Mike Quinn is a 2007-08 Skoll Scholar and Oxford MBA alumnus, he is also the co-founder and former CEO of Zoona, one of Africa’s earliest fintech companies. With over 10 years of experience running a successful social business, Mike shares his hard-learned tips and experiences on how to get a purpose-driven venture started, built and scaled. This is the third, and final article in the series, how to ‘scale’.
I then shifted focus to the next stage of a company lifecycle, how to build:
Build a model
Build a team
Build a culture
it’s time to learn how to scale. This
is the stage that every entrepreneur and investor wants to get to as fast as
possible, but it’s also fraught with challenges when you do.
Know When to Scale
the hardest part of scaling any venture is picking the right time to put your
foot on the accelerator. If you wait too long, you miss the opportunity and
your investors, team, and maybe even you will lose energy and focus. But if you
try to scale too early, you risk stretching your organization too far and
experiencing burn out.
I have done it wrong both ways. As CEO of Zoona, I took too long to double down on our exponentially growing money transfer product in the early years, but then was too aggressive with market expansion in the later years before we had our core team, operations, and technology ready to go.
The trick, I have learned, is to really pay attention and listen to both the market and your team. If the market is pulling your product and growth is coming organically with strong customer retention metrics, that is the first and most important signal. If you then look across all of your business functions and feel you are executing at a 70% performance level or above, then you are good to go. Don’t wait to achieve perfection (you never will), but be wary of flicking on the growth switch if you have any major shortcomings in your foundations. And if you find these shortcomings, fix them fast!
Pick a Strategy and Execute Well
it’s the right time to go for scale, the next question is how? Having the right scaling strategy is really important, and
it’s generally easier and more effective to scale from your core (i.e. don’t
try to scale something that is new to what is already working).
But I would argue that picking a single strategy and really nailing the execution is paramount. You will never know for certain if your strategy is right until you try, and the worst thing you can do is waste time and energy pulling in multiple directions. Have a robust strategy debate with your team and board to find focus and alignment, but then make sure everyone follows Jeff Bezos’ advice: “Disagree and commit.”
Once your strategy is set, it’s all about execution. Cadence is critical: Set quarterly Objectives and Key Results (OKRs) and cull any non-essential tasks that aren’t directly linked to achieving them, set up weekly dashboards to track leading indicators and key learnings, and establish performance management systems for your team. Also, make sure your best people are focused on your most important OKRs and help them by removing distractions and obstacles in their way.
Stay Close to Your Customers
the scaling process, one challenge I faced as a leader at Zoona was drifting
further away from our customers. When you are small, you are in front of customers
all the time and this is critical to understanding and connecting with them.
But later on, you may have two to three layers between you and your customers,
and those layers may also want to execute without you being in their way.
danger is that you spend more time in meetings watching powerpoint
presentations than interacting with the customers who pay everyone’s salaries.
You lose perspective and retain outdated assumptions. Your own energy may even
wane, as your original source of purpose and inspiration may start to seem
I experienced this several times at Zoona. My favourite remedy was to break my routine and take a customer immersion trip. I cleared my calendar for five weeks and spent all my time in the field working for our agents and serving customers. Not only did I discover several product and operational bugs that were easily fixable, I gained a broader understanding of who our customers were and what Zoona meant to them. This, in turn, influenced my thinking on future strategy and enabled me to take new ideas back to my team to lead the company forward. It also set a new behaviour standard, and soon other leaders across our company were spending more time out in the field with customers, which led to many positive outcomes.
Don’t Run Out of Cash!
Lastly, scaling can be very expensive. You have already gone through an incredible struggle to get to this point and may have even raised a big investment round and have cash to spend. But you can burn through all of that cash surprisingly quickly and end up in a very difficult situation if you aren’t careful.
navigate this challenge, it’s critical that you have the right people on your
team and a culture that values your hard-earned money. Keep your fixed costs as
low as possible and spend your money on acquiring and retaining customers.
Establish processes and controls to create budget scarcity so that cash is not
wasted on things that aren’t working, and empower your CFO to declare war
watch out for copycat competitors with deep pockets and potential disruptions
to your business model. It’s when you are scaling that competition suddenly
takes notice and copies what you are doing. Don’t panic (you are probably
better than you think) but don’t stand still (you won’t be better for long if
And finally, don’t wait until you are out of cash to raise your next round of investment. You should start nine months ahead of when you need the money and always have a plan B in case you can’t get it. The best plan B is to get to cash flow positive so that your venture is sustainable and you have more options on where to take it next.
luck scaling your purpose-driven venture!
If you enjoyed this blog series and would like to learn more, I have written a book called Failing to Win on my ten year journey of being a purpose-driven fintech entrepreneur in Africa. I have launched a crowdfunding campaign for you to pre-order your copy to help me cover the upfront costs of getting the book ready for publication. Please click this link now, and help me spread the word!
