🇺🇸From 5K€ to 2M€ in 78 countries : startup, growth and the quest for freedom
The Holy Father of the Startup nation, Paul Graham defined a startup in the clearest way possible : “Startup = Growth”.
As for Afrikrea.com , after 2 years spent developing this “project” in parallel of our jobs, we were stuck at around €5000 of transactions per month. With our 10% take rate, you can guess just how little this represented.
We then committed to it full time for a year, invested all of our saving and time, but still nothing changed significantly.
Then, since April 2016, we became a “real” startup and in the 2 years that followed, everything changed. This time, our gross merchandise volume (GMV) was multiplied by 30 , and “growth” became an obvious issue to manage rather than a goal to pursue.
Here is the story of the “how” in 3 chapters : the take-off , turbulences and then “cruise control to freedom”.
Chapter 1 — The Take-off: April 2016 to December 2016.
First of all, at this time, we were surviving thanks to our unemployment allocations. These were ending in March 2017 and so with my co-founder Kadry, we decided that if we did not reach 10K€ of GMV/month before end of 2016, we will stop there (and use the 3 months left to lick our wounds and dig out our suits) .
But, not only did we double our GMV in only 3 months for the 10K€ threshold, but in December 2016 Afrikrea.com reached over 62K€ of GMV so over 6 times the goal !
Taking a step back, I would say this exponential growth of around 10% per week was the result of 2 key elements :
1) The arrival of our 3rd cofounder : the super super CTO Luc (aka “Jesus” at the time and “Star Lord” today).
This event is probably the most essential one because it is thanks to this execution prowess and his experience that we not only had our new platform but also a new mentality. Our startup activity was that of trusted third party and not only of an e-commerce platform. We had a clear idea of our need , but Luc not only gave life to it, but he built with us a product that gave us a whole new dimension.
The best illustration of the impact of this new platform was the use of our dear clients : the designers ! There are tens of metrics we could quote here, but among the most important: 30% of the sellers connected every day, half of them at least once a week, and combined they added over a thousand new products every week!
And for us , the ultimate achievement was when when we were measuring their NPS (78 !!) and that our users responded to the Sean Ellis market fit question in such a way :
And beware, when we say that retention is the key to success that include the good side effects on our acquisition. Because without these engaged sellers uploading regularly original products, we could not have developed our 1st lever of acquisition at the time : social networks. Indeed we grew from 27K followers on Facebook and Instagram to nearly 200K today !
That would have not been possible without the platform and tools built by Luc, first to have the necessary content to post 5 times a day , 7 days a week; but also to determine thanks to the data retrieved, which product to highlight and at which time.
Also, slowly but surely our SEO progressed so much that it is now our 1st traffic source , thanks once again to our large choice of our engaged community and the craftsmanship of our CTO.
2) The exceptional experience enabled by the combination of the platform and the engaged sellers explains a lot but an unique ingredient makes all of that possible : my cofounder Kadry (aka “Mugiwara”).
In most of startup related content, there is a glorification of acquisition growth hack, with limited attention and details to the retention needed to benefit fully from the former. At Afrikrea.com, this retention requires a lot of things also, but 3 key actions started by Kadry illustrate that well : first, right before we started to grow, we moved to Lille , where we knew absolutely nobody. We then left Paris and our habits (and its awful transportation) but also all of our close ones (including Kadry’s girlfriend) to be 100% focus.
Also, after reading Delivering Happiness , we were looking for a way to foster an exceptional customer service. Kadry then proposed to force ourselves to respond to any client request within 6 hours. This may seem common, but after applying this dedication to Slack reminders and a rare discipline, we started to receive more and more messages of surprise and delight. The same buyers that were having issues suddenly started turning into our most fervent defenders !
Finally, not one day went by in these 2 years, week-ends included, without Kadry and I speaking to at least 1 seller and 1 buyer. Not only to treat their request, but specifically to get to know them better.
All this produced a buyer retention that is one of the pillars of compounded growth and appears as such: 65% of our buyers buy a second time in the 6 months following their first purchase!
Chapter 2 — Turbulences: January 2017 to September 2017
2016 was then a good year for Afrikrea.com, and 2017 was also a just as decisive one. Because, as we were doing our best to keep up with the rocket of growth, obviously our resources got thinner, and then the time to fundraise came.
Of course, we could write a full article on the complexity of fundraising when you are a “marketplace + e-commerce + fashion oriented + inspired by Africa“ (😱), when 70% of your clients are in France… But we will try to stay on the major points ;)
First of all, almost every keyword above in our pitch was a potential way out for the investors. Because on the 87 investors contacted, 12 met and 3 that went to final committee before refusing to invest, the chorus changed but the melody stayed the same :“e-commerce is hell” , “fashion is not my sweet spot and I do not know much about it” and my personal favorite “Africa is interesting but I do not know much about it and your business is quite hard to model (with no external data to back it up)”.
