Vertical Optimization, LLC, was born out of a deep sense of frustration - and a palpable fear of failure. The year was 2004. I had just moved from the U.S. to Nigeria to start a new manufacturing company, Aquada Development Corporation. Aquada was formed to transform low value agricultural produce into high-value shelf-stable products - for domestic consumption.
Our first manufacturing project was the design, fabrication and commissioning of a facility to produce "garri flour" from cassava ('tapioca' in North America, 'manioc' in South & Latin America). Garri is a staple food consumed in most of littoral West Africa. It is made by fermentation of the mash from the cassava root. The result (after fermentation, dehydration, and roasting) is a dry, granular, starchy product that has (somewhat) the consistency of grits (or fine oats). It is typically consumed with a soup or stew that has vegetables and the proteins, by cooking and gelatinizing the granules into a "meal".
Garri is made in virtually every rural backyard in Southern Nigeria. Most farmers grow cassava, then make garri from their cassava. The excess garri made by farmers is what is sold into the local food chain. Given the very large number of farmers that grow cassava, AND the ubiquitous nature of domestic (as in every household) garri production, this "excess inventory" is sufficient to feed the nation - and neighboring countries.
I "knew" we could make a fantastic gluten-free flour which would change the way people consume garri. I had worked on the design and development of the product for a long time (while "working my day job"). Our product would be a flour (literally) that could be used for "swallow" (the term used for consumption of the carbohydrate - formed into a ball - with a soup or stew) as well as for baking and other culinary applications. But it would have the same familiar taste that people associate with garri. Our market surveys indicated a very positive response to the idea of the product. So we set out to build this facility. We designed the process, erected the structures, fabricated and installed the equipment, ran the pilot tests, and commissioned the facility. And out came our first set of products. We did it.
We were right about designing and building a (first of its kind) facility for the production of garri flour. That was an engineering problem. We had solved it.
We were wrong about everything else; just about.
I was wrong.......
I was committed to Aquada. I had saved to invest in the project. I had left my job in the U.S. and relocated to Nigeria to start the company. I had moved from a very comfortable life working for a Fortune 500 industrial giant in the Mid-Atlantic to living in a semi-rural setting in Nigeria. I had put together a team of competent and dedicated staff to drive the project. This was what I wanted to do. This was what I was called to do.
In addition to the challenges of relocating [back] to a country that no longer seemed familiar to me after having been away for more than 15 years, I had a deadline. I HAD to make this investment in this facility work because I had foreclosed my options by not giving myself an out. I had quit my job, packed up and moved half way around the world to do this. I'd laid it all on the line (financially and professionally) for this project. (This is an issue faced by most people who have had to contemplate or make this cross-border entrepreneurial journey, especially where family ties and personal history are involved. Given that you could have an out, how much exposure is too much? How much risk should one assume? It is not an easy question to answer for oneself, talk less for others seeking to go down that road.)
We called the product 'Scintilla Garri Flour'. We trademarked it and went through the regulatory process. Everything was fine. Now it was time to sell the product.
There is no other way to describe this: We went to the market, and the market said 'No!'.
We did not see it coming.
I did not see it coming........
There were many reasons for the strong NEGATIVE response from the market.
No one had heard of branded "garri". Garri is an undifferentiated product that people buy in "cups", measured from open heaps in basins in the market. (Google it and you will see images of the granules shaped into conical heaps in basins in the market.) Vendors measure the garri in cups (or "paints" as in paint buckets) and pour it into a plastic bag. That tied plastic bag is the standard unit of purchase for garri. The idea that garri that would be branded and packaged suggested to prospective customers that it would be costlier. People wanted garri - cheap and accessible, even if it were of questionable sanitary value. (As we were kindly informed by a prospective customer, "After all no one has ever died of garri poisoning!". If you're wondering what our response was, don't! We were simply too stunned to challenge that statement given the intense insect activity around the heap of garri right next to where this statement was made. That seminal experience laid bare how uncompetitive we would be in that marketplace, our best efforts notwithstanding. We were being asked to "wake up!".)
