MPost: The Traction Story of a Kenyan Startup that is solving addressing problem – with Twahir Mohamed [Ep#16]

Receiving correspondences in Kenya might be a real challenge. That’s because addresses (street, number, etc) are not available for every one.

For many years, people have been counting on PO boxes—rented post office lockable boxes—many times shared with other people, in a centralized way.

The problems naturally arise, once your packages might be accessed by unwanted people and there is no warning system to communicate you got a mail.

That’s exactly the problem MPost is tackling with its solution.

Through a unique address code—derived from users’ phone numbers—MPost provides privacy and, at the same time, communication about new packages deliveries.

In the 16th episode of The Traction Stage Podcast, Twahir Mohamed told me how he and his partner developed MPost and how they are impacting the lives of more than 45,000 users.


SHOW NOTES

THE PROBLEM

Let’s start by understanding what is the problem that you’re solving for people in Kenya.

The problem MPost is solving is basically the addressing problem. For the past 100 years in Kenya—within the existence of the Postal Service—the Postal Corporation of Kenya had a maximum to provide addresses of 400,000 to a population of 400,000 people.

MPost has come to solve this problem, by turning the mobile phone number into an official postal address and the mobile phone into a post office. So, you are able to give out these addresses as part of KYC documentation, either in the public sector or in the private sector.

THE SOLUTION

MPost is a 30-second registration process available on feature phones and smartphones. After registration, you receive a virtual address. It enables you to use that address, for example, on e-commerce sites or government forms. When you give out that address and you receive either correspondences or parcels from an e-commerce website, you receive a notification on your phone.

The notification gives you two options: you can go pick it up at your nearest post office, or have that parcel or mail delivered to you at a place of your convenience.

You need to give out your postal address as your mobile phone number. We have a code for every post office that is near you. So, the MPost address basically is your mobile phone number dash the post office code that is nearest to you. They call it a zip code in the west part of the world.

AN EXPIRED OPPORTUNITY

How did this idea come to your mind?

Abdul Aziz [MPost co-founder and CEO] and I were high school mates for some time, and we parted ways when we went to universities. After some time, he applied for a job opportunity in the government of Kenya.

He got shortlisted, went to the interview and got the job—in quotes. I say “in quotes” because three months down the line, he had not heard from the government. His wife told him: “Government communicates via the post office.”

Twahir Ahmed and Abdulaziz Omar, founders of MPost

He remembered the PO box that he gave and it was of his mother. She has not lived in Kenya, since the 90s and the key for the post office box—the postal address—was with his aunty, 400 kilometres away from Nairobi, in Naivasha.

So, he had to go reach that key, come back to Nairobi, and then open the letterbox. And guess what: he found a big brown envelope written “Government of Kenya”. And by opening it up, at the post office, he sees he got the job.

But the job had expired—three months down the line. And it’s written: “If we do not hear from you in seven days, then we consider that you have forfeited the job opportunity.”

IT CAN BE BETTER

With that experience, he started asking himself: “Why didn’t the post office notify me that I had a letter? And why are we sharing addresses?”

With that experience he started asking himself: “Why didn’t the post office notify me that I had a letter? And why are we sharing addresses?”

During our research, we found out that only 1% of the Kenyan population could get a postal address. And that postal address, in this sense, is a brick and mortar—a metal box and a key—where your letters are placed in a central area.

I met up with Abdul Aziz after some time and he told me the problem. We sat at his place, we came up with a technical algorithm and MPost was born. We patented the product, copyrighted it and also trademarked it.

I met up with Abdul Aziz after some time and he told me the problem. We sat at his place, we came up with a technical algorithm and MPost was born.

Then we approached the post office who gave us a pilot. For this pilot, we were challenged to give 200 addresses in six months. But guess what: the demand was so high, we did 1500 addresses.

Because people saw the convenience. They saw the security, in terms your parcels are kept in a safe, secure place whereby it is not accessed by unwanted people.

So, we launched the product MPost on 16th of June 2016 and the product was launched in partnership with the National Postal Corporation of Kenya, by the Cabinet Secretary Joe Mosheru.

FIRST LAUNCH, THEN IMPROVE

Was this pilot really different from the current solution that you have today?

Since it was the first time this has been done, the Pilot was totally different from what we have today, in terms of access channels to the solution.

We began with an SMS solution, but, through customer feedback, we saw it was taking more than five minutes to get a virtual postal address. There were so many complaints.

We improved that and moved to the USSD channel, the web application, and the mobile application channels.

The backend also completely changed from what we had during the pilot. We have scaled the backend to better frameworks, programming frameworks, and also better cloud solutions, from where we had a standalone server.

DELIVERING PARTNERSHIP

Tell me about the importance of the partnership with Postal Cooperation of Kenya.

Postal corporations around the world are the only ones mandated to give official postal addresses. This partnership is really important because it validates MPost as an official postal solution that has been adopted and is also recognized worldwide by the Universal Postal Union.

