Africa’s eCommerce firms have to gamble with logistical hurdles to become successful unlike their international counterparts operating in markets where infrastructure like the national addressing system and roads are in place.
The platforms in Africa therefore find it a problem getting products across to customers and maintaining a fleet of vehicles and motorcycles. Nigeria’s HubbonNG-a logistics startup based in Abuja, aims to solve some of these problems, one step at a time. TechMoran met up with Ejieji Munachiso, founder and CEO HubbonNG and this is what he took us through.
Tell us about your self and HubbonNG.
Well, I am a solutions driven individual. I am a graduate of Civil Engineering with Honours from Coventry University. I have 7 years of work experience in the construction, retail, hospitality and educational sectors in the United Kingdom and in Nigeria.
I have developed technical and transferable skills that enabled me to feel that I can create solutions to transform Africa.
HubbonNG was launched out of the greater notion to improve Africa focusing on business, science and technology as the vehicle for change. The best way I felt to create maximum impact was to create a solution for the growing SMEs industry both online and offline. The major issue that businesses and most important e-commerce businesses face is logistics. The ability to move the products they sell from their stores to the door step of their customers across Nigeria and indeed the whole world at affordable rates. This is the goal to which HubbonNG was initially launched.
We have divested our interests into creating greater value for our customers online as well as offline as providing business listing services that enables them to grow their customer base both offline and online. We have also delved into content development on different social media platforms to create maximum value for Entrepreneurs and their businesses.
As an engineer, what inspired you to toll the line of entrepreneurship and what is the story behind HubbonNG.
It is hereditary. I grew up in a fairly Entrepreneurial home. I was told by my grandmother that my dad had always had excuses for job interviews that he had applied for. He was dedicated in creating wealth by becoming an Entrepreneur since he completed his NYSC. I started my company while I was half way through my NYSC so I guess I beat his record.
My mum is equally entrepreneurial. Although she is a public servant moving from being a teacher to becoming an administrator in the government, she has run different side hustle in the fashion industry. In the trade of materials, clothes and accessories.
My parents trained my siblings and I with the belief system that your life is in your hands and you hold the keys to be as successful as you want to be. My mum believes that peoples ambition is truly their limitations. She urges us to dream as big as we ever can.
Even as a student, I had always wanted to be in charge of my future. I felt that a course in civil Engineering is the most viable field to run a privately held company and earn a lot of money. After I completed my degree, I did an intern job with a construction company whilst offering construction design services privately to individual customers and this raised the initial funding that I used to launch HubbonNG.
When I launched HubbonNG, I had initially offered logistics services alongside construction consulting. The client drive was low on construction and it didnt seem to be a sustainable venture for my team members and I, so we concluded in streamlining our service to only Logistics. This helped our customers understand our company better as a one-product company. It is truly confusing to tell customers that you offer logistics and construction services. They are a totally unrelated market. There was hardly any innovation we could apply to the construction market which is a highly crowded market. The logistics industry seemed like the better bet.
I obviously didn’t launch HubbonNG head on as I earlier iterated, I tested it out while still working as an intern and my building design gig. I didn’t put all my eggs in one basket because I wanted to be sure that what I was doing was profitable enough to
By November of 2016, I had received a total revenue of N350,000 in under 6 months and the majority of my earnings was from the logistics. That informed the decision to streamline my offering. I applied for the Tony Elumelu Foundation in January 2017 and I qualified, this increased my belief in my abilities to create a business that was bankable which inspired me to officially register the business on the 29th of June 2017.
You are a beneficiary of the Tony Elumelu entrepreneurship program (2015), tell us how the program helped your startup from inception till date.
As I earlier iterated I qualified for the programme in the 2017 cohort in March 2017. I went through a robust Entrepreneurship training that developed my knowledge and understanding in launching, developing and scaling my business. This offered me an opportunity to develop my business management skills and gave me an in-depth understanding of funding from loans, equity investments, grants and other forms of funding that can be used in business. I also learnt about unit economics, market segmentation and other technical aspects of business administration.
The programme enabled me to develop a growth strategy for my business and has enabled me increase my volume of transactions (deliveries) monthly as well as enabled me scale my business across 4 cities in Africa.
The programme enabled me understand what my hiring strategy would be and I have already brought on a co-founder who fits into the role of the Chief Operating Officer. I have understood the next few people that need to be brought on to the team.
The programme most importantly gave me access to a 3000 strong mastermind group of Entrepreneurs across Africa and this is my greatest asset. The ability to have them engage my content on social media, plus my search for partners and indeed customers has indeed been made easier with their presence. They are the reason behind the speed of scale of business. They make up 60% of my customer pool.
Do you think the government and investors are doing enough to encourage start-ups in the country.
