Digital Transformation in action in the Caribbean
Hello everyone. Hope you enjoy this, slightly different issue.
After appearing on the ICT Pulse podcast, and writing about public transport in the Caribbean, I met up (online) with the CEO of RIDE Caribbean after writing about it. RIDE Caribbean is a startup hoping to do some of the things I’ve been talking about, and more! This week is an interview with Greggar Deterville, where we discuss some of the issues surrounding start-ups in this category, in the Caribbean and what the opportunities and difficulties are in reality, on the ground so to speak.
I’ll let him introduce himself and his project, but before I do and for transparency, I’ve lightly edited the discussion for clarity. We’d love your feedback so don’t be shy!
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On to the issue.
MC: Can you introduce yourself to let us get to know you better?
GD: I am Greggar Deterville a British National and Citizen of St. Lucia in the Caribbean where I have made my home and place of work. I’m a lover of Technology and the many possibilities it can bring to traditional ways of doing things.
Tell me a little about your background and how you got to where you are currently?
I am Entrepreneur with a 26 year background in Media Management, Sales, Advertising, Marketing, Social Media Management and Information Technology. I was the former Marketing Manager for a National Radio Station and decided that I would look into setting up my own online based Radio Station and from there moved to Online and Cable TV where I pioneered live broadcast of local events in St. Lucia something which did not exist at the time. With the advent of many social media companies offering free options for persons to go live online I needed to find another venture which services where not being offered. I decided that Ride Sharing was the best and most innovative. Thus RIDE Caribbean came about.
Yeah, I recently came across what you’re trying to do with RIDE Caribbean and I thought it was an interesting concept, that is different from the standard Uber copies that are springing up all around the world. Are looking to roll that out soon in St Lucia, can you tell me a little more about what RIDE Caribbean is and what it is you’re trying to achieve?
RIDE Caribbean is a Multi-Service Smart Transportation and Mobile Payment Service which offers various Ride Share, E-Commerce, Delivery and Mobile Payments via one Mobile App. So therefore a user has the option to request his/her desired type of ride, browse through various Food, Grocery or Retail stores purchase items and have it delivered or use the Payment Wallet to make in store payments via a QR code scan or send money to another user.
So, if I’m understanding this correctly, you are a multi-service ride/delivery-sharing platform, is that correct?
Yes, all that but more; our platform will offer:
Carpool options via Cars and Mini Buses
Private and Luxury Ride Share
Food, Grocery and Retail Item purchase and Delivery
On Demand Package Delivery
Mobile Payment Wallet Services
All from one mobile App.
You mentioned a payment wallet, which is the bit that piqued my interest from looking at your website. I understand that Blockchain is an important part of that. Can you explain what you are using Blockchain for and how it enables what you’re doing with RIDE Caribbean?
We will be incorporating Blockchain Technology not only for our Mobile Payment Wallet but also for other aspects of our app. Using Blockchain in our app will enable:
Facilitating Payments via Smart Contracts
Processing crypto-payments and Utility Tokens
Processing of our future Initial Coin Offering
Preventing Data Theft and Abuse
Secure Peer to Peer Ridesharing
Transparent Rider/Driver Identification
Near Real time Tracking
What would you say have been or currently are the main challenges?
I have been able to cover most of the requirements to get the business to a level that would now require specific funding to launch such a unique product. The past year or so the focus has been on Fund Raising. So I would say the main challenge is acquiring the funding needed.
In terms of structural challenges, what have been the most difficult to overcome, and how did you overcome them?
There are no proper sources of adequate Grant, Angel or VC Funding available in the Caribbean. Banks don't fund start-ups based on Business Plans and Projections no matter how good and proven your venture is. Banks are not allowed to take equity as collateral.
Governments seemed more interested in attracting Foreign Investment instead of putting things in place to nurture and encourage local Entrepreneurship. Finding suitable international funding sources is time consuming.
Why don’t you think that Caribbean Banks don’t fund local start-ups, is it a trust issue, a confidence issue or do think its more of a deeper-rooted strategic plan? I’m asking you to get in to trouble here obviously, but I hear this so often, and as of today I still haven’t gotten a better understanding of this. I have however, noticed a recent change in discourse from the likes of the Caribbean Development Bank, where they seem to be more serious in investing in the digital opportunities in the Caribbean, do you have any insight on that?
From my talks with some Banks, they have indicated that it is a risk to provide debt financing to a new business and new business owners based solely on a Business Plan and 5 year projections no matter how good the plan.
