Invaluable Lessons You Learn in Entrepreneurship

by Ayodeji Balogun, CEO AFEX

6 min readJan 19, 2021

A passionate team is the heartbeat of any operations…but how will you compensate them if capital doesn’t flow in?

Our last deal kept us operational, but it wasn’t going to pay salaries.

LAPO Microfinance came to the rescue.

We gave out the first loans to farmers that year. We also secured our first corporate impact bond of £350,000 from the Department for International Development (DFID). Both were live savers.

Still by October, we couldn’t make rent. Shola and I had stopped paying our salaries since July. It was hard. Jendayi came to the rescue again. She sent us $50,000 from her savings to cover rent and our salaries. Yes, she did. She would not let sweat get dry with the labor wage unpaid.

The greatest growth indeed comes from pain and scarcity, not from abundance and luxury.

In all of the pains that came with 2015, we had clarity on our purpose. We defined the business model and built our best relationships.

In 2014, most corporates imported their commodities. Even the Poultry Association of Nigeria got a permit to import over 300,000MT of Maize. There was however a good harvest in 2014, so we had excess stock into 2015.

As we moved into the year (2015), prices kept dropping below harvest cost. By May, prices were between N45,000 to N85,000 and farmers wanted N55,000 per MT. Everyone knew that by June, prices will surge, however, farmers risked losing a whole season if they didn’t sell their grains and buy fertilizer. So, we designed a product (remember, we didn’t have funds, and revenue was low).

We got a processor to buy Maize in August (forward contract) at N55k; we got Olusegun Falade (one day I will be able to repay you for your support), to give us fertilizer on credit for three months, we then gave the farmers barter trade. They gave us grains at N55k which was the price they wanted in exchange for Fertilizer at N5,500 per bag. So we essentially exchanged 1 bag of Maize for one bag of fertilizer. We called it #Grain4Fertilizer. It was successful!

A New Dawn

After a turbulent year, comes the calm with impressive feats. 2016 was the most profitable of the first five years of building AFEX. Trade was booming and we had established our value proposition to two key customer groups — farmers and large processors. Also, we secured additional funding from our investors and could breathe. We also secured a grant from DFID to scale our infrastructure. We doubled the size of the team, increased the count of warehouses from 12 to 36, and we added our first fleet of trucks. Life was good, we had money.

By November 2016, the season had started and with x3 warehouses; we had three times more transactions to process and pay in a day. Before then, our Warehouse Managers would scan a document to Abuja, and that was the basis of payment. With the increased volume and the same processing capacity in Abuja, we could not catch up with that pace.

By 1st December 2016, we had a two-week log of payables to make. Funds where in the account, we just couldn’t download scan, update excels, and make payments fast enough. Farmers and traders locked a few warehouses, some Warehouse Managers had to flee into the bush. It was chaos.

Success had brought us many new problems — customer satisfaction, internal control, payment processing, staff morale, etc.

We scaled too fast, doubled our cost, invested in important infrastructure, but we didn’t have the cash flow to maximize at the time.

On the bright side, we also started our export operations. Unknown to us, that diversification would help us in 2017 when the storm came again, only then it was a hurricane! (I’ll come back to this).

With a decent year, scaled up operations, and new problems, we needed new Line Managers and complementary skills. Now that we had created the right infrastructure, we needed people to manage them. Akinyinka David Akintunde was one of those people.

Akinyinka and I had first exchanged emails while he was at the MBA — Lagos Business School. It did not work out then, as the timing wasn’t the best. Then again, after graduation, I reached out, and he was with FMDQ. I was like, “perfect, spend one more year, learn as much as you can, and let us build” The Commodities Exchange”. It was as if I was a fortune-teller.

Yinka has been an asset from day one. He joined right in the middle of our payment process breakdown and helped with some complex excel formulas that made things better, at least a bit better. In 2017, he designed our first application that helped aggregate field payment data into an encrypted excel sheet. We built this app with Tayo Adegbola. It was named WorkBench®. Now we are launching WorkBench 3.0 in January, thanks to Yusuf Oguntola and Raheem Yusuf, and the rest of our tech-guys. Akinyinka is the only one that beats me to morning emails. He is smart, diligent, and always plays the long game. He is our Daddy Yoh!

In August 2016, I made one of the best decisions that year, and probably to date. Something that sowed the seed of one of AFEX’s DNA — Empathy.

We called every staff of the company to a retreat, we all went to Bauchi, Yankari Games Reserve. It was epic! I think one of our most unique feature as a company is equality. One of my very smart friends Femi Ajayi once said “None of us is better than all of us”.

This retreat made it part of our culture, and further reinforced the belief that anyone had a fair chance at success at AFEX Commodities Exchange if they played their part. Let’s just leave it at Yankari was lit. Thank you to Farhat Kunmi-Olayiwola for a great job coordinating. It was a hell of a task, almost unimaginable, but it worked.

Our manual process had failed. We needed technology, but of what kind? We wouldn’t be a payment company at least I didn’t sign up for that. We decided to partner with an agriculture-payment company. They were supposed to provide technology and an integrated payment solution. They were the “real deal” in agriculture payments at the time. It was a hoax.

There wasn’t any meaningful payment integration, all they did was to copy our operations, and then try to replicate it the following year. While that wasn’t a problem, at least not for me, they chose not to build from the first basis. Four years after, that decision almost killed the company, it left them decimated. They had deep pockets and big investors, so “too big to fail” sort of saved them. Like I mentioned earlier, we also copied from other models, and then put it together with the original thought of ours. I also never for once failed to acknowledge their effort.

Nevertheless, that experience meant that we had to build a payment solution — which failed. It also marked the beginning of our quest for technology. Like Henry Ford says, “Failure is simply an opportunity to begin again, this time more intelligently.” Never be afraid to make new mistakes nobody’s ever made before.

Watch out for the next part in our next post.

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Read the different parts of the series below.

AFEX Beginnings — Saying Yes and Other Stories

What’s Important in Year One

Our #EndSARS Story — The 2017 Struggle

Reshaping the Landscape — Our Survival Story in 2018

Know your True North

Big Audacious Goals : Introducing Project Black Elephant




AFEX’s infrastructure and platforms drive capital to build a trust economy in Africa’s commodity markets.