Fresh from college and burning with a desire to pursue a career in information technology (IT), Alexander Odhiambo got a job at a tech company that depended on donor funding. But since funding was running low, Mr Odhiambo found himself working for six months without pay.
From his IT and web development side hustle, he raised about Sh100,000 as capital and partnered with a friend who was a chef to start a fast food restaurant in Nairobi, a decision he describes as a terrible mistake that he regrets.
The business ran for about eight months but due to high power bills and other operational expenses, he shut it down because it was draining the little earnings he was getting from his IT business.
“Doing business with someone who was not putting in money was a bad idea because he did not feel the pain when the business was not making money,” says Mr Odhiambo, co-founder and CEO of Solutech, a software development and sales automation company in Nairobi.
Having burnt his fingers in the restaurant business and not to be deterred, Alex joined hands with another friend and ventured into large-scale watermelon farming which also flopped after the second season due to lack of market and high marketing costs. He again lost money.
‘It is at this point that my partners and I decided to solely focus on Solutech which we had started while still in employment,” Mr Odhiambo says.
Being IT experts with little business knowledge and networks, they approached their neighbour who was already in IT business with good networks to join them in the business.
“We would do the technical work and he would look for business,” he says.
Having formed what he describes as a strong team, a CEO at one of the Fast Moving Consumer Goods (FMCG) brands approached them inquiring if they could be having a solution on how to monitor his van sales team and since they had done something similar for the insurance industry, Mr Odhiambo and his team gave it a try.
“We had something closer to that but we didn’t have even a single customer so when we heard about the problem of FMCG distribution, we saw an opportunity, convinced him we could do it and that’s how we got our first customer,” recalls Alex.
Their application enables companies and merchandisers to collect data on product availability, expiry, and competitor’s activity for decision-making.
Alex says that at the beginning, the business environment was very tough and discouraging, especially when they didn’t meet customer expectations, but it was the struggle of trying to understand what customers wanted that made them push on.
“People discourage you, potential clients saying no, you pitch and realise your competitor has something better than you. Those moments can easily make you throw in the towel,” he says.
The Africa Business Heroes, a pan-African entrepreneur’s competition Top 20 Finalist explains that in a business journey, you unlock different levels at different times and the more you see, the more you continue to grow.
“We love listening to customers, also known as design thinking and putting ourselves in their shoes, solving their problems and for us, once we got our first customer, the responsibility of serving that customer did not easily make us change our mind,” he tells the Business Daily.
Steady organic growth
The IT graduate says that Solutech’s growth since its inception in 2014 has been patient, steady and consistent and they are now at what he calls ‘a hockey stick’ moment - ready to fly and go.
“We have grown without fundraising, step by step from one customer in 2014 to over 80 large and small manufacturers, both local and international companies, 4,000 sales in FMCG, pharma and motor industry using our app in nine countries across the continent,” he points.
In terms of revenue, Alex says they are aiming at hitting Sh130 million by the end of 2023.
He adds that despite the impressive growth, the company doesn’t fancy exponential growth because according to their philosophy, it is better to have a few clients and serve them very well with maximum attention as opposed to having very many customers and giving poor services.
On funding, Mr Odhiambo says they have all along believed in bootstrapping as opposed to external funding.
“We believe in using revenue and our solutions to grow. We were very keen not to get lots of money without proper planning. We may fundraise as time goes by but right now, the company is still able to fund its growth.”
To prepare themselves for external funding, Alex says they are already creating plans on how to absorb and utilise the funds.
A $50,000 grant from the Google Black Founders’ Fund, an initiative of Google, has also enabled Solutech to add more talent to the team and grow the AI side of things.
The entrepreneur points out that locally, especially in the space they are in, there is huge and untapped market potential and that in as much as we consider ourselves to be market leaders, there are many companies that have not leveraged their technology.
“Our number one priority is sweeping off the Kenyan market very well then spread to other regions like francophone West Africa in partnership with like-minded firms,” says Alex.
“We are looking at partnerships in the form of joint ventures (JV) because of language barrier. We want to take over the continent and be Africa’s preferred sales automation partner as we target over 1,000 corporate customers translating to $1 million revenue annually.”
Mr Odhiambo says that for a very long time, Solutech’s headache has been a lack of trust and belief in local companies to execute complex assignments and offer solutions. They are despised and not trusted.
“Some potential clients wonder how a local Kenyan company has software that can help them grow their business and even if they agree to work with you, your bargaining power is very low and you get paid less compared to foreign firms,” he decries.
“I can be offering a superior product or service than an European or Indian firm but I will be paid much lower, so there is a struggle to be respected in the field being an African company.”
He says that step by step, they have been able to sell value and build trust and respect locally and in other countries because of their good track record.
The other challenge they grapple with is getting the right talent because the universities and other tertiary institutions churn out many graduates every year but there is no quality.