SokoText is an SMS based food pre-odering application that connect food vendors and retailers in the urban informal settlements with fresh produce at affordable prices. Instead of the vendors having to travel to buy the produce SokoText does it on their behalf. They aggregate the orders from the vendors (mama mbogas) and they end up having a big order which allows them to buy and transport the produce at bulk prices. They then add a margin and sell the produce to the vendors which comes to the prices similar to the market or lower.
SokoText was founded by Suraj Gudka, Jonah Brotman, Verena Liedgens, Carolina Medina and Sofia Zab.
I talked to Suraj Gudka to shed more light on the start-up.
How did the idea for your start-up come about?
The idea came about when we applied for the Hult Prize in January 2013 while I was studying at the London School of Economics. The Hult Prize is the worlds biggest social enterprise competition. They identified the problem of food insecurity in urban slums and we had to create a business that solves this problem. Using all our combined experience we though of working on an Idea about group buying to unlock wholesale prices.
Your biggest challenge so far?
Our biggest challenge so far has been to establish good logistics and ensuring product quality. Our operations need to be very cost efficient, and so we need a logistics system which works well at low costs. So far, we have found it hard to do this, however we are getting better at it as we learn more.
Secondly, because we are still operating at a smaller scale, it is hard for us to maintain the quality of our produce. This is because we have to buy from local markets. However, as we get more customers and our volumes increase, we will be able to work directly with farmers which will enable us to control quality.
What has your start-up achieved so far?
In March, we won the online competition of the Hult Prize, we were one of 6 finalists from over 2000 teams.
In July, we had a two month alpha pilot in Mathare slum Nairobi.
In September, we presented our venture to a judging panel of 10 people which included Prof. Muhamad Yunus, Mo Ibrahim and other high profile people.
We presented at the Clinton Global Initiative in New York and President Clinton attended the presentation to award the winning team. We were one of six finalists, however we did not win. The winning team got $1m to start their business.
In December we were awarded a grant of about Â£5000 from the London School of Economics to start our Beta Pilot.
In December we got into Startup Chile an accelerator in Chile. We will get funding of unto $40,000 in the next 6 months.
We are currently making final preparations to start our beta pilot where we will test our concept at scale and decide on what our scaling strategy will be.
What has contributed to your success to this point?
The exposure to some great resources from the Hult Prize and Nailab has largely contributed to our success.Resources such as access to some great business development tools and access to experts had helped a lot.
Secondly, our teams passion of making money while doing good has been a huge motivation. We love what we are doing, and knowing that we are working on something that will make someone’s life better is very rewarding and is what keeps us going.
What made you choose entrepreneurship over employment?
For me, I come from an Indian family but I was born and brought up here in Kenya. I have grown up around my Fatherâ€™s business and I have always been passionate about business. My dream was always to run a business of my own. I chose entrepreneurship over employment because I wanted to do something I loved and be my own boss while doing it. I rejected a job offer from one of the big 4 accounting firms in the UK to come to Nairobi to start SokoText.
What are your thoughts on start-ups in Kenya?
Start-ups are thriving in Kenya right now. They are all over. I am happy to see that more and more young people in our country are taking to entrepreneurship and working on start-ups. However I think we all really need to build something that people actually want. I have seen many start-ups build apps or services without having the target market in mind. We need to make sure that we are building businesses that are solving problems that are faced by people. There are huge opportunities for us to work on start-ups that solve a consumers problem, here in Kenya consumers have many pain points. The key is to identify these pain points.
Lastly, I would like to encourage the youth to look at social enterprise and try to solve problems faced by society in a sustainable way using technology. We cannot rely on the government to do everything, we should be taking actions to make our country a better place.
Which key individuals have been of great help to your start-up?
Our families have been of great help to us. For me, I am very fortunate that my family has been very supportive. They all have contributed in very many ways. Living the start-up life is very hard, we are often bootstrapping with whatever we can and living with family and not worrying about rent or my next meal means I can concentrate on the business. Secondly, my father has been funding us since the beginning and this means a lot to me because we would not be where we are without his help. Lastly, the general support by the whole family has kept me motivated.
Going forward, what does your start-up need?
Going forward, we need to build partnerships with organisations so that we can work together to create more impact. Once we finish the next pilot, we will be seeking funding to scale up and serve more customers.