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Kenya’s John Waibochi speaks about living on the knife-edge of innovation

In 2010 John Waibochi, founder and CEO of Kenya’s Virtual City Group, won the Nokia Growth Economy Venture Challenge, which came with a cool one million US dollars cash prize, putting him on the world map as a top tech entrepreneur. How we made it in Africa’s Regina Ekiru found out what makes Waibochi tick.

John Waibochi

John Waibochi

How did you start Virtual City?

My first job was with a telecoms operator and it involved selling ‘walkie-talkies’. About 12 years ago I founded Virtual City and at the time our core business was offering web services. Our first product was an online shopping mall. We realised that mobile networks were growing faster than the internet. The growth of mobile networks was phenomenal. We changed to mobile, concentrating on the transaction side of mobile technology. Today we are a mobility solutions company specialising in supply chain automation, knowledge management and interactive solutions. I run two sister companies Virtual Mobile, which distributes mobile apps, and VirtualSat, which is concentrating on establishing and running contact centres.

Given that mobile phones were still new at the time, what was the market reception like?

We had to do a lot of market education. Mobile phones were in the hands of the middle class and it was primarily used for voice. We faced pushback in the market because clearly we were ahead of time. We had to make the people understand that mobile phones could be used as business tools, improve efficiency as well as save and make money. When Safaricom’s mobile money transfer service M-Pesa was launched it opened doors by further pushing awareness in the market and opening a mobile payment transactions gateway.

Virtual City won the Nokia award because of your supply chain solutions. Explain the impact of these products on the ground.

Our services have improved distribution efficiencies for small and emerging businesses in the fast-moving consumer goods (FMCG) market. Automation has removed inefficiencies and helped people like farmers earn more from their trade. Our work in agriculture has helped people appreciate the use of new cutting-edge technology to change lives in the most remote areas. In the tea industry alone, Virtual City has impacted at least 300,000 farmers.

For instance, our AgriManagr system has been adopted by clients in automating produce purchasing transactions and has had a great impact in the agricultural industry. It allows users to manage the weighing, grading and receipting of produce collected from each farmer at the collection point. The system also allows one to pay your suppliers using cashless transactions and track and reward loyal customers and suppliers.

Your businesses have been changing course over the years. Tell us more about this.

Yes, we have changed tact over the years to meet market demands. Our motto is: Innovation lives here. We are on the knife-edge of innovation. We do not use the word innovation loosely. It is a fact that when innovation matures it loses value to the customer and the margins begin to fall. There is a time you just have to transition. The business model just has to change. I am very keen on trends, and am always looking for what’s new and working. I am constantly studying the likes of Yahoo!, eBay, Samsung and Apple to see what they are doing, why and how we can apply it. Following trends is actually what influenced me to switch from web design to mobile technology.

What do you foresee for this year in terms of company growth?

We will be unveiling new products. For the better part of 2011 we focused on developing new products. We have moved all of our products to the cloud. We have also just launched Hewani Appstore, a mobile apps provider. The app distributing platform, which is integrated to banks and mobile money platforms, will open doors for mobile phone users to buy local apps. For local developers this will also provide a platform for them to commercialise since they will be taking home 70% revenue from their sold apps on the platform.

Whereas the rest of the world is looking at apps as entertainment, Kenya is looking at apps from a business and lifestyle angle, thanks to the success of mobile money. We are facing pressure to list more local apps on the platform. We plan to introduce between 30 and 50 new apps every month.

Any advice for budding tech entrepreneurs?

Build a company and not just services. As technology changes, the company will be strong even when particular services have been rendered obsolete. My focus has always been to create an enterprise that is light on its feet and able to manoeuvre.

Future plans?

We are looking to expand to the rest of Africa. To enable this we are seeking investment of between 2 to 5 million US dollars. We have won a lot of battles and lost many too. I think I am very far from what I consider success. I will keep soldiering on. I hope to build an enterprise that will live beyond me.

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