“I do not look at Mark Zuckerberg as someone I want to emulate,” says US-born Kenyan tech entrepreneur Kyai Mullei.
After nearly a decade in business and one failed venture, Mullei knows “explosive growth” in business happens only to a fortunate few. “If your entrepreneurial dream is to be a billionaire in two years, you are being unrealistic. There are not many people who end up like Zuckerberg. Things do take time.”
Mullei is co-founder of fundraising platform M-Changa. It enables users to organise quick, easy, cheap and transparent fundraisers via the web and mobile phones. M-Changa has 28,000 users and has helped fundraisers mobilise more than Ksh.30m (about $307,000). From next month M-Changa will be piloted in Tanzania enabling subscribers of telco company Tigo to fundraise via the platform.
Lessons from failure
Mullei was born and raised the US, but he spent part of his formative years in West and East Africa. He moved back to Kenya in 2006, motivated by the changing economic environment which signaled opportunities for entrepreneurship.
He immediately started a consultancy business InfoSystem Solutions, which helped pay the bills as he transitioned into life in Kenya. In 2010 he co-founded DevInfo Kenya, a web portal for development information. It aggregated development jobs, tenders and funding opportunities.
“It started slow but picked up and got to a point where organisations were posting jobs directly on the site. The only problem was the business wasn’t making money. My model was for people to click on banner ads. Unfortunately Kenyans don’t click on those advertisements. At the time there was also no culture of online buying. The business was ahead of its time. I had to shut it down despite the fact that it had thousands of users. It was really painful to let that go.”
Looking back, Mullei feels he might have given up too soon because of unrealistic expectations. DevInfo was operational for under two years. Now he advises entrepreneurs running a business to hang in for at least three years before pulling the plug.
“I had all these great users that I let down maybe because I didn’t have the patience. Maybe I expected too much too soon. I think part of the success of any business or entrepreneur is really seeing it through to the end. If you really believe in it, then give it time.
“If you can survive three years with more and more people using your service every day then you are probably onto something,” says Mullei.
But the failure of his business came with crucial learnings that Mullei now uses in his start-up. One key lesson was the importance of changing the business model as one goes along.
“What I didn’t do then, which I would do now, is pivot. For instance when M-Changa started our pricing model was very different from what it is today. Initially we had a much more complicated model where the fundraiser was charged per action. Now we charge 4.25% of the amount raised. I learnt from DevInfo that if your model is wrong, you can change it.”
A time to admit defeat?
However, some businesses are bound to fail. Mullei also advises entrepreneurs to look at their growth rate when assessing whether it is time to pull the plug.
“If you are growing at double digits, like 30% annually, keep going because eventually it adds up. That is natural growth for businesses. Explosive growth is for very few businesses.
“You should also look at your bottom line. It is okay for businesses to lose money in the first few years but there has to be some point where you clearly envisage being financial sustainable.
“Where do you need to get to in three year so you can have an office, have the lights on, and hire staff? You should know what point you need to get to in order to survive.”