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An in-depth interview with Feleg Tsegaye of Deliver Addis
By Erin O'Connor | Tue Sep 28 2021
For more stories, download our recent Impact Report, and read an abbreviated version of the following story called “Scaling Delivery to Meet Pandemic Demands” on page 18 of the report.
While many companies watched demand for their products and services screech to a halt, Deliver Addis, Ethiopia’s premier online food delivery company, had a good year. Founder Feleg Tsegaye and the Roadrunner/Deliver Addis team responded quickly at the start of the pandemic with creativity and speed to scale the company’s services and expand their online store beyond restaurant takeout to include groceries, household supplies and other consumer products.
Here’s what Feleg had to say during a conversation in the first quarter of 2021. Most of it is more applicable than ever as the pandemic continues in new forms throughout the globe.
Q: First, can you tell me your personal story of the pandemic and your business?
The pandemic was unexpected. We had been waiting to see when the pandemic might hit Ethiopia. It seemed like the rest of the world was getting hit first. We bought out a stock of N95 masks the day before the first case was announced in Ethiopia. Within a day of the first documented case, restaurants started calling and saying that foot traffic went to zero within hours. And they were concerned about their livelihoods. Some closed within the first 24 hours and haven’t reopened. It had a very immediate effect.
We ended up reducing our prices by 30% to make it easier for people to order. Most people were looking to conserve whatever income they were making because they were not sure what might happen tomorrow. We did what we could to reduce that financial impact to people. We worked with restaurants by providing guidance on how to help prevent Covid-19 transmission within restaurants and provided education to our consumers on how to avoid transmissions. For other restaurants, we helped them come up with a temporary, low priced menu in order to encourage people to order. So, we did a number of things outside of delivery just to make sure that the ecosystem itself could remain somewhat stable. We expanded our fleet by 60% to fulfil orders and to provide more opportunities.
It was an interesting time, there was not a lot of precedent, it helped us in the long run and it helped us to help other businesses as well. Most restaurants didn't have to lay off a lot of people. We at least provided some kind of stop gap when many restaurants were feeling the pinch.
Q: What is your outlook for your business? What do the next few years look like?
A sentiment that is widely held in the tech community is that Covid-19 accelerated the adoption of tech based services and products by 3-7 years. Technology can be a bigger part of our lives even more so than it used to be. For us, our goal is to be as accessible to as many people as possible. For the business as a whole, we are going to expand pretty significantly. Especially in terms of labor and staffing so we look forward to a transformed organization along with the transformed environment that we now find ourselves in.
Q: What is the process that you went through as an entrepreneur?
It was really trial and error in the beginning. We didn’t have a lot of historical precedent to say what would work and not work. But the fact that we were there to answer the calls of other restaurants and business owners and just reassure them that there was a way through it changed our relationship with our vendors. Yes, we have a business relationship, but at the same time, we all needed to make sure that we all survived and lived to see another day. So I think it allowed me to step outside of the business perspective and really be there for the businesses which were struggling.
Q: Are you familiar with the phrase “Standing Ground”? What does it mean to you as an entrepreneur?
Yeah, not sure if there’s a specific context to that phrase, other than communicating the importance of resilience. In our case, we couldn't just stand our ground, we had an even greater responsibility given the work that we did, to become more available to people and to prevent people from putting themselves at risk when trying to get food and supplies. Rather than just standing ground, we had to push forward despite the headwinds. We had to launch grocery services and find ways to get people what they wanted rather than forcing them to go to them. We had to push forward as much as we could.
As an e-commerce business, connectivity is pretty important to what we do. We could function during the pandemic because we had the bare necessities. When the internet was shut down for 3 weeks with the uncertainty of when it may come back, it prevented us from having operational visibility that we are used to and allowing consumers to reach us. We took some notes from old air traffic control procedures whereby every plane and designator and other details would be written on a piece of paper and have a board in which air traffic controllers would reorder these planes as they were landing. We sent out a blast text and asked our customers to text us your orders. We used these pieces of paper and a large conference table subdivided into different sections based on the status of the order at that time. This paper would go to each of those stations on the tables manned by a specific individual until it was completed. We used that to manage orders, even when we couldn't tell where our drivers were. It took a little bit of creativity.
Q: What was the hardest part of 2020/2021 so far for your business?
I think the labor force. Staffing has always been a challenge. Because you are trying to bring on people who are not used to formal employment, they may be used to doing things under table or in an undocumented fashion. And as you try to bring them into the formal workforce, there are a lot of people who may not be ready for it. In emerging markets when the economy is growing rapidly, people want to see themselves in it.
Q: What support for these challenges did you receive?
Thanks to the Impact Angel Network, we were able to raise some additional capital. Especially since we had to reduce prices, we needed to make sure that we were still able to pay and compensate our team fairly. We are in a sector that thrived during the pandemic compared to other sectors, so it was really on our shoulders to support the larger community. Whether that is broadening the consumer base or advising the restaurants based on the feedback we get from customers. We were at a point where we needed to help those individuals who were struggling because if many restaurants close then that would also come to us. We developed a symbiotic relationship during that time, where everyone was trying to figure out how to get through each month.
Q: How has your business shifted or pivoted to adapt?
Adding grocery services and other deliverable items broadened the use case for our service. Customers who can’t afford to order for every meal or who don't want to do that for other health reasons, can have the option to order ingredients they will use to cook. In Ethiopia, there is even greater value addition because you often find yourselves going to multiple stores to find anything that you need to prepare any recipe you may want. But in our case, we could tell you what a retailer does or doesn’t have without you having to go to find out.
Q: What do you think is the most important thing that you learned as an entrepreneur from the global pandemic?
Always be prepared for a rainy day. You have no idea what is coming around the corner and so the only thing you can do is be as proactive as possible. So expect that the internet might get shut down or a key team member could come down with Covid-19. You need to continue to build these contingency plans to address these things that might happen.
In emerging markets, you become quickly aware of what could go wrong or how things can quickly change. It's a daily reality depending on what sector/country you are operating in. I think it just continued to reinforce that for us. Whereas for others who are used to things always working, those individuals were most hit. A lot of things they may have taken for granted weren’t there. I think Ethiopia prepares you for these situations. But you realize that this is a great life skill rather than just the business you are in now.
Q: Anything else to say about resilience? Or how to build a resilient company?
This is tough because there are different types of resilience. Financial is one but also the mental resilience as well. I think as a leader, you need to stay optimistic during these times because people look up to you to set the tone in terms of how they should feel about their jobs and situations that affect everyone as a whole. So you need to be prepared to help lead them through those times. It's not always about business but also making sure that they are still feeling positive despite the challenges they are facing and letting them know they are not alone in this; that at the end of the day, you will do everything that you can to make sure that this impacts them as little as possible. That helps people continue in their jobs without worrying about what the future might hold.
Disclaimer: This blog is provided as a recounting of the IAN’s and RENEW's interactions with Deliver Addis and the happenings at Deliver Addis. It is not intended as performance data related to the IAN’s investment in Deliver Addis and is not indicative of other companies in the IAN’s portfolio, their social impact or the performance of investments in them. Any discussion of Deliver Addis's achievements, performance or social impact is no guarantee that such outcomes, performance or impact will be realized by Deliver Addis in the future, or by other IAN portfolio companies or other investments managed by RENEW, now or in the future.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
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