While Harvard Business School nurtured his entrepreneurial spirit, even as a youngster Chinedu Echeruo wanted to change the world. He believes that technology is the key to doing just that.
Fresh out of business school, over a decade ago, Echeruo teamed up with several partners to set up a financial services company to trade money market instruments. The venture failed to meet their aspirations, leaving Echeruo and his partners to rue what could have been.
He took a job at AM Investment Partners, a New York-based hedge fund, until he left in 2005 to establish HopStop. It was the decision of a lifetime. This online city transit guide offers door-to-door subway and bus directions as well as maps for more than 140 cities. This time, Echeruo steered the company to a million-dollar valuation before it was sold to Apple in July this year.
Within this time, he also co-founded Tripology of which he was CEO, before it was acquired by Rand McNally, the 157-year-old American maps and navigation company. Having had a few shots at batting in the global leagues in the world of technology start-ups, Echeruo has proved to be a heavy hitter, who has scored two home runs.
“It feels great because you also remember that a few other ventures I was also involved in didn’t quite go as planned. The very first venture I did right after business school was a company called Afridaq, and our goal was to create a marketplace for financial securities such as FX and money markets in Africa, but that didn’t work out quite as well. So there have been good successes and there have also been setbacks, but it’s still part of the journey.”
Born in Nigeria, where he attended secondary school at King’s College in Lagos, Echeruo recalls, with much laughter, his earliest entrepreneurial effort: to breed rabbits to solve food shortages in Africa.
“I had read somewhere that rabbits procreated a lot, and I thought if I could create a farm to [breed] rabbits, that would solve Africa’s food problem. So I convinced my mum and was able to start with two rabbits and we built a cage and all. They ended up dying though so it was a big failure, but that was my very first effort.”
In the early 1990s, Echeruo moved to the United States, where he studied finance and accounting at Syracuse University; the college counts American vice-president Joe Biden and Saudi Royal Investor Prince Alwaleed bin Talal, with a net worth of $20 billion, as alumni. After graduating, he worked at J.P. Morgan for two years as an analyst; before gaining admission to Harvard Business School’s MBA program.
His experiences on Wall Street shaped his understanding of world finance that helped seal deals with Rand McNally and Apple.
“Billions and trillions of dollars are moving in world financial markets and most people don’t really understand the impact they have on their personal lives, but it’s very significant. So it kind of broadened my view of the global economy.”
Yielding to the entrepreneurial urge, which he harbored from childhood, Echeruo founded HopStop with seed capital from the bonus he received after exiting the hedge fund. The years he spent running the company brought different experiences to those in the financial sector, and allowed him to identify his strengths as an entrepreneur. In 2009, Echeruo stepped aside as CEO of HopStop to pave the way for someone else to lead the company.
“What I thought, and I persuaded our board to consider, was that at that time I thought that another CEO would be better at running it going forward. I think that’s a decision that many entrepreneurs struggle with because usually the company is something they’ve invested lots of money in, their personal time, lots of things go into the early stages of starting a business and to give that to a stranger is something that is very difficult to do. But from my perspective, I thought it was the best decision for the company, and I think the new CEO has done a very good job of growing the company since I left.”
Looking back, the decision was a wise one—the company has continued to grow under the new management team of which Echeruo is chairman. Their performance caught the attention of the folks at Cupertino California, Apple’s homebase. While Apple declined to disclose how much it paid for HopStop, analysts estimate the deal to be worth a few million dollars. The HopStop deal and the acquisition of another company, Locationary, are viewed as Apple’s response to Google’s recent acquisition of Waze, an Israel-based company that provides traffic information based on crowdsourcing.
Echeruo is smiling all the way to the bank, however, he admits that his primary motivation is to solve problems.
“What I’m doing right now, in Lagos, is taking that approach and looking at the several problems that we have in Africa and specifically in Nigeria and seeing how I can apply technology to solve those problems. What we are doing at Constant Capital [a private equity firm where Echeruo is a partner and head of investments] is that we are essentially incubating a few ideas, which we think will resonate with the Nigerian marketplace to start, then evolve, then grow those businesses. I currently look at all the problems in Africa as an opportunity to leverage technology to solve them. We are working at a few companies right now to address some of those problems.”
He is a firm believer that technology holds the key to solve most of Africa’s problems.
“If you look at every sector of the African economy, and Nigeria specifically, you see inefficiency. What I really look forward to doing is exploring how we can use technology to solve those problems. If you look at it from every perspective: from governmental, corporates, consumers, lots of the challenges that people face have to do with information and information technology. People could definitely argue that the rise of mobile phones in Africa has contributed to probably 3-5% increases in annual growth rates in these economies. I don’t think you can underestimate how the ability to exchange information contributes to economic growth. But from my perspective I think of the challenges I am facing in Nigeria in the process of running a business, in my personal life, all these are real opportunities for entrepreneurs to fix and find business models to exploit them profitably, so that’s what I am focused on.”
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