Earlier this month, Naspers-owned Multichoice / AfricaMagic launched an on demand internet streaming service focused on the diaspora. If you are in Nigeria (or Africa) it is geo-located so you can’t access it locally. But if you are in the US or UK, in fact anywhere outside of Africa, you can now access thousands of hours of African TV shows and movies. I would say this is the opening salvo of what will become a titanic multi-year struggle I always expected / predicted to attract the soul of Nollywood viewers globally. AMGo is priced the same as iROKOtv at $8/month but without the commitment (3/6/12 month) discounts we currently have. Otherwise it’s a validation of Subscription Video On Demand model for content platforms I am passionate about and I have always preached. BuniTV recently launched Buni+, their $5/mth subscription service. I feel going forward the digital subscription economy will eclipse the free VOD services as the viewer scale (in the millions) needed to reach $1M annually in revenue is out of reach to most local players. Extreme fragmentation is obvious from what’s happening on YouTube today.
I heard about the potential launch of the service over 8 months ago so have been quietly preparing and root-to-branch re-aligning iROKOtv to deal with this new reality. I am currently breaking up and distorting iROKO to best prepare for a long struggle of attrition. But all in all, money and/or timing won’t decide who wins this game. It will come down to customers. Which service delights the viewers. Not just from a content library perspective but also from a support, discovery and viewer experience dimension. This year we are changing quite radically internally to find a better way to delight our viewers and make them fall in love with us. It’s all seduction and attention. It’s about becoming closer to our viewers.
It’s a great thing, competition (in as much as I prefer not to have it) AMGO will focus us more, make us bolder to break up what we have built before in order to build something more beautiful. More deserving. Quicken our step to accelerate the future.
I salute Africa Magic (I also fear them) as they are essentially unbundling themselves. This is a real innovator’s dilemma scenario and Multichoice have been bold enough to embrace the future. iROKOtv had started the unbundling. They have just joined the party. It has just begun.
Last night I had dinner with Sarah Lacy and her husband Geoff. This was the third occasion in the last 3 years we had actually met. The first was in May 2011, whilst she was heavily pregnant and I was just starting to achieve rapid success in digitising Nollywood. The experience was memorable to say the least. It served as a pivotal point in the story of iROKO.
We had already had features by CNBC Africa and CNN Africa Voices but The Techcrunch features gave us certified tech credibility globally. It was on Techcrunch where Nazar Yasin of (then Tiger Global) was alerted to our existence and decided it was a good idea to bet on a failed entrepreneur running at the time a very profitable company. $21M later, iROKO has become the poster child for the Africa Internet story and we have grown our platform leaps and bounds. In 2011 YouTube represented 100% of our revenue. In Q1 2014 it represent ~11%.
Aside from building iROKO and angel investing many things have changed at great speed. Talking to Sarah really illustrated that.
* I married
* I had my first born (who is now 8 months)
* we launched iROKOtv in Dec 2011 and built a multi-million dollar platform
* we raised $21M in venture capital from Tiger, Kinnevik and Rise Capital
* we launched Spark in March 2013 raising $2.5M to fund locally operated startups
Sarah, on the other hand, has given birth to 2 wonderful children and launched Pando, arguably the most influential tech blog in the world today. Yesterday we spent a significant time waxing lyrical about our struggles and realities of building startups. We both came from different places to the same conclusion. They are ruddy hard.
All in just 3 years. When I think of the time, I always think I never have enough to achieve what I want. But when I look back, I smile at what I have been able to achieve in such a short space of time. Now it’s back to trying to accelerate everything forward before my 35th birthday next December. Got some deadlines to hit!
I always caution aspiring startup founders to think for the long term. How building a defensible company is hard. To grow a massively valuable business in emerging markets usually takes 10 years at the minimum. Paga at 5 is a perfect example of that. I actually sat down with Tayo on Monday, he is one of the most respected people in Nigerian tech. We discussed product roadmaps and ways iROKOtv (and Spark companies) can integrate more closely into a payment platform which is increasingly becoming bank 2.0 for Nigeria. In life it’s important to sometimes reflect on one’s achievements whilst you try and create the version of reality you have dreamed of.
