Crosstown Courier is a Kenyan company that delivers food to corporate clients. In addition, the business offers moving services to both companies and individuals. Founder and CEO Jimmy Tune answers our questions.
1. How did you come up with the idea to start Crosstown Courier?
While at university, I interned for a company that was involved in organising a huge event that brought together different stakeholders. Back then, physical invitations were preferred rather than emails. We prepared many invitations for delivery. A few days before the event, we realised we had received very few RSVPs and upon investigation, we discovered the letters had not reached the delegates via the third-party responsible for their delivery. The event was poorly attended and the organisation lost income.
This incident got me thinking: would it be feasible to have a professional delivery service to ensure safe and successful delivery of important documents. This gave birth to Crosstown Courier Ltd. At that stage, our target market was mainly organisations involved with events.
However, the market shifted and we started receiving orders to do food deliveries. We adjusted our model to adapt to the market. We began linking restaurants to their customers via home deliveries. As we collected data on this model and worked on improvements, we noticed many clients asked about foods they preferred that was not offered by our partner restaurants. We came up with the idea of an inhouse kitchen that prepared specific menus for corporate clients within their budget.
2. Give us a bit more insight into the services you offer.
Some corporates located in certain areas of Nairobi do not have access to nearby restaurants or they are unaffordable for the employees. We offer different menu packages; they tell us what they would like to eat on from Monday to Friday. We are then able to give them a quotation based on their budget. Restaurants have fixed menus but we offer menus for a group at a cheaper rate. Our inhouse kitchen prepares all these meals and we deliver to the businesses.
Helping people and businesses move their goods from one place to another has always been part of Crosstown but before Covid-19 we only had one or two orders a month. Once the pandemic took hold, people wanted to move house because of salary cuts and there was a lot of movement within Nairobi and upcountry. More employees began working from home, and companies moved to smaller offices. This is when this segment really grew.
We are currently building a platform to bring together different SMEs affected by the pandemic. We will be hosting an online site. Crosstown will feature their products and sell on their behalf and deliver; in essence an e-commerce site offering end-to-end services, from ordering to doorstep delivery.
3. How competitive is the industry and who are your main competitors?
As a result of Covid-19, the industry is flooded with people who want to do deliveries. Our main competitor is Glovo, a multinational that launched in Kenya with established structures and enough funding. Even though they are not currently tapping into our corporate client base, they are a potential threat as they are running a similar business model.
4. What are the biggest challenges to be successful in your industry?
The biggest hurdle is infrastructure; the bikes, lorries and different carriers we need to operate. Owning the whole infrastructure is very expensive but we also need to ensure we are always able to meet the demand. Infrastructure also includes the dispatch system, order scheduling and tracking systems.
The other challenge is trust. This business centres on moving clients’ goods; there is need for trust and confidence. Any error could lead to the loss of a client and may even taint the company image.
5. Tell us about the mistakes you made along the way.
When we started, we had verbal agreements in place and some were not honoured which cost us dearly. One client had made a promise of a huge delivery deal, so we invested a substantial amount in the infrastructure and the order was just cancelled. I have learnt to have all agreements in writing and, if possible, witnessed by lawyers.
I have also learnt to separate personal finances from business. When we wanted to expand and get financial support, it was difficult to separate what was business and what was personal.
6. What changes have you had to make as the business has grown?
We started as a business that delivered letters. The Crosstown business model has been continually adjusting and adapting to trends in the market. We now invest more in research to identify current clients’ needs and to predict future needs to prepare solutions for these anticipated needs.
7. You started the business in Mombasa before expanding to Nairobi?
I was busy with my undergraduate at a campus in Mombasa when I launched Crosstown. I had to shift to evening classes so I could focus on building the company during the day. Once we gained confidence and the trust of our clients, they referred us to their headquarters and most are based in Nairobi.
We extended our services to Nairobi in March 2018. Nairobi opened up fresh opportunities and we continued getting referrals. This created a niche in end-to-end corporate delivery solutions. During the pandemic, we realised we could explore the Tanzanian market since it had few Covid-19 restrictions. After some research, we launched Crosstown in Arusha in October. We now have two corporate clients and hope more will soon come on board.
8. Tell us about one of the toughest situations you’ve found yourself in as a business owner.
After graduation, the company was performing dismally and I could barely afford my basic expenses. It was during the early days when potential clients were still learning to trust us with their deliveries. I contemplated looking for employment but it meant killing my vision and this did not sit well with me. I sought mentors for advice and through them, I identified areas I needed to work on to thrive.
I had to believe and trust in the concept and keep pushing despite the lack of clients. The way out was to do a great job with one client and use this as a testimonial to attract others. This ultimately led to more clients and referrals.