Note CanGo was SafeMotos before rebranding in Q2 2019.
CanGo is actively working to build the superapp for Central Africa. To do this we are being focused on day to day execution, but working towards a greater strategic direction. This ‘Top of the Mountain’ post is the internal document that is the direction to which the company is heading.
Phase 1: Building a Transportation Logistics Backbone in Kinshasa
This is the current stage that CanGo is at and is the most important stage as it sets the foundation for future opportunity for the company. The focus is going to be on developing a track record of wins, developing an efficient high quality motorcycle logistics platform in Kinshasa and getting the metrics of growth, retention, customer acquisition cost and unit economics to be on track and moving in the right direction.
Note that this is a summarized version of Phase 1, with additional details available on request.
Phase 2: Bringing Additional Services to Market
This phase is about following market leaders like Uber, GoJek and Rapii in bringing additional services to market. The new services brought to market will make use of CanGo investments into network of drivers and investments in user base. These new services will create new revenue streams and more value to customers. The story of this phase will be a key part of a next funding raise with execution coming post additional funding.
Rapii / GoJek Style Services
These are services that:
- Have been released in other parts of the world by existing on demand companies (eg Rapii, GoJek, Uber)
- Bring additional value and reason to use the app for existing / new users
- Open up new revenue streams
- Create a more defensible competitive landscape as the CanGo product becomes differentiated from potential new market entrants
- Creates additional trips for drivers, bringing drivers more value while making a more efficient logistics network
Services could include:
- Food delivery to home on demand
- Food delivery to bars / restaurants on demand
- Supermarket (food / alcohol) services on demand
- Restock stores on demand
- Amazon style online store on demand
- Scheduled garbage / recycling collection on demand
- ATM on demand
Developing a Services Marketplace
CanGo management has the vision of creating a diverse labor marketplace on demand, where professionals providing the sort of breadth of services that could be found in the Yellow Pages are able to advertise their services to the CanGo app user base, then use CanGo transportation service to bring service provider and customer together.
In the existing marketplace of undifferentiated low skilled service providers, we believe this represents a paradigm shift where it will create the incentives for service providers to develop and differentiate their skill set, while customers are able to get access to a large marketplace of services.
The company we are most closely following on this is Lynk in Nairobi, but we believe there is no clear market leader who has built a service the way we envision it.
Examples from user research of potential services that could be provided by third party’s via our marketplace:
- TV / Refrigerator / etc repair
- On demand security
- Wedding / celebration activities
- Plumber / electrician
SWVL / Uber Van
A clear need for CanGo to meet its mission and to be successful in the African market place is to find a way to be as affordable to end users as possible. To do this, CanGo is very influenced by SWVL / Uber Van, a system that allows private companies to operate private bus routes where users can order their seat by smartphone app or USSD. In Kinshasa, with a dysfunctional mass transit system, a customer centric bus company is sorely needed, while doing multimodal functionality between buses with CanGo motorcycle trips as a last mile pickup / drop off will be a way to open up the city to an entirely new income bracket.
Right now, there is no dominant player in the mobile money / digital payments sector in Rwanda or the DRC, with users by and large preferring cash.
CanGo believes that its suite of services and user base will give it a clear advantage is introducing digital payments to users, allowing a new way to lock users in, provide value to users and open future business opportunities.
For CanGo to maximize impact it needs to scale rapidly once it achieves product market fit and the management team nails an execution model. We believe that the market is still wide open in Africa, with Central Africa in particular being underserved by access to technology companies in general. Likely next targets could include: Luanda, Brazzaville, Lubumbashi and Goma.
Phase 3: AI Fuelled Scaling
Once CanGo achieves a differentiated set of products in a few African market places, then it’s time to ramp up scaling as quickly as possible to leverage our learnings before bigger companies come to eat CanGo lunch. Here, we believe the secret is extremely set automated processes powered by machine learning / artificial intelligence where extremely lean teams in market with the support of set processes can launch CanGo as a ‘business in a box’ in new markets. Here, we are most excited by the emerging cities of Africa, those cities of 500,000 – 1,000,000 people that no one is currently looking at that CanGo can seek to lock into our ecosystem for the long term, as we become an essential layer for the evolution of African cities.
In this video, CanGo CEO and cofounder Barrett Nash explains CanGo’s strategy for growth hacking the CanGo superapp in Kinshasa.