Words from the man himself
This week, Paga celebrates a major milestone – we turn 5 years old! I started the company on April 3rd2009. Our first transaction was in February 2011 – almost two years after we launched. It’s amazing how much time has passed. With God’s grace and a hardworking team, what we have achieved in this short time has been phenomenal: 1.3 million users, 4,470 agents in 25 states, 1,300+ businesses using Paga, 7.4 million transactions processed worth N80 billion ($500 million) in value!!
The challenges we have faced have been enough to make anyone quit; but I am grateful to our 205-person strong team for their dedication to our mission to transform lives by delivering innovative and universal access to financial services. Without the team, Paga would not exist.
I am also grateful to our investors – the 30 individuals who invested when Paga was just an idea, and our institutional investors, who have been strong partners and supported us while we executed under very tough market conditions. My gratitude to them is immeasurable.
Above all I am grateful to you, our customers – agents, business partners, and consumers. Every minute, fifteen customers use Paga! Thank you for giving us a chance, and trusting that we will keep our promise to deliver a simple and reliable payment system.
At Paga, we believe Nigeria can harness its economic potential through efficient payment systems. With Paga you can pay for any goods, service or send money to anyone with a mobile phone number or any bank account instantly. Businesses can also use Paga for any of these services and also collect payments online from MasterCard, Visa, or Verve debit cards.
On behalf of our team, I want to say thank you again for trusting us. We will continue to work hard to deliver the best payment service in Nigeria, and remain your #1 way to pay and get paid.
Here is to the next 5 years!
Founder & CEO, Paga
People always ask me what my exit strategy is for iROKO. My answer is always the same. I simply don’t have one. I don’t think about it. In as much as money is super important to me as a tracking tool for my capitalism adventures; other than the odd shiny thing I don’t really do very much with money. I simply don’t have the time.
I genuinely love running iROKO. Bastian and I had one of our thought experiments when he asked me late last year (pre-fund raise) what would I do if someone offered $100M to buy iROKO today. Without a second of hesitation I told him I wouldn’t sell. He attempted to indulge me in the experiment further by suggesting new projects which w/he might be interesting to work on. He couldn’t seduce me. I literally have zero interest in selling. I hadn’t even thought of it. Of course if someone offered me $250M today, I have investors and other stakeholders and would need to consider it carefully but in the end I [personally] still probably wouldn’t want to sell. Not because I am stupid (as most like to argue) but because I wouldn’t know what else to do with myself. For me spending money is one of the most boring pursuits in the world. And I love my job. I wake up every morning smiling, energised and ready to tackle whatever comes ahead of me. I am truly happy. Even today, it’s rare I am not the last person to leave the iROKO office at 8pm or later. My wife battles to try and have me establish a work life balance. I fail miserably at it.
I spend 3-5% of my time with Spark as I don’t really like investing. I find it all rather taxing. Don’t get me wrong, I love being in the mix whilst companies are founded. I love living ahead of the curve, hacking business models and discovering new industries to disrupt. Ahead of the curve is somewhere I feel most comfortable. iROKO was too early for VOD in Africa. Spark was a year ahead in terms of angel investing in Nigeria. I personally feel no risk so find even the most adventurous things merely fun. Bastian on the other hand had a very successful career in oil trading. He loves investing. I can originate and negotiate deal (that’s my skill) understanding and structuring the end deals are Bastian’s. It’s a skill I have seen very few grasp. And he is really really good at it.
I have been broke for most of my life. I have the classlessness of the nouveau riche and now I can buy pretty much anything in the 5-figure range without thinking about it. So a windfall of tens of millions of dollars wouldn’t have a massive impact on my life. Shiny things aside I still am a rather simple soul. I don’t have any hobbies or any major interests (aside from family) outside of work so their are no golf holidays pending. I wouldn’t know what to do with myself.
I made a commitment to iROKO. I am trying to sign up 1M paying subscribers before 2020. Once I hit that target I’m sure I will revise it upward. Maybe to 5M. Who knows. I am happy now. As long as I am happy (and able) to continue running iROKO. I will. I want to build a $1B company. I am only 2.3 years into that journey. Apparently it should take at least 10.