S1E1: Solving Problems in Africa by Taking the Worm's Eye View

Erik [00:11]: Being close to the ground on that is important, and this is where the mistake comes in with a lot of product development in the tech world. Historically, the epicenter for technology design & development has happened in first world countries and when you have those same people try to apply it to something in Kenya or Africa you start seeing a disconnect.

Justin [00:32]: That's Erik Hersman - Kenyan entrepreneur and CEO of the connectivity and technology company BRCK.

Erik [00:40]: Yeah, everybody's like... I don't look or sound like I come from here.

Justin [00:44]: Having spent most of his life and career in East Africa, Erik has seen first hand the importance of being close to the customer, and where a lack of understanding of the local context is problematic.

Erik [00:55]: An example of this - I remember back in 2010, we had these guys being fast-tracked into management at Google come through, and it was shortly after the first Google phone - the Nexus came out. I had one of them, and we all brought it back and we're like "OK, this is great". The Android smartphone that really is supposed to be the best of the best at the time. And then we realize we can't use M-Pesa on it. M-Pesa is the mobile money system in Kenya that moves like 25% of the GDP every day. Turns out, that the software engineers who were working on this at Google, they were visiting us and so we asked them - we had them up in front on stage with everybody and we're like why can't we use M-Pesa on this. And they said, well we never thought it was important because we don't use it in the States to enable the same tool. Because M-Pesa is so much a part of people's lives in Kenya, that phone will never be used. It's understanding that local context is what drives so much of the adoption.

Justin [01:51]: In our inaugural episode of The Flip, we're taking the worm's eye view. A tenet of entrepreneurship, and Silicon Valley-style entrepreneurship in particular, is doing just that - getting as close to the customer or end-user as possible, to best understand and implement solutions for them. But I wanted to know what this looks like across the African continent, and in particular to explore more contextually relevant local stories on entrepreneurship. You see, I'm an American expat living in South Africa - and I learned that my lens - the one formed by Silicon Valley thought leadership, and by pervasive narratives of Africa in general, and entrepreneurship in Africa in particular - that lens wasn't the right one to be using in this market and in this context. But what's really going on here? If Google can't properly develop a phone for Kenya the first time around, who are the people that are solving problems and filling the gaps? And how are they doing it? So today, on The Flip, we learn from a set of entrepreneurs filling those gaps, and who are solving problems more unique to the African markets in which they operate, by taking the worm's eye view.

VO [03:06]: You're listening to The Flip, the podcast exploring contextually relevant insights from entrepreneurs and investors changing the status quo around Africa.

Justin [03:18]: Welcome to The Flip - I'm your host Justin Norman. In The Flip we're exploring alternative narratives surrounding African entrepreneurship, and when appropriate, challenging the contextual relevance and ubiquity of Silicon Valley thought leadership. Our inaugural episode, and our journey of discovery starts in Uganda's capital city of Kampala.

Ricky [03:39]: When you come to Uganda, they will call it Boda Boda. When you go to Kenya, they will also call it Boda Boda. When you go to Rwanda, Kigali, they will call it Motos. When you go to Nigeria, many people will refer to it as Okada.

Justin [03:54]: That's Ricky Rapa Thompson, co-founder of the Ugandan ride-hailing app SafeBoda.

Ricky [03:59]: A boda boda for anyone who's never been to Uganda is a motorcycle taxi that people use to transport people within and around town in most of the urban cities across Africa.

Justin [04:09]: I wanted to talk to Ricky about SafeBoda's origin story, as it's a great example of the entrepreneur taking the worm's eye view and creating innovation from the bottom up. Ricky himself was a Boda driver before going on to become a tech co-founder.

Ricky [04:23]: I joined the boda boda industry in 2011. In 2012 I founded a city tour company. Early 2014 I lost one of my very good friends that I was working with almost every day. He got a minor accident, he got a crack in his head. He had brain damage, and he died. But after that, I realized, there are so many accidents that are going to happen, and something needed to be done. So I started as an advocate of road safety.

Justin [04:50]: The boda boda industry at that time was suffering major reputational issues, perpetuated by inconsistent pricing, a lack of adherence to the rules of the road and major problems of safety.

