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Sunday, June 16, 2024

Failing To Win: Lessons From A Purpose-Driven African Startup

In 2009, Canadian entrepreneur Mike Quinn packed his backpack and moved to Lusaka on a mission to find African entrepreneurs building scalable, high-impact businesses. This decision changed his life and his account of the events that followed will inspire and guide the next generation of African entrepreneurs.

Failing To Win the new book by Mike Quinn is the authentic story of a uniquely African startup at the forefront of the continent. We chat to him about his journey and the book.

It’s taken you two years to write Failing To Win: Hard-Earned Lessons From A Purpose-Driven Startup, and it’s finally published. Take us through the journey: why did you feel compelled to write a book, and what was the most surprising aspect of writing it?

When I left Zoona in April 2019, 10 years after I joined as a co-founder, I couldn’t stop thinking about what happened, and “what might have been”. I had survived so many ups and downs throughout my Zoona journey, but the last year was especially traumatic.

Just 12 months earlier, we were on the cusp of signing a $40-million investment round and launching Zoona as a digital bank across three countries. Those big plans evaporated, and on the day that I announced my resignation to the staff, I also had to tell them the company would have to shed most of their jobs just to have a chance of survival.

Several weeks later, encouraged by others, I started writing – mainly to clear my mind and reflect. I tried to write as honestly and vulnerably as I could, without worrying too much about what came out. Once I got started, the words poured out; eventually, I had a 120,000-word “letter to my therapist”! And I felt a lot better.

What really surprised me during the writing process was the realisation that all of our biggest achievements, or “wins”, were always preceded by a long string of failures, which were the source of so much learning and growth.

It was almost as if we consistently failed in order to win. The more I talked about it with other entrepreneurs, the more I realised how common an experience it was, but also how little failure is talked about openly.

This motivated me to share my failures and what I learned from them, with the intent of helping other entrepreneurs.Turning my original 120,000-word manuscript into a published book proved to be a whole other challenge.

Tell us about the title of your book.

Failing To Win came to me while on a run early in my writing process. In one sense, I was in a lot of pain as a result of my failure to lead the company through its recent challenges, and the realisation that I wouldn’t be able to achieve the ambitious vision and objectives I had set for the company and for myself.

In another sense, I was reflecting on the role of failure as a critical input to success, and the hard-earned lessons I had learned figuring that out. We set up Zoona as a purpose-driven company from the very beginning.

The vast majority of people in Zambia – and the rest of Africa at the time – were unbanked and underserved, and youth unemployment was sky-high. Our vision was to create “a cashless Africa”,powered by our technology platform and a network of young entrepreneurs who served as Zoona micro-franchise agents to provide money transfers and other financial services to their communities.

This purpose was our raison d’être; we wanted to build an enduring company that was about more than just making money.

Mike Quinn. Photo: Burnet Media

You emigrated to Zambia in 2009. What were the challenges you faced?

I would rather start with the opportunities! In 2009, Zambia was a young and growing country of 13-million people, with a stable democratic government and an abundance of natural resources. Cash was king (just as it still is in almost all emerging markets), and almost all adults were unbanked and underserved.

Change was in the air, though, with mobile phones and data internet sweeping across the country, along with a groundbreaking mobile money-transfer service called M-Pesa growing quickly in Kenya.The biggest challenge we faced was building trust with consumers.

There had never been a digital money transfer service like Zoona’s in the market; people who needed to send money (for example, to support dependants, pay school fees or settle supplier bills) would either physically carry cash or use an expensive and slow parastatal post office service.

Zoona’s service was far superior, but it took us a long time to build up the consistency of service required for people to trust it and make it their primary mode of sending and receiving money.

Your book includes a number of chapters on lessons learned. What is the one thing you would do differently?

With the benefit of hindsight and experience, I would do many things differently, but above all I would make sure that I built the highest- quality team withthe fewest, right people.

