My guest today is Jehiel Oliver, founder and CEO of Hello Tractor, a farming equipment rental platform serving farms across Africa. Jehiel has an amazing blend of energy, excitement, and tenacity that is hard to find and energizing to be around. Jehiel and I talk about how he influences behaviors in creating new markets, training markets, capital strategy through growth, and growing in his role through vulnerability. Please enjoy this fantastic episode with Jehiel Oliver.
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(00:02:57) Getting into the tractor business and the business model for Hello Tractor
(00:07:01) Influencing behavior
(00:09:15) Maintaining trust
(00:11:05) The most challenging parts of service
(00:13:53) Entering new markets
(00:17:33) Experimenting with incentives
(00:18:56) Costs & operating leverage
(00:22:11) Fostering speed amongst the team
(00:25:27) Vulnerability in the CEO role
(00:28:01) Working through key challenges
Alex Bridgeman: Jehiel, it’s good to see you. It was fun talking to you about tractors and my own time as a kid on the tractor for a little while. So talking about tractors sounds like a lot of fun. Can you talk about kind of like what was the idea behind Hello Tractor and what made you want to get into the tractor business?
Jehiel Oliver: Well, first and foremost, I was very motivated to leave finance. I started Hello Tractor shortly after the financial crisis of 2008 and I wanted to do work that was more meaningful. My observation at the time was the global poor earn their income on the farm, and creating solutions commercially to address their need could be deeply impactful. So that’s what ultimately led to the creation of Hello Tractor. There’s a kind of confluence of things that was happening around that. But the biggest kind of motivating factor was just wanting to do work that was meaningful and observing the role that agriculture plays in the poverty story globally.
Alex Bridgeman: So what’s the model of Hello Tractor? How does it work for farmers?
Jehiel Oliver: It’s pretty simple. We start with a fleet management solution that we natively design for smaller tractors, low horsepower tractors, which are the type of equipment that’s used most often in the emerging markets. And we built this solution to give tractor owners comfort in sending their machines from one end of the country to the other with a hired operator to service jobs but be able to secure that asset. And so that’s what gave us the supply side of our marketplace. And then once you have a secure asset, and you can feel comfortable sending it to far off places, the second question that we wanted to solve for was how do you make more money with your tractor. And so, we developed a booking application where young people, gig economy entrepreneurs can download the Hello Tractor app and book farmers in their community for services, earning a commission for the jobs that get serviced. And our marketplace connects those bookings with these connected tractors. So it’s a win-win solution where we can help our tractor owners earn more money while helping smallholder farmers who wouldn’t otherwise have access to equipment access equipment at an affordable price point.
Alex Bridgeman: Do you have individuals then buying a larger and larger fleet and portfolio of tractors just to be rented out on your platform?
Jehiel Oliver: Yeah, we started with some pretty large fleet owners, very entrepreneurial individuals in Nigeria, which was our first country of operation. And that was pretty cool because we were able to onboard a couple hundred tractors just through one very wealthy customer. But then as we started to build the solution out further, we were in a privileged position to begin to reach deeper into the market and through the launch of our pay as you go tractor finance product, actually get folks who were typically unbaked, typically would not have access to large loans to own their own equipment to now own their own tractor, graduating from booking agent to tractor owner by amassing a large enough network of farmers within their booking app. So now we see a much broader distribution of tractor ownership from the big wealthy guys, but now, the more common customer is somebody who was previously unbanked who now owns a $30-$40,000 tractor. And it’s earning income for themselves, their family, while delivering a tremendous value to their community.
Alex Bridgeman: Yeah, that’s pretty exciting. One thing you talked about was there’s a lot of behavior influence, especially in creating kind of new markets around this. Can you talk about the ways that you influence behavior?
