How I Started A $3.7K/Month Software Company In Kenya
Hello! Who are you and what business did you start?
My name is Marvin Hosea, I have been developing software for more than five years now and I am the founder and lead at Apps: Lab KE. We are a team of expert software developers, data analysts, and designers specializing in problem-solving using technology and data for businesses and communities.
We specialize in software development and that is what is generating 85% revenue for the company. The other 15% revenue is generated by in house projects, one of them is our on-demand food delivery mobile application known as LetaFood operating in one city in Kenya at the moment, Eldoret. All revenue from our services and flagship projects generates $3,500 per month.
We are good at what we do and that is software development as stated by our slogan Heart of Tech
What's your backstory and how did you come up with the idea?
Briefly, about how we started the company, I went to Moi University and studied computer science. During my time at university, I used to train other students on campus how to develop software, basic programming to be precise. We teamed up with some of the students who were good at software development and we wanted to share these skills with the world, a year later after graduating, we started Apps: Lab as a company and not a software training organization.
The best decision I have made since we started the company is being transparent and let everyone run the company.
We worked on Apps: Lab as a side project for about one year, with our team contributing to local meetups and tech community. 2018 July we got our first client from Uganda who paid us $4,500 to develop a high school multi-vendor software. And that’s how we started our company officially, though the company was incorporated in 2017 February.
After our first client, we went full time. We started receiving other clients and it was a new experience and responsibility that we had to deal with. This was overwhelming because the team was small, we were seven co-founders with a computer science background. None of us knew anything about management, running a company or budgeting all those activities that involve running a business and we had to learn on the job.
Take us through the process of designing, prototyping, and manufacturing your first product.
Our company has a six-step process:
Conceptualization
- After meeting our clients and listening to their ideas. We sit down and conceptualize the idea and the best way to develop it after agreeing on the pricing.
- This process helps us make the decision on which software/tools to use for development and which programming language to use to develop the solution.
- At this stage, we also help the client with market analysis and business thesis ideas.
- Finally, we come up with a software requirement specification which guides us in the development of the project.
- One of the team members is assigned as a product manager and lead to follow up with the client and the developers
Product Design
- At this stage, we focus on the application mockups, design, application theme, and database design.
Product development
- The actual development of the project stage is the longest stage in our process. We iterate back to product design at some point if logic is not clear or is off.
- It involves assigning tasks to team members and consistent prototyping features during development.
Testing
- We use TDD technique among others during development but at this stage, we give the application to users to test and give us feedback.
- This is a very important stage in our development process since it helps us understand if we got the logic right and if the application is working as intended.
- The client is part of this process.
- At this stage, we can iterate back to product development and design from the test feedback.
Launching
- After successful tests which include application written tests, user tests among other tests, we launch the application as per the customer schedule.
- This is the most critical stage in our development circle because you never know what you will get from the users using the system or who the users are and how they use the system.
- We’re required to give support and fix any bugs that might arise after launch in time.
Customer success
- After a successful launch, we contact what is called a customer success story which involves getting feedback from the customer. This helps us improve our services for the next customer.
What I have not mentioned is research because we don’t do it on every project. We do research on most of the new and modern technology to keep up with the continuous innovative tech industry and also to be up to date with the trends in the industry.
On legal, we learned a hard lesson this year when a client threatens us with a legal sue. Since then we don’t work with good faith, we make sure we sign a contract and NDA with all our clients. The contract helps both parties to understand the rules and terms of engagement.
Describe the process of launching the business.
Personally, I don’t have any launch strategy, At Apps: Lab we launch solutions when we are ready aftermarket study and have the finance to support the business.
But here are some ground rules:
Do a market feasibility study first.
- Doing a market feasibility study is very crucial because it will help you understand the market. The time you need to launch or even if the product is viable in that region.
- A good example from our company on Launching LetaFood - an on-demand food delivery service. During our first launch, we did not do any market study and it flopped. We got three orders only in two months - which we never delivered and we had to stop LetaFood operations for a whole year. Eventually, we hired someone to do market research and study before re-launching and it went well now we are doing 86% orders conversion rate
Build a community around your product.
- After solving a problem faced by a number of people you build a community of people around that solution and you, the product owner act as a leader to them. You will have to keep on engaging with your community members and make them feel like part of your “product family”. The advantage of building and engaging your community is they tend to recruit other community members as long as you offer quality service and good customer care. A Product community is an agent of mouth-to-mouth marketing.
Have an input budget before and during launch.
- Before you launch and after launching track your running cost. You might be spending too much or not spending enough on your solution. This helps in calculating your profit in regards to your revenue and costs
Launch services or features progressively.
- Launching everything will always eat into your launch time and a lot of maintainability for small users as you grow. It is advisable to launch the core features and launch the other features progressively as per the users’ demand. You will be able to join the market early at the right time.
Your products need to have metrics, get metrics after launching your application.
- After launching your product make sure you collect users’ metrics like. The services they use the most, the pages they visit the most. Metrics will help you make informed decisions that are aligned with your users’ actions.
As mentioned in point 4, metrics can also help in choosing which feature to launch next for your users.
Leverage social media marketing.
- As a company, we have never used social media for marketing but there is a huge potential in it and we are going to try it out in 2020.