Ricky [05:01]: One of my selling points was offering a helmet. I used to carry with me a second helmet. I was the only one. So it was alongside that I started advocating for helmet wearing, I used to give my customers helmets, but it used to be a very tough discussion to convince one customer to wear a helmet. Once they refused to wear a helmet, I actually give it to them to carry for me, and I would make it personal, I would tell them about my friend who died in a boda related accident. So they would agree and the next day they would call me and ask for the helmet and helmet and helmet. Most times, we would agree when we were already in motion because every time I would try to wear one from the beginning they would say no, so I would make you sit, I talk to you, before we complete the journey you would make me stop and wear the helmet and the next day you wear and wear and wear.

Justin [05:51]: So as Ricky set out on the difficult path of changing customer's behavior and increasing safety in the boda industry, it was a serendipitous connection on one of his boda tours that ultimately led him to tech entrepreneurship.

Ricky [06:03]: I had one of my clients called Louise, from the UK, who came on a boda tour and I told her about my story and what I wanted to do. She said "I'll spare some time and come back to Uganda to help you". So she came back to Uganda 3 months later to help me. You know, I didn't know that much, all I wanted to do was possibly do up a small call center and then train drivers, provide them with equipment and then customers would call to the call center and then they get connected to drivers. And then what happened, when we were crafting the idea, Louise happened to be staying in one of the shared houses with Max, who is now one of the co-founders of SafeBoda. So Max got interested in the story - he had lived in Rwanda, Kigali - where 100% of customers and drivers wear helmets so he felt very uncomfortable using bodas every time he would come to Uganda. So he said I want to meet that young man, he called me, we met and we agreed that we were going to work on a project called SafeBoda.

Justin [07:04]: Now, with any market place or product such as a ride-hailing app, it's necessary to build up both sides of the marketplace. Though SafeBoda provided a better innovation for customers, it was the improvement to safety and to the reputation of Boda drivers, that was vital to build up the supply side of SafeBoda and to provide a superior experience for their customers. Ultimately, what made SafeBoda uniquely positioned for success, was Ricky's intimate understanding of the needs and wants of the Boda industry, because the boda industry was his industry.

Ricky [07:36]: A boda guy needs to speak to a boda guy to make that person understand. For us as boda drivers, we are smart. We need other boda drivers to speak to us. That's why from the point go, I've been really focusing on the boda boda world, the boda boda drivers. When I started this journey, I made sure I recruited people who have been in the boda industry to work with me. And that was an eye-opener, because once I got these people to believe in me, they would share the message with other people, so the words and the good things about SafeBoda just kept on growing, because of the kind of people we were relating with. So, what we have done is we have worked together as boda drivers, as people who have been in the boda boda industry, as people who appreciate our work and no what we want from the boda boda industry, and worked together as a team. Even as of to date as we speak, most of the operations team is dominated by ex-boda drivers.

Justin [08:38]: For Ricky and boda drivers, it wasn't merely about an opportunity to make more money or use technology to provide an improved experience for end-users. It was equally about dignity and respect. SafeBoda gave its drivers a unique ID number, a uniform, and their names on their uniform. They gave their drivers an identity, which proved vital to getting buy-in and creating behavior change amongst the boda drivers.

Ricky [09:01]: They were like, this first group of people really needed change and most of the time that's the reason why they joined us. Because they wanted an identity, they wanted a sense of belonging and they wanted some kind of human face into the business they were doing. At the time when I started sharing my idea, and what we wanted to do with the boda drivers, they were like yeah IF I'm going to look different, if people are going to appreciate me, if I'm going to make more money, if I'm going to be respected then I am going to be part of SafeBoda.

Justin [09:34]: And if you're wondering how Ricky and his team have done from a driver recruitment and retention perspective...

Ricky [09:39]: When you look at other ride-hailing companies across the world, we are one unique company that has a retention of over 80% of our drivers.

Justin [09:46]: Meanwhile, take a guess at Uber's global retention rate - it's only four percent! So, after 5 years of building and innovation, how does Ricky describe SafeBoda today?

