The four pillars of a great organisation

Hi everyone,

The reality of starting a business from scratch is that at the beginning, you don't really know what will work. So you try a whole bunch of things and follow the traction. We launched as a money transfer business, chasing the dream of M-Pesa's success in Kenya. In 18 months, we have grown our money transfer business to over $600,000 turnover per month. To achieve this growth, we quickly learned that we had to become an agent business, and we now manage a network of over 220 agents in every region of Zambia. And to lock-in this agent network, we became an electronic voucher business, with our agents redeeming over 56,000 agriculture and food vouchers worth over $1,000,000 in October alone.

For an organisation to scale, it must have strong foundations. Below are the four pillars that are transforming Mobile Transactions from a good idea to a GREAT organisation:

1. Focus

As a business matures, it must constantly refocus its scarce resources for growth to accelerate. This is no easy feat, especially for a start-up business like ours that is building a new industry from the ground up.

Our focus is on increasing transaction volume. This means two things: a) capturing more value on our system by locking-in existing and new strategic customers in our sales pipeline, and b) growing the overall liquidity of our agent network. We have created two separate teams tasked with these objectives with clear KPIs to measure their progress.

2. Alignment

Alignment means orienting every single staff member in a common direction where every individual is adding value. This must start at the most senior level, and then filter downwards with buy-in at all levels.

We recently took our entire management team away on an off-site retreat to get everyone on the same page. The first day was limited to Brad, Brett, Keith, and I getting aligned on high-level strategy as Senior Management. The rest of the management team came the next day and we had two very productive days mixed with fun and work. We went through a process of redefining roles and responsibilities in a new organisational structure, identifying quick wins and game changing new deals to go after, and revisiting our guiding principles. Perhaps most importantly, we created shared stories and experiences that have re-energized everyone to push forward during these critical next few months.

3. Ownership

Businesses are only as good as the people who work in them, and good people must be enabled to succeed. We are very fortunate to have an excellent management team who are all 100% committed to achieving our vision of a cashless Africa.

One outcome of our retreat is to create cost and profit centres that will give our managers the ability to run their own units as if they were business owners. Managers of these centres will have real decision making power over who is on their team and how best to manage them to achieve measurable results. This new structure will need to be matched by each individual stepping up and taking full ownership over his or her role.

4. Accountability

Accountability is the feedback loop that ensures what is agreed is implemented to the best of our ability. Without accountability for both individual and team performance, the above three pillars are significantly weakened and we will not become the great organisation we all want to be.

We made a big step in creating a culture of accountability by bringing Keith in as our Chief Operations Officer. The first think Keith did was set deadlines for managers to present their quarterly budget and KPIs, which their performance will be measured against. He sent a strong message that there is no excuse for missing deadlines, and that we should all embrace this culture as it is the fastest way to accelerate both our business growth and individual careers.

Keith and I have divided responsibilities around these four pillars. My job as CEO is to keep our business focused on what's important, and ensuring everyone is aligned around our overall strategy. Keith is responsible for creating the right conditions for everyone to take ownership over their roles, and for holding each individual accountable for performance.

If we can continue this progress, I have no doubt we will be successful and one day make that infamous transition from "good to GREAT".

Best,

Mike

What attracted me to Mobile Transactions

At the time of writing, I have been with Mobile Transactions for almost two weeks. So much has happened in this short time. I considered writing about my early experiences in this exciting company. But it has all gone by in such a blur and it is too early for me to put my thoughts in a coherent way. So instead I decided to write about why I made the decision to leave the cosiness of the corporate world for a young, growing company.The obvious question many people have asked me is why would I give that all up, pack up my life and join an early stage company? I can answer that question very easily with any of the standard clichés (which all happen to be true by the way):

· “I was looking for an exciting new challenge”

· “I wanted to get away from the politics and bureaucracy of a corporate”

· “I was bored of being pigeon-holed in a single function and wanted the variety that comes with being in a young business”

· “I was sick of having an anti-septic, throttling corporate culture imposed on me and wanted to be part of building something different”

· “I wanted to be able to wear jeans to work”

I could go on and on. But that is only the first part of the answer and is the far less interesting part. What is more pertinent is why Mobile Transactions? What is it about Mobile Transactions that made it stand out amongst all the other possibilities I was considering?

