Wednesday, September 29, 2010

Passing the Torch (and trying hard to let go of the reins...)

Hi my name is Brad Magrath, and I am one of the founder shareholders of Mobile Transactions with my brother Brett. This is my first blog ever anywhere so I thought I would share some of my thoughts and experiences that every entrepreneur will probably go through as they ramp and scale their business: bringing in and retaining new skilled people, and empowering and trusting them to take the business to new heights.

Having two teenage daughters of my own I certainly relate to this story as told to be by a mate: When his daughter was 22 she was reversing out of his drive way in her new car and she crashed into the gate. She jumped out the car in tears and distraught and ran towards him. He opened his arms to console her when she ran straight into her boyfriend (now husband) arms. He just stood there in shock and still is not sure who was more upset – him or his daughter. I guess the moral is everyone has a time and place of influence and time stands still for no one. As a founder of a business getting your head around bringing in new managers to manage yourbusiness, is certainly an interesting and challenging concept.

Entrepreneurs by their very nature are passionate and committed. Certainly my brother and I have always been very passionate about Mobile Transactions. Similar to the cartoon TV show “Pinky and the Brain” who are lab rats who wake every day with one mission: World Domination, we wanted to create an awesome business and one that would scale across Africa. An early concern was how we would create a culture and organization that could get and keep the very best people. The nature of our business: Mobile Payments has both commercial and social impacts, has in many ways allowed us to be able to successfully do that. No mean feat having our first operations in Lusaka, Zambia – not a hot bed of world best recruiting talent.

As a company we have transitioned in highly skilled, qualified and experienced new staff: CEO, CFO as well as over 5 senior management staff and as founders we have realigned our roles as part of this team. Was it easy, absolutely not. Could it have been easier, I am not sure. In many ways we did a lot of things right and we actively sought to bring in the new skills but the reality is as strong willed individuals in an emotional hot bed even with the best intentions you can expect fireworks and we certainly had them. As we went through the mincer we certainly had some blood on the meeting room table, most of it constructive conflict but at times just conflict. In hindsight being brutally honest with myself I probably had visions of being a benevolent dictator: a democracy when I say so. Equally new management I am sure would equally face up to mistakes made during this time.

Some of the outcomes of this process we took on have been a far more focused, accountable and productive team. Incidentally over the 9 months we have been in this process the business has grown over 950% with platform revenue in September 2010 of over $2 million for that month.

Pretty staggering growth and born mostly out of this transition – I guess a great product helps but getting the skills and management to drive the business was fundamental.

Having outlined some of the issues, I think the following points contributed us going through this and coming out a stronger performing business with more capacity to scale. Again these are just lessons we learnt so take then with a pinch of salt when reviewing other businesses.

Trust, integrity, egos at the door
Even when heads were clashing there was an absolute trust in the integrity of all players round the table, and that differences aside everyone had the business best interest at heart. Also nearly every manager has filled numerous positions and job roles as required.

When things are not yet aligned this is a key factor

Coming from a team sport background you always get an understanding of the person next to you once you have won and lost together. It tells you a lot about them. I can remember Mike, now our CEO and fully fledged partner taking Brett and I out for a first strategic meeting (with us maintaining we were too busy for it) and then sitting there, arms folded behind my head thinking: OK, Mr. Oxford MBA what have you got to teach me. Needless to say we have come a long way a year down the track and have history to fall back.

Understanding Cultures
With a management team that has consisted of people from Zambia, South Africa, Canada, USA, UK, India, Polish and now we are adding Kenya and Nigeria it took us awhile to get to grips with the dynamics. We are not there yet but there is certainly more understanding - if the United Nations ever need help we can add some insights.

Make a plan and get things done. As a start up that has to be a call to arms and we have adopted it. It does mean feet get stamped on and ego’s bruised but it is critical that while defined roles and responsibilities are important and have value, sometimes stuff just has to get done and the closest person is often the best.

Mistakes happen, deal with it. Make a plan. There is no value in yes men or people who think just like you.

The first time I did not get my way, and I guess even now when I do not, the person standing in my way had best be able to stand their ground. This business means a lot to me and I certainly start every discussion thinking I am right. We have been fortunate to have solid individuals and professionals who have backed themselves and their role in the business. You just do not need to know everything that is happening every day.

