Ken Njoroge Finding Impact

FIP 36: A Billion Dollar Homegrown African Business with Ken Njoroge

Ken’s first business was a web development firm called 3mice – which became pretty well known as one of the first web development firms in the region. After selling the business, he would sit for four hours a day over coffee with his buddy wondering why there was so much great talent working for large multinationals but no one building a great African business. Thus the vision of a billion dollar, worldclass, large, pan-African mobile-based company founded in Africa by africans was born.

On this episode you’ll learn:

  • Ken was quick to notice the huge subscriber rates in telecoms compared to dial-up services, and quickly theorised that mobile in Africa could be big. He simply used the information he was seeing around him to start looking for a business opportunity in the mobile sector.
  • How Ken’s curiosity and inquisitiveness led him to wonder, with his co-founder, why there weren’t more homegrown African businesses, when there were so many multi-national corporations employing great talent. Thus the vision of a billion dollar, worldclass, large, pan-African mobile-based company founded in Africa by africans was born.
  • Growing up in money-poor backgrounds, they were driven by the idea they could create wealth in Africa by running a values-based business – absent of corruption or bribery – driven by young people driven to be their best. This idea seems to have been driven almost as much by anger at the current paradigm, as opposed to pure ideology.
  • Cellulant started out selling ringtones, but Ken admits it was challenging for the first 2-3 years bootstrapping the company, as it required investments in IT infrastructure. They ended up borrowing money from credit cards, friends, and overdrafts – spending 70% of their time finding the money to keep the operation going. Some of their staff went 3-4 months without a salary.
  • Cost wasn’t only in the infrastructure. They didn’t compromise on the people – at the very beginning they hired the best people they could find and could barely afford them.
  • Things started to come together in the third and forth year, becoming cashflow positive, so that 70% of time running around to find the money to keep afloat, they could start to focus on growing the business.
  • They soon realised if they could serve 8 million people buying a dollar each, they could extrapolate up to 100 million customers, and that became their focus.
  • They realised the big impediment to scale was that the only payment option for their customers was to use their airtime, but the telecom company took 80 cents on the dollar, so they realised building an alternative payment platform was their problem to solve. This was a year before M-PESA launched.
  • Banks turned them away, thinking no one would trust making a payment from their bank using their phone. This is what M-PESA did and within a year, Safaricom had hit one million customers using M-PESA.
  • Solving this problem turned out to be phase two of their business. So beginning with selling mobile ringtones, four years later they built a mobile payment platform to bi-pass the telcos, and created something that could be sold to other businesses wanting a similar solution.
  • Ken speaks about having to change his management style as the business grew, having to create two layers of management. He also sets timelines based on what seems right, and really stretches the goals of his direct reports – but accepts he can’t do that for everyone.
  • Ken realised he had a problem with his management style when he wasn’t connecting with his staff. He hired management consultants to understand why. Faced with the decision to report their findings to him directly or to the group as a whole, he opted for the latter, simply because he knew then he’d have to act on the recommendations.


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