Then came the issue of the appearance and texture. Garri is known to be GRANULAR, not powdery (like a flour). It is perhaps the most staple of staple foods in Nigeria. EVERY child knows what ("normal") garri looks like - granular, in one of two hues ("yellow", roasted with palm oil as a colorant and preservative, or "white", roasted without the addition of palm oil). And here we came with a fine, powdery (admittedly visually appealing) product called "garri flour". People could NOT get themselves to call it "garri". If they could NOT call it "garri", then they could not make the mental leap to viewing it as a part of their staple diet. Those who tasted it liked it but...... they wanted to eat "garri". They were used to their garri, not that "fine smooth powder that tastes like garri".
There was more bad news.
Given that garri is made in homes by farmers who grow their own cassava and deploy their domestic labor in the production of garri, the cost of labor in most of the garri sold in the market is..... nil. Most farmers do NOT price their labor (and that of their supportive family members) into the production of garri from [their own] cassava. That free (and often very experienced) labor pool is readily available as part of the filial compact, not a commercial enterprise. That is not a luxury a manufacturing firm like ours has. We pay for labor. It is difficult to compete with "free", especially when it is indeed free.
Then there was the cost of cassava. We had to buy cassava by negotiating with smallholder farmers for the supply of subsistence volumes of cassava, aggregated to support our facility. As smart entrepreneurs, they would only sell what they could not process to garri since garri fed their families and sold for more than raw cassava in the market. So we were, in effect, buying raw materials from the direct competition. Prices would go UP each time as they realized we were committed to buying in large quantities. That inflationary pressure would progressively reflect in our pricing of the "garri flour".
Everyone who [eventually] tasted the product liked it. But the sales figures were dismal.
We were asking people to change too many things at once - new visual appeal (granular to flour), new presentation (undifferentiated bulk product to packaged offering), new mouth feel (which they liked if they could be convinced to taste it - for free), a different pricing regime (sold by weight instead of volume i.e. the "cup" or the "paint"), different price range, and above all, different sales channels (from mounds in basins in markets to store shelves).
It was too much. We deserved the "No!".
I had been blinded by my well intentioned (but utterly misplaced) North American cultural and culinary sensibilities, exported wholesale to a nutritionally illiberal society. This was confirmation bias (on our part) at its most dangerous.
We were failing. We had to change.
We needed to look at the flip side of this failure......
There was one demographic that liked the product and bought it consistently. These were well-heeled Nigerians who were primarily interested in the nutritional and culinary value of their food. They valued the hygienic standard reflected in the product; they were excited at the prospect of eating garri but with a much reduced glycemic load (and they knew what the term 'glycemic index' meant); they were happy to avoid the "bloated feeling" that comes after eating garri; they appreciated the refined hand-feel and mouth-feel of the product. The fact that it was gluten-free was an added bonus. They acknowledged a much better nutritional experience "eating Scintilla" as compared to "swallowing garri", something many of them had simply stopped doing. (An interesting point: This demographic would typically NOT call it "garri" or "garri flour" but instead call it by its brand name "Scintilla". This is the exact opposite of the other segments that WANTED to call it "garri" but could NOT make that mental leap for the aforementioned reasons. So they referred to it as that "fine fine garri".)
This well-heeled demographic could afford such differentiation....
That was NOT the situation with the bulk of people who eat garri daily. This well-heeled (female, middle-aged, upper-middle class, often foreign-educated) segment was telling us very clearly what we needed to do. Look away from the [Nigerian] mass market to other markets where the attributes of our product would be a virtue. On close inspection, this very tiny sliver of the Nigerian food market looked almost identical to the middle-class consumer in the U.S. We were going to flip this failure around by listening to the 'Voice of the Customer'.
We were going to export "Scintilla Gluten-Free Garri Flour".