Not only that, the postal services have subsidized delivery and logistics solutions. This is subsidized because postal service is a human right, according to the UN. That’s why they have a UN body, known as the Universal Postal Union.

This makes our solution an impact solution, through which we are able to provide addresses and delivery solutions to those below the pyramid, those who live under the line of poverty, or those who are trying to make it through getting products from outside and having them delivered to their homes, using the MPost addresses.

The Postal Service also has the widest network in any country. For example, in Kenya, they have the largest spread out offices—over 638 offices across the country. This enables MPost addressing a solution to be able to deliver from the cities to even the outside far-flung frontiers of the country.

ACTIVE LISTENING

You did a lot of research, a lot of customers feedback. Is this a practice of MPost?

Yes, it is. We continuously seek to improve the solution. We usually engage our customers through SMS surveys, on-ground surveys and activations, so that we are able to improve the solution and to see the impact that MPost has to the community.

Also, these surveys and researches help us to scale in new markets and learn, because African markets and developing country markets are almost similar.

We usually engage our customers through SMS surveys, on-ground surveys and activations, so that we are able to improve the solution and to see the impact that MPost has to the community.

FUNDING THE JOURNEY

How have you funded this journey so far?

At first, we started out with friends and families, and money from ourselves. Then, we did a lot of bootstrapping—the first two years—before we got a good angel investor, who we raised a seed round from.

Now, we have been able to open our series F round, which we are closing at the end of this August.

Were able to start generating traction with your family and friends’ money or did you need this angel investment to really generate traction for MPost?

We needed the angel’s round to generate traction. It helped us to move our numbers from where they were to where they are now. Just to build an MVP, to make sure that everything from technology, operations are working in a proper way.

We have not done any marketing to achieve these 45,000 subscribers. But it was through word of mouth, we are planning to use the money that we raised from our series A to acquire and retain talents, and especially to do marketing in order to be able to achieve growth in Kenya. And then maybe to move to Uganda, Rwanda, and also close the East African market.

THE POWER OF REFERRALS

You did a campaign that provides commissions to referrals… Have you had any results from that campaign?

Yes, we have. Actually, most of this has come from that campaign, most of the subscribers. And also we have created around 3000 virtual jobs for young men and women who are selling MPost through the referral system. For every referral, they gain $0.50.

You have attended the Startupbootcamp Afritech Accelerator Program.  How did that help on the startup development?

Our experience at the Startupbootcamp opened up so many doors. We were able to pivot our business from a B2C to B2B Business, and to understand our business model and improve ourselves. We got good mentorship. We were able to meet various investors, who believed in the dream and who came in our pre-series A. So, Startup Bootcamp exposed us to the ecosystem in Africa.

While in the Startupbootcamp, we were also able to enter the competitions such as the South African Innovation Summit, where we won first prize. We also entered the Startup World Cup, where we were the top startup, and we went to represent Africa in the Startup World Cup in San Francisco, in which we emerged top five.

Also Startupbootcamp AfriTech exposed us to large corporates, like Unilever, with whom we have been able to negotiate commercial agreements where they are buying prepaid addresses for their clients.

What kind of advice could you give start entrepreneurs that want to build successful businesses?

First, use whatever resources you have to build an MVP, before going to the market. Bootstrap. Be able to do a pilot. Have your IP correct, in terms of copyrights, maybe trade marking. And if it’s a really unique idea, try to spend some resources to patent that idea. Also, go for commercial agreements. Then, seek fundraising. And also, do not give up.


MORE ABOUT THE FOUNDER

Twahir Ahmed Mohamed (LinkedIn)  – Entrepreneur | Co-Founder | Digital Technology | Experienced Chief Technologies Officer with a demonstrated history of working in the information technology, Innovation and services industry. Skilled in Digital Strategy, Web Project Management, Servers, Web Design, and Management. Strong entrepreneurship professional with a Bsc. Information Technology focused in Information Technology from Jomo Kenyatta University of Agriculture and Technology.

Abdulaziz Omar (LinkedIn)  – Experienced Founder with a demonstrated history of working in the information technology and services industry. Skilled in Strategic Management, Innovation, International Relations, Project Management. Strong business development professional graduated from KENYA METHODIST UNIVERISTY.

MORE ABOUT MPOST

Mpost (Website; Facebook; Twitter) is an innovative product that allows you to enjoy Postal Services at home, in the office, or on the go at your convenience through your mobile phone – Posta Mkononi.

Once a user registers for the service, they choose the most convenient post office (out of the 622 Post offices across Kenya) where they can receive their letters/documents/parcels. Once a letter/parcel is received by the PCK, an SMS will be sent to the user, notifying them that they have received mail (letters/documents/parcels). The user then has a choice of walking to the post office to collect the documents or ask that Posta delivers them to their house/office/different location at an extra fees. This service costs KES 300 per year.


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