Welcome to the 10 people who have joined us since the last essay! Join other smart, curious folks by subscribing here.
Hi friends 👋🏻,
Welcome to another essay on Open Africa.
I sat with Osinachi of Heroshe to discuss Heroshe’s founding story. Heroshe is a cross-border logistics company for e-commerce. The market size for online retail which drives last-mile logistics is $27billion and increasing.
Osinachi is optimistic that Heroshe can ride this wave to increase e-commerce penetration from 2% to 10% in a decade.
TL;DR
If you only have a few minutes to spare, here's what you should know about Osinachi and Heroshe.
Heroshe is a cross-border logistics for e-commerce. Heroshe is building a platform to enable buyers to ship products from global retailers such as Amazon, eBay and Asos to Nigeria.
The company almost shut down in 2018. They listened to customers to introduce new services. However, doing this almost led Heroshe to go bankrupt and out of business. It has bounced back since and has shipped more than 200,000 pounds of packages to 40,000 customers in Nigeria.
Heroshe’s MVP was built with No-code tools. With no CTO on board, Heroshe founders needed to be scrappy. They made a product that could take orders, and handle payments and shipping without writing a single line of code
They want to build the “Plaid” for logistics. I wrote this down as one of the opportunities to tackle in the logistics industry. Osinachi doesn’t give me the full scoop but the plans they have are very ambitious.
p.s: sorry for stopping you before going into the interview.
I have essay ideas I’d love to write about but making a choice on which to write about every month doesn’t come easy. When possible, I always want to make sure each of my 186 subscribers gets enough value from reading Open Africa.
To do this, I’d love to have your ideas on companies, trends, and industries you’d love to learn about. Please share them here - Help Make OpenAfrica Better🙏🏽 .
Now, let’s get to it.
Open Africa Founder: Osinachi Ukomadu, Heroshe
Hello Osinachi! What's your background, and what is Heroshe about?
I graduated from college with a degree in Computer Engineering. I have spent the last 13yrs helping fortune 100 companies save billions of dollars to achieve their profitability goals. I also worked as a management consultant providing insight through data analysis to help management make decisions.
I am currently working on Heroshe.
Heroshe is linking Africans to global commerce. We are on a mission to improve lives by opening access to the global eCommerce market. Heroshe is both located in Houston, Texas and Lagos, Nigeria.
In one sentence, why should someone read this interview?
After years of gaining experience across different parts of the world, working with Fortune 500 companies, and building businesses like Heroshe, I have made mistakes, learned and grown. I believe this interview will in some ways, prevent you from making similar mistakes or even learning better.
What motivated you to get started with Heroshe?
The motivation to be deeply involved with Heroshe started when I saw the impact made by people using it.
These were not just anyone, but women taking up entrepreneurship. At the time, women-led businesses were not a thing. My mom built a business to support our family from scratch, so seeing enterprising women lifting themselves and their families through our services struck a chord that inspired the idea.
The idea started with an aunt who was starting a boutique store in Nigeria. She needed to source products from the US and reached out to us. She referred her business friends who became our customers. If we had not helped, she would not have started.
No permission was needed to get started. It was a problem that was being solved by family and friends freely. It simply evolved when those family members and friends started building businesses and continued to need the same help with their businesses. It only made logical sense that they pay for the service since they were using it to make money.
What went into building the initial product?
The initial product was a combination of no-code tools.
Me and my co-founder, Chinyere needed to build an MVP that was just enough to get us started and validate the concept. We used Squarespace Squarespace for our landing page, hooked Formstack to it for taking orders and connected Formstack to Freshbooks for invoicing. We used Google Sheets to manage customers.
It was a scrappy product but we did what we could to get started.
Flutterwave and Paystack were not available then so we received payments directly into our GTB account and found a way to do reverse remittance to process customer orders. With all of these problems, we didn’t do deep customer research but worked with the direct demand that came to us. We didn’t have the luxury of selecting customers. The customers selected us and pulled us toward their problems
We launched the integrated logistics platform in 2019. This is the platform that we have continued to iterate on.
We started seeing B2C customers on the platform after this product release.
Today, we have learned from mistakes and are focused on building products for our B2B2C and B2B customers.
Getting to where we are today didn’t come easy. In an extreme case, we worked in a storage location without insulation and air conditioning in over 100 degrees in Houston summer weather.
Side note: I didn’t know how to understand 100F weather, so I did a google search.
The most challenging part was finding the right talent that believed in the vision and willing to accept “startup pay”. Those that chose to take on this challenge are our true heroes.
What was the journey to attract and grow the first 1000 users?
Our first 1,000 customers came to us organically mostly through word of mouth.
Our name is gotten from the Japanese word 寛 (Hiroshi) meaning "tolerant, generous" inspires everything that we do. Our number one growth tactic has been customer delight.
We go to lengths to delight our customers and that keeps them talking about us. I send the first onboarding email to all new customers to ensure they have everything they need and they are well taken care of. The little details like the packaging or adding little treats matter. These things have created an amazing word-of-mouth campaign for us.
We tried paid acquisition which worked until iOS 14 destroyed our CAC (Customer Acquisition Cost). We turned our attention to referrals and have seen the numbers grow.
However, we saw an inflexion in growth when we added two new features;
Customers could now have multiple delivery addresses.
Split pay where customers could split payments with friends and family.
Focusing our attention on building customer-specific products with a strong referral system has been core to our growth since.