In this video CanGo CEO and cofounder Barrett Nash explains how venture capital works and why Venture Capitalists have chosen to fund CanGo.
Objectives and Key Results (OKRs) have taken the startup world by storm. While they played a key part in the golden era of companies like Intel and Google, they took over the startup world after OKR evangelist in chief John Doerr published ‘Measure What Matters’ in 2017. It seems to have supplanted ‘lean’ as the buzz word of choice.
OKRs are great. They push a company to achieve stretch goals, make accountability easy and help create directional euphony among employees of a company. If you haven’t dived into them, I’d recommend reviewing the slideshare.
The purpose of this blog post is not to discuss the pro / cons of OKRs themselves, but rather how we built them into the DNA of CanGo with the hope that some of our lessons learned might help out with others.
For CanGo the key breakthrough on OKRs has been to realize it’s all about direction setting. You want every element of the company to be oriented in the same direction, in sequence chasing big things. It reminds me of how as a child you can turn a piece of iron into a weak magnet by rubbing another piece of iron over it: the more the uncoordinated magnetic poles are oriented in the same direction the stronger the magnet is. What we did at CanGo was to take this concept of direction setting and actually incorporate into the company infrastructure that runs our day to day. Every process of the company should be pointing in the same direction.
How did we do that?
OKRs aren’t just something talked about or worked towards, they’re reported on as well. Every management member submits a weekly OKR report to our CEO and CTO following a set format (Objectives, Key Result, what’s going well, what isn’t going well, what do you need help with). A meeting is held once a week between each head of department and the cofounders to discuss individual OKRs, as well as a full management team to discuss all the OKRs together as a team. These reports are read together Amazon briefing style, with each meeting starting in silence as everyone reads the report.
The discussion at these meetings is not about going through the report, but rather a set of identified discussion points that anyone can add to while reading the report. The talking points are prioritized with the most important at the top, going down to the least important at the bottom, with the meeting focused on working through the discussion points. Following the pareto principle of 20% of effort having 80% of impact, instead of trying to go through all the discussion points the team seeks to make real progress with the top ones, at the expense of ignoring lower ones.
In order to make sure that everyone is held to account by OKRs, CanGo’s cofounders submit their own OKRs to their board of directors for accountability and to be able to have proactive discussions on progress.
Another key thing we do to incorporate OKRs in the DNA of CanGo is setting internal processes to push towards OKRs. We have a Trello board for processes broken into daily / weekly / monthly categories, then assigned to different team members. Each card holds a process (from Process Street) that is to be completed by a set due date, aligned with if the task is daily / weekly / monthly. Every process is to be directly related to an OKR. This allows the company to develop muscle memory on working towards OKRs, means we do not reinvent the wheel every day with how we conduct our activities, and allows tasks as they become repetitive to be passed down the chain of command freeing senior staff for more strategic work.
For CanGo as a company OKRs have been an organizational breakthrough that we’re still in the early stages of optimizing, but already reaping the benefits from.
Ride-Hailing Doesn’t Make Money: Long Live The (Profitable) Superapp
Since Uber was founded in 2009, ride-hailing apps have sprung up in almost every corner of the world. However, to date, none of these companies have yet turned a profit. Last month, the company I work with, CanGo, launched a ride-hailing service in Kinshasa, the capital of the Democratic Republic of Congo. While we understand the necessity of investing in building the business, we are less an Uber and more a Gojek: because the secret to winning is to become a superapp.
The unstoppable rise of ride-hailing apps
Almost every major city in the world, especially those with populations over 2 million people, now play host to several ride-hailing apps that all compete fiercely against one another for market share. For instance, Uber has been present in the Kenyan capital of Nairobi for a while, but over the past several years competition has sprung up in the form of Bolt (formerly Taxify), Little Cab, Mondo Ride and inDriver, in addition to startups offering cheaper motorcycle taxis, such as SafeBoda.
The simple reason for this is that it actually appears relatively easy to start a ride-hailing company. First, choose your market and close your seed round from venture capitalists and wealthy individuals (especially those who have never forgiven themselves for turning down Uber back in the day). Second, use that money to build a couple of mobile apps – one for customers, one for drivers. Third, onboard some drivers who own their own vehicles, and then you’re pretty much set to go. The marketing strategy is simple, too – just offer discounted trips to hook users.