Jehiel Oliver: Yeah. So it starts with identifying individuals in the community who are already trusted, who are already engaging in doing business with farmers, and leveraging on that social capital that that individual has accumulated. That person is the perfect booking agent for us. They’ve already proven themselves to be capable of developing and leveraging relationships with farmers. And so what we’re offering that individual is another product, another service to offer their farmers to not only improve their financial position but also improve the livelihoods of the farmers that they serve this. So targeting that person can take on a variety of different dimensions. We do digital ads like most startups. We focus a lot on Facebook because maybe farmers are the last people on earth that still think it’s cool to be on Facebook. Apologies to the listeners who are on Facebook. But we also go through channel partners like fertilizer sellers, seed sellers, commodity aggregators. They all have field workforces that could also play the double or dual role of booking tractor services on behalf of the farmers that they already service with these other products or complementary services. And so, there’s a different- there’s a variety of ways that we target these individuals. But I think the most important piece when it comes to behavior change is trust. And it’s difficult to organically grow trust. And so what we do is we leverage the trust that already exists in these communities. And then we do everything in our power to make sure we never violate that trust because that’s core to our success is continuing to deliver for the customer and maintaining that trust based relationship.
Alex Bridgeman: So what are some ways that you maintain that trust? Or where are some risks of it being broken?
Jehiel Oliver: Well, most often, maintaining trust manifests itself into losing money on transactions sometimes. If a farmer is dissatisfied with the quality of a service, if a tractor does not show up because of a maintenance issue or negligence on the contractor, the tractor owner side, it means Hello Tractor going above and beyond to remedy the issue, even if it means us losing money. But the thing about farmers is it’s really hard to influence that behavior change. But once you do, if you do right by that farmer, you can have a customer for a lifetime. They’re some of the most loyal customers you can imagine, but you do have to deliver for them. And the thing, the other thing about agriculture more broadly is this idea, the ethos around testing and failing fast does not really apply to agriculture. If you fail fast on a farmer’s field, they could lose a season which could mean them using the farm. It’s a very tight margin business. There’s not a lot of give, a lot of elasticity. And as a result of that, you have to deliver for them because you can push somebody into a deeply entrenched cycle of poverty if you don’t, and that’s not something we’re willing to live with. So, it’s good for business to approach things that way. It also helps to insulate ourselves from these kind of unfortunate outcomes when you’re responsible with your customer.
Alex Bridgeman: What part of your service do you feel like has been the most challenging to get right over time?
Jehiel Oliver: I would say definitely in the marketplace making sure that you’re aggregating demand through the agent in a way that allows for tractors to be deployed at service fields at economies of scale. Let me paint a picture for the listeners. Most of the farms in Africa, which is our priority market, we work outside of Africa, but in Africa, we’re in 16 countries, most of the farms are tiny, I mean an acre, two acres on average. And they’re stretched across broad geographies. These countries are massive. And you have these tiny plots sprinkled throughout these rural communities. So, when you book a farmer for tractor services, you have to book maybe 50, 100 of these farms in the same location in order to justify a tractor owner driving 100, 200 kilometers down the road to service that cluster demand. And if it’s not clustered tight, if you don’t have a lot of density, that tractor owner is going to lose money. They’re going to spend more time driving between plots than on the field earning cash. And that means the system would fail. And so, figuring out ways to increase that cluster density, figuring out ways to increase that cluster density involves insights from the booking agent. That’s more on the analog side and the insights that they bring and leveraging on their local knowledge. But it also involves some very advanced analytics. We use space technology and satellite imagery to map markets and understand what is the density of farms in that market to use technology, terminology, what’s the total addressable market for that community, meaning acres under cultivation. And then does it reach a point of density where, if we assume some level of conversion in that community, we know we can deploy a tractor profitably. And there’s a lot of machine learning that we built into that analytics to be able to automate those decisions. And that’s really cool. Because that sits in the background, the customers don’t even know it exists. But when the tractor arrives, it arrives because we did our homework in the cloud. That’s kind of cool. So, it’s a mix of the digital and data and then, of course, the local insights, which is the most important piece.
Alex Bridgeman: So if you’re going towards a community that you haven’t had any customers in before, I assume you’re doing a lot of work trying to meet all the booking agents and doing direct local marketing or something like that to make sure that there’s enough demand there from day one. How do you do that?
