FIP 30: Disrupting Markets with Grant Brooke
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I was introduced to Grant through Christie Peacock (Episode 6). When I later met with him in a Nairobi lunch spot, he came across as an unassuming guy just minding his own business. A little into the conversation, I was struck by his immense curiosity – which is a hint at the qualities that have led him on this path of pitching to VCs with an Amazon-like business model. Grant spent a good chunk of his time in academia before settling on business, so understood economic theory and how well functioning markets should work. As you’ll hear in this episode, this deep knowledge in his subject matter paired with true authenticity, has undeniably led him and his co-founders to create such a disruptive business model.
On this episode you’ll learn:
- How Grant spent 2-3 months on the road asking co-ops, county governments, farmers asking tons of questions, before realising the opportunity for business in the domestic market.
- As a simple early stage pilot, they bought a couple of tuk-tuks (small three wheeler vehicles) and hired a small warehouse, to see what would happen if took products from the farm directly to retail.
- They found that there can be up to seven trades between farm and final retail.
- 2-3 months after starting their first banana pilot, they participated in a VC pitch competition, and received considerable interest from investors.
- After sketching out what size the company could become and the many small sellers putting in small orders for produce, they soon realised that this would become a technology company because a traditional business could not cope with that many transactions.
- In order to reach cash flow positive, they were drawn to higher margin products. But in focusing on scale, they realised they needed to chase the products with the biggest demand.
- Before they take on a new product, they figure out the tipping point for how many customers they need to reach in a single day, which they build out first, which helps reduce wastage / maximise margins.
- Their hub and spoke model allows a truck carrying 10,000 kgs of bananas to reach thousands of vendors around the city who only need 20-30 kgs every 2-3 days.
- Twiga’s end game is that sub-saharan africa doesn’t need large scale wholesale markets or commodities markets. They need hundreds of thousands of small vendors on the end of their mobile phone ordering their stock. controlling pricing dynamically, with produce delivered to their shop, and we can let big data and predicative analytics pull purchasing power back to farmers.
Resources:
- twigafoods.com
- VC pitch competition 1776
- Nairobi Garage Co-working Space
- Understanding Amazon’s flywheel
Connect with Grant:
