A few days ago, a tweet from Uche Ukonu about his business, SmallChops.ng, went viral.
Few days later, he was speaking to PiggyVest. Among other things, he talked about his beginnings as an entrepreneur and the American film that inspired him to take up tech. He also explained how his startup sells hundreds of thousands of food packages without a kitchen.
What was growing up like for Uche Ukonu?
A bit harsh for sometime and then much better. I am the first of four kids — I have three sisters, one of whom is a popular influencer.
What do you mean a bit harsh?
We were pretty much objectively poor…
Objectively?
[Laughs] Yes. I remember the day I turned two. My mother didn’t have money to mark that birthday and my dad wasn’t around. So she went to the kiosk next door and begged them to give her a bottle of Fanta and biscuit.
I think it was about ₦50 at the time. She came in and gave me those two things. Then, she entered the room and cried. I could hear her sobbing from the sitting room.
I’m sorry. What did your dad do at the time?
He was a civil servant. He was sent to a post outside of Lagos where we lived. Things were hard. Luckily, by my sixth birthday, things had changed. My mum started her business and ended up being one of the top makeup artists of her time.
What was school like for you?
I was the dumb kid in class for a while. And then things changed.
Just like your family’s financial status…
Yeah. There’s a story behind it.
Tell me.
My mum was worried that I was always coming last in class. So she took me to the pastor of her church. That’s Pastor Taiwo Odukoya of Fountain of Life. He looked at me, hugged me and told her I was fine. From that point, things changed.
Wow.
True story. I was either first, second or third. I didn’t do SS3, and I got one of the best results in my school.
At this time, were you already interested in tech?
Yes. I had always had a thing for computers.
How so?
I saw an American movie called Hackers.
Strange coincidence: a famous American hacker died days ago. If you Google enough, you’d find a link between him and that film.
Interesting. So, yeah, I watched that film and told myself that I wanted to work with computers. Luckily, my dad was really supportive; he got me my first computer when I was 10. This was around 2003. He got a desktop and I took it apart. And that set the trajectory of my life.
From 10. That’s pretty early.
Yeah. At the time, I thought my career would be more about software: writing code and hacking. But now it’s more business. In my first year at Covenant University, I was with a group of guys creating websites for schools.
Something is missing. Where did you learn how to code?
Oh. Because I didn’t do SS3, I had a free year and spent that year doing a programme at NIIT. When I got into school, I met people like me who had experience with coding.
So the website business. How good was it?
Quite good. We got a contract to build a website for The Bells Secondary School, which is close to CU. That was between my first and second year. This was likely in 2011.
How did you guys get the contract? That isn’t a gig people offer first year kids.
It was my friend Ebuka’s idea. He was already building websites commercially even before we got into school. In this case, we just walked into the school and asked to see the principal. Maybe because we all looked older than our ages. [Laughs]
How much did it pay?
When the first cheque came, it was over ₦1m. We had charged about ₦3k per student and didn’t even realise how much it would come to.
Sweet sweet cash.
Yes. And we basically blew it! [Laughs]
Why am I not surprised?
[Laughs] I think we all bought MacBooks and I put some of the money into my stand at our school’s trade fair. But it wasn’t really for money.
So you were already cooking?
Somehow. When things started to improve at home, my mum got a cook and we’d have a variety of meals. I started to bring some of that to school. I had the crazy idea that if people could eat food from everywhere, we’d move towards world peace. [Laughs]
You are kidding.
Well, I was 18 or so. [Laughs]
How long did that last?
I did it through school. During our school dinners, I’d usually get a contract to supply some food, including small chops. But it was when I left school that I started SmallChops.ng.
How did the initial idea come to you?
I couldn’t order small chops without ordering, say, five packs. And the companies selling it would request that orders are made a day before. I thought, “Are there others like me?” I asked my friends and they said they, too, had never really had small chops at home. That is, without attending an event.
That’s a neat light bulb moment.
