Setting out to execute a startup idea is extremely exciting. You get this rush of adrenaline that makes you believe you can do just about anything. The science of creation is rather interesting – I saw a comment Blake Lively made recently about being pregnant with her 4^th child - "I just like to create. Whether that's baking or storytelling or businesses or humans, I just really like creating." She most likely meant this to be cute and funny, but the comment holds a lot of truth. We are designed to create; establish dominion over the earth you know.

PS: click here if you don’t know Blake Lively.

I recently had a conversation with Ayodeji Balogun; CEO of AFEX Commodities Exchange Limited (AFEX); for Founders who Dared. AFEX has been running for 10 years and it was interesting to hear about the details of their product development journey.

Watch the first part of our conversation which discusses their journey to product market fit here: https://youtu.be/guetfCrteJk

The excitement of creation (let’s call it creator jitters) tends to lead to some or all of these –

• oversimplify issues (in defining the problem and solution),
• underestimate the required inputs (cash and other resources),
• overestimate the required resources (technology, people, time),
• overestimate our abilities.

In the case of AFEX, theirs was a mistake that cost 10 million dollars, a lot of time and effort. Having clearly defined their vision and business model, execution was next. They went about creating value by connecting with their target customers, understanding their needs and defining processes to solve the identified problems. I discuss AFEX’s journey to product-market fit in the article ‘Not your typical founder”.

They had defined processes that worked, but then they needed to optimise for a bigger customer base…

AFEX’s key value proposition is facilitating agricultural trade in Africa. Their goals were clear; they wanted to build an exchange that allowed small-holder farmers trade their products. To this end, they needed to provide the farmers with 2 core things – access to buyers (markets), cash (loans). The manual processes they had built worked just fine. They had operators in their warehouses across multiple locations who bought inventory from farmers, paid them and sent the transaction information to their central back office in Abuja. The problem with this is – emails, uploading physical receipts and excel sheets work fine when you’re dealing with a few thousand customers; but at the point of scaling your operations, these easily become a nightmare.

They set out to automate…

According to Ayodeji, their first attempt at acquiring technology went south very quickly. In typical creator jitters fashion, they over-scoped based on several assumptions that didn’t pan out. Two most significant for me were –

1. That they hadn’t considered the maintenance requirements of the system  they were considering. Buying a world class trading platform as a startup was a clear case of overestimating the required resources. This would have had a huge toll on any startup, even if they had a large pool of funds.
2. That they hadn’t considered the peculiarities of their markets. Their immediate markets at the time were Rwanda and Nigeria. Even with the technology advancements in Africa, we are still largely behind on infrastructure. Beyond the cost of deploying and maintaining the platform which could have sunk their ship, there was the issue of usability and customer adoption.

Getting back on the horse…

The key to success, they say, is to keep going; Consistency + Adaptation = Growth.

So, they tried again. This time, they started small; with key requirements they absolutely needed to run their day-to-day operations. After several iterations, AFEX has successfully built a product that currently processes all their transactions (B2B and B2C) which amount to over ₦150bn (YTD 2022) according to the CEO.

Evolving from a simple tool that consisted of a basic frontend to collect transaction data and a database to store and manage this data to a multifunctional and multi-user product is no easy feat. Kudos to the team!

I had an in-depth conversation with Ayodeji on their journey from their first proprietary product; Workbench, to ComX; their holistic, customer facing product, which currently handles all trading and financing processes for the company.
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My key learnings from this conversation...

1. Scoping is not an exact science but with agile development frameworks and microservices, winning is easy(ier).
2. Don’t spend all your money at once. You may not get more.
3. Solve your immediate problems first.
4. Trade-offs and prioritisation are key aspects of product management.
5. Everyone makes mistakes. It’s important to not dwell on what’s gone wrong. Review and evaluate. Answer the questions – what you did well, what you didn’t do well, and how you can do better. Get back on the horse and give it another go.

Thank you for reading.

Watch my full conversation with Ayodeji here on #FoundersWhoDared channel: https://www.youtube.com/channel/UCUREl8_Fvp7W9uBu7GBngyQ