Ricky [09:57]: If you ask me and you're in Kampala, what is SafeBoda? You know, we are a tech company, but people do not know us for being a tech company. People know us because of the people that we have worked with from the point go. So, today I would describe SafeBoda as a community of Kampala's best boda drivers that we have selected among the rest, and trained them, empowered them to be able to support the community and the ecosystem, as well. One thing we are proud of is the community of boda drivers that we have created, and they advocate for what is best for themselves and I think that is what has kept us going.

Justin [10:40]: So while a boda driver started SafeBoda, what about startups whose founders come from a different background than their customers?

David [10:47]: Our aim was to use technology and hardware to mitigate risk and try to stop the challenge of shack fire.

Justin [10:53]: That's David Gluckman, the CEO of South African technology and financial services company Lumkani.

David [11:00]: Francois was our founder was at the University of Cape Town and he was tasked with finding a technical solution to the problem of shack fire.

Justin [11:10]: The technical solution David is referring to came in the form of a networked heat sensor device used in population-dense informal settlements. When a fire has been detected, the system sounds the alarm of the networked devices within a certain radius of the triggered sensor and also notifies residents via SMS, allowing for rapid detection and networked alert.

David [11:30]: So the main design feature was that - the diversion of fire detection in informal spaces is your method of detection. So, do you detect for smoke or heat? That is the immediate diversion. In a place like this, in this office, we cannot detect for heat, heat dissipates weirdly, you also don't expect to see smoke in this place so that is the best form of early warning. In our market's households, smoke is very prolific - it's either a fire burning inside your home from fossil fuels, a propane stove, a candle, smoke outside, dust, you name it. So the idea of doing a smoke detector would have been foolish. Furthermore, our devices are actually networked to each other using radio frequency, so if we were going to have a device as sensitive as a very sensitive sensor, then we'd actually be annoying more people than we currently do. Hopefully we don't annoy anyone, but we do need to network - the purpose of the network is critical in reducing community-wide risk, which we've seen again. Almost every situation we have, it's the network that reduces the risk.

Justin [12:32]: We can already start to see the unique design features of Lumkani's networked device, that were necessary to create the greatest utility for the end user in informal settlements, but it was the customer feedback and listening that led them into financial services.

David [12:46]: The main driver was the business and the customer. Our customer said this is all cool and well, we may not pay this upfront price for this fire detector but what's the deal? If it detects and then I still have a fire, what next is basically the question - what will you do? We found that the best possible way about doing that was through financial services. It's really a much easier way and much more tangible way and probably a more effective way of dealing with the issue.

Justin [13:12]: So, back in 2016 Lumkani introduced fire cover, South Africa's first insurance product for households in informal settlements. And Lumkani's strong local partnerships allowed them to gain trust and co-develop these financial service products with their end-users.

David [13:28]: A lot of the design, a lot of the thinking, a lot of the strategy was co-developed with your end-user. We could speak to our end user every single day. That's probably one of our critical enablers - the ease of access we had to our client and who would be our future client. Our original partnership was with an NGO, who was working with a network of informal settlement communities. The people who were working in the organization and rallying their communities were part of the organization. So the NGO is structured as a very grassroots organization, so we weren't talking to elites who would pass us down - the members of the committee of the NGO were those living in our households.

Justin [14:06]: This co-development process also allowed Lumkani's co-founders, none of whom grew up in a township, to create the utmost value for their users and crucially to build trust in an industry where the trust is vital yet has eroded in this market in the past.

David [14:20]: It's always going to be a big challenge when you're faced with requiring a lot of trust and your customer is a little cash-constrained. Trust is the most important thing for anyone, who's trying to sell you something as important as financial services. Having said that though there are many many cases where our clients have historically been taken for a ride with flyby night organizations who promised big things and then don't deliver. Even really well-known insurance brands are often cited as crooks in our community, in our neighborhoods and by our clients. And look, thinks like claims are really important. You deliver a claim, you've changed the nature of trust in a space. Having local agents is definitely a thing, having built local relationships, investing a bit of infrastructure like a billboard or a kiosk, or when people have seen your agent there for 3 years, 2 years or whatever the case may be, there's this level of like OK, maybe this is legit.