Jehiel Oliver: We start from space pictures. So, we get these 10 meter resolution images from European Space Agency. And from those images, we can roughly estimate how many acres of farmed land exist in that community and what the density of those acres are. And that gives us a go, no go decision. Once we have a go decision, then we activate our digital marketing channel, then we look at partners that we have in that community. There’s a OCP fertilizer seller there, that person probably knows a lot of farmers; let’s see if we can onboard somebody from that fertilizer retailer to be a booking agent. So, there’s a variety of channels that we can attack once we make that go, no go decision using the analytics framework that we’ve built. And then once we’re there, not wasting marketing dollars in markets that won’t be profitable is hugely beneficial because we can’t afford to do that. We’re a small company. So we have to really point our arrows at the right targets. And the data really is useful there. And then yeah, once we get in the community, it is really all about how do we efficiently acquire and onboard customers. And then once we get them onboarded, even how you train them. How do you get somebody to use a booking application that we think is intuitive, but if you’re very early in your digital journey, it still requires some training. I always think back to like how hard it was to teach my mom how to use the Uber app. She would literally call me, “Hey, Jehiel,” I’m sitting in [inaudible 13:07]. She’s calling me, “Hey, Jehiel, can you order me an Uber? I’m in Cleveland. I’m downtown. I need a ride home.” And I’m like mom, this has to end, like I bought you a smartphone. It has internet. But these farmers weren’t that different. And so just as I’m patient with my mom and getting her to understand how to use the Uber app, which is an elegantly designed app, we have to spend that kind of time educating our booking agents on how to book through the Hello Tractor app. But the incentive is there. And that’s the important piece. Incentives matter a lot in any market. In our markets, they certainly matter. And the opportunity to earn a 5% booking commission is huge. It can be transformative. And then booking your way towards becoming a tractor owner is literally transformative for an entire generation, an entire household. And so that’s a strong enough incentive to get them up that learning curve. And that’s benefited us. And we use a lot of interesting tools to test and learn. We do a lot of short snippet videos ala TikTok. We do a lot of- we do some virtual reality trainings where we send out virtual reality goggles. That works very well for young people who just want to try the virtual reality stuff. But you got to experiment and you’re always just looking at reducing costs as much as possible while growing retention of knowledge.
Alex Bridgeman: What kind of experimentation have you done around incentives?
Jehiel Oliver: We test constantly. We’re constantly testing, playing with everything from a free smartphone or a free motorbike if you book a certain amount in a certain period of time. Of course, the opportunity to own a tractor under pay as you go tractor financing was a huge incentive. I mean, that accelerated booking activity like no other incentive. And I think that makes sense. It’s a pretty big incentive. So that worked really well for us because it solved two problems. You get more bookings. And so you don’t have to worry as much about the customer acquisition costs of a farmer because booking agents are just going crazy because they want the opportunity to own a tractor. But then you also doubly get the benefit of a new tractor being deployed into the market. And it’s a one to many relationship. One tractor, 400 farmers, 1200 acres total, all done by one person, enabled by one person. So that incentive package worked really well for us, and one that we’re double clicking on, we’ll be deploying. We’ll be doubling the size of our portfolio this year with hopefully some big announcements around what we have planned for the next two years.
Alex Bridgeman: So doubling the size of your portfolio, is Hello Tractor a fairly capital intensive business? You’re not owning the tractor, but it sounds like there’s a lot of other costs involved in expansion anyway.
