What you need to know:
- Mark Kiarie and Kevin Kuria resigned from their jobs to create a tech product that required different skill sets.
- Their courage and efforts finally paid off when in January 2021, they managed to roll out their first product.
In today’s economy, leaving a high paying job to start a business which you are not sure is going to work out is considered either very bold or foolhardy.
When Mark Kiarie, an architect, and Kevin Kuria, a visualisation artist, resigned from their jobs to start a tech company, everyone that knew them was aghast.
Having invested so much into their studies, then into their careers, at the time, it seemed unwise to leave it all behind. But they had dreamed of running their own practice for a long time. They thought long and hard about where to start. At the time, the technology sector was booming, as shown by the large number of venture capital funds being pumped into it.
If they could create tech products that would address gaps in certain industries, even if it meant starting with the industries they previously worked in, then perhaps they could find a way to bring their goals to fruition.
But creating any tech product would require skills that were completely different from what they had trained in for years. In essence, they would be starting from scratch.
“We knew nothing about coding. We would spend hours on our computers watching videos and reading material on coding. Many times, this went on late into the night. In truth, we had no social life then,” says Mark, co-founder of tech company ‘Chpter’ in an interview with Powering SMEs.
For almost a year, they worked tirelessly honing their skills with no income. Their courage and efforts finally paid off when in January 2021, they managed to roll out their first product, Chpter for Banks.
This product would assist financial institutions to automate most of their accounting tasks. While they appreciated the invention, most banks would however take too long to adopt it.
“We did a lot of brainstorming and realised that for our products to move, we would need to target a sector that has potential, but is underserved. The SME sector has huge potential, but was among the hardest hit during he Covid-19 pandemic because many small businesses had not integrated technology into their functionality,” says Kuria.
And so around November of 2021, the two techpreneurs developed Chpter for Merchants. They managed to raise about Sh20 million in seed funding to develop the product, test and pilot it, and also to establish themselves as a business.
The product came as a package. Any business that signed up would get their own customised website, where customers could order and pay for products while service based businesses could send invoices to customers through the platform.
The product also has a point of sale system integrated on a dashboard that records customers’ details, so businesses can tell which customers are new, and which are repeat.
It also has a tool for managing inventory, therefore enabling businesses to know how much they are earning per product, and which products are moving more than others. Businesses could use such details when seeking finance.
Value of every transaction
“SMEs are especially underserved when it comes to finance. A business can, for example, apply for a loan in January, but because it lacks data that the bank needs, it will get the loan in April, but then it had so many arrears, by then, the company could already be dead,” notes Mark.
They would charge no initial fee for customers to use the product, but would instead charge a commission of 2 per cent on the value of every transaction made through their platform.
“Indeed, there were businesses willing to pay even up to Sh2 million for this kind of product, but asking all businesses for payment upfront would not be viable because not every business has that kind of money. Then again, it is not every month that a business will make money, so it is better to charge them only when they make money,” notes Kevin.
Four months since going live, the proprietors say Chpter has so far managed to onboard over 70 clients, processing over 2,000 transactions worth about Sh4 million, an achievement they are proud of.
“I remember on our first day of going live, we managed to sign up our first SME client, a close friend who ran a food business. Someone made a purchase from them through our platform and we made Sh23 from the transaction. We were so happy because this was the first return on investment we got after we launched Chpter,” says Mark.
They plan to take their operations to the region soon and capitalise on the entry of DRC into the market, then hopefully to Nigeria and Ghana, where they will provide companies with critical business tools in one platform.