The travails and high ended stress that most Nigerian students pass through when trying to get a hostel to rent is unspeakable. Most times, they have to walk from hostel to hostel, and from street to street in search of a habitable and affordable place. What do you think of an online platform that allows them to rent a hostel right from the comfort of their smartphones? Cool, right? See – Offkrent
TechMoran held a chat with Alao Tope, founder of Offkrent, a platform which allows students to rent hostels online. The platform has really helped students ease off the stress involved and recently, Alao announced that they processed close to one million naira worth of hostel booking just last month.
In our chat with him, he talks about how bootstrapping the business has been like, their goals as a startup, how well they are growing, competitors and many more. Do enjoy.
You processed close to one million naira worth of hostel booking last month at OffKrent. Tell us the effect this has had on the startup, and the team.
Boostrapping the business up to this point has been both interesting and challenging. Processing that amount in a month have made us realized how big the industry we are is. Before, it was just numbers on pitch deck.
Going back to the beginning of your startup, what initiated the launch? Did you experience problems with getting hostels as a student?
It all started when I was in the University with my roommate, who is now my Co-founder. Back then, we were trying to get a new hostel as we were no longer able to pay for the hostel we were living. So we set out with the goal of getting a less expensive hostel. But then, we were faced with several challenges. One of which was the fact that most of the hostels around don’t have any sign to show if they are vacant or not.
Another one was the issue of paying consultancy fee before some agents can take us to view their hostels, which we don’t know if we will be satisfied with any of the hostels. That was a no brainer for us as paying consultancy fee will mean spending part of our rent. Fortunately for us we found someone who later agree to take us to view his hostel for free. On getting there, it was a disaster, the place was farther than we thought, rough and for the worst part, there were existing occupants who were smoking and blasting music, that was one thing we can’t live with as we were introverts. At that point, we gave up on searching for a new hostel and decided to pay the rent for our existing hostel.
The question then came to me that what if we have a place that student can know the details of any hostel before they visit the hostel manager? This I believe will eliminate consultancy fee and let students make informed decision. After some months, I decided to set up a wordpress website, that has no booking engine, to list hostels around the University campus. Back then, I was only doing it for the fun of it. So I didn’t generate any revenue for the first year but I had some hostel managers (agents) who gave me some cash, it was more or less like a charity donation. But with time, we have added many features that allow us receive payment and track bookings.
How many institutions have you covered so far?
Currently, we have operation around 4 campuses. Our goal for this year was to get the business to profitability, and also learn how to expand to new campuses, both of which we are able to achieve. Our plan for 2018 is to expand operations to 24 more schools while keeping our overhead as low as possible and also getting to cash flow positive.
Share with us how you’ve been able to convince hostel agents to list properties on your platform.
It’s been difficult to convince hostel agents and owners to list their hostel on our website as most people are still skeptical about the online world, even those that are technology oriented. But one thing I believe is that no matter what you sell, you will always have some customers who are willing to give you a try. Your job is to show up to this set of people.
Let us in on your business model as a startup.
Our business model is similar to what most online marketplaces use. We get a certain commission, from the hostel manager, on every successful hostel booking a student make that comes from our website.
How has Offkrent been funded till this point? Have you had investments, or it has always been bootstrapped?
We are at this stage 100% bootstrapped using the little stipend we have. I was lucky to get some scholarships and event sponsorship, some of which I sold, while I was in school. That money constitute a large percentage of offkrent’s funding. But we are currently speaking with some investors who have shown interest in joining our seed round and are open to any investor who have interest in our space.
Competitions are inevitable in most business spaces. Tell us how you’ve been able to deal.
We have a lot of competitors and it has been fun learning from them. But our major objective is to provide the best service for our customers. My personal goal is to be part of a company that people feel grateful for using its service.
I’m sure one of the problems you face would be getting students to trust your platform. How have you been able to walk around this?
I think getting people to trust an online platform in Nigeria at this stage is difficult. This is because the market is not yet oriented towards technology. This is now changing though as certain tech companies, including offkrent.com, are doing the job bit by bit. For now, we process most of our transactions offline.
If you had to do one thing differently since you started, what would it be?
I don’t think we would have done anything differently. The way we’ve built the business is one that have helped us build a great product that people want to use.
In 5 years time, tell us how big you envisage Offkrent.
In 5 years time, we want to be the one championing the student hostel booking space in Africa. We want offkrent to be synonymous to hostel booking the way Amazon is for online retail. That is a goal that excites us as a team.
In two words, what has kept you going from the very beginning up till this point?
People and prayer
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