Sramana Mitra: Besides selling some of your incubated projects and shutting down some others, you said the web development company’s journey was about 10 years. I take it around 2010, you moved on from it. Was the company sold or did it continue and you moved on?
Chris Folayan: It continued till about a few years ago. I left the company to start Mall For Africa. Mall For Africa was a company that came out of OCFX.
Sramana Mitra: Was it one of your incubation projects?
Chris Folayan: It was. It’s obviously become the biggest one so far. The reason why I left OCFX was, once Mall For Africa was taking a life of its own, I saw that you can’t be the captain of two big ships. You have to pick one. VCs require it. No VCs want you to be the CEO of two different companies.
Sramana Mitra: Right. Very unusual. In terms of incubation, what did you do with Mall For Africa while it was still part of the web development company? How did you validate? How much of the company did you build before you spun it out?
Chris Folayan: We started small, which is how I think everybody should start. We tried to look at what was the quickest and easiest way to get to point A to validate the product and market. I kept traveling back and forth to Nigeria to meet with family. One day I went to the airport, I had so much luggage that the airline said I cannot check-in all my luggage. I didn’t catch the flight.
Every time I go back home, people keep asking me to bring stuff. They know what they want but they can’t buy it because these stores don’t ship to Africa for many many reasons. The idea was, “How can we provide a process where people can tell me what they want to get without sending me different emails?” It started with an online form, which is the simplest thing anybody could do. You go to an online form and say, “This is what I want. Tell me how much it costs.” I’ll respond and say, “This is how much you have to pay me for me to bring it to you.” The form did really well.
Once I was getting at least 10 of those submissions a day, then I took it to the next level of creating an app. The app was very basic in the beginning. That app was something similar to the form, but the app would then find out what the exact price of the item was. We did the app and then we progressed from there to creating more advanced apps over a period of time. The changing point was really when we saw a huge ramp. In the beginning, it was really hard to grow. It was just friends and family. My brother was the main culprit in getting other friends and families in Nigeria outside my circle to utilize the platform.
It went from 10 submissions a day to 15, to 20, to 30. Then the app was steadily improving. It got to the point where everything was bootstrapped. It went from my bedroom, down to the garage, to this small warehouse. When it got to the small warehouse and we were getting a lot of orders in, I said, “This is a business that we can really take on.” There’s always that funding part. I bootstrapped and I’ve spent enough of my personal funds and utilized corporate resources as much as I can. We need money. We need money for advertising and marketing. At that point, we were doing about a hundred orders a day. That was the tipping point where we said, “We need to go talk to investors and show them our books.” I went to meet different investors all over the world and settled on the one that gave us the best valuation.
Sramana Mitra: Who was that?
Chris Folayan: Helios Investment Partners.