This is going to be a three part series. To me, this is a story that very many startup founders can relate to, especially those that start out young in Uganda and Africa generally. I decided to share it, so that other young entrepreneurs can have a small dose of reality and where this journey might lead.
BACKSTORY (How did we get to Twekobe?)
I am not a fan of failure. Whereas very many other entrepreneurs wear it as a badge of honour, I still loathe it. But failure is inevitable and no matter how uncomfortable you are with it, you have to accept it when it happens. Twekobe, my proptech startup that had a goal of connecting house hunters to verified real estate agents failed after limping for sometime. Let me start with a backstory.
In November 2018, my co-founder, John Paul Namisiko and I were working on a food delivery startup of our own. We were looking to land Safeboda as a key partner for the deliveries. We had just had a meeting with Maxime Deudonne, one of the Safeboda founders, we learnt in this meeting that Safeboda would be launching Safeboda food in the next few months.
It was like being hit by a rocket. We were distraught. In the back of our minds, we knew that we were David up against Goliath (If you have a chance to be Goliath, be Goliath. David beat him in the Bible, but 99 out of 100 times, Goliath wins). We gave up on that idea there and then. Even though people always say don’t give up, in this case, we did not think persisting was worthwhile. This was our justification for pivoting to Twekobe.
THE GENESIS ( In the beginning, there was co-living)
Twekobe started as a co-living startup. We wanted to build a platform on which homeowners / people renting homes could post homes, and then get housemates / roommates to co-live and split the rent bill. We were inspired by WeWork then and our major target was the expatriate community to start. We had a website up and running in 3 months by February 2019, and had gained some traction. Our revenue model was going to be to get a small cut of the rental fee.
Why did we do co-living? Uganda has a huge housing deficit, and the rental prices are still relatively high. Our thinking was that we could bridge this gap by playing the role of matchmaker. We would connect people that were struggling to pay rent with people that were willing to share the rent costs and the other bills. For example, if you rent a two bedroom house at shs 600,000($175), you can surrender one bedroom so that the two of you pay half of that rent.
We ran this model for about 6 months. We learnt that co-living is really hard in Uganda. We faced so many questions. How do we ensure safety of both parties involved? How do we vet the roommates? Who is responsible for the furniture in the common spaces like the sitting room etc. Trust was a very important thing we could not guarantee. More questions than answers. People were simply not comfortable with sharing homes for a longtime with strangers. We were literally building a long term AirBnb model. Instead of staying with someone for a weekend, you could even stay for a whole year!
We had slow traction. In the first month, we were getting less than 10 visits a day. But we hit gold by sharing our website links in Facebook groups of Expatriates in Uganda. This was our first market target. Within 3 months, we were averaging about 6-10 people using our service per month and making shs 300,000($100) to shs 500,000($180). But those that used it, left after a month or two. It bothered us a lot. Talking to most of them, they couldn’t stand the housemate/roommate after sometime. I guess it’s hard to share a home for a long time with someone else. We had no idea what the market size would be for this model. We didn’t really care about that stuff.( Lesson in there)
But the most important question we faced over those 6 months was, “I just want to find a house for rent for myself, can I get it on your platform?” For 6 months, the answer was No. But the question wasn’t going away, and avoiding it wasn’t helping. It’s not like we were making a lot of inroads with co-living anyway.
At the end of July 2019, we put up our new website, with a little bit of co-living, but more of being an online real estate marketplace. We wanted to partner with verified agents, and only then, could one post houses for both rent and sell. We had stringent measures. An agent had to provide some form of nationally recognized ID, guarantors, and a license. We were excited to start verifying agents. But the agents did not come. When we went to them, they ran away. I remember one time, a friend who was house hunting asked a broker why he did not use Twekobe. The broker replied in Luganda, “Oyo Twekobe, woba toyina offissi takutekako ku website ye.” loosely translated as, “If you do not have an office, you can not be listed on Twekobe.”
We had a dilemma on our hands. Lower our verification requirements and we risked being used by fraudsters who pose as brokers to fleece house hunters. This is a very rampant problem. It was our first taste of reality. When you don’t have any leverage over these agents, your verification process is a barrier.
However, we did get a few agents that were loyal and willing to grow with us. They put up houses and within two months, we had hit over 1,000 properties for both rent and sell. We were attracting about 3000 people per month or 100 per day to our website. But one thing was bothering us. How were we going to make money? At this point, it was just John Paul and I working on the startup.
We wanted to make money from our efforts. In part 2, I will talk about our search for product market fit and a consistent and repeatable revenue model.