Trackhub.ng — Our Story, and the Bumpy Road to Being a Logistics Company in Abuja
This is the first in a series of Trackhub articles detailing our journey so far in fixing the customer experience problem in the logistics space in Nigeria.
The various topics include:
- Our story
- Why we pivoted
- Riders will break you
- Operational expenses — (OPEX) is your friend
- Hacking growth
Trackhub.ng is a logistics aggregator start-up, that was founded by Chukwuemeka Emmanuel Azubuike. A medical doctor and health economist with a vision of an African logistics landscape where last-mile delivery is seamless.
An aggregator essentially connects producers and customers for a commission, and most of these platforms have become everyday start-ups, some of which include Uber, bolt, in transportation, and Nairaxi, Dellyman, in the logistics space.
Trackhub thus became one of the very first aggregator platforms to launch successfully in Abuja. Backed by a team of professionals spanning software and product development, research, data analytics, and business management, the team launched in the Abuja market on a mission to improve last-mile deliveries through a superior on-demand delivery experience.
Figure 1: Initial 2-sided platform model underpinning Trackhub
Being a 2-sided platform connecting delivery companies (merchant side) to users requiring delivery services (customer side) as shown in figure 1, the business set about onboarding delivery merchants in a winner takes all Abuja market.
Mobilizing a 2-sided platform is not easy- most new 2-sided platforms typically face a chicken and egg situation.
A “chicken and egg” in platform context is a situation where the value you bring to two separate groups on your platform is dependent on success in the other.
For example, a platform like uber, with the number of drivers driving attractiveness to riders, and likewise the number of riders driving attractiveness to buyers.
In this situation, the chicken and egg is your new platform not creating enough value to attract new users. Thus, it is not economical for merchants to join your platform when there are no riders and vice versa. This poses a problem about which side to mobilize first.
To solve this problem, Trackhub approached this scientifically, conducting market research to understand the market and assess the potential adoption of the solution (see figure 2).
Our theory of change was that if we were able to link merchant and customer seamlessly and created the right incentives to stay on the platform, we had struck gold- after all, it is a winner takes all market. We then proceeded to create a buzz about the solution to the customer side before launch and then piloted a program with only a few players on the merchant side.
Figure 2: One of the insights from the Trackhub Survey conducted in three cities.
Notable logistics companies that signed up in Abuja include- Messenger.ng, Samfort Go, BME logistics, etc. Two of the above-listed companies are dominant players in the Abuja space. This helped create some activity on our platform pre-launch.
At launch, we targeted two categories of delivery companies, delivery companies with at least 5 bikes, valid registration permits and a good track record but also smaller 1-bike only logistics personnel. Our offer was more volume for merchants and better-quality riders for customers. At first, this sounded great on paper, but as they say, “everyone has a strategy until you get hit by the market”.
Figure 3: Two-sided growth strategy leveraging network effects.
After 5 months of learning and executing over 1500 deliveries across 12 logistics partners, and with good marketing, the business model pivoted to a different approach. The vision is the same, but the mission has changed to using technology, process innovation, and strategic partnerships to fix the customer experience problem in the logistics space in Africa.
Our model now entails:
Direct delivery using in-house delivery bikes
Restaurant aggregation and food delivery using our bikes and
We have now found our sweet spot and are enjoying “dividends of democracy”. They say, “magic happens when you find the right person”, same goes for markets- when you find the right market, magic happens!
Find out why we pivoted in our next post and how we are bringing our economies of platform learning into food delivery with eats.trackhub.ng
Visit our website to learn more about us and if you like us enough to do business…
Call us or use our courier web app at courier.trackhub.ng
Find out more about us on www.trackhub.ng