Startup spotlight: Interview with Johannes Degn co-founder of Lynk

We had a chance to speak to Johannes Degn co-founder of Lynk a network of professionals that allows customers to book services from over 60 categories, ranging from plumbers to nannies to tutors via mobile app, the web and SMS.

Headquartered in Kenya, where 83% of the working population operates in the informal sector (e.g. electricians, carpenters, hairdressers), Lynk is revolutionizing the way people obtain services by allowing businesses and households to easily connect with verified service providers and by using automated processes to ensure consistently high quality work.

Launched in 2016 by Johannes Degn and Adam Grunewald, Lynk has grown into one of Kenya’s leading service marketplace with annualized platform sales of almost $2 million USD and an 80% customer retention rate with an average of 11 jobs per active household customer. The startup boasts 43% Women and 68% Youth in its user base.

When asked what inspired the duo to start Lynk, Johannes Degn had this to say.

Lynk started in an apartment in Ngara, – one of the areas Nairobi’s informal sector population such as carpenters, painters, welders, housekeepers, etc. live. On our walks to the supermarkets, we would meet workers sitting idly in front of hardware stores waiting to get hired by passersby. The radical underemployment is what inspired us to start formulating thoughts around how this sector could be organized in a better way through technology.

Despite over 80% of employment in Kenya taking place in the informal sector, households and businesses constantly complain of low quality work delivered by unreliable individuals with inflated prices. For workers, the informal service sector is plagued by uncertainty, low pay, broken incentives, and few opportunities for career growth.  Good work does not necessarily mean more work or higher pay.  The market is broken on both sides.

Lynk targets households and businesses. Households can request services from Lynk using traditional technology channels such as our mobile app or our website. For businesses we offer additional tailored services such as a white labeled version of our platform which businesses can offer to their end-customers. This gives us a nice growth channel in form of a B2B2C offering.

We envision that Lynk can become a bridge between business customers on the one hand who have unique requirements such as receiving VAT invoices, payment terms, price lists as well as integration into procurement and account systems and informal sector workers on the other hand who are skilled at providing specific services but not able to fulfill the requirements of most business customers.

As we started receiving larger and larger requests, we built a team of construction managers, designers and architects which have at this point built dozens of restaurants and offices throughout Nairobi using our knowledge and access to reliable and professional workers as well as our tech platform to help us organize them.

There are a couple of companies and marketplaces that are playing in the same space. But none has come close to Lynk. Johannes Degn explains.

The biggest difference between Lynk and similar marketplaces cropping up regularly is that we embrace the operational complexity of staying deeply involved in ongoing jobs. Where others would shy away and offer simple lead-gen solutions directly connecting workers and customers but not staying involved more deeply than that, we think the actual problem statement customers are interested in is to make sure the work that they need done, gets done reliably and at high quality.

We take that to the extreme, offering our customers a full satisfaction guarantee. There are lots of reasons for us to do this, -the most important being that we are committing ourselves deeply to our core value proposition both operationally and financially. This means we have to sometimes do things that don’t initially look like they can scale and then later on find ways to make them scale. Our track record so far has proven that this was the correct approach.

Lynk is proud of its ability to weather storms and maintain steady growth throughout the years.

People say that everything breaks at 25. Fortunately for us things started to break at around 35 employees only which forced us to build management tools and team processes that work for a larger team. We have recently broken the barrier of more than 40 employees. We thoroughly enjoy doing that so for us this is an exciting position to be in.

The startup is looking forward to growing the team to over 70 employees in 2019 which will drastically change the company from what it is today.

We love to see how every new hire we make brings exciting new views to the company and helps us shape it.

As such, Lynk believes the importance of team work and emphasizes team in the company culture.

We like to celebrate successes together, – whether that is while having beers on Friday after work with or at our monthly socials, we like to remind ourselves what we have achieved.

We strike a good balance between a high performance culture where individuals are encouraged to grow and a jovial, fun company. We believe for us as a startup to be able to achieve 10 or even 100x growth we need every individual to grow as well which creates both a high pressure and high reward environment but as we know, high pressure can shape diamonds.

Over the past few years Lynk has had a lot of significant accomplishments.

We recently reached the milestone of having paid out more than $1 million to informal sector workers and we have just completed our 20,000st job completed through our platform. We are also considered to be one of the best global solutions to unemployment.

We have built a sticky product in a difficult market which most other players shy away from and which most government as well as non-governmental institutions understand very little about.

We think there will be huge future growth of informal work in all of Sub Saharan Africa whether that is something that governments want to happen or not. Populations are becoming more youthful and formal sectors are not able to soak up all the additional labor supply. By necessity we think the gig economy will have to provide livelihoods for a lot of individuals. We are proud of how we have been able to provide structure and entrepreneurship infrastructure in this unstructured environment, helping talented individuals leverage good work into more jobs and career growth.

In early 2017 Lynk raised 1.3 million in a seed round of investment led by Novastar. They also brought on board Safaricom, Mercy Corps and Steel Africa, all of which have proved to be strong strategic investors. They are now raising their Series A round which they hope to conclude by the end of 2018 after which they’ll start scoping out expansion markets with the goal to be in a second market by the beginning of 2020.

While Lynk boasts a couple of high profile partnerships where business partners are using Lynk’s platform to provide services to their customers (B2B2C), the company wants to improve their offerings even more.

Lynk is also looking to leverage the data it collects to offer additional products and services to informal sector workers and their customers – including loans, tools and material wholesaling, managed maintenance contracts, and more.

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