Recently on Global Startup Report, Founder Institute was pleased to be joined live by BetaStore Co-Founder & CEO Steve Dakayi-Kamga to learn about the B2B eCommerce startup that just raised $2.5M in May 2022 to accelerate the company's growth across markets in West and Central Africa.
BetaStore, a Lagos Founder Institute portfolio company, helps to solve informal retailers' inventory and financing challenges—these are small neighborhood stores, mom-and-pop shops, family-run corner bodegas—a scale of micro retailer that is somewhat less common in other parts of the world. But as CEO Steve Dakayi-Kamga explains, a whopping 70-80% of ALL retail across the regions where they operate takes place via these small independent retail stores! Each carrying ~200 individual items on average, these are SMALL retailers that face HUGE challenges, specifically around supply chain and inventory costs—and that's where BetaStore comes in.
Watch our full 2022 interview with BetaStore Co-Founder & CEO Steve Dakayi-Kamga here, or read the highlights below:
Key Founder Insights & Highlights:
- Key challenges informal retailers face in Lagos, the rest of Nigeria, Senegal, and the Ivory Coast
- Validating startup hypotheses in a sequential order, across a 2-sided marketplace MVP, especially in earlier stages
- Scaling up a B2B eCommerce marketplace, on both the brand-supply side and the retailer-consumer side
- Different channels for doing business with retailers, and how the next generation of small retailer store owners are shifting those channels
- Lagos, Nigeria as a proving ground and beachhead market for other regions across Africa
- Fundraising as a challenge every entrepreneur (*of a venture scalable business) has to go out and actually learn, while the professional investors already know the game
- BetaStore CEO Steve Dakayi-Kamga's advice for early-stage entrepreneurs just getting started
Originally from Francophone Cameroon, Steve Dakayi-Kamga Co-Founded BetaStore in Anglophone Lagos in 2022. As he explains, average small retailers across the regions where BetaStore operates typically each stock ~200 items in their store. This number of items stocked will require each small retailer actively maintains working relationships with ~20-30 individual suppliers—this is to source different products from different suppliers, but also to maintain item SKU supplier redundancy for restocking, in case one supplier is out of a particular item when the retailer needs to reorder it.
Maintaining all these individualized business networks and supplier relationships is a major time burden, and adds significant complexity to the operations of these small retail businesses—BetaStore CEO Steve Dakayi-Kamga explains,
You might imagine this network is easy for a supermarket chain, who has maybe 4 or 5 procurement people—but the small retailer is typically just one person! In Nigeria, 80-75% of them are women, and they have to manage a very complex and a time-consuming restocking process [on top of managing their retail store itself]. And the other part is that the cost, in terms of logistics (going to the market, finding people to help with the product, finding a vehicle to bring it back to the store)—it's quite expensive when you're small scale, because the volume is limited. You will not necessarily fill a large truck, which means that you pay more as a percentage of the product, so that's the challenge.
BetaStore solves each of these major challenges for its small independent retailers: it maintains reliable inventory across its product offerings, lets retailers place their orders via whatever convenient digital or voice channel they prefer, and caters specifically to this clientele with order delivery in 24 to 48 hours.
Asked about the complexity of scaling up a two-sided marketplace offering, particularly at the early stages where founders often face a proverbial 'chicken vs the egg' problem in deciding which side of the marketplace to concentrate their early efforts, BetaStore CEO Steve Dakayi-Kamga emphasizes the need to focus on validating your assumptions sequentially, saying,
I think it's important to go through the phases step by step, being very clear in terms of what you're trying to to validate in your business model, what is the offering that the customer wants to pay for, and then validating if the unit economics within then make sense.
While BetaStore is now expanding internationally, CEO Steve Dakayi-Kamga describes why he, originally from Cameroon, chose Lagos as the beachhead market for his startup, noting,
Lagos or Nigeria itself is a very different market than any other, even East Africa or West Africa—you could say, 'Yeah I've been successful in Kenya or in South Africa,' and then you think, 'Okay I will move to Lagos, and then it will just click.' No, Lagos is a different beast. I think if you're able to make it and to successfully grow your business there [in Lagos], you are really ready to tackle the big challenges in a lot of other places—maybe not all, but [Lagos] prepares you to be to factor in a lot—and that's what we've seen, subsequently launching in Senegal and Ivory Coast.
Asked what is next for BetaStore's continued international expansion across the region, CEO Steve Dakayi-Kamga notes the company's goal of operating in 100 cities by the end of this year (2022) by growing its footprint across Nigeria countrywide, as well as across its Francophone African markets in Senegal, Ivory Coast and beyond.
BetaStore CEO Steve Dakayi-Kamga offered a nice testimonial about how the Founder Institute accelerator program helped him in the early stages specifically, by acting as a 'forcing function' to go out and truly validate his assumptions, saying,
I think what is great about the program is it really forces you to go deep into the problem that you're trying to solve, really try to validate all the hypotheses, and your understanding of what you think you know about the problem: the job that your target customer is trying to do, and how you can support them. Also the pace of the program and the assignments you have to do, that forces you to go through these steps without actually trying to find shortcut. And I think that's one of the key advantages of going to the FI program, even if you think you already know the answers—you know, I've done an MBA at INSEAD, I've done a lot of entrepreneurship training—but still, FI was really valuable in the sense that it forces you to go through each and every important step, one after the other.
While BetaStore only recently closed its pre-Series A this year, CEO Steve Dakayi-Kamga has big plans to continue the company's accelerated growth trajectory, and is already back at the beginning of the fundraising process again, this time for the company's next Series A round. He notes that fundraising is a skill a founder must learn through actually doing it, and testifies that Funding Lab helped him to learn that process early on, when BetaStore raised its pre-seed in 2020, noting,
Funding Lab was extremely helpful after FI, when we actually needed to do our pre-seed back in 2020. There's a lot of things that you think you know after reading reading it—it's not, it's just not enough, you need to experience it. And there's a lot of psyche also that goes into fundraising as well.
Asked about the one piece of advice he would offer to prospective entrepreneurs who are inspired by BetaStore and his own startup journey, CEO Steve Dakayi-Kamga offers some wisdom on Founder-Problem fit, saying,
You need to think very hard about the match between the problem that you're trying to solve and who you are, and your experience. So it is very important to be thoughtful about that—you don't just pick any problem, it needs to be something that YOU know. It's called the 'Founder-Problem fit', you know there's a 'product-market fit' but there's also the founder-problem, and it's important to be thoughtful about that... in order to increase your chances of success.
To learn more about the B2B eCommerce startup solving many of West & Central African small retailers' biggest challenges, visit BetaStore.co
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