However, these low barriers to entry have also become some ride-hailing startups’ biggest headache. The overriding problem is that neither customers nor drivers feel any loyalty towards a certain ride-hailing app – both will simply use the one that gives them the best rate. If a new ride-hailing company enters a market and offers a better package to drivers, it would take just a few minutes to register as a driver on their mobile application and start earning an improved salary. In reality, many drivers use several different apps throughout the day. Similarly, if the technology is basically the same, then customers will naturally choose the cheapest option, regardless of how long they have been using one or the other.
It’s all too easy for copy-cats with significant venture capital to come along and undercut the incumbent. In June 2019, Bolt reentered London and decided to take just 15% commission from their drivers – half that of Uber. As a result they can offer lower prices to customers and have inevitably gained significant market share from Uber, as the apps and waiting times are almost identical. But is such a business model really sustainable?
For the second quarter of 2019, Uber reported losses of $5.2 billion, while their growth is also showing signs of slowing – earlier this year a huge restructuring program saw them lay off over a third of their marketing team. Many argue that Uber and other ride-hailing apps will only become profitable once they remove the driver from the car, when everything is autonomous, but how long can they wait? Perhaps instead they will finally realise the need to incorporate other services into their business. Indeed, they’ve made the first step by acquiring electric scooter startup JUMP, however, what has become clear is that right now, ride-hailing as a sole service has a long way to go before it is either profitable or sustainable.
In the end, only superapps will win
Two examples of ride-hailing startups that have seemingly negated these issues are Grab and Go-Jek. Both based in South East Asia, they are superapps, where within the same mobile application customers can choose between several different on-demand services, including taxis, buses, food delivery, and professional services or blue collar workers. Both also offer invaluable mobile payment and banking services to the region. While they began by offering motorbike taxis on demand, it is the other services they have gradually incorporated into their superapp that means they are nearing profitability or are powerful enough to fight off competition from other ride-hailing companies.
Go-Jek’s founder and CEO Nadiem Makarim believes that food delivery is now the company’s main business. Makarim has been quoted as saying that GoJek is close to profitability in all its services, apart from ride-hailing, thanks to delivering a staggering 50 million food orders a month. Similarly, Kell Jay Lim, co-chief of staff to the CEO and regional head of GrabFood, claims that success in its food delivery service is also driving the company towards profitability. Grab’s position in the region is also so strong that Uber finally decided to pull out of the ride-hailing war in South East Asia and agreed to the sale of its regional operations to Grab in May 2018 (albeit in return for a lucrative 27.5% stake in the company).
The superapp seems almost indestructible. Yes, Uber has UberEats for food delivery, but it’s in a different application altogether. If you really want to hook users on your app, surely it makes sense to put all the services in the same place? Because users of Grab and Gojek use the apps for pretty much everything, copy-cats have a very low chance of knocking either of their perch, as has happened and will continue to happen to Uber.
A superapp for Kinshasa
At CanGo we have built Kinshasa’s first ride-hailing app, which was a logical place to start considering Kinshasa is a city of 14 million people (predicted to be the largest in the world by 2075) with a total lack of any modern transport systems. There is also a dire need for safer transport as locals claim the highest chance of being robbed or kidnapped is actually by your moto taxi driver.
But this is only the start – we want to build Africa’s first superapp, we want to do it in Kinshasa, and we want to tailor it towards the lower-class African end user. In the coming weeks we plan to launch on-demand delivery in Kinshasa having learnt valuable lessons in our innovation lab, Kigali, over the past few months. Once we have made Kinshasa a fortress, as Gojek and Grab have done in South East Asia, we plan to roll out the same on-demand services across other Central African cities larger than 500,000 people that have so far also been underserved by technology, and will one day be some of the largest cities in the world.
Ride-hailing still works, and is especially beneficial in cities where transport is broken and/or dangerous, and maybe one day it will indeed become a profitable service, but in order to realise this possibility it should be just the first service of many that a ride-hailing startup plans to offer.
CanGo cofounder and CEO Barrett Nash explains what a startup is and if CanGo, a DRC based superapp active in Kinshasa, is a startup. This talk was for CanGo employees in Kinshasa, Kigali and Nairobi.