This might sound incredibly obvious but for nearly two years we had two employees, the other one being family. Fast forward to this agriculture voucher season and Hans joining the team and working with Graham, employing 14 new short term staff, creating plans and budgets and then most important implementing an awesome project that generates over 50 new agents and $1.6 million revenue with little or no input from you, and certainly no control of the process by you. I have needed at times to remind myself to step back and not jump in. Trust their and Mike's judgement and focus on my job: selling. Once you get your head around it and just let go, it makes a difference.

Pig and Chicken
An oft quoted role in our business is that when you sit and have bacon and eggs for breakfast – the chicken is involved but the pig is committed. We like people in Mobile Transactions to be able to say “oink “. Certainly staff at all levels have put in sweat and long hours to show commitment. As a company we have started to roll out share options, cash incentives at a senior level and moving to the 2011 we will be extending various incentive plans across our staff network. Commitment works both ways.

Manage by numbers
If an entrepreneur does read this then this is the only paragraph of the whole thing worth remembering. Once we recruited Dave as our CFO and he got on top of the numbers and we identified our key value drivers and he was able to give us weekly up to date dashboards of our financial metrics around these same drivers: bam. Every dynamic around the team changed. Meetings stopped being about opinions, and who could voice their opinion loudest or longest but became fact based. The numbers were there and they were indisputable – everything started to flow and decision making was easier and lots of bottlenecks removed. If you want to make changes like these get on top of your real value drivers and measure them to the nth degree.

Celebrate victories
Something we have not yet got right, but when you are in dog fight you cannot celebrate false dawns but saying that we work hard, are making progress but seem not to take stock of the wins. The reality is this team has grown nearly 1,000 % in 9 months. It is normally only when you tell people our story that you take a moment to reflect on the progress. I think we also know what mistakes we make and how we could have done things so much better

Next Steps
As a senior team, led by Mike we are aware of some key challenges we will need to address going forward.

We are confident that this is the team that can scale regionally but are also aware that as and when we grow each and every senior person has no claim to a chair and as we grow and attract potential new investors change dynamics at all levels of the company remain possible.

More importantly in the short term we have some key management positions that are at key points in their careers. We will go to the plate to keep them but these are not done deals in any way.

To date we have not yet shown an ability to advance our Zambian staff up through the ranks. We have identified our Next Generation of Zambian Managers Claudius, Memory, Teddy, Charles and Agents like Michael and Thersford and others will be given opportunities but it is an important that both they and us as a company step up to get them to a level they have shown glimpses of but not yet achieved.

We are also setting up an independent and professional advisory board. It is important we know what we do not know and where we are short. Corporate Governance, investor readiness etc are all good buzz words but are also things we want to engrain in our culture through good advisors, while remembering that these can be implemented and in no way dilute our work culture and need to remain a cutting edge start up.

Well I have rambled on for 4 pages so if anyone has managed to wade through the whole thing I finish with what I said to Mike, our CEO on his handover. We got the business to $ 4 million; you and the team have to take it to $ 40 million. I look forward to supporting him every step of the way.



Tuesday, September 28, 2010

MaKwacha Champion Agents on the Copperbelt!

Hi everyone,

My name is Teddy Sampa, I am the Deputy Agent Manager for Mobile Transactions.

Last week we toured Kitwe and Ndola to see how the Makwacha Champion Agent network is coming up. Makwacha Champion Agents are men and women who have been contacted by Mobile Transactions to run franchised shops called Champion Agent Shops. At the moment Mobile Transactions

has eight Champion agent shops; two on the Copperbelt, one in Livingstone, two in Eastern Province, two in Lusaka and one in Mongu.

I would say we were very pleased to see the way branding is coming up for both Makwacha Champion Agent shops. My prayer is that once the shops are fully branded we will see more people sending money through the Makwacha Champion Agents in Ndola and Kitwe. At the moment both shops pay out more money than they send out.

In the picture, left to right is the Agent Manager Graham Lettener, followed by Sandra Jere and Sarah Lungu in Kitwe Champion Agent shop. Below is a picture for Ndola Champion Agent shop.

We are expecting to do the first Loan disbursement for Harmos in Kitwe probably the 1st week of October 2010. And Kitwe being a big town, we are looking at having the same number of Loan disbursements for Kitwe as in Lusaka as time goes on.