Our market research showed that there was rapidly growing interest in gluten-free flours and wholesome foods in the U.S. People were willing to pay a premium for wholesome food ingredients. For instance, a small advert demonstrated to us how effervescent the market was at the time. Within a week of advertising to a small online group, we had more than two dozen people send in different pizza recipes (with very vivid pictures) based on our flour. All of them shared glowing accounts of their experience using our flour to make pizza for their families. Several more people produced tortilla for their home use. There was quite a lot of bread baked and documented with this same gluten-free flour. We got very positive responses to the product wherever it was presented (including events, trade shows, and online outlets). Contrast that with a different market where we could not give it away free. Not to be outdone, my Haitian mother-in-law used Scintilla to make 'akasan', a drink she had enjoyed in her childhood before moving to the U.S. Though made typically from corn in Haiti, it was effortless for her to make akasan from Scintilla (which is made from cassava). With all this happening at about the same time, we could see the red lights turning green. Gradually.
We had to change our strategy. Aquada would have to become an export-focused company if it were to survive. Fortunately, we had the essential elements needed to establish a viable export presence in the North American market, starting with physical and operational access to the markets.
In March of 2006, I returned to the U.S. with the express intent of setting up a company that would be the international market development partner for Aquada. I registered that company on the 1st of April, 2006.
That company was named........ Vertical Optimization, LLC.
The initial driver for this new company was to remedy the failures that led to its formation in the first place. There were three vertices in our progression from Aquada. 'Product' (we had that down pat), 'process' (we did that quite well), and 'markets' (that is where we fell flat on our faces). So the searing discipline for this new company would be a "tri-vertice" approach in which we would ensure that we ALWAYS scaled these three vertices in the business development process. (As trained scientists and engineers, we tend to demonstrate STRONG personal and professional bias in favor of the first two vertices with smug disregard for the third. That bias can be perilous.)
So our work in this company would adopt a process of vertical optimization, one vertice after the other ('product' first, then 'process', then 'markets'). This new company would ensure that we scale the three vertices in this vertical progression to commercial viability. That is where the name 'Vertical Optimization' came from. That is also where the concept of our logo comes from, three vertices, interconnected, interrelated, but all equally essential to commercial success. This is why our logo is called...... tri-vertice.
That change in strategy in 2005/2006 was seminal in the history of both organizations. Aquada became an export-focused company, subsequently evolving into a exciting science-based organization that processes food, produces materials and generates energy (all from local agro-based resources). Vertical Optimization has continued to grow as an enterprise development service provider.
Once we built the systems and platforms that would enable us buy produce from farmers in Africa, convert it to value-added, shelf-stable products, and sell the products in the U.S., it did not take long for people to notice. (This is a problem many organizations have grappled with, with limited success.) Before long we were being approached by public and private companies as well as non-profit entities in many countries, all seeking to walk the same path. The goal was almost always the same - help small businesses to develop their products and processes, and assist them to get their products into the U.S.market. That led to the formation of Export Path™ (our trade development service focused on emerging market entry). Export Path™ has assisted hundreds of micro-entrepreneurs and small businesses in close to a dozen countries seeking to enter the US market, and vice versa.
Subsequent to that, we were engaged by a U.S. government development finance entity (one of a very small number of companies worldwide) to assist with the origination of loans and the extension of development support to micro-enterprises in the countries we serve. That marked the beginning of our capital formation practice. Beyond that, we have worked with commercial and development banks to enable access to capital and productive capacity for small businesses and micro-enterprises.
At our core, we remain a manufacturing enterprise development firm. We remain focused on helping our clients develop, produce and distribute their products (and services, in some cases) to suitable markets. Our goal is to help our clients grow, as we grow. In our line of work, there is no such thing as "success". It is virtually impossible to measure. But we can measure "progress". That is what drives our work in the firm, continuous improvement, and the resultant progress we can deliver to our clients. As our clients progress, so do we.
It would be our privilege to contribute in whatever we can to the progress of your endeavor. Thank you for the interest in our organization.
Founder & Chief Executive Officer