“Order anything you want”
Kigali, as an innovation lab for CanGo, is all about learning. The primary purpose of CanGo Rwanda is to track customer preferences and trends to learn which services are most popular, scalable and profitable. We also want to see if there is anything individual consumer sentiment surprises us with. While we were not the first on-demand delivery service in Kigali, we aspire to be the most innovative in bringing services that are tailored to the unique case study of a middle class / lower class African end user. What we asked ourselves was: what if customers had always wanted to order particular items on demand, but just never had the chance?
In light of this, we decided to launch a service where customers could order absolutely anything they wanted (as long as it could fit on the back of a motorcycle).
We quickly concluded that the easiest and fastest way to start collecting real user data was to allow customers to order through WhatsApp, since it demands no app install and is highly prevalent in both Kigali and Kinshasa. We subsequently set up a WhatsApp Business account, an alternative version of the WhatsApp mobile application that was released in late 2017 solely for small businesses.
The primary benefits of WhatsApp for Business include the ability to:
- Be seen as a legitimate business by customers
- Set opening times
- Create away messages and quick replies
- Set labels to each conversation
WhatsApp Business allows us to manage every stage of an order process seamlessly, whilst we are also able to offer extremely personalised customer service in comparison to a mobile application or website.
Here’s how it works:
- The customer sends us a message on WhatsApp telling us what they’d like to order
- Our customer service team enquiries about the availability of the item(s) and tells the customer the total cost of the order
- A WhatsApp group is created with the customer and a delivery pilot where both are asked to share their live locations
- The pilot rides to the store and pays for the item in cash
- The pilot delivers the item to the customer, and the customer pays the pilot for the cost of the products and the predetermined delivery fee
So far, customers have been using us to order food from restaurants, groceries or alcohol from supermarkets, and products from other stores and markets around Kigali, such as electronics, clothes and beauty products. Many people and businesses have also been using us as a courier service to pick-up and/or send items to friends or customers.
But the real beauty of ‘order anything’, and of using a WhatsApp number rather than a website or mobile application, is that customers can order anything that pops into their head at that moment in time. There are absolutely no restrictions, as long as it can fit on the back of a bike!
Starting was easy. We hired several of the best drivers who had worked with us previously at SafeMotos and set up a small customer service team to handle orders. In terms of marketing, we started a Facebook ad campaign, showing off how customers could ‘order anything’ and posting photos of food, groceries and alcohol to wet their appetites. Our call to action seemed simple and effective: “WhatsApp us now on 0789397682”.
Gaining traction, however, was not so simple. Following our first week of operations, we had only completed 4 deliveries. We were also not even receiving many messages on WhatsApp, despite our Facebook ads reaching over 7,000 people and receiving hundreds of ‘likes’ each day.
So, we decided to offer a promotion. It read something like this:
“Today we’re giving away FREE cupcakes. Just send us a message on WhatsApp! Soon we’ll start charging, but for now we want to see if you like our service.”
Yet still only 4 customers asked for the free cupcake…
Who wouldn’t want a free cupcake?!
If I was in the U.K. and saw an advert on Facebook of a company giving out free cupcakes, I would definitely give it a go. What would I have to lose? It’s free! If it never arrived, then I lost absolutely nothing. Either customers didn’t trust us or we were offering the wrong gift.
Whilst I was almost certain that people didn’t yet trust our service, in this case it turned out to be the latter. On the weekend, I met a Rwandese in a cafe and asked him if he would like a free cupcake. His response: “What’s a cupcake?”
So instead, after a quick discussion in the office, we started offering free sandwiches. And just like that, people started messaging us. In fact, during our second week of operations, precisely 266 people reached out to us, and in turn, we completed a total of 114 deliveries to some very happy customers.
With all these new customers, we felt like we were close to unlocking the market in Kigali and gaining some real traction. But could we convert people who had ordered a free gift into repeat customers who would actually pay for our service? This is precisely the question we planned to answer in the following days.
One of the things the CanGo team believes is that the African technology and startup ecosystem is still in its infancy with best practices still being pioneered.
While as a company CanGo seeks to be a model in following business best practices, we also believe that making use of our existing experience via lessons learned by our practical experience in Kinshasa, Kigali and Nairobi markets can be catalysts in unlocking the maximum economic and impact opportunity for the company.
