Adapted from Chapter 6 of my book Chasing Black Unicorns, about building Jovago, the hotel booking site that became part of Jumia, the “Amazon of Africa”.
It was April 2013. The launch of our service in Nigeria was set for 5 August. On that very day an article about the start of Jovago was due to appear in TechCrunch. We were supposed to have a working site with thousands of hotels on it, and hundreds of reservations from our first real customers.
The date was not going to move, unless I wanted to return home as fast as I had arrived. And I had a lot to prove, both to myself and to everyone around me.
The brief: “Build me a Booking.com”
My office was the attic of a colonial villa in Lagos that Rocket Internet had turned into the headquarters of Jumia. Every square meter was an office. One of the bathrooms held a conference table. In the other, the cleaning ladies ran a laundry for the staff. There was no air conditioning, so I found a fan, aimed it at my sweaty face, and turned a walk-in closet into the CEO’s office.
The order from Rocket was short: build a Booking.com MVP. A minimum viable product. In practice that meant the most important thing was not technology but supply. Without enough hotels on the site, a visitor would not feel they had a real choice, and nobody would come back.
What the consultants got wrong
The preliminary report prepared for us by one of the Big Four consulting firms said there were 1,500 hotels in Nigeria. I knew immediately that this was wrong. There are 1,500 hotels in Lagos alone.
Such discrepancies come from pure ignorance. Big companies, big marketing, big words, and at the end of the day you are left with a few PowerPoint slides put together by an intern. A typical hotel in Africa is a large villa divided into twenty or thirty bedrooms, plus a canteen. There is no signboard and no neon sign, because a sign would only attract tax collectors and people looking for tribute. A consultant sees a hovel. A Nigerian customer sees a three-star hotel. And what a hotel is is decided by the customer from Nigeria, not by a consultant from New York.
The consultant Rocket sent to “help” me for a few days handed me a list of companies that should find customers and partners for me. I told him I had not worked this hard to pass the work on to someone else. “You won’t manage on your own,” he said. “You’re totally new in Nigeria, not to mention all of Africa.”
That woke the monster that had been sleeping in me for years. I’ll show you.
Plan A: go offline
The fact that hotels had no internet access did not stop us. We would employ people who worked offline. A customer would book a room on our website, and my guy would go to the hotel and make the reservation in person. Half the rooms are always empty anyway, so overbooking was not a risk. In stage two we would add a call center to confirm reservations. Stage three, a panel where hotels update their own prices and availability, could come after a year, maybe five.
In my first week I visited fifty hotels, every one I could find on Google Maps plus the ones my driver knew. I would walk in off the street and say: “Good morning, I’ve flown in from Europe to see your manager. It concerns sending large groups of customers to your hotel.” That was enough to get attention without any explanation of “some internet thing”. Behind my back I heard the receptionist tell the manager: “There’s a white man to see you.” My meticulously prepared pitch boiled down to one fact. It did not matter why I had come. It mattered that I was white.
The negotiation that mattered most was commission. Once a contract is signed it is hard to renegotiate upward, and news travels fast in this sector. My instinct was that the less developed the market, the higher the commission ceiling before hotels learn the technology. I opened at 50%. We signed the first few dozen hotels at 30%. Within a few years the contracts had come down to about 20%.
The day I got 10,000 CVs
In the first month I personally signed forty hotels. But every hotel also had to be photographed and described, and with internet that could upload one photo in five minutes, that took almost a whole day per hotel. We needed to add nine a day. So I needed people, many people.
I told my assistant Bertha to post a job ad on local employment sites. She asked if I was sure it was a good idea because… but I did not want to listen. Who was the start-up guru here, me or Bertha?
The next morning there were 10,000 emails waiting for me.
“Quiet. I don’t want to hear one word,” I said.
“But I didn’t say a thing.”
“You said ‘I told you so’.”
“Maybe a little.”
The CVs were an education. One applicant was eighteen years old and had two degrees. Another had five years of experience, four of them as “Bill Gates’ assistant”. I learned that in Nigeria you recruit through advertising, but above all through personal recommendation and multi-stage testing. Fifteen candidates sit in one room, at computers, and take tests before anyone is interviewed.
The Okada trick
Now we had a sales team and no way to find hotels. We could not find them on the internet, because we were building the first real hotel website. First we hired taxis. That worked but it cost a lot, and drivers refused to go to some areas.
Then came the Okadas, the motorcycle taxis. I stopped one on the street.
“Do you know any hotels around here?”
“Yes, yes. I’ll take you.”
“Not me. Go to all the hotels you know and ask the manager for a number.”
“They won’t talk to an Okada. A poor guy like me can’t afford a hotel.”
“Tell them your uncle is getting married and you’re looking for a hotel for 120 people. They’ll talk to you, because the whole family and the whole neighborhood will be coming.”
“But my uncle is already married.”
“Then tell them you’re looking for a hotel for a wedding. Bring me the number. For every hotel that isn’t already in my database, I’ll pay you 100 naira.”
“Ahhh. That uncle of mine. Oh yes, my uncle is getting married!”
By the end of the day I had six new hotels in the database, for 600 naira, a little under $5. The news spread like wildfire. Within weeks we had the data of 1,500 hotels in Lagos, the number the consultants said existed in the whole country, and we had paid $2,000 for it. Rumor in Lagos was that there would be an awful lot of weddings that season.
Where it went wrong
Of course, when you pay per lead, you get creative suppliers. Some Okadas, and some of our own sales reps, started inventing hotels complete with documentation and photographs, to collect the commission. I got suspicious when I received a list of twenty hotels from a small town near Abuja, all on the same street, with phone numbers that differed only in the last digit. I called one of them.
“Good morning. Is that the hotel?”
“Yes, yes, the hotel.”
“Which hotel?”
“Which one are you asking about?” he asked back.
That was all I needed to know. Checking everything we had collected took a long time.
What I took from it
- Local knowledge beats a big report. A $2,000 experiment with motorcycle taxis out-researched a Big Four consulting firm.
- Whatever you pay for, you get more of. Incentives work, including the ones you did not intend.
- Listen to the person who has been there longer, even when you are the one with the title. Bertha was right.
- “I’ll show you” is both my greatest asset and my curse. It built Jovago and it caused some of my worst decisions.
This story is from Chapter 6, “The Lust for Money”, of Chasing Black Unicorns: How building the Amazon of Africa put me on Interpol’s Most Wanted list. All of my income from the book goes to the MaYa Foundation.
Listen to this chapter: Polish audiobook on YouTube (English version coming soon) · Spotify
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