VConnect’s founder, Deepankar Rustagi was on the ‘Building The Future Podcast’ with Dotun Olowoporoku. The weekly podcast features guests who are leaders in the Nigerian tech/business ecosystem.
The spotlight was on VConnect’s journey so far. Deepankar expounded on the lessons he has learnt building a business in Nigeria and what VConnect learned from its foray into eCommerce.
If you think the talk was all about business, then you’re wrong, there were moments to reflect on Deepankar’s early years growing up in Ilupeju and why he is in love with Nigeria.
The link for the entire podcast is below. However, we have excerpts for you to read if you do not have time to listen to all of it (although you should listen to it all).
On early years in Nigeria
“A lot of people approach me and ask why I chose Nigeria. I have way more time in Nigeria than India, I am Indian by origin but I came here when I was 13.
My Dad is a textile engineer and he used to work here, so that’s how my family moved here. I schooled here and grew up here. Majority of my learning, connections and formative years were here. So I have a very strong impression for life in Nigeria.”
“…there was this incident when we travelled to Ibadan and we had an accident, it wasn’t a big deal, but two of them were hurt… we looked around and asked for the nearest hospital, we wouldn’t find one, we checked some of the popular search engines for hospitals in Lagos and Ibadan, we didn’t get the right information, we were being redirected to Lagos in Portugal…this was in 2009, there was hardly any data available… That’s when we said some basic information has to be there. So post that, we started creating a small intranet amongst friends and family….I wasn’t always planning to be an entrepreneur… it happened and we built it and then we realised this could actually be made a business. So I spoke with my employer at the time, which was Tolaram and they were very supportive.
They said ‘you want to do this? It should be great, if you need funds, we will support you’, I was surprised.”
What VConnect started as
We started with a directory. At that point, businesses were not using the internet, so we couldn’t ask them to register on their own. We built a field force of freelancers… Trained them to use the internet on their phones, how to educate businesses on why to be online and then register them. That was really the big task we had and then we started seeing traction.
On the importance of persistence
“We all know it is not easy to get returns. If you give up at the wrong time, nothing you’ve done will pay off. Being persistent, being focused, was very important to us.”
The complexities of SMEs and e-Commerce
“A lot of SMEs come to us and say they want to sell on their own e-Commerce platform rather than sell on other platforms. We hold these business forums where we advise businesses on ways to grow. I always say it’s about what you do the best.
So they should see e-Commerce as a channel that brings additional sales for them, rather than trying to become an e-commerce portal, they should continue focusing and growing.
So if they are a retail player selling baskets or bedsheets, they should focus on how they can grow the number of baskets and how they can optimise the cost, understand customers better, rather than focusing on building another channel for sales. This ‘I will do it all’ thinking leads SMEs into trouble.”
“From an SME’s perspective, they shouldn’t see building a website as a one-time job. I know it’s not that simple, they need to understand that business is about building core competencies, rather than doing it all. This is where a lot of businesses lose focus and lose market share.”
How he felt about failing at e-Commerce
“… yeah, it was sad, because we put in a lot of effort, but we learnt a lot and we moved out of it at the right time. After 12 months we realised we were going to back out, but wanted to do it the right way too… A lot of people say eCommerce is going to be profitable in the future. Agreed. I don’t dispute that, but when exactly is the future? If the future is the next 6 months or a year, that’s great… if you see growth in returns without increasing costs, you are going in the right direction, but if you don’t see that your costs are growing proportionally with your returns, your unit metrics will never come into the picture. It is easier to correct things on a small scale, it is way more difficult to correct things at a larger scale.
“…From the ego perspective it is never easy to accept defeat, but it is important that in business emotions should play a secondary role and logic should play a primary role.”
Getting the team to see his vision
“When we moved to eCommerce, I didn’t have detailed discussions with my team. I wasn’t experienced about getting the buy-in from everyone. I said ‘this is the obvious move’ so I pushed everyone into it, and we failed.
Then we realised that it is more important to convince everyone and bring everyone on board. There were some people who joined the team with eCommerce as their specific career, a couple of them left.
Moving on from that
“We understood that everything should happen on your platform. So instead of building a solution where there is a lot of manual intervention, if you are in the marketplace space, you should try and create a platform where both the user and the customer/business are equally active.
This was one of our learnings, we started building a dashboard which is live on business.vconnect.com, where businesses can use tools for them to do things on their own; like search optimise their website.
So a business can have a profile on VConnect and the business has a tool on the dashboard where they can publish their own mobile optimised site, with their own URL in about 5 minutes.
The problem is that businesses don’t create their own website because they don’t know how the design should be, they don’t know what the content should be. So we started going industry by industry. We created a few themes where you can change the colours but the structure remains the same. So if you have a completed profile on Vconnect, you simply publish your website.”
“The bigger war for an SME to be won online is to be included in the decision making process of the user. E-commerce, even after all the investments made in it worldwide is still not bigger than traditional commerce or even close. But the bigger part is that majority of the decision making has moved online completely. What I mean by that is that even if you prefer to buy your shoes offline, you still go online to see the new variants Nike has released. So having a simple site brings you into the decision-making process of the user. That is very important.”
The big picture in the future for VConnect
“For VConnect we would be in more countries in one sector- the service sector, helping businesses find their customers conveniently and be the single platform for them to engage with their customers. That’s the big picture.
Right now, 75% of businesses in Africa do not see the second year of business out, they shut down before 24 months, that’s a lot of loss.
There are different reasons for that; lack of funding and abnormally high interest rates, high infrastructure costs and not reaching customers effectively. We are trying to address that problem of not reaching your customers effectively”
Key trends in the African tech ecosystem
“…today there a lot of companies who invest in training of their staff, that invest in courses. There are a lot of events happening that bring connections and exposure for people to learn. So I think the ecosystem is going in the right track. A lot of entrepreneurs like me have matured and understand that sharing multiplies our strength….at one point I felt it was like “He is doing this, why can’t I do that too?”, But today it is about “He needs this, how can I provide it for him?”.
So the ecosystem is growing and is in the right direction.”
Biggest business pain point for VConnect
“Getting businesses to stay active, educating them about staying active.”
Number 1 growth metric
“Number of connections we deliver every day”
What he is reading at the moment
“Zero to One by Peter Thiel
Which business apart from VConnect gets him excited at the moment
“Fintech gets me excited. Financial inclusion gets me excited. Another business that gets me excited is lending for SMEs. So a company like Lydia gets me excited”
“So startups working in that space I am always happy to help in any way.”
You can listen to the entire podcast and episodes with other entrepreneurs here.