving quickly. Logistics isn’t an issue, as customers want to come by to the Tuskys store.

Lessons & Insights

Surprises: gaps in human capital and pilferage of stock

Biggest lesson: “It is shocking how much opportunity exists in food retailing in Kenya”

Biggest insight: only 30% of retail in East Africa is formal. This is increasing 2% each year which presents a big opportunity.

Website

http://www.tuskysonline.co.ke
http://www.tuskys.com

Overview of Food in East Africa: Lessons from interviewing Food entrepreneurs in East Africa.

Booming factory business. Tales of growth, expansion and toilet paper, from Darshan Chandaria

Overview

Manufacturing is one of the major value drivers in an economy.

In this episode, I speak with Darshan Chandaria, Group CEO of Chandaria Industries, the company founded by his grandfather in the late 1940s and which has now diversified into other areas.

The core business is hygiene products: recycling waste paper and turning it into tissue and other products.

This episode is slightly longer than usual, mainly because there just seemed to be so much to talk about. This includes the set up of their fully integrated operation, the thought process of building a new factory, hiring strategies across the group and Darshan’s management strategy for leading the team. Essentially: find people on the same wavelength and leave them to it.

There are also other tidbits of information in there around designing detachable roofs in the new factory, the comparatively high cost of transporting goods, as well as Darshan’s strategy for building his Instagram following.

The interview took place at Chandaria HQ which is a working factory and so at times there might be some background noise of trucks moving around. I’m sure you’ll agree though that it adds to the effect.

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Other notes

Family business established since the 1940s. Established in 1964.

Diversified portfolio of companies. Hygiene is the main. Largest tissue and hygiene products company in East and Central Africa: a fully integrated operation.

There are 30,000 Kenyan families employed in the paper collection. Often these jobs stay in the family: there are generations of people in collecting of paper waste. 3,000 people are employed across the group.

Toilet tissue is the biggest seller. It’s the entry level product to hygiene.

Leadership team have to be on the same wavelength, the same vision.

There a few major channels they work with, the crux of the experience the customer should feel is: does the customer feel comfortable enough to call you late at night, because you will sort out the issue they have.

Meeting ISO standards, and the way in which that is measured.

It’s a capital intensive company with high barriers to entry.

Transport cost takes up a higher percentage of the margin.

The expansion of building a new factory will be a $50m investment. Part of this will be a detachable roof in the design. Most of this new factory will be taken on with debt.

Raw materials is a big thing. Less things being printed means availability of raw material is a concern.

Transition from Family Office to Venture Capital firm. Early stage companies to then scale up.

Lessons and Insights

Biggest learning: the leadership team has to be on the same wavelength

Biggest insight: future proof your investment decisions i.e. does your factory need a detachable roof

What keeps you up at night: as paper usage reduces, raw material costs will increase

Social media etc.

Chandaria Industries

Website: http://www.chandaria.com/

Facebook:https://www.facebook.com/ChandariaIndustries/

LinkedIn: https://ke.linkedin.com/company/chandaria-industries-ltd-

Darshan (personal)

Twitter: https://twitter.com/dchandaria

Facebook: https://www.facebook.com/darshan.chandaria/

LinkedIn: https://www.linkedin.com/in/darshan-chandaria-7143a57/

Kasha opens up access to sanitary pads in East Africa through last-mile distribution

Overview

There are certain products which, let’s face it, are more embarrassing to purchase than others.

You don’t think twice about buying a pint of milk, however things such as contraceptives, or sanitary items make you a bit more self-conscious, especially if you’re an awkward teenage girl.

Kasha an enterprise in Rwanda, started by solving the very discrete problem around girls accessing to affordable, quality sanitary items which can cause long-standing societal issues, such as school drop-out, if not solved.

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They are now running an ecommerce platform delivering female products throughout East Africa to women on all levels of the social spectrum.

Joanna, the CEO and I discuss the different customer segments they have on Kasha,the mechanisms by which they reach their users,and how their B2B offering of data-backed insights is funding those customers typically overlooked as unprofitable.

We conducted this interview in Joanna’s office, in Kigali and near the end, there was a huge downpour of rain which you can hear in the background.It doesn’t distort the interview, and if anything brings you closer to appreciating the changing microclimates of Rwanda, but just a heads up, in case you’re wondering.

For now though, let’s get started on this great episode with Joanna.

Kasha is a social enterprise based from Rwanda, but which is soon expanding to Kenya, and then beyond.

Joanna started her career at Microsoft, and then at Gates Foundation, the latter being an early sponsor of a pilot they were running.

The mission driving Kasha is that no girl should be prevented from access affordable, quality healthcare products.

This means having various channels for the different customer types, based on their income, but more importantly geography: we spend time discussing the various routes to market needed for both urban and rural delivery.

More recently Kasha has moved into other products that females wish to buy, namely in the beauty section.

The business makes money from various channels, one of which is the insights and feedback possible from their rural customer base. Companies such as Unilever have no way to get such feedback, and so the Kasha platform is able to provide.

Lessons and Insights

Biggest learning: even though we’re e-commerce, a call centre is incredibly important in building trust.