Consulting different experts in the industry even after launching. Keep updating them on the process of your business or product to help them give you affirmative advice.
Make sure you have metrics for the product, for example, the number of active customers, the number of installs and uninstalls, how much people check out, etc.
Don’t employ too soon, employ only when necessary because you can outsource most of the work.
Since launch, what has worked to attract and retain customers?
When you do a good job, you will always attract clients. Because they will always refer you to other customers. And also when you are good at your job, people will appreciate your work and the only way to prove that is by sharing your best work.
We contribute a lot to the local tech communities and this helps us market ourselves by word of mouth and skill set. We have not done any social or PR or email marketing since we started the company, so I cannot give any advice on the same. But we are looking forward to leveraging social media and email marketing come 2020
Another trick that has worked for me and my team is being kind, networking with other people and making friends.
On retaining customers or rather customer relations, we are still working on this one, we have not fully mastered it but we will be there soon. And we are not badly off either.
How are you doing today and what does the future look like?
Currently, the business is not doing great because companies are closing the year and it is very difficult to get a project at the moment - lol we would love to have some customers. We are shifting our focus to in-house projects and product development which we will launch sometime next year. Another challenge is in Kenya, technology consumption is very slow, businesses are not appreciating the power of technology and this somehow this cut across Africa due to low internet connectivity although this is improving with time. We aim at changing this narrative and introduce as many businesses to technology as possible by the year 2040.
We spend roughly $20 for customer acquisition. Once a customer is referred to or approaches us, we foot in the initial cost for the meetings, travels, and communication. We usually assign a budget of $100 for customer acquisition every month and on average we get five to seven customers a month but we win one or two of them.
Yes, just like every business, we are planning to scale and venture into new markets and regions.
Our short term goal to increase our market share in our country. And our long term goal is to be the leading technology company in Africa and migrating 200 SMEs to cloud in five years.
Through starting the business, have you learned anything particularly helpful or advantageous?
My background is in computer science, I don’t have Bsc in business, marketing or any business-related course. And this has been a challenge learning on the job. I would say I have been lucky all this time to a point where I am able to handle the challenges with ease, and I do believe I inherited my pitching or marketing skills from my mother who is a businesswoman, she is good at it.
Positioning yourself as a leader is not easy, much is expected from you by your family, wife, colleagues, shareholders, community, customers, mentors and you have to listen to them, and at the same time lead by example and align the company activities along with the company goals and vision.
One of the characters that I am battling is the ability to force anyone to do stuff or an activity. I suck at that, but I have a good team that knows what to be done and very supportive where I am not able to deliver. Man, you need to have supporting pillars around you, who back you up or give you ideas and suggestions where necessary.
The best decision I have made since we started the company is being transparent and let everyone run the company. Positioning yourself as a leader is not easy, much is expected from you by your family, wife, colleagues, shareholders, community, customers, mentors and you have to listen to them, and at the same time lead by example and align the company activities along with the company goals and vision. No one is built for this but often you figure it out on the job, as long as you listen and make a final judgment from the feedback then you are good. What you have to remember when you are a leader, your team, clients, parents, shareholders, community, friends, and the general public is your boss and they will always keep you in check.
The lesson I have learned so far is, working with a team is the best way to grow. And here is my explanation; A team has a lot of ideas and when you combine these ideas you end up with a solid idea that propel the business into the right direction, A team will always point out your mistakes and where you suck, you cannot get that from any person very easy. A team is a network and somehow they know how to solve all the problems that arise in the company, in all honesty, I don't know how but yeah we solve all the problems as a team.
And finally, I will quote our CTO “If one in the team fails, it’s a failure to the whole team, not an individual”.
Like I mentioned previously, we’re good at software development but we did not know how to price our solutions, manage our clients among other challenges experienced by every starting entrepreneur and over time we have mastered these skills by accepting the mistakes we made initially.
But it is an interesting process, the process of making mistakes, learning and re-learning, being corrected by mentors, colleagues, shareholders, clients and sharing ideas on what works and what doesn’t.
I am just good at bringing people together somehow.
What platform/tools do you use for your business?
- Jira - For clients issue tracking and project management
- Trello - project management
- Our own ERP - For operations
- Zoho for emails
- Bitbucket for software versioning and management
- Scaleway for cloud and hosting
- Namecheap and Kenya Web Expert for domains
- Our own blogging platform Geeks Talk Thursday for blogging
- Spark post for application emails integration
- Mailchimp for subscription and email marketing
What have been the most influential books, podcasts, or other resources?
Books:
Podcasts:
Advice for other entrepreneurs who want to get started or are just starting out?
There is no formula for entrepreneurship and you will never master it. But working with people; your colleagues, mentors, co-founders, friends, shareholders, clients, etc put you in a position where you have compound eyes and everyone is helping you sail through the business storm, makes it easy to run a business with minimal mistakes, because they will always guide and point you to the right directions.
Listen to people's experience to avoid falling in the same pit hole they fell in, I often refer to this as “someone selling his/her ten-year experience to you in five minutes”. You can never buy that. Take what you can from the experience and apply what suits you. You don’t have to do the exact thing because everyone has a different success formula, find yours.
Where can we go to learn more?
- Am vocal on twitter
- Our Website
- Facebook Page
- Twitter Handle:
If you have any questions or comments, drop a comment below!
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