RO Espresso: the "mess" as the moat

Dear reader,

Welcome to the RO Espresso.

In these Tuesday emails, we pick a common theme we've observed amongst startups we’ve covered. We unpack the theme, comparing and contrasting how different founders go about it.

This week’s theme is an afterthought. Not in our writing of it, but in the way it manifests itself for companies. Some startups giddily launch their product before realizing said product cannot function without a certain infrastructure. The catch is that the infrastructure doesn't exist. 

Founders resort to building the infrastructure themselves, since they don't have much of a choice. This can create friction with investors who balk at the startup seemingly straying from its core product.

The founder knows that building the infrastructure (in other words: organizing a mess) is necessary to their company's existence, but can also become a moat.

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When organizing the “mess” becomes a moat

In tech-mature markets, cloud providers for storage, logistic providers for delivery, and digital payment gateways abound. This allows startups to remain asset-light, focus on delivering their core product, and offload the rest to specialized providers.

In many emerging markets, this “plumbing” if you will, is either absent or isn't reliable (enough). Logistics are fragmented, cash is preferred, and vendors’ service quality varies. For a startup, this slows down or hinders the delivery of their core product.

For some founders, the solution is simple. Build the infrastructure you need yourself. Organize the mess. Maybe you can even foster a moat in the process.

Here's how three companies The Realistic Optimist has covered have gone about this topic.

MAX (Nigeria)

Electric vehicles (EVs) promise lower running costs for gig workers, thanks to the replacement of petrol with theoritically cheaper electricity.

However, access to charging infrastructure remains scarce. Digital payments infrastructure also remains fragmented.

Nigerian startup MAX, which provides credit to gig workers to purchase EVs, chose to build the infrastructure itself.

Adetayo Bamiduro, CEO and cofounder of MAX, explains how they build ther own credit scoring infrastructure:

"Many of the drivers we finance lack both formal banking relationships and formal income statements we can use. We’ve had to innovate.

We have a set of questions, where we ask the drivers what they would do in multiple scenarios. The questions are designed to not feel like they have a “right or wrong” answer. We want to know what hypothetical choices they’d make in a variety of hypothetical situations, which helps us gauge credit-worthiness from a behavioral aspect.

Sample questions include: What is your typical day like? What expenses do you incur during the course of your business and how do you cope with payments? How do you overcome money challenges?

We’ve extended credit to over 50,000 drivers so far, so we’re starting to understand what traits make good or bad repayers. Our pattern matching sharpens as that number grows."

But also physical/tech infrastructure:

"We’ve had to build an IoT infrastructure to track utilization and localization of our vehicles and our batteries. We’ve had to build a digital wallet system to ensure that drivers’ repayments are digital (repayments in cash would dramatically increase operational complexity)."

And last but not least, a battery-swapping network, which is becoming a revenue center:

"One of the new, promising verticals we’re expanding into is MAX Energy, which is battery swapping infrastructure. Users pay a subscription for access to the network as well as a price per battery they use.

Today, this infrastructure is mostly used by individual drivers but I project that companies with EV fleets will soon make up a much larger part of the customer base. I think MAX Energy will make up around 30% of the company’s revenue in the near future. "

Adetayo understands the counter-intiutive nature of this. However, he believes doing so is necessary in a context where being "asset-light" can sometimes be a pipe dream:

"Many startups understandably optimize to reduce complexity. But in emerging markets, so much of the infrastructure your company needs might not exist, so you have to build it yourself.

That adds complexity and costs, evidently. It’s a good muscle to exercise nonetheless, because the upside is potentially enormous. The investment we’re making laying out Nigeria’s battery-swapping infrastructure will pay off in the long-run. "

Excerpt from MAX: fueling EVs in Nigeria originally published in the Realistic Optimist.

Niko (Mexico)

Electricity demand in Mexico is rising and fueling the switch to solar energy. For households (and businesses), the “switch” to solar remains cluttered with friction.

Installation reliability varies by service provider, and integrating one's solar panels with the grid requires bureaucratic coordination. Obtaining financing adds another layer of complexity. 

Mexican startup Niko attempts to solve this by internalizing all aspects of the “switch.” At its core, Niko sells and finances solar panels. But beyond this, it manages installation, paperwork (with the grid operator), and maintenance of the panels. This turns operational and administrative friction into a defensible moat.

As Raffaele Sertorio, cofounder and CEO, spells out,

“The Comisión Federal de Electricidad (CFE) is Mexico’s state-owned electricity provider. It’s a monopoly, producing the majority of the country’s electricity.

One of the administrative complexities of switching to solar is dealing with the CFE. Generally, houses are connected to CFE’s grid. At the end of the month, CFE calculates how much you contributed to the grid versus how much you consumed. You are charged accordingly.

The difference with solar is that you now have a house that produces electricity and can contribute to the grid, so the equation flips. Your house’s CFE meter needs to become bidirectional to account for that change. In many cases, your house’s meter is out of date and needs to be replaced.

This entire process represents a 3-6 week administrative process (including the potential installation of the new meter), which we take care of for our clients.

[...]

We’ve decided not to rely on the limited number of companies offering such [installation] services (they prioritize their bigger clients over us) and have started building our own internal payroll of Niko technicians. We can still outsource “blue-collar” functions (ie: picking up the solar panels, physically installing them) but we need a Niko engineer to oversee the entire process. 

This internalization yields professionalism, which although more expensive, can be positioned as a value proposition even in a price conscious country.

Here's Raffaele again:

"Everyone knows a handyman that could, in theory, find and install solar panels for cheaper than Niko. But that handyman doesn’t have the professionalism we bring and installing a solar system is more complex than fixing your washing machine. That handyman won’t do the CFE paperwork and a solar system that isn’t connected to the grid is useless (because you can’t sell back the energy to the grid).

I’ve heard countless horror stories of clients coming back to us after initially choosing the handyman, because the handyman messed up. This is even the case for clients with $10M homes, who still opt for the cheaper option initially regardless of the associated risks, and then call us in to fix it. "

Lastly, Raffaele notes how what Niko does in that regard is different from the German company (Enpal) it is modeled after:

"Building an internal team of technicians is something Enpal only had to focus on when they reached scale rather than in the early stages, because the German market had a denser availability of competent installation companies."

Excerpt from Niko: scaling solar panels in Mexico originally published in the Realistic Optimist.

Beeorder (Syria)

Beeorder, a Syrian food-delivery startup, entered the food-delivery market by solving one problem: allowing restaurants to upload their menu on their app. They quickly realized that delivering food was an operational mess.

Beeorder built its own food delivery fleet by training drivers. Since digital payments infrastructure was weak, the company had to work around it.

Here’s how Abdel Malek Al-Mouzayen, the cofounder of Beeorder, describes their operations:

“We give our delivery drivers cash, which they use to pay for the food that’s ordered.

They deliver it to the customer, who pays in cash. Drivers have an accounting tab on their app, which indicates the amount of delivery fees they need to send us back. They can then drop off that amount at our offices or at a partner restaurant/merchant (we also have groceries and pharmacies onboarded)...

Restaurants also have an accounting tab which tells them the amount of commission they owe us.”

Excerpt from Beeorder: food-delivery in Syria originally published in the Realistic Optimist.

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Disclaimer: the articles quoted here were posted in 2025.

While what the interviewee expressed at that time was their current thinking/numbers, it might have changed. We believe their thoughts are valuable nonetheless.