SafeBoda Nigeria: One Year Later…
On March 2, 2020, we did something amazing. Amidst the doubts, fear, excitement, we launched SafeBoda Nigeria in the 3rd largest city in Africa. Ibadan, Oyo state.
You can read all about it here.
Since then, it has been a whirlwind. I sat down with the man at the helm of affairs (Babajide Duroshola) for a chat and this was birthed. This is the story of a brand that is making strides as the first Ride-Hailing business to successfully survive for a year in Ibadan.
What were the challenges the business faced in the first year? (Both large and small).
Getting the riders and customers through the right mindset: Not anchoring them on discounts and bonuses was the hardest thing we had to do. They had unrealistic expectations around pricing and bonuses because of previous market experiences they’d had.
Building and maintaining quality: Although our riders are far from perfect, they understand that there are rules and sanctions for bad behaviour. We typically reward the behaviour we want to see and punish the ones we don’t want to see. We sieve quality especially around customer service and financial fraud to ensure that they don’t defraud the customer or even the company because that was an issue.
Reacting to ever-changing market conditions: Since September 2020, we’ve been having price fluctuations and economic turbulence, and typically, Riders expect that as these changes occur, it’s reflected in their take-home but being able to manage that fluctuation was a challenge.
That can’t be all the challenges we faced cause I recall there being a time we talked about going lean so we had to do a Business Continuity Plan.
That wasn’t a challenge. It was a Doomsday-type scenario. Thankfully, we didn’t face it but we had some structures in place like putting people on sabbatical and part-time work, that is, figuring out those who were critical to the business at the time and those who could work part time.
We needed to plan in case the world wasn’t recovering, how we were going to shut down the office and scale back operations. Thankfully, we only implemented stage 1 of the BCP where it was getting masks and sanitizers for staff. There was a time that we put people on sabbatical but that was only for a month. The good thing is that we were able to get people back on track.
How were these challenges dealt with/resolved?
On the rider side, it was more about Rider education. Changing the narrative around false earnings and doing basic economics for them to understand how earnings are made and how they can grow their income the right way by working hard. And so, because we had some strong processes, we were able to cut down fraud to the barest minimum.
Educating them on our core values was a way we dealt with this making them know that to get rewards, you have to put in the work. Some of the first guys we got coming in were people who had worked with the competitor and found a way to game the ride-hailing system. Their main reason for joining us was to quickly come in and cash out but when they saw that we weren’t about that life, they found their way out, making it easy for hard-working guys with the right mentality towards work to come in.
On the customer side, it was anchoring them on the fact that although we were discount-based, we weren’t going to do “50 naira anywhere” kind of discount or anything of the sort. That’s a good way to grow but it typically puts people in your system that can’t necessarily afford your service so they bloat your system.
I basically don’t want a situation where you are championing more than 40% off because the chances of someone who can pay 60% of the cost being able to pay 100% of the full cost is very high than if you were subsidizing 70% of the cost. When you begin to pull back those discounts, they (customers) are going to churn.
On the marketing side as well, our guys focused on acquiring quality customers. Our average use case per customer is about 6.2 times per week which means that every day, our average customer takes at least one SafeBoda trip and this is good because it shows that we are a part of the customer’s daily life and they’re not just using us because we are running discounts.
How did you deal with the hike?
Well, we had to adjust to it. I think one time we had to change our prices because the hike in price was about 30% so we had to increase the per km charge. We try not to make too many increases so we don’t get to the point where we are not so affordable. You know, like where you become a premium-priced product when you’re supposed to be a mass-market product. One thing we’ve been able to do is, as far as our prices are below market prices, we will always find users.
What results did we see from the resolution of these challenges? Did things level out or get better?
We saw a flatness of growth for a couple of months where we weren’t growing. There was social instability (End SARS) and we had shut down some of our services and databases in Kampala so when we were coming back up, it kind of affected our service delivery. There was a period of like 4 weeks where we were constantly having app issues, like in the entirety of a day, the app would be down for not less than 3 hours.
We came up with a Rider productivity strategy where we started to offer phones to drivers at a discounted cost. That helped us grow our fleet from November as more riders came on the platform. That got us to onboard not less than 600 drivers per month.
On the rider side, we’re growing at about 20% Week on Week (WOW) and about 30% WOW on the Customer side so that’s a good thing.
In your one year as Country Head, what are the lessons that you have learned from running a business in Ibadan?
Nigeria is a very price-sensitive market, that’s one.
Two, I’d say despite the fact that we could be honest people, we’ve misplaced our value system. You find that the average Nigerian is not hesitant to find ways to defraud you. They’re always thinking about what they stand to gain today, not how to ensure that tomorrow or the next is better (there’s no big picture kinda thinking).
Another thing I realized is that sometimes the Government doesn’t need to help you, they just need to leave you alone to thrive. Don’t worry about policies, leave us alone to figure it out. Not having government interference has been a huge thing for us.
Other positive things I’ve learned is that for every organization to succeed, you need three important things.
- Strong Leadership
- Very strong organizational culture
- You need people to be able to organize in teams and have a shared vision of what they need to achieve. People being able to rally together around a common goal.
Other things are that culture fit matters. Showing that you care about people because if you care about people, then people start to care about you as a business. For instance, when inflation was going up, I remember sitting and having a conversation on how we can adjust people’s remuneration based on the growing inflation. These things show that you not only care about business outcomes but you care about people as well.
This Big picture perspective, is it from a Rider POV or Customer or just Nigerian?
It’s a Nigerian perspective. We hardly see the big picture.
With all these lessons learnt, how has that influenced or changed the business approach in recent times?
Nigeria is a very tough place to run a business. I’m not sure it’s going to get easier anytime soon but I think there are still chances for you to make it in Nigeria as well. Being able to just understand your product and what you’re trying to solve makes so much sense. At this point, I’m not looking to get 4.5 million users, I’m looking for the 200k users that can afford to pay for a decent service.
Do you think a different approach would have yielded better results?
I’m not necessarily sure. There are things we could have done better. Things we could have known when to do them and when not to but you can’t necessarily predict the oil prices, social instability, and things like that. The bigger idea is to look at the cards you’re being dealt and how you can make it work for you.
In this kind of business terrain where there is a lot of uncertainty, the bigger skill you need to learn is to be able to adapt. Adapt or die.
Based on the trajectory of the past year, can you say that we are on track?
Yes. We actually did well and it looks like we are on track to building something sustainable but with startup life, you never know. You live for every three months.
Do you think the way the government in Ibadan is set up, there will be more openings for more Tech startups to move here?
Yes. I think Seyi Makinde is a socialist Governor. He’ll just leave you to do your things provided you pay your taxes. There was a time people tried to bring ridiculous regulations because they had seen that Lagos had done it and he refused to approve it.
I think if they position themselves right, Ibadan could be a satellite city. Think of Silicon Valley and top cities and then smaller/Satellite cities like Seattle and Redmond. I think Ibadan has the capacity to be that satellite city.
So Ibadan is a viable market?
Yes.
Thank you for taking the time to share this with us.
You’re welcome. Thank you for having me.