Justin [14:58]: But, going where no other insurance company has gone before was not without its own operational and design challenges, as well.

David [15:06]: There is nothing that we could draw on to build this, absolutely nothing. Not from the way we collect the money... Cash is still our major channel of collection. I mean, no insurance company collects cash. Optimizing the time an agent works in the time of the month. We've had to invest a lot of time in - when is the best time to collect money? Now we're doing push to pay. If I had push to pay back in the day, it would have changed the game because I wouldn't have had to even figure out because the client could tell me when they're ready. On-demand payments is obviously a dream. The flexibility of how the client can pay and drop off, and we know exactly a client drops off or why they drop off or when we need to stop them from dropping off. And clients who even come back after months who then we subsequently suspended, and we understand why that is the case. And no insurance company gets that data. But granted, we come from a very low base of customers so we can invest so much more in learning.

Justin [16:01]: Lumkani has endeavored to solve a difficult problem for the bottom of the pyramid but is proving that there is market demand for a product developed with the right features, and at the right price point for a specific end user.

From ride-hailing in Uganda and insurance in informal settlements in South Africa, we move, naturally, to crowdfunding farming in Nigeria.

Onyeka [16:28]: Hi, I'm Onyeka Akumah and I'm the CEO of Farmcrowdy.

Justin [16:33]: Farmcrowdy is a crowdfunding platform out of Abuja, where everyday Nigerians can invest in agriculture harvests around the country.

Onyeka [16:40]: We've been able to use our website and mobile apps to sensitize the public about how agriculture can have tremendous impact on the economy, and get them to participate in it while informing them about the process involved in agriculture. And then getting them to make money - so they're doing good while doing well. While making money, the farmers are getting wealthier and at the end of the cycle, there is more food that is produced.

Justin [17:06]: In terms of impact, Farmcrowdy's stats are impressive -

Onyeka [17:09]: In the last two years we've generated close to 11 million dollars in sponsorship on the platform - US dollars in sponsorship on the platform. We've been able to work with about 30 to 40 thousand farmers across 14 states in Nigeria, we've been able to cultivate over 60 thousand acres of farmland, raised over 2 million birds to date, we currently have done maize, rice, soya, chicken, cow farms, cassava farms. We also have the largest community of agric enthusiasts in Africa on a platform we call Agric Square, with about 16,000 people as of today - it's like a forum that allows people to ask questions and get answers from experts.

Justin [17:56]: Onyeka came from a technology background, and didn't have any agriculture experience prior to Farmcrowdy. But he always paid attention to agriculture, given its importance to the Nigerian economy, and saw an opportunity to help farmers improve their yield using technology.

Onyeka [18:12]: Not many people have done valuable stuff using technology to create solutions, so I saw that opportunity to be able to use technology to get people excited to about investing in these farmers and then sign up the farmers to take investment and do the proper work. The underlying factor was the technology that was connecting both sides. I had the idea around that we could get people to come together to invest in agriculture rather than having one person taking the risk. And doing my research around which farmers to work with I noticed that there was over 38 million farmers in Nigeria that had 3 main problems: access to phone and technology to improve their yields, and market access to sell what they produced. So we then designed the model of getting the crowd of people to fund through our platform, so they invest through us for us to sign up to get the farmers to do the work on the farm.

Justin [19:08]: During the initial design phase, it was vital - specifically given the novel nature of Farmcrowdy and the inherent risk that comes with investing - to intimately understand and to address and design for the concerns and considerations on both sides of the crowdfunding marketplace.

Onyeka [19:24]: I put myself in the shoes of the first investor that wanted to invest in the platform. It was a case of I had to be the first investor and I noticed the challenge the investors were having - one of it was the farmers weren't giving them enough updates, they were worried about the risk of their investment going bad and them losing all of their capital. These were my own worries, as well, so I put myself in the shoes of the person investing in the platform and tried to make sure we designed the platform that met all of these needs. So we provided insurance coverage for their capital, we provided updates from the farms so that person is getting updates about the activities from the farm and we did all of the things necessary from technical expertise standpoint to make sure that the investor is confident with his investment with us, and we had customer service taking care of them.

