PickDelivery Journey - PickDelivery

PickDelivery: Our Jounrey

September 2024

My entrepreneurial journey began with a startup called PickPro, a platform designed to connect gig workers like plumbers and electricians with clients. Unfortunately, due to financial constraints and a lack of experience managing a new business, PickPro struggled and eventually shut down. I was working alone, which contributed to the challenges of running the startup. However, the experience taught me valuable lessons about the hurdles of starting a business.

After this setback, I returned to my previous job, but the desire to start something new remained strong. This time, I knew I needed a co-founder to share the vision and workload. That’s when I met Yesak, my co-founder, on Twitter, and together, we decided to venture into the growing food delivery industry.

Starting PickDelivery: Early Challenges in Adama

At the time, food delivery services in Ethiopia were just starting to gain traction. Tikus, one of the first bicycle-based delivery services in Addis Ababa, had been operational for around seven months, and Beu was still in its early stages. We saw an opportunity and thought: why not take it to a less saturated market? We decided to launch PickDelivery in Adama, a city I knew from my university days at Adama Science and Technology University. Adama also offered the advantage of being less expensive to operate in compared to Addis Ababa, allowing us to start with a modest investment.

We spent around four months developing the app while still employed elsewhere. Once we completed the first version of the platform, our first major hurdle was acquiring delivery bags. Importing specialized food delivery bags was too expensive, and there were no local suppliers. After a long search in Merkato, we found regular bag makers who could replicate the bags for us. However, they couldn’t add the aluminum foil linings needed for food insulation, so we had to plaster the linings in ourselves.

Moving to Adama: A New City, New Struggles

Once we had the bags ready, Yesak and I quit our jobs and relocated to Adama. It was my first time living in a new city with no job security other than our new business—a mix of excitement and anxiety.

Finding delivery bikers in Adama proved challenging at first. Yesak took to the streets, distributing brochures and speaking to bikers directly in an effort to recruit them. We also struggled to onboard restaurants, many of which were skeptical about collaborating with a delivery service since they had no previous experience with one.

Despite these challenges, we decided to move forward and announce our delivery service to the public, even without any restaurant partnerships. We believed that if we could demonstrate how the service worked by handling a few orders, restaurants would eventually come on board. This strategy worked: even restaurants that initially declined began to collaborate with us after seeing our value and service.

Overcoming Early Struggles: Expanding and Growing

Running PickDelivery was a steep learning curve for me, especially since I’m an introverted tech guy with no prior business experience. Managing the day-to-day operations, developing relationships with restaurants, handling marketing, and dealing with financial pressures were all new , difficult and tough, so tough that I used to get sick of stress and pressure.

Our initial strategy was to establish ourselves in Adama and then expand to Hawassa, as Adama’s small size limited its growth potential. We believed that being operational in multiple cities would help us attract investors and demonstrate both our market potential and scalability.

With limited resources for marketing, we focused on delivering excellent customer service. Yesak and I accepted orders ourselves at the office, ensuring the quality of our service to build customer loyalty. Slowly, our daily deliveries increased from 20 to 50, then to 60 and more. This growth showed us that the market demand existed, encouraging us to pursue investment for further expansion.

Setbacks with Investors: A Difficult Partnership

Despite our progress, scaling up proved difficult without sufficient funding. We applied to various acceleration programs and were accepted into two: Ninja by Renew Capital and Venture Meda by IceAddis. While we didn’t secure funding from the Ninja program but had some valuable training sessions. we, however joined the Venture Meda which eventually connected us with investors who showed interest in PickDelivery.

After several discussions with the investors. We reached a partnership agreement, trading a significant equity share in exchange for investment and also a strategic partnership. This was a major milestone for us—securing an investor felt like a recognition of all our hard work. For me, as a first-time entrepreneur, it was super exciting.

Even though our plan was to continue expanding to Hawassa, our investors recommended starting with Addis Ababa due to its larger market size. We agreed and suspended our activities in Hawassa, believing that if we established a foothold in Addis, we could then expand to Hawassa and other secondary cities later on .

I moved back to Addis to prepare for the expansion, upgrading our platform to handle two-city operations, partnering with restaurants, and recruiting bikers and more. In just two and a half months, we rolled out our pilot service in Addis and started accepting orders, making PickDelivery the first food delivery service in Ethiopia to operate in two cities.

Unfortunately, our partnership with the investors quickly soured. Despite the initial agreement and the value we expected from their involvement, their engagement became less productive over time. Even after 7 months, they had failed to release the full amount of the promised investment, despite the agreement they had signed. We had trusted they would honor their commitment when we signed the agreement with out making sure that the money was released, but after about 7 months of delays and fruitless back-and-forth negotiations, we ultimately decided to terminate the partnership.

We continued operating with limited resources but were forced to suspend our expansion efforts in Addis. This is adding to the already suspended expansion in Hawassa. After all the work and challenges we had faced, this one is a discouraging setback that has drained much of our energy and vision.

Successes Along the Way

Despite these setbacks, PickDelivery has achieved significant milestones. As of August 2024, we’ve completed over 40,000 deliveries, partnered with 110 restaurants in Adama, and expanded to 30 restaurants in Addis Ababa.

Over the past two years, we’ve built a strong team of gig workers, providing jobs to around 60 delivery bikers, many of whom were students working part-time or young people working for full time. We also upgraded our platform to include features like online payments, simultaneous order management in two cities, and standalone apps for both bikers and restaurants, positioning us as pioneers in Ethiopia’s digital delivery space in secondary cities.

Lessons Learned: Moving Forward

The acceleration programs we participated in were helpful, providing exposure, networks, training, and an equity-free grant. However, they lacked the real-world support necessary to navigate the day-to-day challenges of running a startup or in making some strategic decisions.

My experience running PickDelivery has been full of both successes and setbacks. Over the past three years, I’ve learned how to manage operations, finances, and partnerships while also understanding the importance of choosing the right investors. It’s crucial to set clear expectations and document every detail—from how investments will be disbursed to the roles and responsibilities of all parties involved.

Despite the challenges, I’m proud of what PickDelivery has accomplished, and I am hopeful that it will overcome current obstacles and continue to grow.

Final Thoughts: Advice for Aspiring Entrepreneurs

Starting a business is never easy, and running a startup brings its own unique challenges—many of which according to my experience, results from a lack of experience or knowledge. However, it is also incredibly rewarding. If you take every challenge as a lesson and learn from others, you will grow and become better at it.

I believe in sharing experiences and learning from others. If my journey can inspire or guide even one aspiring entrepreneur, it will be worth sharing.

If you have any questions or want to hear more about my experience, feel free to reach out to me on T witter/X @eyobderrick.