The following are sets of concepts CanGo brings in our business approach that we feel others working on business success in the region may find helpful. If you have any disagreement or pushback we’d love to hear from you, feel free to drop a line to [email protected]
In no particular order:
- Whichever company listens / builds closest to users will build better products
- Jumia has their tech team in Portugal. Most technology approaches execute on design languages pioneered for the Californian middle class. CanGo believes a tight feedback loop between user experience research and in market software engineers who bring their own awareness of local realities will make technology friendlier to use, minimize funnel loss and make the office an an engine of innovation. CanGo is practicing what we preach as we’ve transferred from an Indian / European tech back office to a Nairobi based team.
- The company with the best culture wins
- Talent is challenging to find anywhere in the world, but this is doubly hard in Africa with braindrain to the West and cities that are often expensive with a low ranking on international livability indexes. We believe that a mission driven culture can flip these realities on its head: by having a culture that empowers employees by prioritizing mission alignment between personal goals and business goals, employees will be happy, the company will be able to hire top notch talent and a company can rise above rivals in employee innovation and retention.
- For business opportunity to be unlocked the economic pie in Africa needs to get bigger
- CanGo seeks to be a part of building a greater economic business opportunity in Africa by building value rather than extracting value. Right now, the economic pie is very small in Africa. The economy of Seattle has a larger GDP than the DRC with almost 90 million people: it’s hard for businesses to decide to focus on Sub Saharan Africa when its opportunity is still so nascent. However, this is an opportunity as well, since it means that there is so much scope for longterm growth while the competitive playing field is still open. CanGo believes that businesses instead of focusing on winning the economic pie of today should focus on bringing / scaling new products to market so that they win the larger economic pie of tomorrow.
- Instead of ten companies providing ten services, one company should provide ten services
- Lean startup methodology focuses on narrow products that fit a market opening and scale quickly. However, in Africa where the services ecosystem is still by and large in its infancy, this is not an option. CanGo believes that this is not a challenge but an opportunity, as shown by our current strategy. We believe that controlling multiple logically connected services (IE anything that can move on a bike, digital payments, etc) ascan create efficiencies, create a more defensible market positioning and bring more value to customers who benefit from a one stop shop.
- Individual cities if won absolutely can be long term defensible monopolies
- While tech companies like the myth of genius, it’s quite accepted that the real secret to the sky high valuations of technology companies is discovering natural monopolies. CanGo believes that interconnected services scaled together quickly within a single city will be a defensible natural monopoly over the longterm.
- Continuous improvement needs to be in the DNA of every process
- CanGo believes that a company does not stay the same: it either becomes better or worse. Therefore, continuous improvement needs to be built into every process of the company.
- Technology is just one of many tools
- CanGo believes that technology is a disruptive tool that is unique in its capacity to scale products rapidly. However, CanGo is flexible to use other approaches if technology is not the right tool for a task at hand.
- The best startup teams right now are founded by a mixture of local
- Obviously we’re a bit partial here as CanGo is founded by a Canadian and a Kenyan, and we’re certainly not saying this is a rule written in stone. What we’ve experienced is that a local founder, who understand the market, brings connections and can place themselves in the minds of users, paired with an international founder who has seen other markets and doesn’t take entrenched consumer habit as inviolable means that when addressing the challenges of growing a business you’ve got multiple lenses to see the problem through.
- Business is war and it’s either win or be beaten
- The technology startup ecosystem in Africa can sometimes feel just a bit too cozy. If it’s the endless ‘pitch competitions’ or the fact that grants fund a disproportionate amount of startup it seems like often the animal spirits the drive the worlds greatest companys are missing from the DNA. This is a concern, since one of the biggest challenges for a startup is to validate a market or product then have a more primal company enter the market and eat that startups lunch. It’s time for companies to feel second place to no one and focus on winning as a binary challenge, with either win or be beaten.
- We believe that Africa’s most successful company will be the one which uses technology to make African bottom of the pyramid users make more money
- The bottom of the pyramid is defined by having low purchasing power and low discretionary income, which makes them not well suited to the consumer products that thrive in America / Europe. However, this segment of the population is enormously hungry for economic opportunity and whichever company unlocks this will be positioned to become Africa’s most successful company. The killer app for Africa is going to be the app that can open up the economic ladder.
For the team team at CanGo we believe that right now is the most exciting time to be running a startup in Sub Saharan Africa. The demographic future of the world is going to be centered on the continent and we believe that there is a unique opportunity to develop a culture of business that is an evolution rather than a dependency of global business best practices. We’ll be happy to see how many of the above hypotheses are validated, wrong or evolve as we seek to unlock success for CanGo.