At this point I knew 2 things: that the “use of cash” problem we were seeking to solve at Paga was a global problem, and that we were determined to build a world-class platform, one that could stand shoulder to shoulder with any platform built in Silicon Valley where I had worked and lived for 9 years.
My first approach to this was to partner with a company that already had an existing platform and was willing to collaborate on my vision. I thought this idea would be more easily acceptable to investors by eliminating the technology risk. And so I evaluated different platforms, called companies all over the world, and eventually thought I had found what I was looking for in an Indian payments company.
They were interested, we signed an agreement, and we started working together. As I dug further into their platform I was not impressed with the user experience. I also had no way to evaluate the technical strength of the code base. I needed someone with strong technical capability who could help me dig under the hood.
I decided to reach out to my friend’s brother, Eric Chijioke. I had met Eric a couple of times before and had shared with him some of the ideas I was looking to work on. We had tried collaborating on the cloud payroll idea — as it turns out he had just architected a payroll product and his company, Apposit which is based out of Ethiopia, were about to start building it. I had decided not to pursue cloud payroll so we didn’t move forward together but Apposit ended up building and selling the solution.
Now focused on Paga, I called upon Eric to see if he’d be open to consulting with us to help define our technical requirements, build the user front end of Paga, integrate to the Indian company’s payment platform, and importantly help me dig under the hood of the platform.
Eric and his business partners, Adam Abate and Simon Solomon, were excited about the idea of collaborating on Paga. They agreed to consult with us, we signed an agreement and got started. Eric flew down to Lagos and we kicked off a week long sprint to finalize designs of how Paga would work — everything from registration to sending money to withdrawal. I remember how we’d work till late, have pizzas for dinner, and Jay would draw the process flows ahead of a review in the morning. A week later, Eric and I got on a plane to Mumbai to go over our processes with the Indian payments company.
The three days we spent in India led to one of the biggest decisions we had to make on the Paga journey — deciding to build from ground up
At the end of each day, Eric was less and less confident in the technical capabilities of the Indian company. He kept telling me that his company, Apposit, could build a better platform for Paga from scratch, than the Indian company’s platform. Why work with them when they would have to rebuild to meet our requirements, license back to us, and didn’t seem very strong technically?
I came back to Lagos with a pivotal decision to be made.
How would investors gain confidence in our platform?
How would investors view the risk associated with a 3rd party as the development team for Paga?
We deliberated as a team and with our advisors. Eric did the same with his partners. We decided to build the platform ground up working with Apposit. Apposit agreed to dedicate a team, led by Eric, to work with us full time — no other projects for this team. Also, Paga would own all intellectual property, and Apposit would not compete with Paga, or work with any competitor of Paga. To further demonstrate their commitment to Paga, the Apposit partners agreed to invest in Paga’s Seed Round.
This turns out to be the best decision we made. Paga’s initial engineering team went on to be 100% based out of Addis Ababa, Ethiopia, for the next 8 years!
To build a platform such as Paga you need engineers who understand the need to architect a system in detail before writing a line of code. You must also answer some key questions and ensure you have a solid software architecture from the ground up.
Eric (and Simon) spent significant time architecting the Paga system and answering the key questions, such as:
How do we handle transaction growth at the software level?
Do we have a multicurrency system? Can each account hold more than one currency?
Do we have a multi-lingual platform?
Do we build a multi-channel platform?
How do we find quality talent with strong enterprise grade engineering skills?
We ended up deciding to build a multi-currency system because our vision is a multi-country platform. Not only can the platform currency be multiple currencies, but each Paga account can also have different currencies within it. The multi-country platform also meant building multi-lingual.
Given we were operating in a market where not everyone has a smartphone, we decided to build a platform that can be accessed via multiple channels — SMS, USSD to get a menu based system on feature phones, web, mobile applications, and IVR. The system is architected to be so flexible that we can add other channels very easily. This has been very useful to us as it has allowed us to reach a more diverse audience with greater ease.
Finding talent in Addis (or Lagos) is not easy but needed to build and sustain a world-class platform. We decided we needed to develop our own training program. A program that brings on super bright developers and takes them through a 2 to 3 month program which is highly customized for Paga. This is our own version of what companies such as Andela try to do but in our case, goes beyond the general training to focus on the Paga system. After going through this program the engineers then join the Paga support team. This gives them a lower risk way of getting to feel their way around the Paga code base.
The Paga platform today is a complex platform with millions of lines of code. However, the software architecture is a thing of beauty that any geek would love to see and geek over. For most of us, it is just sufficient to know that it is secure and works very well.
The fears I had about how investors would see our decision to build did come to play out. Our Series A investors required we get a team at VMWare in Germany to evaluate our platform and architecture for extensibility and scalability before they invested. We recently did a similar review, 7 years after we got started, with a technology firm who works with large US companies such as Facebook, Intuit, etc. The feedback on the platform we have built is very positive and I am incredibly proud of the work Eric and team have done.
The experience working with Eric and the team in building a world-class payments platform has been amazing. Some key lessons I’ve taken away:
- Hire a very strong CTO if you are not that person. Someone with deep experience in architecting and building enterprise-grade systems.
- Don’t compromise on the underlying software architecture. Similar to a house, better to design and plan everything as best as you can imagine ahead before you start digging. This doesn’t mean you won’t need to break down a wall one day or re-do something but reduces the need.
- Develop your own onboarding programs early on. No matter how good engineers are they need to understand how your platform is being developed. The more structured you can make this process the easier for people to come on board.
- Finally, there is nothing better than controlling your own destiny and building your platform in-house. As I did, you can get creative with using a 3rd party partner if you don’t have a technical co-founder.
There have certainly been hiccups along the way — which platform doesn’t have some hiccups? Also, moments where we had to balance life and platform, in some cases literally such as when Simon had to ensure the platform GSM modems were working while his wife went into labor…yes, we used modems to send out SMS messages for two years! The mobile operators in Nigeria refused to let us connect to their SMSC directly until they were forced by the regulators. Many moments we now look back at and laugh or smile about how we once were flying by the seats of our pants dealing with inefficiency and making the best of it.
Overall, it has been a brilliant journey and partnership with Apposit. And, without a doubt, one of the very best decisions we made on the Paga journey was to build ourselves. We have truly built a world-class platform and will continue to innovate on that platform to meet the needs of our customers!
Read Part 5 — My lessons for budding entrepreneurs!