Regular Africans Building a World Class Business… in Africa!
Inside the C-Suite, Episode 3. Ken Njoroge, Co-Founder & Group CEO of Cellulant
Charismatic co-founder and CEO of Cellulant, Ken Njorge shares his inspirational story of how an initial business idea sketched on a napkin went on to become one of Africa’s leading tech companies.
This podcast is packed with business wisdom, told through Ken’s inspiring style of storytelling. You’ll learn what it takes to build a multi-million-dollar business from scratch, including building a team, raising capital and some of the characteristics that set successful entrepreneurs apart from the rest.
EPISODE SUMMARY
0:40 — Mobile Commerce Evangelism
Ken talks a bit about his background and why he is so passionate about mobile commerce in Africa.
1:54 — Cellulant: 120 Million Consumers in Africa
“Could then, these Africans sort of build a business in Africa? That was Pan African? That was a world-class business?” Ken tells us the inspirational story of how Cellulant was born after the initial plan being sketched out on a napkin by himself and Nigerian fellow co-founder, Bolaji Akinboro.
8:03 — “Financed Off Bolaji’s Credit Card”
In the early days of Cellulant, money was tight. Ken discusses how he utilized all resources around him so the company could survive and grow.
11:17 — The Entrepreneur’s Journey
Being an entrepreneur is never easy. Ken shares his strong views on what it takes to be successful and what it takes to survive in business.
14:00 — Billion-Dollar Business Aspirations
“Tell me that we can’t do it… That never sits well in my ear and Bolaji’s ear. So, we’re driven!” Ken talks about the growth of the business, revealing the early model and how he ended up changing the attitudes of the big banks when they decided to take the company to the next level.
22:02 — “I Would Say It Is Essentially Our Secret Weapon”
Hiring and development strategies, African Leadership University and the women working for Cellulant. Ken gives us his philosophies and insights on employees and how he hires and develops talent to give the company “that competitive edge.”
28:37 — Raising $47.5 Million Dollars and the Importance of Storytelling
Despite raising nearly $50 Million, Ken’s journey of raising capital has been long and arduous. He explains the disconnect between a founder’s expectation and that of an investor, as well as giving his key insight into why you could be losing potential investors.
38:46 — “Go Big! Go Bold! Or Go Home!”
Ken imparts his wisdom on what entrepreneurs should be doing in Africa. Including: solving the problems of the business, opening oneself up for growth, while helping to solve the problems of the continent.
38:46 — “We had to pony up a couple million dollars… almost overnight!”
A fine example of how a company can overcome the biggest of crises and you’ll see how investing in people paid off in the long run.
“We started the business with a very simple promise. That regular Africans could actually build a world-class business… In Africa!”
Introducing Ken Njoroge
An entrepreneur operating for 19 years, Kenyan-born Ken Njoroge initially started web-based company that was eventually sold in to Africa Online, Africa’s largest ESP at the time. In foreseeing the potential power of mobile, he was very quick to capitalize on market trends as they unravelled. His passion and enthusiasm in the mobile space has led to him being referred to as a “Mobile Evangelist.”
It was in 2002 that Ken and like-minded Nigerian, Bolaji Akinboro, decided to collaborate and create a company together. Initially sketching their business mission on a napkin and without any significant initial sources of capital, they launched their vision, which they called Cellulant. After 16 years, it proudly stands out as one of Africa’s leading tech companies and success stories.
Cellulant by Numbers
11 Locations
300+ Employees
34 Countries served
120+ Banks
40+ Mobile networks
21+ Mobile wallets
600+ E-commerce merchants
120 Million consumers in Africa
The Journey of Cellulant
1. The Idea
Ken met fellow co-founder, Bolaji in 2001 at a dinner. Hearing him speak about technology and the telecoms business, Ken remembers thinking “Wow! That guy is super smart”. The two would develop a close friendship on the back of their mutual interests, having long conversations about the business of technology, the state of Africa and the possibilities of creating something together. “We spent a lot of time complaining… We complained a lot around Africa itself… About the state of the continent and so on… At some point we said ‘we keep complaining about it, but what are we going to do about it?’’’
Their opportunity to shine came when they were invited to pitch to a service provider in Uganda. Ken remembers it well, fondly mentioning the cream suit that his Nigerian partner would wear to the meeting. Without any expectations on what the outcome might be, the pitch would conclude with one of the executives responding “Ok great! When do we start?”
2. The Attitude
“Cellulant is an attitude,” explains Ken. And, while their passion may be technology, the duo’s principles are very much encapsulated in proving a point. That two “regular Africans” can build a world-class business, without an Ivy League education, without political connections. “We wanted to build a business that never paid a single cent in bribing… a world class business… started by two regular guys, from regular backgrounds.”
