teshmbaabu

“Be willing to be a beginner every single morning.” Meister Eckhart.

The more I think about it, the more I’m certain that entrepreneurship is simply a person’s fate. The journey chooses you, and it might never be clear to anyone on the outside, but you cannot unshackle yourself from it. I’ve been an entrepreneur for about 13 years now. Somewhere at the age of 18, I got bitten by the bug and chose a path that has been incredibly rewarding, fulfilling and humbling in equal parts. Lately, I’ve spent a lot of time reflecting on that journey as I navigate closing a significant chapter in my life as an entrepreneur and opening a new one. 

The closing chapter… 

In 2018, Mesongo and I conceived MarketForce as a sales force automation software company, offering real-time market visibility for consumer brands on the performance of their agents, products, and services. We spent time validating the idea with multiple large paying customers, but quickly realized that there were fundamental flaws we couldn’t escape. The growth was slow, the sales cycles were incredibly long, and it was the kind of business that needed funding at a time when venture capital was elusive. 

We bootstrapped for a year and a half before finally convincing friends, family, and angels to inject $200K in seed capital — most of them entering the world of venture capital (VC) investing for the first time. 

Just as we finished raising, the world went into crisis around COVID-19, nearly killing our business. We lost most of our recurring revenue when the pandemic hit, and our largest client threatened to pull out in favour of building the software internally to reduce costs. When we weighed the options, we knew we would only survive if we redefined the business. We pivoted from a SaaS company selling enterprise software to large FMCGs/Financial Institutions to a B2B marketplace directly serving neighbourhood merchants.

This is the version of MarketForce that garnered a lot of traction, much to our surprise. From our vantage point, we knew it was a bold move and people we respected advised us against it, but we went ahead and did it. It was quite a gamble, but there is also a bliss in naivety that allows you to jump into those kinds of situations, guns blazing. We were determined to prove everyone wrong and in 6 months, we’d signed up over 1,000 merchants, which validated that we’d successfully made the pivot. 

Once we “bolstered” the move, the pivot was met with significant validation. It got us a seat in Y Combinator, the most prestigious startup accelerator in the world, in the summer of 2020. This gave us the much-needed boost to officially launch RejaReja, our B2B e-commerce platform that rapidly grew and enabled us to raise an additional $2M for product development and geographic expansion in 2021, followed by a significant Series A investment in 2022. 

For Mesongo and I, MarketForce wasn’t the first business we’d started together, but by 2020, it was the most ambitious one. We were two 27-year-olds at the starting line against big dogs in the same market, staring down a layered and complex problem that promised such widespread impact. We had millions of neighbourhood merchants in mind and millions of dollars of fuel and expectations. 

In just 3 years, we expanded our footprint to 21 cities across 5 countries: Kenya, Nigeria, Uganda, Tanzania, and Rwanda, creating over 800 jobs and serving over 270,000 merchants. During that period, we have delivered just shy of 1 million orders, amounting to over $160 million in gross transaction volume on RejaReja alone. The integrated features empowered the merchants to earn more money by making them one-stop financial services shops. This enabled them to drastically increase their earnings while solving the last-mile distribution challenges and increasing financial inclusion for thousands of Africans. Whatever we achieved in that time will always be a testament to a very ambitious and talented team. Great businesses are always built by great people, or people who believe and show up greatly. That season taught me that when you care for the teams, they care for the business and that is a multiplier you cannot beat. 

When we raised our Series A at a valuation of over $100M, I finally felt like the world now understood the magic of tech, our business model, and the potential impact it could have on the continent. To think that a group of experienced investors believed in us and the business, the growth potential, and the “unlimited” addressable market enough to commit $40M was a reality that kept the fire in our bellies. We could no longer play it safe, not with the backing of that village. 

So, we built an Uber-like model around aggressive expansion. Sometimes, I think back to that phase, and the growth was dizzying. We were expanding into new markets, acquiring businesses that fit within the thesis, and building out the team, all while figuring out the nuances of the market and our product. We were processing millions of dollars in orders every month at that point, and over the next few months, we grew fast. 

But in our bid to scale quickly, we did not realise that we were treading in new territory or anticipate the “funding winter” that would strike later that year. This taught us a very hard, painful lesson. Venture capital is not for good, or even great, companies. It’s for companies that are so excellent that they produce outsized returns at the right time in the right market. We got this completely wrong, and it hurt us when the committed capital didn’t fully come through. Now we know that every dollar a startup can raise is a gift. It should never be the life-blood of the business. The current movement in the tech ecosystem towards profitability is a beautiful reminder of that lesson. That means obsessing over customer dollars and using investor dollars as additional fuel. We lost sight of this for a time, and that is a mistake we will never make again. 

The B2B distribution business that was RejaReja became unsustainable for a few reasons. Firstly, the retail FMCG market has razor-thin margins, which means that at a unit level, we struggled with profitability. The segment is also highly price elastic, which means the price wars are consistent. That’s always a race to the bottom. I shared what we learned about this business model when I journaled about it earlier this year. Still, there was a moment when Mesongo and I had to look each other in the eye after trying every possible tweak and call it. In those moments, the writing is on the wall — you know it, and everyone around you knows it. What’s left is courage. 

