Finding the right co-founders is the best decision Mike Otieno has made since he ventured into entrepreneurship. He had no delusions about the complexities that awaited him and therefore agonised over it to identify the right partners for the journey.
They had many lunches and dinners together trying to align their values and beliefs and when they felt certain they were on the same path, resigned from their lucrative jobs to grow Wowzi, their influencer marketing platform.
“We believed in the disruptive nature of technology, the value of hard work, integrity and building something from the ground up. That was our first step,” says the Wowzi president of the initial step that put the startup on a firm growth trajectory.
Mike had done his homework and established that regardless of how good a business idea is, 80 percent of startups fail because of founder dynamics.
“Once you start fighting, that is the end,” he points out.
Being outliers, their next step was aggressive marketing after developing a viable product.
Being new entrants in a sector that is flooded with techpreneurs with novel products, Mike says they knew they faced tough competition if they opted for the often preferred venture capitalist funding route.
“We went for a unique investment angle - high-net-worth Kenyans. We convinced them and secured funding. They were interested in Africa renaissance and were eager to make a difference,” Mike says of the business proposition during their pitches.
“Wowzi is a content creator platform solving a two-sided problem; one being multinationals looking to connect with the continent’s young population that cannot be reached using traditional marketing methods,” explains Mike.
He points out that this demographic spends most of their time on mobile phones and other gadgets and are looking at new ways of engaging with brands.
“Marketing dynamics have changed and that’s big problem enterprises face. On the flip side, we have a massive young population who have built profiles on social media but don’t have ways of monetising their skills,” says Mike adding that Wowzi then comes in the middle by creating value for the two.
Wowzi’s revenue model is commission on the campaigns that run through the platform at a ratio of 80 to 20 in favour of the content creators. This is unlike some of their competitors who take a bigger cut (as much as 60:40), making them to content creators.
Mike says that the beauty of working with high-net-worth Kenyan investors is that they believe in them and have patient capital because they know innovation takes time. He adds that they also tend to open doors to more opportunities.
The winning bet
So far, the Kenyan investors' bet on the startup appears to be paying off.
“So far, we have about 160 brands and close to 200,000 young people running campaigns on Wowzi platform spread across the continent,” Mike points out.
The clientele
Wowzi counts brands such as Diageo, Safaricom, Coca Cola, Nestle, Google, Absa, Netflix, WPP among others as its clients.
Having those door openers for investors, Mike says, proved to be very useful because “you have to be invited to be trusted. It’s a trust world in the B2B [business to business world”.
The business grew in leaps and bounds during the Covid-19 pandemic.
“Brands were looking for solutions and the more we portrayed ourselves as problem solvers to scale their influence and marketing programmes, the more interested they were,” says Mike.
The entrepreneur observes that social media marketing has become a crucial strategy in corporate branding across the world, so much so that more brands allocating bigger budgets to it due to its ability measure the Return on Investment (ROI), two level conversation with brands and getting feedback.
Mike elaborates,“The pace at which the world is moving, if you want to be ahead of conversation, ahead of culture, trends influencer marketing is the way to go. We provide that insight and data back to the brands which then become more valuable than any form of marketing.”
The lessons
Mike says that very little time is spent by entrepreneurs defining problems. They instead rush to put together a business plan to secure investors leaving less time to product development.
At Wowzi, he says they spent time speaking to 1,500 people through surveys and focus groups just to know the issues that affect them and if their technological solution would solve them.
“Investors are investing in you more than the idea hoping that the idea will pivot, evolve and get better. But what are bringing to the table? Do you have the right skills, competencies and people around you?” Mike poses.
The cash flow management
Mike says that having a board is important because it holds the management accountable even if it is a fiduciary one which can then grow into a governance one.
“Cash flow management is an issue that every company grapples with because there will always be a gap when your receivables are coming and when payouts are going and for us, we work with financial institutions offering LPO financing.”
He adds that having a strong CFO is key to cash flow management and he/she should have technical competency to predict when the firm needs more money.
Eyeing new products
With a team of 36 staff, Otieno says Wowzi is looking at being the market leader in the enterprise layer of influencer marketing raking in millions of dollars for content creators in the continent.
“We are looking at how to differentiate by deploying new innovations like artificial intelligence, payment solutions an enhancing social commerce capability,” adding that they want to be profitable, increase financial capability and create value for their stakeholders.
Working with Gen Zs
Otieno says keeping the staff motivated and excited especially Gen Zs whom loyalties are not as strong as other generations is his biggest headache.
“They are always looking outside so how do you grow and help them build a career here, how do you build a culture coherent to your values and create an environment where people want to be in are things I worry about every day,” he concludes.