Despite having no money, Ken would have to rely on Bolaji’s credit card to finance the early days of the business. “2004, 2005, 2006 was funded by sweat, really. Employee sweat… in supplier sweat… family sweat… my mother… Bolaji’s wife. Every single cent we could lay our hands on, we did.” Things would eventually change, however, in 2011 when Cellulant got $1.5 million from its first private equity institutional investor.
3. A Simple Business Model
While the initial business model seems very simplistic, Ken reveals the early years were all about surviving, “so, we started off as a music business… We published a catalogue over the weekend, listed the top 10 songs, top 20 songs. We sent a text, the system sent you back a song. We charged a dollar. And that’s it!” Eventually they got the business model right and “by 2008 we had grown, roughly a $5 million-dollar business selling music in Kenya and Nigeria.”
Despite their success, the hunger for bigger and better things would drive the co-founders to adapt their model. Paying 80 cents per dollar to service operators, they realized it would be impossible to achieve their “billion-dollar business” aspirations if they remained as the “middle man in a music business”. This led them to move forward into the payments business.
4. Changing an Industry
Selling the vision of mobile payments to the financial institutions of African was never going to be easy. “And the banks thought we were crazy at the time. And banks would ask us ‘will Africans trust mobile phones? Will they transact with mobile phones? It will never happen!’”
But Ken and Bolaji, never two individuals to give up, would be quick to react after seeing an article that announced the intention of Africa’s giant mobile network operator, Safaricom, to enter the mobile payments market. The banks’ attitudes began to change and Ken’s new mission became clear: “We have a short window… sign up as many banks as we can! And that’s what we did.”
Regarding Employees as Partners
After listening to Ken speak for only a few minutes, it’s easy to find yourself getting enthusiastic about his vision. “I think it’s really central to our progress. I would say it is essentially our secret weapon to why we are where we are.”
When Cellulant was born, the business was shared equally between the two founding members. As the employee count increased, Ken would view the new arrivals more like partners than employees, inspiring a commitment from staff where they would even be willing to sacrifice some of their pay to ensure the survival of the business. In Ken’s opinion, “It’s just deeply philosophical that you treat them as partners. They bring everything to the table. And that’s just it.”
The level of staff commitment was evident in 2016 after Chase Bank went into receivership. Ken tells the story: “We essentially were, I think, one of the largest people that they supported. So, we had a line of credit that was fully utilized in the bank… It got called in,” adding that “we had to pony up a couple million dollars… Almost overnight!” Relying on his management team to come up with a plan, they set out to solve the problem. As part of the solution they agreed to forgo two month’s salary. “It was a shared problem. Everybody carried their weight… and, in 2017 we’ve grown like we’ve never grown before.”
Ken is also rigorous in his hiring processes. Partnering with African Leadership University, Cellulant pays the school fees of future employees. The program ensures that by the time their students graduate, they will already have three-months’ worth of experience working with the business. This will facilitate their development and commitment. Ken explains, “so, what we’re trying to do with this program is become very intentional about identifying, engaging and supporting people to grow as a fundamental backbone of the business.”
Key Lessons & Takeaways from a Successful Entrepreneur
Ken Njoroge has achieved remarkable level of success in his entrepreneurial career. Raising $47.5 million dollars, he inspires the confidence of investors and continues to grow Cellulant through his determination, trust in people and sheer grit. Here are some of the key takeaways from the podcast:
1. “You Have a Higher Chance of Surviving by Being Bigger”
Ken’s aspirations are by no means modest. This can be summed up in one of his favorite phrases “Go Big! Go Bold… Or go home!” To prove his point that two “regular Africans” can build a “world class business” he would accept no less than a billion-dollar business, as he didn’t want to leave any room for debate.
2. “Open Yourself Up for Investment”
To facilitate growth, Ken has always worked hard to get financial backing. Recently he spent 24 months on the road chasing investors. He notes that an entrepreneur’s inability to tell a story is one of the key reasons why investors don’t invest and has worked very hard to improve his own capabilities in this area. He has also come to realize there will always be a “disconnect” between how a founder and an investor both perceive the value of a business.
3. “Growth is a team sport”
As Ken puts it, “trust that growth makes you a little bit more resilient. Because there’s more people interested in solving the problems of the business.” Whether it’s being able to openly communicate with investors, or developing a management team to run operations, Ken has learned how to share problems and decisions with those around him to give his company the best chance of success.
4. “It doesn’t seem to make sense to me, that from day 1, you only give that business 20%… 10% of your time”
Ken doesn’t recommends splitting your focus, or holding a separate day job if you’re an entrepreneur who wants to succeed. “Every single thing that we do, every day, there’s a competitor somewhere who can do it better, faster than we do it”, he acknowledges. “What makes a difference is that for the last 15 years we have searched, seen through and solved every potential problem that can kill us. That’s the difference”