Banks would require a high percentage down as collateral.
Most Entrepreneurs are not able to come up with the collateral.
Banks are not allowed to take equity ( percentage of the business) as the collateral.
Most new Businesses cannot afford to go into debt from day one.
Banks don't offer a grace period for payments.
With regards to the CDB, I have read articles indicating the move to a Smart Caribbean and making available access to funding for viable businesses moving in that direction. But any funding/financing from the CDB will come via respective island government agencies or Caribbean funding agencies, and in my mind this is where the issues arise.
In my opinion and from experience, the funding amounts are very limited and one is subject to a rigorous eligibility criteria and waiting periods to acquire this funding. You are asked to provide confidential business information and are subject to questions/comments and advice on changes to your business which are not relevant to acquiring funding. In the end you are told sorry we cannot fund you. What then happens to the confidential information you have provided?
So there are two distinct issues here. First the chicken and the egg problem, how do you the initial funds to get the larger funds to finance the initial project. The second, being an issue of reciprocal trust, or lack thereof. To answer the first issue, it seems that the Caribbean is crying out for angel investors that can initially get a project like yours in to a state that it is, shall we say, sexier to organisations like the CDB and Island Institutions. The second issue feels like a power play from the banks, they hold all the cards and therefore apply the pressure to be in large majority in their favour, if I am understanding this correctly. If true, then the banks need to adopt a model more akin to the Andresson Horowitz model. Did you know that 6% of their investments actually make 60% of their profits? Over half of them are loss makers, but they are profitable overall.
In the case of RIDE Caribbean the budget for our MVP is so high that we need investment funding or a convertible note. But it is necessary to develop a proper product that would scale and attract further investment thereafter. So therefore yes the Caribbean needs proper Angel Investors and/or a Large Investment Fund from the CDB, EU or any International VC Company who can see the gold mine that is the Caribbean. The governments of the Caribbean who have access to these agencies to create these funds prefer to concentrate on other areas of interest instead of creating a proper Entrepreneur Eco-System.
Going back to operational matters, getting a startup off the ground not only takes a lot of time and passion, but finance is clearly needed, where are you with that at the moment?
My daily focus is souring and reaching out to potential investors. There is interest but most want to see an already working MVP which in my case is very costly.
I am reaching out to International Investors and Companies on a Daily basis who have interest in pre-seed and early stage ventures. I am unable to find any proper funds in the Caribbean. I have been in touch with IADB, IDB Invest, IDB Lab, CDB, Compete Caribbean, Carib Export, and a number of other agencies who claim to provide funding/financing to Latin America and the Caribbean. Most only work through other agencies or governments or member countries only.
OK, accepting that, what is it that you need to get to the next step, i.e., to allow you to develop your Minimal Viable Product? I’m assuming that your plans are to get the basic app and platform off the ground, expanding upon its services as and when it gains traction, pretty much following the disruption model I talked about in Issue 23 - Intel’s Pohoiki Beach and Disruption Theory?
My current daily focus is acquiring the necessary funding required to get my MVP up and running for a period of 12 months. This will require quite a bit of funding based on my business model and budgeted requirements.
One last question Greggar, do you think crowdsourcing could help you and/or other entrepreneurs in the Caribbean get over that first step to better financing, or do you think that the Caribbean isn’t quite ready for that model?
Crowdsouring or Crowdfunding as it is commonly known, can help based on the product and/or venture. But, it requires that you have a physical product to offer as perks. If you are looking at going the traditional crowdfunding way you will have to be quite innovative with your perk offering as per ours on indiegogo, which is not doing well similar to other ride share crowdfunding campaigns.
The other option is Equity Crowdfunding but you must have your business registered in the US or UK with a bank account.
Another option which can be considered is an Initial Coin Offering which is Blockchain based and a bit costly to setup. One must also have an innovative product to justify the ICO and use of the Tokens.
Excellent insight in to the life of a startup in the Caribbean. Thank you so much for taking the time to answer my questions. I’m looking forward to following your business as I believe there is scope for this type of development in the Caribbean and with a little luck, it will definitely help in the development of the local economy. One thing is for sure, mobility provides fuel for growth in an economy, the more we can do to make that easier, more efficient and cheaper, the better it is for the country. I’d like to check in on you in a few months or so to see how it’s going. Let’s keep in touch.
I am passionate about his venture and know that it will change things in the Caribbean for both local, visiting users, merchants and service providers. I thank you Matthew for the opportunity to speak on what I am working on and about to launch in St. Lucia for the Caribbean.
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