Am sure many of us living in Abuja can relate with the stress faced when trying to refill a cooking gas cylinder. The thought of visiting a gas station and waiting on long queues or carrying an already filled gas cylinder from the station back home most especially if you are not mobile, can be very discouraging.
But thankfully, GazHub is here with a solution for us. Techmoran met with the co-founder, Nurudeen Mohammed, a graduate of Business Management with a major in Banking and Finance. He also has a 10 years working experience in a Mortgage Bank and a vast experience in Human Resources.
This is what he told us about Gazhub.
How did you meet your co-founder?
I was introduced to Antonio Bruni through Byron Moorgan from TomTom Maps – South Africa.
Antonio is the founder/CEO of picup Technologies, an on demand delivery platform based in cape Town- South Africa. When I was conducting a research on maps that would be suitable for my business model, I never knew about the existence of Google maps. My business model is designed to reach out to destinations having known that the terrain in Nigeria and most of the locations are haphazardly located and do not have zip codes with a few house numbers for easy accessibility and would require a comprehensive mapping system , I came across TomTom maps and sent an email for inquiry.
I was referred TomTom maps regional office in South Africa. I received a response from Byron Moorgan whom we corresponded for a while and planned to visit him in South Africa.
After securing my visa, he sent me an abrupt email that he would be visiting Enugu and we should meet. I flew to Enugu and in the course of our discussion he mentioned he knows an entrepreneur who shares almost similar business model with mine and i requested for an introduction. I knew that I could not build Gazhub alone and needed experienced and competent hands. He sent an emai to Antonio and that was it. I made an offer to him be part of this journey and he consented to be play an advisory role.
Moremi Onabolu is a success story behind Gazhub. She is the founder of The Refuge Firm, a consultancy firm for start ups. I was introduced to her by a mutual friend, Mohammed Bello, CEO of Virtual PA. She principally designed the business plan.
What led to the start of GazHub?
Gazhub was born out a painful experience. My wife was cooking and suddenly ran out cooking gas. She called me amidst my busy schedule in the office and was caught in between abandoning my urgent work or go hungry. With a few months baby at home, it was inconvenient for her to step out of the house to buy cooking gas. We have only one car and I suddenly remembered a familiar cab man whom we often use occasionally and rang him to inquire if he was close by to help me buy cooking gas. Luckily, he was within my proximity. I gave him money and added a tip . He picked up the cylinder at home, refilled at the closest gas plant and dropped off with my receipt at home. He called to inform me he has completed the errand. I was like wow , this is stress free and convenient. I suddenly said to myself, I can actually build a business model that can alleviate the pains of others” . I was submerged in deep thoughts on how to create the strategic goals. I came up with the power of proximity and networking that gave birth to Gazhub.
Another embarrassing scenario was my in laws were in my house to spend the night and right in the middle of cooking dinner, we ran out gas which I bought from local gas vendors. the process of cylinder to cylinder was not so effective that led to the cause. We had to eat what was cooked beneath and leave the uncooked below. I didnt eat because the cooked portion didnt circulate to me. I was so furious and was determined to also provide satisfactory refill and began to design my gas monitoring device.
What is GazHub all about?
Gazhub is an online cooking gas refill and delivery platform or what Id like to call an online LPG logistics company. We seek to take the hassle off refilling gas cylinders which was our initial main service but we later included other cooking gas related problems that our customers started to encounter like gas cylinder leakages, faulty regulators ,cooking gas installations and servicing of gas cookers.
We also offer bulk cooking gas delivery services to restaurants, hotels, boarding schools and other institutions that need it. Currently, we are working on introducing devices that help our customers keep track of their LPG usage and enables them safely manage your cooking gas. In the future we might also be considering direct LPG piping to neighborhoods and vicinities that opt for it instead of the use of cylinders like it is done in more advanced countries. We also plan to link potential gas plants to major suppliers across the country on one platform.
How does it work?
We have made it very easy for customers to place orders by easily logging on to our website www.gazhub.com, they sign up and follow the simple steps, choosing what they need which might be Cooking gas Refill, new Cylinder, cylinder accessories or servicing of gas cookers . we have two types of delivery options, same day delivery, and 90 minutes Delivery( express) which will have us at your door within 90 minutes. Then they can proceed to checkout to complete orders and our drivers would be on their way.
Customers can also call our customer help line directly to place orders, payment options are flexible too because customers can either make direct bank transfers or pay cash on pick up.