The startup industry in Nigeria is still at its infancy and I believe that the government and investors have not truly understood the pace at which we are growing. It is evident though that there has been a greater awareness by investors in the startup industry as Nigerian Startups have been selected and funded at both local and international levels. The government has also made efforts over the years with the GEM funding, YouWin and other forms of single-interest loans that are made available to startups to grow their business. There are other government agencies that I am aware of that offer services to startups to build their human capacity amongst others to ensure that startup businesses are run effectively.
There is definitely a lot of room for improvement amongst government and investors and indeed the startup industry itself. The government needs to enact and enforce laws and policies that make it easier to do business in Nigeria and provide affordable basic amenities that reduce overhead costs for businesses in order for those business to thrive as well as ensure that their products are offered at competitive prices in the markets.
A large percentage of investors (local) are focused on the Real Estate and the Oil and Gas sectors of the economy. Although most startup Entrepreneurs that have been funded massively by local and international corporations have created a funding culture for other startups in Nigeria and this is a welcome development. We expect that more startups develop into Unicorns. In the future, we can hopefully see some mergers which would help startups pool their funds together and create even better solutions for Nigerians. This is based on the premise that two heads are better than one, which is always not the case.
Despite the startup industry is risky, we also do expect that in the future, the interest of big money investors would switch from Oil and Gas and Real Estate economy to the digital economy, agro-allied economy as well as other sectors where additional value can be created to increase the GDP of Nigeria.
I expect this growth to be gradual and this calls on Nigerian startups to be innovative and create solutions that can be profitable within the shortest possible time frame and learn how to network and court possible angel investors that they can endear to the vision of their company. Nobody would fund a business that they are unsure of. That belief system needs to be nurtured in Nigeria.
How challenging was raising funds for your start up before TEEP 2015.
It was not very challenging as my startup did not require a lot to kick off as I initially imagined. I devised a minimum viable product that enabled me to access the market with the least investment input. My personal savings from my civil engineering intern role, my NYSC salaries as well as my building design gigs gave me enough financial runway to grow my startup. I started my company at a perfect time! The Tony Elumelu funding came at a great time too as I was completing my NYSC programme and it enabled me to offset some costs in order to launch effectively into January 2018.
What is your start-ups unique selling point.
HubbonNG offers small and medium sized businesses logistics/delivery services not only within their cities but to their customers in order cities across Africa. What sets us apart from other delivery companies is that we offer additional value to our clients by offering advertising services on our social media platforms.
How has the market responded to your service.
We offer excellent delivery services so we offer our service to a controlled number of customers to manage the supply (delivery requests), this enables us to offer quick and affordable services to our customers. This has enabled us to keep a failure threshold to a fairly minimum level. By failure I mean, the amount of deliveries booked or ordered that we would not be able to attend to.
Words of advice for young and aspiring entrepreneurs who dream of having a startup like yours.
The answer to this question is fairly easy. Dont delve into my industry. The challenges are enormous. But regardless, starting a company should not be based off what others are doing but where you can assess that you can create maximum impact. They are still sectors of the economy that are in dire need of disruption either with our without technology and it is up to young people like us to do that. Simply put, Be the change you want to see in the world.
Despite this response, I believe there is a false motive for most Nigerian Youth that believe that building a startup is rosy. Far from it. I support being a fan of the process. It would be difficult to build a company if you do not have the experience working in one. Despite the fact that my premise might be flawed through examples of different young Entrepreneurs that built companies from their Youth with little or no experience but it doesnt negate that the process of building a company is not easy, experience is valuable.
Be open to learn, because as an Entrepreneur you would be required to do a lot of thinking on your feet and a lot of lessons would need to be drawn from the experiences of others to avoid making similar mistakes that others have before you. It is important that aspiring Entrepreneurs collaborate with each other and get mentors that can share ideas and experiences with them of their own startup story in order to help them build solutions faster and better than their predecessors.
Finally, what are your thoughts about the startup ecosystems in Nigeria.
The Nigeria Startup Ecosystem is a budding industry and there have been an increase in the number of startups that have scaled their operations over the number of years. The increase in the number of incubators and accelerators has definitely provided startup founders with the necessary support systems to launch, iterate and scale their products and services. I foresee mergers, acquisitions in the future as unicorns are built in Nigeria. Some startups are definitely going to graduate to good ol companies and their experiences would be shared to younger startup founders so they are able to leverage and scale faster and better than their predecessors.
I also foresee a shift in local investor culture and I see more startups receive local funding as compared to most startups that have received funding abroad especially with their growth in the preceding years.
Despite these good signs. On the reverse, I want to speak against the false notion of the digital economy not only in Nigeria but across Africa. Apps cannot solve farmers problems as most of them are not online. Our solutions can only scale if we find innovative methods that can enable our services/solutions to be accessed by a majority of the population and they are majorly illiterate and offline. The majority of the Nigerian Population has low purchasing power and have a cost-centric culture so startups need to create solutions that are effective yet affordable and look to cater to the basic needs of the Nigerian populace in order to scale effectively beyond the 200,000 active users benchmark.
Trust God and Stay Gritty!