A daily cash recon tool in excel format has been introduced to both Makwacha Champion Agents. This will help Sandra a Makwacha Champion Agent in Kitwe and Katongo a Makwacha Champion Agent in Ndola to reconcile their cash and electronic credit at the end of each business day. The same tool will be used to reconcile cash and electronic credit after Harmos Loan disbursements. And to make it even better Mobile Transactions Accounts have an Online statement, so using both our online statement and daily cash recon tool will even make life easier for cash recons. Therefore, I would say that, we are confident enough that all cash and electronic credit will be handled properly even if large sums of money will be handled during loan disbursements for Harmos.

Both Champion Agents have signed a new contract with Mobile Transactions to run the Champion Agent Shops as franchise business for Mobile Transactions. This week two more Champion Agents within Lusaka will be signing their new contracts as well.

I do believe that in a few months from now we are going to make a huge difference in the way payments are made on the Copperbelt just as we are making a difference in Lusaka. Its high time Copperbelt began making electronic payments to its esteemed customers and clients, and Mobile Transactions is the IDEAL SYSTEM to use.

Have a great week!

Teddy Sampa

Monday, September 20, 2010

An interview with a MaKwacha Champion Agent

Hello everyone,

Agents are the heart of our business, and Michael being one of our MaKwacha Champion Agents plays a very big part of this. He started working for Mobile Transactions a year ago, and his achievements speak volumes to date. In this piece I sit with Michael and get to know him a little better.

Me: Hi Michael, am going to ask you some questions that I will later write about on our blog, so I’ll need you to come out and be as honest as you can.

Michael: I can come out anywhere and to anyone you don’t have to worry about me being shy or fake.

Me: That’s good to know, tell me
about yourself.

Michael: I am 26 years old, first born in a family of two boys, I attended Mansa secondary school during which I had to be constantly absent from class because of my mother’s illness, nevertheless I excelled in my studies and was chosen Head boy for the school. After I graduated from Secondary school, I studied Chartered Institute of Management Accounts (CIMA). I completed Level one but could not go any further due to financial constraints.

Me: You have quite a story, how did you join Mobile Transactions?

Michael: I was working for Barclays Bank at the time as a Lead Sales Generator, then my team leader Nevyson approached me and told me about a job offer and I accepted.

Me: You must have been either very unhappy or suffering from temporally insanity, why would you leave a job in a bank for another job at a company you have never even heard of?

Michael: When Nevyson told me about Mobile Transactions, he also explained how it works and I was fascinated by the technological aspect of it, especially the SMS notifications after every transaction. To me it was also about joining an organization where I could be able to influence decisions.

Me: Well and good. You started off as a Sales Generator, then were promoted to Operations Support, then to Champion in Chipata, Katete and now Lusaka, and you did exceptionally well in all the mentioned positions and the success in Chipata and Katete has been attributed to you, why do you think you did so well and how do you feel about it?

Michael: To be frank I think I did so well because of my drive to do
things quickly, am not ashamed to do any type of work as long as it is giving value to my business and the organization as a whole. To answer your question about how I feel, I feel that what I did in Chipata and Katete is just a fraction of what I was supposed to do.

Me: Wow! Let’s talk about the People at Mobile Transactions, off the top of your head, who do you admire and why?

Michael: Brad, the regional director, for his business sense and language, he can sale anything to anyone, and then there is Teddy, the Deputy Agent Manager, he has integrity and does not lie. Then there is you, the Brand Manager, your speed and wonderful spirit is admirable.

Me: Huh! Thanks I bet you mentioned cause I am the one doing the interview. How do you manage your team and why do they fondly call you Mwine Mushi (a Bemba term that means owner of a village)?

Michael: No, I mentioned you because it’s the truth I admire you. I run my team by making myself approachable, I have developed a work culture of team work with defined roles and responsibility. As for the nickname I guess its because I take ownership, you can get the answer from my assistants as they are the ones who call me by that name.

Me: I certainly will. You mentioned goals; can you share what those are?

Michael: Our goal right now as Katondo Champion store is to build enough cash float so that we can also start paying microfinance loan disbursements.

Me: Good luck on that goal, if there is someone who can achieve it, it is most certainly you. Thank you for your time I know you are extremely busy.

Michael: Thank you.

After our interview, we took a walk to his store, and yes I asked Michael’s assistant Simon why they call him owner of the village, and he simply said because he is such a great leader, no one deserves that title quite like him.

Have a productive week.


Thursday, September 16, 2010

MaKwacha Loan Disbursements with Harmos Microfinance!

Hi, my name is Claudius Fundi. I am the project manager of the Harmos Micro-Enterprise Development Limited account.