What's your business model, and how have you grown your revenue?
Our business model is fairly simple. We charge a flat fee of $5/lb for every item we ship. We charge a $10 delivery fee for the last mile delivery. We are currently experiencing a 24% MoM (month-on-month) revenue growth.
Growing revenue to where we are today didn’t come easy. We chose to bootstrap the business because we wanted to properly understand what business and revenue models made sense for us.
Now, I can confidently say that bootstrapping a startup for too long is an extreme sport.
We raised $50,000 from family and friends earlier last year to manage operations. We are currently raising our pre-seed round - Q1 2022.
What are Heroshe’s goals for the future?
Our goal is to increase eCommerce penetration in Africa from less than 2% to 10% in a decade. We are building the infrastructure that will enable this growth. We are building for:
Personal Shoppers - People who shop for other individuals
Online Sellers - People who have online shops and looking for inventory
Social Commerce - Those with 9-5 jobs looking for “side hustles”
Shops Owners - Those with physical shops looking to increase their variety of inventory and reach new customers
I am most excited about reducing the current shipping time from 12-14 days to 5-7 days. Our customers have been asking for this for the longest time. We are finally able to provide them with a faster shipping alternative.
We will be launching this service in the coming weeks so don’t miss it.
What are the biggest challenges you've faced and obstacles you've overcome?
Payment and last-mile delivery were big challenges we faced when starting.
Initially, collecting online payments from customers was very challenging until Paystack and Flutterwave solved those challenges. Last-mile delivery was a challenge that our partners like MaxNG (we covered Tayo and Max back in March) and GIG came in and solved.
The current challenge we are facing is supply chain disruption caused by Covid which is causing cargo capacity challenges. This has messed up delivery timelines causing some hardship for our customers.
We are on top of the problem and will be rolling out lasting solutions in a few weeks.
Building a business is hard, building one in Africa is a lot harder. What was your most 'if I perish, I perish' moment that turned out to be worth it? What were the stakes for you?
This experience happened when we were still figuring out the best business model for the business.
Customers told us to ship certain items which they would buy when they got into Nigeria. We got excited and filled up a 40ft container with the items they had requested. Upon arrival, we quickly found out that the reality was different.
No customers showed up to buy anything even after they were contacted.
It took sheer grit and daily pounding on the pavement to sell those items and recover some of the funds invested. We were very close to giving up at this point. It took real bravely from everyone involved to keep searching for a working model.
How did you motivate yourself and your team to avoid failure when things were tough? Do you ever think about giving up, and how do you push through that feeling?
Side note: The first thing I noticed from Osinachi’s responses was the fact that he had his staff assist him with them. When I saw that and I went…Damn! They get to see their “Leader” vulnerable and honest in his responses. Osinachi said it was critical to have this sort of openness. Very brave on his part👍🏽
To motivate others, you first have to be motivated.
I use my moments of prayer and meditation to get my day started. I mentally cast off the failures of the previous day to move into the new day with the mindset to win.
Then, I push into the day with positive emotions and optimism for what the day has in store. This allows me to genuinely motivate my team. I speak to my team with the mindset of one who has been given charge of the day to win.
Everybody thinks about giving up at some point.
Especially when you have dealt with bad news again and again. Sometimes, I ask myself, “what’s the point?”, “Why did I choose this path again?”. Truth is, on some days when it gets really bad, I permit myself to end the day early. I get some rest and reset for the next day.
My mindset is, that if I make it into the next day, more wins are waiting for me.
Have you found anything particularly helpful or advantageous?
Reading and listening to podcasts have been a game-changer for me.
I have learned more from them in the last couple of years than I did my entire time taking courses in college. I invest an inordinate amount of time in reading books that tell the stories of people that have crossed this entrepreneurial path which I trudge.
It helps prepare me mentally for the next level
I spend 30 minutes to an hour a day riding my bike leisurely around the neighbourhood. This helps me clear my mind. It gives me time to decompress. Thanks to masks and AirPods, I can talk to myself out loud on the street without looking like a crazy person. This helps me tell myself things I need to hear. This is my way of self-therapy. Mental health is key to longevity in this game.
For fun
Recommendations: Get away from your desk in the middle of a workday and get a quick walk to reset yourself. It does wonders for your productivity.
Books: Ben Horowitz's The Hard Thing About Hard Things, Phil knight’s Shoe Dog(Nike founder)
Small wins: Going out to play ball with my kids in the evening. There is no substitute for time spent with family and friends - none at all.
What’s on repeat right now: Haha, nothing. Although, recently I have found myself singing old songs I grew up listening to. This somehow brings me succour. I guess it centres me. It reminds me of times when things were simple and I had no care in the world.
Where can we go to learn more?
Website: https://www.heroshe.com/
Twitter: https://twitter.com/shipheroshe
Instagram: https://www.instagram.com/shipheroshe/
You can find me on LinkedIn. I am that guy that while others are active on Twitter or Instagram, I am stalking everybody else on LinkedIn. I need help😅.
If you enjoyed this piece, please like and share it with your friends, bosses, journalists, co-workers and anyone else that could benefit from it.
Also, If you’re an early-stage startup in Africa that wants to share your story, I’d love to chat about what you’re working on. You can send me a mail or send a DM.
What did you love about today's essay? Please let me know in the comments. Your feedback helps me make this great.
Thanks for reading and see you soon.
Kamso.