Biggest insight: “Bottom of the Pyramid” customers are even more aspirational than I imagined.

Social media etc.

Website: http://kasha.co

Twitter: KashaRwanda

Instagram: kasharwanda

Facebook: kasharw

Why Ethiopia needs a localised version of Uber, with Habtamu Tadesse from ZayRide

Overview

In many parts of the world, ordering a taxi from your smartphone is the new norm.

Until July 2016 though, this was not possible in the country of Ethiopia, Africa’s second most populous country.

There are several nuances about Ethiopia which made it difficult, and it was only once Habtamu returned to his home country after several years away that the capital Addis Ababa now has this service.

It’s worth saying that Ethiopia is distinctly different from the other countries featured so far on this podcast. The ruling government runs a relatively closed economy, and there are strict regulations on anything involving interaction with the international business community.

In this interview, Habtamu and I discuss just this, and some of the workarounds that he has had to develop in order to operate in Ethiopia.

We cover how people have debit cards, but can only use them to withdraw cash, national company ownership for particular industries, and also how unlike other countries that Uber and the like work in, it’s illegal for private drivers to earn money giving rides.

There’s lots in this episode around doing business in a difficult place, and the strategies to overcome it, and so beyond just leaning about Ethiopia, I have no doubt you’ll get a lot from it.

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Born in Ethiopia, raised in Boston

I returned to Ethiopia after working for Uber in Boston with a view of bringing the idea Addis Ababa. Only 4% of Addis population have private transport so there’s a big need.

We’re better than Uber

Mainly because the internet is poorer than elsewhere we have designed our app to better fit the environment. Namely compressing the app size (because of 2G connectivity) and having a call centre.

Logistics companies have to be Ethiopian

Owing to the regulation a logistics business has to be Ethiopian, meaning Uber/ international companies couldn’t operate here. This is aside from the technical difficulties.

We went to the Ethiopian CIA

The equivalent government entity were required to sign off on signing up ZayRide. They were concerned with the safety of passengers which was all sorted.

July 2016 was the first ride

The first customer didn’t realise that he was the first customer. The passenger was a US expat who heard about it on the radio. He had a great experience.

We partner with bars on Friday nights

ZayRide gives 15% off on evenings when people may have been out drinking. There will be a partnership where the bar will include a code at the bottom of the receipt

You pay cash to the driver

It’s not possible to use international credit card processors. There are no ways to process debit card payments. People have plastic cards, but it can only be used to withdraw cash.

We’re building our own payment processor

There are costs involved with paying cash in our business. ZayRide doesn’t want to wait for someone else to build it, and so they are doing it themselves.

Mobile payments

Essentially it works by transferring money from one account to another. From the users’ perspective it feels the same as paying with a debit card, except that they’ll swipe it at the end of the trip.

Ethiopia is way different from Africa

In Ethiopia businesses are wary of anything too automatic. Having a physical device so business owners can “feel” the money they’re receiving. They want it to be tangible, and so don’t trust mobile money as much.

Government official’s phone number

It’s normal to take the personal number of the officials that you work with. You’ll call them up at night, it’s normal here.

Limousine fleet in Boston

A lot of the taxi drivers in Boston are Ethiopian and so I was able to sign them up on behalf. I could see that it would be a big opportunity.

Series A funding

To date it’s been funded by Habtamu’s Ethiopian restaurant. For the next level, investors are from Kenya, London and the US.

Personal cars not allowed to give rides

The regulation prevents private drivers from giving rides to people. The rationale is that it would take business from taxi drivers who have invested in their car. ZayRide have overcome this by having a crowdsourcing scheme.

Increasing supply is important

Currently there are 8,000 cabs and there should be 40,000 cabs. The market hasn’t corrected itself as Ethiopians don’t view taxi driving in a positive way. Drivers make lots of money though, which isn’t always seen.

Looking after our drivers

This is pressing for us. Maintaining a good relationship is key for us – we meet with the Taxi Associations every fortnight so that they feel part of the decision. Everyone is happy.

100,000 customer base

This is a big target for us. Partly through partnerships with hotels and NGOs. This will be done partly through offering tablets to the hotel lobbies so guests can hail a ride easily.

A dying tribe…

Is the inspiration for the name of ZayRide. They live on an island and the population has now dwindled to 5,000. ZayRide is named this way to give them recognition.

Social Media Follows etc.

Website: http://www.zayride.com/

Facebook: https://www.facebook.com/ZayRide/

LinkedIn: https://www.linkedin.com/company/zayride/

Running an online business in Ethiopia when the power goes out, with Feleg Tsegaye from DeliverAddis

Overview

When running an e-commerce company in most parts of the world, there are certain things you can take for granted. Namely that your customers can get on the internet in order to use your service.

In Ethiopia, this isn’t always the case.

The country regularly has power outtages meaning the population are without electricity and businesses are forced to adapt.

Even when the lights are off though, people want food, and part of the reason that Deliver Addis is still in business is that they have had the creativity and tenacity to overcome such issues.

Feleg and I discuss how they created offline procedures for his online company, attracting investors in a nascent climate, and the steps they take to onboard restaurants to their platform.