Justin [20:14]: In Onyeka's case, it was his personal buy-in - skin in the game - that helped mitigate the concerns that existed from the investing side. But not having a farming background, testing and iteration was the way forward for creating solutions for the farmers.

Onyeka [20:28]: On the farmer side we took up several test projects to try to understand what the farmers' needs were and in understanding and finding those needs, we then arrived at a place where we picked those major points that if we were able to solve for the farmers, we would have more impact on a larger scale. In providing updates to the farmers, and telling the farmers how to do things better on their farm - technical expertise - we decided to build a mobile app that we're able to get the farmers to use to have access to technical experts that will translate things to them in their own language and recently we also started thinking about how we can use voice recognition software to provide it with voice tutorials, not just text. So, these solutions helped the farmers to be able to get the desired knowledge they need to improve their yields. The second one is the farmers struggle with where they sell what they produce so we built a platform called Farmgate Africa to give the farmers access to the right market so they can make a decent margin - we're becoming a super middleman, now the farmer is able to see the average price from the buyer directly and they know how much they can make, so that aggregation point on Farmgate Africa became a solution for those farmers. The last thing, the farmers struggle with access to funding from banks because they usually go as independents. We were able to aggregate a mass cooperative to allow them now to now to go through our platform and get the right inputs and needs in order to get funding.

Justin [22:10]: Crucially, Onyeka and Farmcrowdy were very strategic and selective in how they approached farmer's problems, and in determining what problems to solve for.

Onyeka [22:18]: We decided to start small so we could learn through the process and then start making changes and making adjustments... and then we started scaling. Rather than doing everything for a farmer, you're not able to scale with that. So we looked at the different pain points and then defined those that we could scale with and that was how we arrived at the model we have today. So we don't solve all the problems, we just take some of the problems that we become very good at solving and then we can scale.

Justin [22:49]: I believe that this strategy is the key. Sometimes, it's not what you choose to do that's most important, but it's what you choose not to do. Farmcrowdy is not solving every problem - and in intimately understanding their end-user, they are able to pick the most scalable problems in an effort to create the most impact for them.

Onyeka [23:06]: The future for us - we want to sign up on our platform a minimum of 30 million farmers that will be able to access our service. If we have 30 million farmers in Nigeria, that's 1 of 3 of all farmers in the country. That is a focus point for us.

Justin [23:24]: This podcast wouldn't be possible without the help of my self-appointed executive producer and b mic, the Nigerian born and Johannesburg based entrepreneur Sayo Folawiyo. Sayo is the Co-Founder and CEO of home services marketplace Kandua.com. For each episode, we wish to further explore and discuss what we as entrepreneurs get out of the insights shared from those interviewed. The truth is, there is no prescription for entrepreneurship, and we don't want to create the type of content in which we pretend to know exactly what entrepreneurs need to do. Nor do we wish entirely - for the benefit of "The Flip", in which we compare and contrast African entrepreneurship with western thought leadership - to create differences where there actually aren't any there. Instead, we wish just to transparently put everything out there on the table, and let people come up with their own conclusions. So, what did Sayo and I get out of this topic and the insights shared from Ricky, David and Onyeka? Take a listen...

Justin [24:21]: Effectively there's a gap - and there's an opportunity created by the specificity of the problem, and those who know the problem well are well-positioned to solve it.

Sayo [24:30]: I'm trying to decide if I agree. I don't know that the specificity of the problem makes it a bigger opportunity.

Justin [24:37]: Bigger in what sense?

Sayo [24:38]: More or more of, or any sense.

Justin [24:42]: I don't mean more lucrative - I just mean... fine, maybe an opportunity.

Sayo [24:48]: I don't think the specificity of the challenge makes it any more of an opportunity than any other opportunity.

Justin [24:54]: I think... It's a greater opportunity for those who know the market more intimately than a foreigner, for example. Though I suppose a foreigner can learn the market, but that's gonna take a longer amount of time and be more expensive.

Sayo [25:09]: So that I think might be true - how do we substantiate that within the actual body of the podcast? I'm just not sure there is a particularly - in my mind there's no point in making up a juxtaposition where there isn't one. I think you just say, hey this is one of times where it's exactly the same... But isn't it interesting - the kind of problems people have.

