Alex Wicks from Karzo (ex Kargo Myanmar)
A solution for a nationwide logistic problem
We met Alex Wicks in his office near the central railway station of Yangon in a very modern building. He took the time to receive us and explain us how he managed to create Karzo and what he is doing to make his company become a future unicorn in Myanmar.
Can you tell us more about you and how it began?
I’m originally from Sydney but I moved across the world following my girlfriend. Actually I lived in France for a couple of months, then I have been to Vietnam and finally to Yangon. As I was often moving I needed a job which could be done online so I worked on web development and SEO. When I arrived in Yangon, I understood quickly that there was a real problem of logistic; a real pain for multinationals. One well-known multinational even had to buy trucks for its own logistic, things this company never does usually but the system is so bad that it had no other choices.
Before launching your product, did you make any market study ? How did you manage to sell your first product ?
At the very beginning, I tried to deliver some boxes with trucks but after few tests on the BtoC side, I shifted very quickly to BtoB services. I knew that some companies already had this problem that I could solve with Karzo. I didn’t really need to sell my product as clients were already there willing Karzo to take on their problems. But I had more difficulties finding the truck drivers. I tried indeed at first to hire some drivers before finding my first clients, but they laughed at me: “you have no contracts, come back to me when you have some!”. It was like a chicken – egg problem, but little by little I achieved to attract people on both sides and earn my first contracts.
How do you manage an order of delivery?
In Myanmar, everything goes through Viber, Facebook and Whatsapp. There are groups for everything, my drivers are on a Viber group. So when there is an order, it goes through my team of support which manages the contracts and finds the drivers. We contact them on Viber and then on the phone to explain them the specificities of the contract. They are kind of freelancers who work for me through defined contracts.
What is the legal framework for Karzo?
I have a registered company in Singapore, which is the holding and an operational company for everyday business in Myanmar. This is how it works here, and this is important especially to be funded by Ventures and Business Angels. They can’t fund you if your legal framework is in Myanmar.
Is there a cyclicality in your business?
I will say yes. Now when we analyse our figures and growth, we take out the figures from April to August. Because in april the country is slowed down by the Thingyan festival which is the Buddhist new year and this celebrate also the beginning of the wet season. And the wet season it is more complicated as is very heavy here. My objective is to grow on the dry season and to stagnate on the wet season.
Do you still work on your brand image?
Yes ! Lately I had a problem as new brands were founded with my name in other countries. Some people asked me if this was me behind these brands or if I was working in Indonesia. I didn’t think about this problem before, so I killed two birds with one stone by giving to my brand an international identity while changing my name to distinguish myself from other brands. Now I have done all the paperwork to be sure that my brand is protected. But I had to speak with my clients to tell them that our services are not gonna change. Finally we wanted to maintain the same identity so we kept the word Kargo but only change one letter, this is how we became Karzo.
Do you have an advice for a future entrepreneur intending to start a business in Myanmar?
Patience is more than a word in Myanmar. This is a country with a big gap to be closed, this implies a lot of possibilities but you can’t be impatient here. Everything is very slow. There is a lot to do, especially to train people to our vision and standards of work.
Do you have little anecdotes due to the cultural difference with Myanmar?
Yes means No. When you have some employees who says yes, you cannot be 100% sure he has understood what you said. You need to make them tell you what need to be done, to make sure they will do it. This is a real problem and I work on it by training them, doing workshops.
Furthermore I organised workshops with drivers because I thought it would be great if my employees could speak with them. But there were no interactions in the workshop and everyone stayed with their friends.
I also had to manage the communication, because people didn’t want to tell me about the problems they met. As I am the boss, people don’t want to “disturb me” with the problems they face even when they are very important, so sometimes I find out about them when it is too late.
What are the next steps of Karzo?
After a seed round and a pre-series A round I am now preparing my third round of funding. I found a lot of help in Cocoon, a singapore fund that took some equity in the previous rounds. They are very available and I spend a lot of time with them.
And I also want to take a step back from the operations. I hired new people and now I spend a lot of time meeting investors for this new round. I go also to a lot of events, it helps me develop a clear vision for my firm by talking about it.
This next round’s money will help me create a real IT platform which will fully automate some processes. As my business have many repetitive processes, I need to automate them so to reach another stage.
One other goal of the 2020 year is to be break-even at the end of the year. This is very difficult as we are investing a lot of money in the firm’s development but I am sure that we will reach this goal.
Do you deliver in other countries?
Not for now, we are still a young firm and there is a lot to do in Myanmar. So I am really focus on the country for now but it will be something that Karzo will do some days. There is a real appetite for this from the clients and there is a good conjoncture for it: India wants to be able to reach the Mekong easily while China wants to create its silk road. Myanmar is on the way of both projects so it will be an opportunity of growth for us.
It is very expensive to buy a truck for Burmese, how can you develop this network of drivers?
Yes this is a kind of lifetime project. You save money until you can buy one truck and then you save enough money to buy another and then you bring your family on board.
I think there like three type of drivers:
- the one who has one or two trucks and who is independant.
- the other one who has like twenty trucks, these are often family businesses
- and the last one who owns like three hundred trucks. I think there are twenty guys in the whole country who are in this category. They often are specialized in one region by the way. One of my big goals is to get to work with all of them.
Finally now we are a blessing for the banks. Because we try to create a real database with all the drivers who are going through us. This helps the bank to grant loans to people who want to buy trucks, using us like a sort of insurance.
If you want to learn more about Karzo: https://karzo.com/
And if you want to read more interview on Myanmar Entrepreneurship, you can read these from Sully Bholat from Flexible Pass (https://rocketbike.org/en/flexible-pass-sully-bholat/) or Julie Garnier from Lilla (https://rocketbike.org/en/julie-garnier-lilla/)