It’s a great insight into business in Ethiopia, and so I hope you enjoy.

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Ethiopian parents, raised in the US

After growing up in the US I felt a need to return to Ethiopia and create opportunities for people there.

I was getting hungry…

and the fact there wasn’t a food delivery service in Ethiopia made me think why not create on

Others like me

It seems that there are others in Addis Ababa who are also “hungry and lazy”

Not many motorbikes

Unlike other African countries, Ethiopia doesn’t have the same “boda boda” culture. This makes it difficult when sourcing drivers.

Cultural things to overcome

Ethiopian culture doesn’t value urgency as much as some other cultures. This means that we have a training programme that people need to pass in order to meet the requirements.

Keep it asset-lite

Sometimes Deliver Addis will rent back a bike from the driver, if the driver owns it themselves. Deliver Addis then rents the equipment back from them.

Women are too smart to ride motorbikes here…

So all of our drivers are men. The longest serving driver has been there for 3 years.

We have a rota

To ensure that there is coverage. Drivers will self-organise this to ensure they have X drivers on call.

Restaurants are big fans of us

DA delivers a lot of volume for them, and so as long as the kitchen is open, they can make money.

There’s a lot of data

We track popular dishes as well as time spent on different parts of the flow in order to optimise the experience.

Minimise number of clicks

This is our goal in terms of placing an order. Optimising for where they spend time on the site.

Investors understand our business

We just closed our investment round from international investors who have a presence in Ethiopia.

Ethiopian investment climate isn’t mature

Especially when it comes to technology businesses. There are a number of blockers to overcome such as the internet being shut down.

How to overcome no internet?

For an ecommerce company it’s pretty critical. When it happened we overcame the situation mainly through using phones, and developing offline procedures.

We had our best month…

In the month without internet. People found our number and were able to order still.

Ties with Jumia..?

There could be some sort of partnership that exists, as they don’t operate in Ethiopia.

Deliver Addis is nuanced

There have been additional steps necessary to ensure that our business works, in Ethiopia especially.

Tenacity is key

Often Feleg will hit the road and go deliver a meal when it’s needed. The boss is in there with me.

Have a presence beyond Ethiopia

A goal is also to go to other countries. Feleg owns additional domain names, such as www.deliverafrica.com and www.deliver.africa. The latter was more expensive.

My favourite dish is vegan

It comes from a chain restaurant that has developed an awesome tofu dish.

~$3 delivery

There’s a view to start charging restaurants also in the future. But for now we just want to have a good catalogue in place

Restaurant onboarding

It takes several stages. The first is to have a “blind taste test” which involves someone from Deliver Addis coming in to have a meal. Looking at the cleanliness of the bathrooms as well is a good gauge too.

Hole in the wall

We look for the places with a great value proposition, and so aren’t too worried if it’s not a big established restaurant.

Ethiopia is worst case scenario

From a technology perspective, it’s really difficult to work. Therefore when we look at other places to go, it’s somewhat “trial by fire”, but if it works here, it’ll work everywhere.

Tech is all me

Feleg has built the tech platform himself. The servers need to be in Ethiopia as the cloud computing doesn’t really work.

Organic growth

There hasn’t been a marketing spend yet, word of mouth has got us this far.

Social Media Follows etc.

Website: https://deliveraddis.com/

Twitter: https://twitter.com/deliveraddis

Facebook: https://www.facebook.com/deliveraddis/

Overview

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Overview

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Social Media Links

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Overview

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Social Media Links

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Overview

Thank you for signing up!

Dutch digital nomad

What struck me about Kenya?

The company has evolved

NGOs train people in tech

Working remotely didn’t work out

Focus group is mid-20s

Incentivize people to return

Who is the buyer?

Caspar represents the developer community

Why is it called Caspar Coding?

Corporates are into outsourcing already

Adopting the Spotify agile approach

A Dutch candy is our secret weapon

Key lesson

Key insight

Links etc

Overview

Thank you for signing up!

It all started trying to attract capital

Sean works on different

Entrepreneurs know the ins and outs of their business.

Example of wheat processing.

Ethiopia is different

The foreign currency reserves are key

12 step financial model

Sensitivity analysis is the most interesting

Net working capital is key

Scale my own business slower

Message to investors on delays

Our investment philosophy

What’s changed the life perspective?

One for One on the book

Lessons & Insights

Links etc

Overview

Thank you for signing up!

Accountant by background

Tuskys is a mass-market supermarket

My Mum is a milk farmer

Tuskys began with a small grocery store

We open shops to empower communities

What determines opening a new store?

How Tuskys transforms a town

Increasing demand through availability

We don’t have many own label products

Listing as a supplier

Gross margin on foodstuff

“The best yoghurt in town”

Other opportunities lie in…

Human capital gap

Pilferage

International retailers are coming!

Consolidation in Kenya retailers

Self-regulation

e-commerce opportunities

Lessons & Insights

Website

Overview

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Other notes

Lessons and Insights

Social media etc.

Chandaria Industries

Darshan (personal)

Other links

Overview

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