This post is not anything to do with traffic; advertising is not part of our business model but if you want to know-we act as an eye on Silicon Cape, Silicon Savannah and Silicon Lagoon for Silicon Beach.
We have worked with 88mph, shared the same roof and coffee and so have we with PesaTalk and shared so much more with former PesaTalk Ceo Joel Macharia but we are not going to get personal here; this is a sermon in the Savannah according to PesaTalk.
We covered the departure of Macharia and the planned closure of the financial web news start-up here.
This Is What We Didn’t Know Then
Moneyacademy.co.ke gave birth to PesaTalk, whether content was valued or not is another question.
According to the gospel (read- good news) from Macharia, “Pesatalk started in earnest in mid February 2012 when I ported content over and pointed the domain from moneyacademy.co.ke to pesatalk.com. The name pesatalk was arrived at from trying different permutations of Swahili, Sheng and English words, to seek a .com name.
He remembers the naming competitions. This is our second discovery, PesaTalk as name is Macharia’s baby.
Let There Be!
Macharia says, “I harassed people at the iHub, testing their Swahili skills, and going through names such as pesapress, helanation, pesadaily, chapaa, pesanews, before settling on pesatalk. I felt that it embodied the social conversation element that I wanted to make a key part of the site. The original plan had been to carry news, tutorials, financial products price comparison, a Pesatalk forum and a stocks tool with real-time prices and analytics.”
Things We Hate
We knew Macharia wasn’t a newsman, we hate it too, this thing makes you to mind other people’s businesses that’s a burden but we love the end result-you, happy readers! (Everyone values feeding on great content)
Macharia says, “I wasn’t a newsman. I still am not, but as a traditional entrepreneur, I knew what I needed to get done – pull resources together to profitably take advantage of an opportunity.”
The Heart of The Matter
Macharia adds, “Capital was in place. It was now to figure out how to get content flowing, grow the audience and then… make money.”
Capital gave entry of grey hairs and even if he build a team, inspired it and sent it out as an editor in chief with full day-to-day control over team, he had to report to the wisdom guys as the majority shareholders (with a mouth-watering 80 percent stake).
Things changed along the way.
“When we’d kicked off Pesatalk with 88, a key part of the deal had been that we would set up a completely new company, with me as a minority shareholder, but with majority control. We signed a basic MOU to hold for 3 months, while we got the incorporation and other documents underway, with the fund setting up the company in Mauritius. This was a big mistake, on my part. I was eager to get started, and didn’t take sufficient time to make sure we were on the same page, and to legally cover my ass – our discussions before signing must have taken a total of 6 hours, spread over 3 or so days. It was later that I came to realise that we had started off with different ideas of what my role was – to the fund I was a cheap employee. To me, I was investing a couple of years to gain invaluable exposure, experience and shareholding in a business that I could count amongst my assets.”
Sign Now or No Pay
Macharia walked and the company lost a visionary, an intelligent guy passionate to run Kenya’s version of the Motley Fool. Remember Steve Jobs when he was fired at Apple, went home set up Next Computers then acquired Pixar before eventually being hired back to reinvent the sinking firm he co-founded. Macharia had tried to save the boat for some 8 months with little success and to his realisation, no PesaTalk Ltd yet and no more Mauritius talk.
He remembers, “Meeting with the fund principal, and agreeing to get the company done. A week later, he told me the documents were being prepared by his lawyers. However, later that month, he sent me a contract with their company name, rather than the Pesatalk Limited documents I was expecting, and went further to hold my pay ransom to get me to sign.”
Macharia’s comeback will be great, he says, “It is an opportunity that I will be making a play in again. I may be down, but I am definitely not out.” He adds that it was a worthwhile lesson after all. If only he had booted the firm on his own could be his wish today but he wants you to learn a lesson or two-as long as you are an angel investor, a VC, a consumer like us, or building Africa’s next big solution.
Plant Seed & Reap or Acqui-hire & Fire
He points out,”Pesatalk is the unfortunate victim of teething problems in Kenya’s nascent tech start-up funding environment. There will be several more as the field evolves, undoubtedly. Some VCs come into the country with a god mentality, and this will lose them money.”
Angel investors and VCs will definately make more money if they just invest and join the board to help drive ventures.
The amount ventures get in East Africa as seed funding, meager Euros 25k (Ksh 3.3 million) to run a venture for a year is definitely not enough for a buyout and cannot compare to what their counterparts raise. Nigeria’s iRoko Partners raised $8m VC funding from US hedge fund Tiger Global and recently announced a $2m round from Swedish-based Kinnevik.
This idea that Africa can make one an internet billionaire in five years will cause thousands to lose their investments if there is no win-win agreement between investors and local tech entrepreneurs. Even as we hope for IPO’s in faith.
You can read part II, response from the 88mph accelerator fund shortly.