Jehiel Oliver: Yeah, we’re pretty lean, and our operating leverage is pretty impressive. I think that’s one of the competitive advantages of big companies like John Deere who’s our biggest investor and one of our most valued strategic partners. It’s why they invest in us. We’re a lean team, and we move incredibly fast. Our feedback loop is incredibly tight. So we get an insight, and we turn it into action. And the shorter we make that feedback loop, the more competitive we are, the more attractive we are to big companies that can pretty much do anything they want, they have the money to do it. So why would they work with us? And I think what we have to do is continue to earn our value by shortening that feedback loop. And I’ll give you an example. Two weeks ago, and these are real timeframes, two weeks ago, one of our credit analysts observed escalating fuel prices in the market that were squeezing profitability for our tractor owners. For our finance tractor owners, that’s a real problem because if they can’t earn enough money, they can’t pay us for the tractors that they financed through us. And within two days, she did some scenario analysis to understand what the real impact was of these incremental price movements in fuel. And then simultaneously, one of our field engineers engaged with a fuel distributor, who negotiated to have a fuel pump placed at our hub. We have these hubs that exist in the communities where we have large networks of tractors operating. And the hubs are really designed to provide spare parts, maintenance, that sort of thing, close to where the tractors are, which is an innovation in and of itself on the business model side. And within that three day period where we were doing the financial modeling and scenario analysis, our field engineer negotiated to have a 10% discount on diesel fuel at the hub. So, we had a hub place, a fuel pump placed at the hub at a 10% discount to what people were paying at the fuel station, which is far away from the farm. So you had to waste fuel to get to the fuel pump and then pay more. And all of that happened in less than a week. There’s not a company, large corporation on Earth that can- that’s like, just to do one of those things would be three months’ worth of emails just decide on when we will have the meeting to discuss the fuel issues. And I’m super proud of my team for being able to turn around these insights and convert them to action, and it creates real value, meaningful value to the customer. And I think that’s how we earn our keep in the market. And that’s an example of our agility and just fantastic operating leverage.
Alex Bridgeman: So what do you do to foster that speed within your team? Where does that come from?
Jehiel Oliver: I think it starts with humility and recognizing Jehiel’s an idiot. But you did hire a bunch of smart people, mostly from the markets that we service. They have amazing insights and give them the autonomy to go after it and solve problems that they observe. And they’re intimately familiar with the problems and they often have really good solutions, local solutions to local problems. And proximity matters a lot in agriculture. Proximity to the problem often gives better solutions. And I think that’s the value of hiring from the markets that you service. And I think that even speaks to things around the value of diversity and diversity of thought. I see a lot of startups that come into markets like countries in Sub Saharan Africa, they bring in a senior leadership team from top universities in the US. And what I found is that folks with my profile tend to be really good at making excuses, really pretty PowerPoints, but when you really scrub through it, you’re like, but you didn’t solve the problem, and you didn’t do what I asked you to do. But your explanation is amazing. So, kudos to you. But I still need this problem solved. And when you hire local talent, they’re smart, they’re hungry, they have a deeper understanding of the problem, many of them have lived those same problems, and they have a vested interest in solving the problem that goes beyond just monetary compensation. So, that’s a real benefit that I think our team brings to the table. My job is to stay out of the way, bring in resources when needed, leverage my networks and ability to grow the size of the pie, so we can experiment more. But it’s the team that really is responsible for executing on that strategy and bringing those solutions to the customer. So far, they’ve been doing an amazing job of it. I don’t even know if they realize how good they are. That’s the funny thing. I always laugh, like when we leave, I have the benefit of going out and you go to conferences, and you meet up with folks at these big companies. And I spend a lot of my time outside of the company with partnerships and investors and all that. And when we talk about the business, the tone is just of amazement, like how are you- Like, how did you do that again? Like, how did you get a fuel pump at the hub in three days? That’s insane. With a 10% discount on the fuel. And that’s just a trivial example, actually. We can go into some of the work that we’re doing in machine learning and artificial intelligence, and I’ve talked about some of the space technology and all that. I mean, it’s just incredible. And it’s really a testament to the team that we’ve constructed who come from Nigeria, Kenya, Uganda, Rwanda, Ethiopia. It’s amazing.
Alex Bridgeman: You talked about your own role as CEO and growing into it over time and then how kind of vulnerability balances in with that too. In what ways does vulnerability kind of have a role in your CEO spot?