The easiest way I can explain it is by telling the story of how it came to be.

Mike (CEO) and I met whilst studying at Oxford a couple of years ago. He immediately struck me as a highly intelligent man with great integrity. Our friendship grew through what turned out to be an amazing year. He came to visit me in Johannesburg during the soccer World Cup in South Africa. One evening, we were out for dinner with his lovely wife Isabelle. I was ranting (as is my wont) about my frustration with all the points mentioned in bullets above (and a few others I have no doubt). When eventually I stopped my self-indulgent diatribe, I asked him more about what he was doing. When he told me he was helping to run an exciting new mobile transactions business, my immediate thought was: “oh no, not another one”. For several months up to that point I had been leading a team investigating the possibility of opening a retail presence in Africa for the bank I was working for. A key part of this investigation was whether we could use mobile to deliver our strategy. I had been to several conferences and presentations on the topic. Although the promise mobile banking held was palpable, nothing I had seen got me particularly excited.

In an effort to be polite, I asked him more about it. During his enthusiastic description, my scepticism slowly changed to interest and ultimately to an incredible sense that I was at last hearing something different. The subtle tweak in the way in which Mobile Transactions was approaching this market all of a sudden made so much sense. (Feedback from Mike on his recent whirlwind trip the UK and USA indicates that scepticism, evolving to gradual awakening, culminating in that Aha! moment is a common reaction from people who hear about the business for the first time.)

With an increasingly affluent and growing population almost the size of India’s, the consumer opportunity in Africa is huge. But consumers are too heterogeneous and too widely dispersed across too many borders to be viewed as a single market. Contrary to what many people think, this is not the United States of Africa! What is common and spans borders however is Africa’s continued reliance on foreign flows (remittances, donor funding/NGO’s, micro-financing, multinational corporatesetc) and the massive role of the State within these economies. Fail to understand that, and you fail to understand Africa as it stands. Mobile Transactions acknowledges this and has set about trying to capture the consumer opportunity by first trying to capture the institutions for which the vast majority of consumers rely on in their day-to-day lives. That is the Aha!of Mobile Transactions to me and what sets them apart from all the other companies clambering for a piece of this very big, meaty pie.

Joining a business you wholeheartedly believe in comes with an increased responsibility to help make sure you do your bit to ensure it reaches its potential. Our recent good results are proof of how Mike, Brad, Brett and the rest of the team have the ability to make the business grow as fast as it can. But all great businesses are built on complimentary skills. So for the time being, I see my role as ensuring that while we grow as fast as we can, we also grow as slowly as we need to. Making sure the right processes, structures and systems are in place to de-risk the business to allow us to grow our markets and products in a controlled and deliberate way. This I hope will allow the rest of the team to focus on what they’re good at without worrying about being capsized by an internal or external black swan that inevitably comes from growing too quickly.

My concluding remarks are aimed at Mobile Transactions employees.

Upon leaving the aforementioned bank a couple of months ago, the consistently predictable counter-offer followed soon thereafter. I was offered the position of heading up what will become a retail presence in Africa for the bank. Whilst the offer was interesting (more for the timing than its substance), I didn’t consider it for longer than it took for me to explain to them that the place I am going to will be part of making theestablished financial model redundant. Our continued success in this space will render the incumbents that fail to adapt irrelevant. Why would I take a horse and cart into battle when there is an armoured tank in the garage?

Through our platform, we have the unique opportunity to change the transactional landscape forever in a very real and significant way. The best part of all this, is that we get to do all this whilst making a positive difference to the lives of the people who most need it. As employees of Mobile Transactions, we need to cherish that privilege and feel the weight of responsibility to ensure that it is nurtured. This is big stuff!

I thoroughly look forward to meeting the rest of the team in Zambia when I head up from Cape Town in a few days.

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

History

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.

Alignment

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.

Ownership

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.

Conclusion

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.

Best,

Brad

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 1^st 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

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.

Memory.

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.

Background:

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.

Cheers,

Claudius

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.

Best,

Mike