Harmos Micro-Enterprise are a subsidiary of Vision Fund International a World Vision International owned micro finance organisation. They provide business loans to Small and Medium Scale Enterprises in Zambia.

In April this year Harmos Micro-Enterprise Development Limited and Mobile Transactions Zambia Limited signed a Memorandum of Understanding for the provision of electronic payment solutions to facilitate bulk loan disbursements to their unbanked and banked borrowers, and for the provision of a loan repayment module through the Mobile Transactions MaKwacha Agent network.

Pilot Project:

Since this was a new avenue that Mobile Transactions had ventured into and in accordance with the company’s 1-5-All policy (where we start with a localized pilot project and quickly expand to the whole project compass as implementation succeeds), we piloted with Lusaka Banked Disbursements in April this year. Within a month the project matured to banked disbursement to the whole country.

Unbanked Disbursements:

In August 2010 after a review of the project both parties agreed that the time was ripe to expand to unbanked payments, first for Lusaka and quickly expand to the rest of the country. These are mainly Group Loans of about 7 people in a group and an average amount of K1,000,000 ($200) each. Group Loans constitute 80% of Harmos loan disbursements.

The Lusaka implementation was launched on a shaky note on. The borrowers are mostly people who have never had a bank account in their lives and shared only one or two phones in the group. Harmos Credit Officers are at pains to hammer the new concept into the minds of their clients. The borrowers usually do not understand how their loans could get paid into a ‘mobile phone’.

When the initial beneficiaries went to collect their payments from the designated Champion Agent-Tresphord Mwango, in most cases it transpired that they had deleted the text messages that designated their users names. This made the activation of their MaKwacha accounts difficult and as such Tresphord had to refer them to the Mobile Transactions office for resolution of this problem. The other challenge was that once the beneficiaries received notifications of payments by phone text, all the groups would go at the same time to demand for payment from Tresphord’s. At one time this was up to 10 groups. Time is also not observed. Most times groups come late in the afternoon after 16:00 hours. In other cases we have had people turning up for payment upon receipt of text messages informing them of the creation of their MaKwacha accounts only but without payments being made to them yet.

The demand on Tresphord was overwhelming with the crowds of loan beneficiaries almost choking out the other customers sending and receiving money transfers. But Tresphord being the excellent manager that he is has managed this very well.

A total of 200 unbanked loans with the value of $40,000 have been paid through Mobile Transactions since and our capacity to cover them efficiently is increasing by the day. With the collaboration of Graham Lettner, our Agent Manager, and his team the process in Lusaka has improved with more agents taking on the payment of these beneficiaries.

Our target is cover Copperbelt unbanked disbursement in the next couple of weeks and there after quickly expand to Southern Province and then the rest of the country.



Wednesday, September 15, 2010

CEO Update - Wednesday September 15

Hi everyone,

We have our August numbers in and it was another month of growth. Key highlights include:

We processed nearly $1.8 million in transaction value through our system. This is a 583% increase since January.

Our system processed a total of 42,886 transactions, a 441% increase since January.

Voucher transactions for August broke through the 20,000 barrier for the first time. We are targeting over 28,000 voucher redemptions for September with WFP, CFU, and FAO leading the charge.

We paid out nearly $40,000 in unbanked microfinance loans and casual worker payments.

In June, July, and August, we processed over 9,000 system payments to Dunavant Farmers worth $1 million.

Finally, August finished off with the founder shareholders, CAD, investing $75,000 cash into the business.

The focus in September is Traction Traction Traction. We have aggressive growth targets, and we want to quickly scale our banked and unbanked payment products to complement vouchers and money transfers. We've had a couple months to test these in the market, and we will now switch to selling and implementation. Brad will focus on Corporate, SME, and Government sector sales, while I will target the development and microfinance sectors. In addition:

We are launching both banked and unbanked payments for the Zambia Emory HIV Research Project (ZEHRP). We anticipate processing in excess of 500 payments per month for ZEHRP at full capacity.

We are hiring 3 new IT development resources in Cape Town to beef our our capacity and meet client demand. Focus areas will be on current contracted work for our existing clients, followed by a new agent cash reconciliation tool and other product enhancements.

Brad will be travelling to the US to speak about our electronic voucher product at a conference hosted by Catholic Relief Services, one of the largest NGOs in the world.

Expect September to be another busy and fruitful month. We've got a big challenge ahead of us but I am confident that the Mobile Transactions team is up for it.