Unfortunately, that is our closing chapter. After immense efforts to make our business model sustainable, including downsizing the business to extend the runway for as long as possible, we have concluded that it is no longer feasible to keep RejaReja operational. 

Endings are always hard, whether they are good endings or bad endings. This particular ending is devastating for Mesongo and me. For everyone else, it is a “case study” to learn from; for some, it is a cautionary tale, but for us, it is a punch in the gut — all our sweat, blood, and tears staring back at us. In no way do we discount the mistakes we made as we built and the ways we could have thought differently, and communicated faster and clearer about the things that weren’t working. It hurts that those mistakes all had such high financial and emotional costs for people who had bought the dream and made sacrifices to give the business a fighting chance. Those are the realities that make such endings incredibly difficult. 

We’ve always known that building a high-growth startup would be hard. However, we believe that entrepreneurship is a person’s fate because, from the day you start, you’re more likely to fail than to succeed. Our ecosystem is still very young, and we need more failures, not less, because that’s how we learn, grow and emerge stronger. Failing means we are pushing the limits and learning lessons that help us discover what truly works in the African context. We need to get better at acknowledging business failure, embracing it, analyzing it, and applying the learned lessons to future endeavours. Mesongo and I are coming into the next chapter, having graduated from a multi-million dollar course in building for the continent- the school fees we have had to pay. Speaking about this has been an exercise in healing, but we continue to strongly believe that the only way we lose is if we don’t get back up and try again. 

The next chpter. 

We conceived and built RejaReja to empower one million merchants to harness the power and scale of technology and realise their maximum potential by 2030. We spent a lot of time reflecting on this mission and realised we were most passionate about the “who,” and for us, that is merchants. 

The mission we’d set out to achieve is broader than neighbourhood merchants. 

Rather than starting from scratch, we decided to join forces with founders that had built a business focused on a different kind of merchant — an online merchant selling a lot via social platforms. Mark and Kuria founded Chpter in 2021 and built an elegant online payment checkout experience for this segment. Funny enough, Mesongo and I had invested in Chpter in the early days because we loved the co-founders and thought the segment had a lot of potential. As we weighed a couple of pivot options we had a couple of conversations with Mark and Kuria and agreed that we could do a lot more and build bigger together. Mark and Kuria being ex-architects were extremely close to the product while Mesongo and I had experience when it came to scaling the technical and commercial elements of the business. 

Starting again is only made easier when you go back to the basics. So with Chpter we anchored on a single insight and a single solution for a single merchant. We could call the last 6 months the silent months. We hunkered down with a small team focused on speaking to customers and building a product they cared about. We refined our focus and thesis on what we’re building for who we’re building and how big we want this to be. Moreso, we focused on building the business around our superpowers (our innate passions and skills) as co-founders. Our collective experience in product strategy, software engineering, business development, and marketing come together around a mission to empower 1 million merchants in Africa to maximise their profits and grow in a digital age.

Today, a lot of buying and selling is done over social media platforms like Facebook, Instagram, WhatsApp and soon, TikTok. In emerging markets, this brand of e-commerce (called social or conversational commerce) has grown rapidly. It now accounts for most of the e-commerce activity on the continent, mainly because these channels don’t require much digital expertise and make running and growing a business accessible to all. E-commerce in Africa is estimated to grow to $46Bn by 2025, with over 500 million shoppers. 

Social commerce does a great job of combining content sharing, messaging, and selling, helping businesses shorten the sales cycle. But most transaction processes—from product discovery and selection to order placements and payments—are crude and inefficient. 

Businesses need help handling inbound customer requests, which results in a significant percentage of sales revenue slipping through the cracks. Simply put, social networks just aren’t built to support end-to-end online shopping experiences, leading to e-commerce businesses losing up to 40% of their revenue to abandoned carts. Besides optimising conversion, these businesses also struggle with order management and fulfilment, creating inconsistent customer experiences and low trust. That is the problem we have joined forces to solve for online merchants. 

Chpter empowers businesses to unlock more revenue through the fastest growing commerce channel, social media.  We provide an AI-powered conversational commerce platform that enables merchants to sell more on social platforms like WhatsApp and Instagram by automating conversations, marketing, and payments all in one place. 

We are building a product for merchants who want to grow their businesses and make money even while asleep, and we believe we can do that through the power of automation and artificial intelligence. 

Chpter is now live in Kenya and South Africa, powering hundreds of merchants and assisting them in seeing up to 5x revenue growth across their social channels due to the power of conversational commerce. 

We are thrilled to share this next Chpter with you. We’re extremely hopeful about this direction and the impact it promises for the continent. Please follow our company LinkedIn page for updates on how we are pioneering the social commerce revolution in Africa. 

On a personal note, I’m glad to share what this journey has been and has taught me, hoping it encourages another founder to keep swinging. It is perfectly okay to begin again; to close one chapter and open the next. What is not okay is not trying again — businesses only die when the founder gives up. 

With much gratitude and warm regards,