In 2008, I completed an MBA as a Skoll Scholar for Social Entrepreneurship at Oxford University’s Saïd Business School. It was an amazing experience where I gained an expansive network and learned a lot about venture capital, technology and innovation. However, the application of these themes to Africa was completely absent from the MBA curriculum, mainly because it was also absent in practice. When I declared my intent to move to Africa immediately after my programme to connect socially-oriented investors with high-impact entrepreneurs who were building scalable tech-enabled companies, it was a novel idea. But it was also an idea that few people took seriously as a commercial enterprise.
When I arrived in Lusaka, Zambia in January
2009, I found a cash economy where over 80% of adults were unbanked. People
were constrained to using post office branches or trusting cash envelopes to
minibus drivers to move money around to pay for school fees, health emergencies
and business stock. Unknown to almost everyone in Zambia, a mobile based
person-to-person money transfer service, called M-Pesa, was emerging in Kenya.
Entrepreneur brothers Brad and Brett Magrath saw the opportunity to be first to
market and set out on a journey to replicate M-Pesa’s success in Zambia.
I helped the Magraths secure a $200,000 seed
investment from the Grassroots Business Fund, which none of us knew at the time
was one of the first institutional fintech investments in an African start-up.
After convincing my parents in Canada to mortgage their house to lend me
$100,000 to invest, I joined them and became a co-founder and CEO of Zoona. We
continued our pioneering trend by raising a $4 million Series A at the
beginning of 2012 and $15 million Series B in 2016 to fuel our growth. In
Zoona’s first ten years, we enabled millions of consumers to transact over $2.5
billion across 2,500 micro-franchise agent outlets in Zambia and Malawi.
Africa’s fintech landscape has transformed since those early days of starting Zoona. In 2018, African fintech investments reached $357 million with ecosystems emerging in Cape Town, Lagos and Nairobi. This growth has tracked Africa’s mobile money industry, which had 132 live mobile money deployments, serving 146 million active consumers and 1.4 million active agents in the same year. In Zambia, Zoona was disrupted by this competitive wave after two multinational telcos invested aggressively to roll out 47,000 agents. According to the UNCDF, over 45% of Zambia’s adult population actively uses digital financial services. Across the continent, the fintech landscape has segmented into payments, lending, savings and insurance. Applications have also broadened from financial services to agriculture (agtech), healthcare (healthtech), education (edtech) and even regulation (regtech).
While these statistics and trends are great, they also mask some significant unintended consequences. For example, easy access to unsecured digital credit has fueled an explosion in sports betting, with $2 billion gambled last year in Kenya with 500,000 young people defaulting on loans to fund their habit. In total, 2.2 million Kenyans have non-performing digital loans, with 49% of defaulters having outstanding balances of less than $10. 62% of borrowers also report having more than one digital loan. These are worrying statistics for the industry and warning signs of speed bumps ahead.
So what is the future of fintech in Africa? I
will offer three predictions.
First, fintech itself is not a silver bullet. It is the application of it that matters. Fintech solutions that are embedded in the real economy and help increase people’s incomes and reduce their costs will have tremendous positive impact. Those that drain people’s limited resources and promise short term investor returns will have long lasting negative consequences.
Second, the current investor hype in African fintech will wane as the industry matures, but the good investors will stick it out. Too much of the money flowing in is chasing the hype, and not enough people have been burned by the very real challenges of scaling companies in Africa. But the investors who have been around the longest, like Zoona’s Series A investors Flourish Ventures (a spin off from Omidyar Network) and Quona Capital (a spin off from Accion), are well positioned to ride the wave.
Third, the potential of fintech to deliver both positive impact and financial returns is very real. The opportunities in Africa are enormous for thick-skinned entrepreneurs who are prepared to roll up their sleeves and execute well. As I learned my first time around, there is no guarantee of winning in the end but that is all the more reason to try again. It’s a great time to be a fintech entrepreneur in Africa.
About the author
Mike Quinn, 2007-08 Oxford MBA alumnus and Skoll Scholar. Mike is the co-founder and former Group CEO of Zoona, one of Africa’s earliest fintech companies.
During his 10-year stint at the company that started with the
first transaction in 2009, Zoona processed $2.5 billion of transactions,
generated $26 million in income for 3,000 micro-entrepreneurs and their
employees across Zambia and Malawi, and raised $35 million in investment. For
his leadership, Mike was awarded the Accion 2017 Edward W. Claugus Award for
Leadership and Innovation in Financial Inclusion and with one of the Schwab
Foundation’s 2018 Social Entrepreneurs of the Year.
Mike’s entrepreneurial journey in Africa started as a volunteer in Ghana and Zambia with Engineers Without Borders Canada after graduating with a mechanical engineering degree from the University of British Columbia. He has completed an LSE Master’s in Development Management, an Oxford MBA, and a Harvard Leadership for Systems Change executive education certificate. He grew up in Calgary, Canada and now calls Cape Town, home.