Justin [25:30]: I suppose, if we're searching for things that aren't true, then I don't want to misrepresent the situation. So what we can say is - getting close to the customer is ubiquitous - that's a tenet that's ubiquitous. Taking the worm's eye view is ubiquitous. But isn't it interesting the types of people that can solve these types of problems here in Africa. An Uber driver didn't start Uber. A boda driver started SafeBoda.

Sayo [25:56]: But then I think there's also a lot of examples of boda companies that weren't started by boda drivers.

Justin [26:01]: The thing is, it's both. There's no prescription.

Sayo [26:05]: No, I'm not looking for prescription as much as I'm looking for pattern. Which makes the narrative stronger. I don't know what it means...

Justin [26:13]: If there's no pattern?

Sayo [26:14]: Yeah. So an Uber driver didn't start Uber but a boda driver started SafeBoda, and so - therefore...

Justin [26:19]: Does there have to be a therefore or can it just be, and that's interesting?

Sayo [26:23]: Why is it interesting?

Justin [26:24]: You don't think that that's interesting?

Sayo [26:26]: No. To be fair, maybe this is our conversation.

Justin [26:28]: Yeah I mean, this could be the conversation.

Sayo [26:31]: And I also think that that's interesting as well, in terms of a way of going about this - it's just like being a bit transparent about the conversations we're having and then let people come to their own conclusions.

Justin [26:42]: I would like to make the argument that it's perhaps easier for local people to start something because they understand the problem more intimately - but again, that's prescriptive, like there's cases in which being close to the problem is helpful and there's cases in which being close to the problem is disadvantageous.

Sayo [27:01]: In a startup world it's just you and your customer, it's just get it done. I've never heard of anyone being too close to solve a problem.

Justin [27:08]: But what about this notion of being close to the problem means that you think you understand the customer and there may be a false paradigm where you're not actually taking in the customer feedback or doing the design thinking exercises because you're making assumptions because of how close you are to the customer because of how intimately you understand the problem. A better way to ask that question is - in some instances, might a startup founder be better off by assuming they know nothing? And does it make it easier to assume they know nothing when they actually know nothing about the market?

Sayo [27:46]: Yeah, there's something to that but I think in a space where time is a super valuable commodity those assumptions are probably what can often make the difference between a winner and a loser - just the ability to make those quick assumptions based on experience. There may be questions around how you define that customer, is the customer segment that you're talking to the right customer segment that is your experience - so you have to have an open mind. But if we assume that you're closeness to the problem is not fabricated and the customer you're serving is someone that is actually like you, then almost 95% of the time it's more beneficial.

Justin [28:24]: So then what we're arguing is that being close to the customer and understanding the customer problem is more beneficial 95% of the time.

Sayo [28:33]: Yep.

Justin [28:34]: Ok, and so here in this episode we talk of 3 use cases of people. Some started close to the customer and then some got close to the customer - either way they ended up close to the customer.

Sayo [28:44]: Yeah and they all have quite different businesses.

Justin [28:47]: Well, is the conclusion perhaps - are we validating the ubiquity of design thinking?

Sayo [28:56]: (Laughs) Yeah I think that's what's happened... which is cool. It sets up the thought that we're not out to just bash on Silicon Valley shit, and some shit just makes sense. And then it also sets up the rest of the contrasts.

Justin [29:12]: Yeah that's what I'm thinking - If we are to create a blueprint at some point down the line, it's not going to be entirely different or diametrically opposed to the Lean Startup. It's still going to have many tenets of this methodology apply because it's universally applicable. I think, in this experience and through this process we can confirm and validate that much of it is, in fact applicable, but there are going to be some instances - this may not be one - but there are going to be some instances where we find other things that are not applicable, and that's going to be the key diversion.

Sayo [29:51]: Exactly. And I think the point is really about being able to tell the difference.

VO [30:01]: Thanks for listening to this episode of The Flip. You can subscribe on your favorite podcast app and follow us on social media @theflipafrica. You can also join our newsletter by going on our website theflip.africa, Tweet us, DM us, email us. We'd love to hear your feedback on the show. We'll see you next time.