Understanding business models

By Strive Masiyiwa

When you see an opportunity, get STARTED! A case study.

I knew it would be the next big thing. It was time to act, and be a “fast follower…”

The product opportunity I saw: Mobile Money. I’d been watching the developments at Kenya’s M-PESA, talking to friends in the industry, reading about it, and had even made a secret visit there to look for myself. I also knew what was happening in other parts of the world, in places like the Philippines and Bangladesh…

First step (to answer one of your questions at the Tanzania Town Hall): Do your homework!

Next step (yes, you’ve heard it before): #People.

I needed a small team of people of highly-motivated entrepreneurial executives. I plucked a guy working for us in Burundi, and asked him to move to Nairobi, the epicenter of this new Mobile Money revolution. He didn’t report to anyone else, except me. Every week he wrote me a report on his observations. Sometimes we would talk for hours on the phone:

“Sir, there are some smart Kenyans I think we can get…”

“Sir, we can get developers from Cape Town. Can I go see them?”

“I have found a guy in Cape Town but he won’t move to Zimbabwe, can I ask HQ to hire him and keep him in Cape Town?”

“Sir, the best platform for us to use is in India. Have made contact. We need to travel to India to see them…”

Months later:

“We have a system up and running in Burundi. It’s small but we’re learning fast…”

“Sir, I have been working with HR’s talent management team. We’re tracking some really smart young people who we think we could recruit and train to run with this. There are also some people in our system who want to try something new…”

__The #People and #Product were coming together nicely.

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Next step: #Process.

“We need the ‘Process builders’ to get involved heavily now, because the business plan is looking good!”

“I love it!!”

# Finance systems? Check.
# IT systems? Check.
# Legal systems? Check.
# Marketing? Check.
# Sales? Check.
# Recruitment? Check.
# Distribution? Check.
# Training? Check.
# Logistics? Check.
(What else? You tell me).

“Bring on some really experienced talent for process. You can even use consultants. This business will require complex processes for recruiting and managing dealers.”

“We also have a very sensitive product… Money!”

“Sir, our competitor in (x) is rushing to market with a similar service. What should we do, because we’re not ready?!”

“Neither are they, so stay the course. Don’t cut corners, even if it means they get a year’s head start. We’ll beat the pants off anyone who goes into the market with a half-baked idea.”

__Intense meetings took place every day on getting the #Processes right!

Twelve months later:

“Sir, Burundi is looking great. Can we scale to a bigger market now?”

“Not yet. I need to see more data.”

“Bring your team.”

After listening to them: “What do you want to call this great service of yours?”

“Sir, we were thinking to call it EcoCash.”

“I like it. Go ahead.”

Fast forward 10 years:

The executive who set it up is now one of the most senior members of our organization. He runs our financial services business called Cassava Fintech, based in South Africa. Their operations cover every aspect of Mobile Money including Digital Banking, Payment Systems, Mobile Insurance, Remittances, and eCommerce. They are active throughout Africa, and even in the U.K.

__Another question from our Town Hall meeting this week: “If you feel like you want to give up, what do you do?”

There were times when things broke down completely, and crisis meetings. Sometimes I had to fire people who failed or were not up to scratch. Sometimes people resigned or were poached! We lost so much money in the first two years that some of my more senior executives were actually begging me to shut it down. Yes, we almost shut down EcoCash before it took off!

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This year the GSMA (the organization representing Mobile Network Operators from around the world), meeting in Barcelona, Spain named EcoCash the best Mobile Money Solution in the World for 2017!

__How did we do it? We kept our focus on the 3Ps.

If you want to find out more about “People, Process and Product” (and much more) go to Kwesé Inc (channel 405 on Kwesé TV). If you want to learn more about Cassava Fintech, visit the website: http://cassavafintech.com.

To everyone who took part in our Tanzania Entrepreneurship Town Hall (from Tanzania, here on this platform, all over Africa and the world via lifestream on FB) and to our hosts in Tanzania: Thank you. I really enjoyed meeting you and look forward to another one soon.

_”When did you first see the opportunity?”

When I first started Econet Wireless, I travelled to South Africa to meet the senior leadership of one of the leading mobile network companies. I was looking for investment into our business. I did the customary pitch and offered them 40% of my business. For some of you who have seen Shark Tank on Kwese Inc, it was a similar experience!

Their CEO balked at my price. “No way!” he said. “That is just too expensive!”

For several weeks we haggled over the price but we could not bridge the gap, and we decided to go our separate ways.

More than 10 years later, I ran into the chairman of that company at a reception, and he pulled me aside and said, “I really regret that we did not do that deal with you. Now I realize that your business was worth a lot more than you were asking for.”

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He nevertheless congratulated me and we kept close and friendly contact until he died. He was a wise old man.

This has happened to me many times. Sometimes I’m the one who walked away from a potential investment and sometimes I’m the one who missed out on a potentially great deal.

It’s all business!

In that particular case, there was a reason we could not agree: I believed that the potential for growth in mobile phones was multiples higher than what they were projecting.

__Even though we were both in the same industry and could be considered experts in our field, we had a dramatically different view on the impact of a new technology: “Pre-paid payment” system!

(At that time you could only get a contract. The pre-paid technology was invented in Israel, and it totally transformed the industry, allowing billions of people to get access.)

I believed it would change everything. They thought my assessment was exaggerated.

There are so many new technologies coming through these days. Do you know what great technology is going to dramatically impact your business or the company you work for?

Years ago I used to keep a quote from William Goldsmith (one of the first British billionaires) which said:

“If you see a bandwagon, it is already too late.” What do you think that means?

Let’s talk.


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