True. So we did an MVP with Google Sheets. We met with caterers and asked how many they could produce for same day delivery. They told us. We then tried to aggregate orders across social media to meet up with that minimum amount. When that’s done, we’ll get a rider to deliver to individuals. That’s how it started. This was in 2015.
Who’s “we”?
[Laughs] I have had my amazing co-founders, Michael Chukwu and Farida Ahmed, since last year. At the time, it was just me and the brand. But I did get help from people. Right now, three heads are better than one.
Did you ever try to raise capital?
Yes. We joined a platform that was supposed to help us crowdfund. But it didn’t go well. We had a bad experience with a vendor and that led to a lot of bad publicity. On the streets of social media, the truth is secondary to clout.
Always. It must have been tough.
It was. We also had theft within the company, and I had a setback in my personal life. All of this happened within four or five months. We were still doing deliveries but a lot of the team had to be let go and the crowdfunding drive fell apart.
It was around this time I got cofounders, although initially it was just me reaching out to an old friend I used to code with.
To go a bit back, did you ever get a job?
Not really. I left school with plenty of money.
Was this from the website business alone?
I used to sell snacks and drinks to students after the vendors in school closed. At about a 50% markup. I also started a fish farm and a rice trading business. We would go to Abakaliki to buy rice and then resell it in Lagos.
This guy. Weren’t you in school?
[Laughs] Let’s just say I could have done better in school.
You didn’t go looking for a job. You must have been rolling in funds…
Well, this was around 2015. If you had ₦1m then, you didn’t have to look for a job.
Fair enough. And you were living with your folks.
Yeah. I bought a car and later moved out, first to Gbagada and then Anthony Village and then Lekki.
Was SmallChops.ng your main focus after school?
Yes. I realised the other businesses wouldn’t work because my advantage was the student community. Luckily, Small Chops was profitable from the start, immediately after we set up shop online and began to run ads. We had figured out the unit economics. But the business has undergone changes since then.
For instance, in 2018, we had to start making the small chops ourselves to ensure quality. But in 2020, during the pandemic, we handled six to seven times our usual volume with a 24-hour notice. I saw that we had processes that could scale without increasing our operational costs. That was when we shifted from being a small chops business to a food delivery start-up. That’s how we got to the fundraising phase.
How much did you want to raise?
About $100,000. We wanted to expand across Nigeria. We are only present in Lagos.
Has the business recovered from the setback?
Yes. We are doing double the revenue we had back when we started and were growing really fast.
That is what that viral tweet was about…
Yeah. The 600,000 packages I mentioned is our all-time figure. We got new customers even as we had to start over again last year. We are now about to launch in seven cities across the country. So the funding question is back. But we don’t just want money, we need strategic partners.
You mentioned that you guys have no kitchens and riders in that tweet. How does that work?
We create logic-based operational zones within the city for efficient logistics and economic viability. We also identify the best local caterers in those zones through an objective rating index that we developed from our experience producing small chops ourselves.
When an order is placed, it’s routed to the caterer assigned to that zone for production and then picked up by independent logistics partners that have also been assigned to that zone.
That has to be a crazy amount of quality control.
Yes and no. Our rating index has certain metrics that allow us to predict the consistency of the quality of the vendors that we onboard. To confirm consistency, we do spot checks and maintain a list of tasters that we randomly send products to.
So, how rich has SmallChops.ng made you? What’s a good month?
[Laughs] I’m comfortable! And the business is doing well. ₦20m is our highest recorded revenue for a single month.
Sweet. So what entrepreneurial lessons can you share, given your experience?
Pay attention to unit economics. It is pointless to acquire loss-leading customers. So start charging from the first day. Don’t subsidise. Make sure you know what you are spending to the naira and make a profit with each sale. Cover your costs, even if you are not profitable.
Second, it might pay to start with a niche. You can then grow from there. But this might not apply to every business. It has definitely worked for us, though. It’s easy: If you want small chops, you think of SmallChops.ng.
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