There are so many obstacles to founding and scaling a company, and it’s the people who need to find ways of overcoming them. The right ones unlock value – but the wrong ones, who don’t fit the culture or who lack the abilities to get the job done, can get in the way and absorb bandwidth.

And if there are too many people (even the right ones), your overheads will quickly increase while your speed and agility decrease. We learned this lesson the hard way at Zoona. Looking back, we could have achieved the same success with a much lower headcount.

This would have enabled us to run the business with lower operating costs, providing us with more flexibility and preserving cash to navigate through the turbulence we faced

Startups need funding. When Zoona entered the market, Africa was not a popular investment destination – but Zoona attracted many investors. What was your approach, and how did you successfully bring investment into Africa?

Back when we started, there was virtually no venture capital funding ecosystem in Africa. There was some private equity flowing into stable, profitable companies, but it was almost laughable to think about starting a company from scratch that would attract millions of dollars of venture capital and grow to a billion-dollar valuation (the fabled “unicorn”).

The thought of doing this in a small market like Zambia was even crazier.I had a mentor named Patrick Pichette, who was the CFO of Google. (I had met him years earlier as a volunteer at Engineers Without Borders Canada, where he was chair.) Patrick became an early angel investor in Zoona, and would always coach me to think big.

Our vision of “a cashless Africa” declared our ambition and intent right from the outset, and we pitched this to anyone who would listen (and many who wouldn’t). Behind the scenes, we put in a lot of hard grunt work to acquire customers, develop our technology platform and grow revenue month-on-month, showing that our story and vision had substance.

Luckily, in 2012 – three years after I had joined the original founders Brad and Brett Magrath – we were able to close one of Africa’s first “Series A” equity investment rounds from global impact investors Omidyar Network and Accion. This $4-million equity investment in an African startup was a high-water mark for the ecosystem at the time, and nearly didn’t happen (the details are in the book).

It was a huge relief to finally have a cash runway, but in hindsight I have learned that a funding milestone is really just a new starting line – with higher expectations. If you continue to meet expectations, there is always more investment, but if you don’t – even for reasons out of your control – it can dry up almost instantly. After going “all in” for 10 years, you decided to end your journey.

Why? Zoona ran into a perfect storm of obstacles: a cholera epidemic in Zambia that temporarily shut down our core market and weakened our business, the collapse of a $40-million “Series C” equity investment round, and a “carpet-bombing” attack on our agent network from two deep-pocketed mobile network operators.

It became clear that our original vision could not be achieved in the current Zoona vehicle, and nearly 10 years after I had convinced my parents to mortgage their house and lend me $100,000 to invest in the company and become a co-founder, I came to the gut-wrenching conclusion that I was no longer the right person to be CEO.

I handed over the reins to my original co-founders Brad and Brett Magrath, and stepped aside. Brad continued to restructure the company for another year before also moving on, and Brett developed a new fintech spin-off called Tilt that he is running today, which leverages Zoona’s technology and agent network for enterprise cash-in cash-out services.

How has your experience at Zoona helped you in your new venture Boost?

I end Failing To Win by sharing a set of virtues and principles that I learned mainly from my experience at Zoona. These have formed the “constitution” for my new venture, Boost, which also builds on the market understanding and network that I gained from Zoona.

Boost exists to enable Africa’s 100-million informal small businesses to thrive in the emerging digital economy. We started during lockdown in April 2020, and within our first 18 months, we raised $1.5-million in investment and set up in Ghana, South Africa, Nigeria and Egypt. I would never have got to Boost without first building Zoona, and I’m excited to grow it into the biggest and most impactful business it can be.

What is your professional and personal five-year goal?

I plan in 10-year increments – and my current goal is to build Boost into an enduring company that enables Africa’s 100-million informal small businesses to thrive in the emerging digital economy.

Failing To Win is an ideal read for anyone doing business or investing in Africa, and in particular for purpose-driven entrepreneurs and impact or venture capital investors. It is available via online retailers Amazon, Audible, Takealot and IngramSpark, as well as at major bookstores in South Africa.

Author: Simone Meyerowitz

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