Jehiel Oliver: Well, I think willingness to be vulnerable particularly in front of the team. I think vulnerability in front of the team builds trust. And in some ways, I don’t think we think about it this way often, but it also shows strength to the team. Because the comfort to show the team, hey, we’re going through a difficult time. I remember, at the front end of COVID, we didn’t know if the business would even survive. And I was pretty public about some of the challenges that we were confronted with. And I had confidence that we would survive, but it meant making some pretty real sacrifices. And leading by making the deepest sacrifices myself, my senior leadership team, they cut to a zero salary to protect the business, and then asking the team to contribute whatever sacrifice they can muster and live with. And we didn’t have any turnover, which is incredible because most companies, you can’t really ask your employees to work for free. And it was during that period and it was because of that, I believe, because of that vulnerability, it engendered the trust that we can- we believe we can get through this. And we’re willing to sacrifice and take the deepest cuts. And it was during that period that we designed and launched our pay as you go tractor finance program, which was a huge accelerant to the business. And it happened during our darkest period. And that’s such an incredible example of how we’re all humans at the end of the day. Yeah, it’s work, we’re at work. But we’re still humans and connecting with people on a very human level, even when it means removing all those artificial barriers that sometimes exist between employee and employer and just having a very human authentic conversation around challenges and fears and I was scared to death at that time. Actually, in March, I didn’t know, nobody knew what was going on at the beginning of COVID. We honestly thought the world was ending. It’s kind of ridiculous when we’re looking back on it. But the response was so absurd. But we got through it. And we got through it together. And I think our authenticity and managing that situation is how we got through it.
Alex Bridgeman: What other key challenges have you worked through in Hello Tractor in the last few years?
Jehiel Oliver: Key challenges, there’s been a lot. When we first started, we were – this is funny – when we first started, we were manufacturing our own tractor through a white label manufacturer in China. And we thought we were going to be competitors to John Deere. We had our little tractor with the technology on it. And we thought we could create the Tesla of tractors, even though Tesla really wasn’t a thing back then in 2014. So this was still somebody else’s idea before Elon stole it. You can edit that out. Actually keep it in; what is he going to do? Is he listening to this podcast? Anyway. Is he going to turn off my internet? And so that was kind of a ridiculous blunder because we enjoyed no competitive advantage in manufacturing tractors. Our competitive edge was on the technology side. We were the first to connect these low horsepower tractors to the cloud. It was a fleet management solution for contractors. We were the first to market with this marketplace to make sure they can make more money with their equipment by connecting with farmers efficiently and transparently. That’s where our competitive advantage was, not in manufacturing metal. And we spent three years trying to be a tractor manufacturer until we realized, wow, we need to focus on what we do well, and we stopped selling the tractor and focused on the tech, and the business took off.
Alex Bridgeman: What piece of advice do you commonly offer CEOs?
Jehiel Oliver: It depends on their business, but I think most often, especially now, but I was even using this a few years ago, especially for entrepreneurs in our market, meaning in Sub Saharan African, a lot of the advice is around protect your cash flow, make sure your unit economics are positive, you should sell things to make money. We’re not in a market where our investors are forgiving, and you can run unprofitable businesses into perpetuity, and they go public, and magically, the money appears. You actually need to make money as close to day one as possible. So that’s the first piece of advice. And then the second piece is your business, most businesses, they live within a system, like the human body, and you should understand the system. Yes, you need to understand the product. You need to understand who you sell to. But there are all sorts of things around that business that also you should understand because it can benefit you in how you design strategy. You should understand the supply chain that you work in, the macroeconomics in the business, that can impact your business. I’m talking about, like we talked about fuel, the fuel issue earlier in the conversation. But you have things like FX risk in our markets, inflation, geopolitical risks, climate change is huge in our markets. You better understand that. And not just anecdotally. You should model it out. You should be able to apply a dollar amount to that risk, and then figure out ways to mitigate it. I think you’ll benefit from that as a company, particularly if you’re in it for the long haul which Hello Tractor is.
Alex Bridgeman: That’s great. Jehiel, thank you for sharing your time with the podcast. I really appreciate it.
Jehiel Oliver: Yeah, my pleasure, Alex. Thanks for having me.