But beware, the only constant was that ALL of them were singing in choir just as much our growth was impressive, that they liked us as entrepreneurs for our focus and command on the subject/numbers. Which is funny, as all of them swear that the team is their first criteria, but it was always our market or our model that cooled down their interest one after the other.
And I somehow understood them. Our clients were a flowing target that they saw as a minority (a “niche”, which it is not) and there was no hard data to prove that their purchasing power or size, and worst of all, no role model to compare to but a list of similar failures that came to mind.
Thankfully, some investors (like Hervé Cuvilliez and Thierry Petit ) we met already had convictions on this market or knew the model sufficiently well to believe in it. Most of all, they could put their money where their convictions led them. We will probably never thank them enough, except by building a company so successful that if there is an exit, it will have a significant monetary and reputation gain , as they so deserve it !
Especially since in the 3 months following their investment, we made our biggest mistake so far: burning over 50K€ in acquisition, notably on physical events…
Thinking back on it, it is a well known vice of most startups that finally manage to get funding , to spend to grow, grow , GROW at all costs … and for us the fantasized acquisition channel , that was requested again and again by our clients (buyers and especially sellers) was the physical events (pop-up, exhibitions etc..) … Since we finally had the means to afford to, we decided to test that channel to the most we could.
As often, this paid acquisition was not completely inefficient, but just too costly for the ROI in the timeframe needed. More concretely, we surely had new clients during those events — for instance, over 1500 e-mails of prospects in a day for the biggest event — but… on these 1500 persons, almost half already knew us … from the social networks ! Social networks in which we were spending less than €2000/month compared to the events which cost us up to €10000 each , with 5 interns, at least 1 week of intense preparation and 2 weeks of recuperation after it, and worst of all : the defocus cost us one of our biggest sellers at the time ….
So, we at least quickly decided to stop the hemorrhage, enough humility to recognize our mistake and most of all to learn something from it.
And that “something” stil guides us today: focus completely to improve on our core activities is the key to our success, and no test to grow more should make us risk losing that, no matter how big the dreamed growth behind it !
Which is why, with the renewed trust of our investors , we decided to move from Lille to Abidjan (Ivory Coast) ! This time again, we had never been to Ivory Coast (as we grew up in Mali and New Caledonia) but this time also it was the most rational choice to keep our focus, and optimising our run rate and also our most important ressource: the team!
Chapter 3 — “Cruise control” : October 2017 to today
Actually, as you might have noticed in Chapter 1 , in my humble opinion, the principal reason of our growth and minor success of Afrikrea.com is the team.
At the beginning, this team was just us 3 co-founders, spending countless hours together in our apartment in Lille or Luc’s house in Saint Civran. Now that we live in Abidjan, not only we work together but we also all live together non (yes, in the same villa, Facebook style 😎). Not only do we spend less that we would do in France, but we live better and in addition we can recruit more heroes to join our quest.
Thanks to the lesson learned in Chapter 2, we now know that growth is not our main objective as a startup but as Jason d’IROKO explained so well : to just survive !
In our opinion, that does not mean that we will not grow anymore or that we do not have the ambition to not only dominate a market but extend it, and eventually create new ones. Survival means to trust our team, our culture and our process to grow over time but also to optimize our ressources to get the said time for that to happen.
Because if Paul Graham never said it yet and Jason only subtweeted it , our new startup mantra is “Rentability = Freedom” .
Freedom to test new things, to bring new solutions to our sellers, new format and products to our customers; freedom to recruit , to pay better our employees and shareholders, to choose who they are and who we work with and more generally to build a company that will still be there even when we are not alive anymore.
Our startup was a rocketship that now became a plane, that we must pilot all the way to the Eldorado, even though we have to get lighter, slow down but never give up or change directions. And to do so, we must thank again our dear community that everyday wear the revolution of Africa lovers !
But it is only the beginning. One of our cardinal values at Afrikrea.com is “ We Share”. This article, this blog and the white paper on African fashion online that we share freely are the first contributions to the ecosystem of African, black startups, and more largely the minorities all over the world.
Our growth will now come after our quest for freedom, even if that freedom will naturally go with growth. For instance, we just passed the €2 Millions cumulated transactions threshold!!
But to come back on our symbolic threshold of 10K€ evoked in Chapter 1 :
- for the first time, 6 months ago, one seller (based out of Africa moreover) achieved alone more than 10K€ of order in a month!
- and a few weeks ago, we just experienced our first 10K€ of transactions … in a single day !
It just goes to show, that a lot can happen in 2 years, and that the quest for freedom is surely compatible with growth!
So if you liked this first article, or just smiled reading it , please give it a round of applause *claps claps*, and follow us, it is only the beginning ! ;)