What are the current challenges? How are you solving them?
To be a co-founder is an adventurous journey accompanied with bitter hurdles. One of the basic challenges of running a business is raisng capital, building the accurate business model , getting the technology and team that would be on deck. Before I launched Gazhub, there was profound enthusiasm in me until when I realised that the launch date was imminent. I developed a cold feet and postponed by 2 weeks. Questions kept popping out of my head, “will this be an accepted business service, will i cross over the hurdle and build up to my expectation” what if I fail?. But I believe failure is a pathway to success. Another challenge was creating awareness of the business to the public. Advertisement comes with a cost which we were running without adequate funds. But we successfully elevated our client profile from zero.
How difficult was raising capital to start the company?
Raising capital was immensely difficult. Despite the challenges, I started with my savings, low interest rate loans and sold my car. I received a few contribution from my sisters and got a N1,000,000.00 grant from Nigerian Young Professional Forum (NYPF). Getting seed funding from Venture capitalist is a hurdle as the are cautious in investing in start ups until the are comfortable with the traction. Those numbers were significant to us to grow. Sometimes I lose finically to gain clients.
What is yours startups USP from the competition and how do you aim to monetize?
Our USP as it is popularly called in the business world is safety, cost effectiveness and a one of a kind customer experience, unlike other LPG home delivery services who stock their trucks with refilled LPG cylinders and drive down to clients houses and transfer gas from one cylinder . This process of refill is risky and does not accord with the safety measures and thus we avoided such a trend. We plan to build storages stationed at strategic locations for swapping within our city of operation to make deliveries timely and cost effective.
Customers also get a text message alert as soon as the driver starts moving which comes with a link to enable our customer track the exact location of the driver and determine the distance driver is to their home.
Our prices are very competitive to roadside and the conventional gas retail prices and for the convenience attached to our services, customers would opt to pay about the same price as it would cost for picking a cylinder to a gas plant themselves .We generate our profit from delivery fees, sale of accessories and service charge.
How has the market in Abuja responded to your business?
Abuja residence embraced our business services and business model and most of the people we met never heard about an online cooking gas in Abuja or elsewhere. That is not to say we dont have competitors. A segment of our potential customers love the idea of having their cylinders refilled and dropped off at home whether they are at home or not amidst their busy schedule. The some love the idea of going online to place an order as stress free and convenient. The love it, especially when it is identified as that centre point for just anything cooking gas. Basically we have had a lot of challenges like any other start up as a result of customer reactions to our business model. We spotted our weaknesses and consolidated. We observed that some customers are not inclined to go online and some experience network failure or run out of data. We had to accept orders by phone call and whatssapp and started handing physical receipts. We had wanted it to be a fully online based service initially, but the fact is not everyone belongs to such group. This is just one of the challenges we have faced but in general. People love it, they think the idea is problem solving and hassle free. we have also had customers place orders home to their families from out of the country. In general customers who have tried are usually impressed and thankful.
What are your future plans?
I hope for Gazhub to be the first thing people think of when cooking gas is mentioned anywhere, it should be a household name and a giant for other emerging competitors to draw inspiration from. Yes I also hope to expand our services to other functional states within the country and to neighboring African countries, Gods willing. We have made some mistakes in our journey so far and learnt from them in the process, we strive to keep developing the model and consolidating our services to be the very best.
Finally, words of advice to young entrepreneurs who are finding it difficult to raise capital for their startups?
I will advice young entrepreneurs to first of all identify their passion for their businesses. You dont need to flow with the trend in business simply because you see a promising profit in a particular industry. What is paramount is what makes you STAND OUT. Think about how Travis l Klanick revolutionised the taxi industry and Brian Acton & Jan Koum developed whatsapp to disrupt the instant messaging concept. Dream big, apply tenacity and disrupt the industry. Passion propels you like a rocket launch. Believe in your dreams and forge forward. Challenges are inevitable and entrepreneurs must be willing to embrace it. Money making is important in building a brand but should not allow money to becloud their vision. Money will certainly bounce back if you build the right business model and strategy. I was considered a dandy. I was a frequent online shopper on Charles Tyrwhitt shirts and ties, luxury perfumes and chilly lifestyle. I used my dining area as my office, my DSTV subscription dropped from DSTV compact plus to family, migrated from bottled water to sachet water All that changed. I no longer see that as a priority. I channelled my limited resources to pay for my operational cost. I knew I have to remain focus. Everything will definitely fall in place with time. As long as you work hard.