Paul Harris is a banker. In fact, he's a former CEO of RMB, FirstRand Banking group and FirstRand Limited. The billionaire retired in 2010, but that doesn't mean he's having a quiet life, and certainly not since he invested in World of Avatar (WoA), and specifically its acquisition of Mxit in September 2011.
"I've always been interested in IT," says Harris, who was very involved with the starting up of eBucks at FirstRand. Alan Knott-Craig Jr approached Harris with the idea of 'bank-rolling the Mxit acquisition' (WoA bought 90% of the company), and, says Harris: "We bought into the story, the vision, and the potential."
Knott-Craig Jr stepped down just over a year later, in October 2012, in a shock move that left many questioning Mxit's chances of survival. Knott-Craig Jr stated that he left due to a difference of opinion with shareholders, who had just invested R100 million in the company. This left Mxit to weather a storm of speculation, and without a CEO.
Francois Swart (previously CFO) is still acting CEO, some eight months on, although an announcement of a new CEO is apparently imminent. The rest of the board comprises Harris (who has only recently taken a directorship, something he says he initially had no intention of doing), his son Kevin, CTO Marius Freeman and chairman Roger Grobler.
There have been a lot of changes, says Harris.
"There was a period where we needed to have our feet on the ground and do what needed doing, staying under the radar. I got involved in the strategic planning process as soon as Alan left. Our objective was to get collective buy-in as to what the strategy was, and to give all the really clever people at Mxit a chance to contribute their input into what the strategy should be."
Harris says he's not in favour of the 'coming down the mountain with tablets of wisdom' approach, preferring to empower people by asking them to come up with the strategy, and then challenging it.
"It's a process I used during my entire career at the FirstRand group," he comments. "I'm a great believer in the process of empowering an organisation. We use the concept of filing a flight plan. Everyone can contribute to it, it sets out what you want to achieve, and is created through robust debate and interrogation. Once it's signed off, you leave it to the pilot to fly the plane. This way you empower people to fly the plane the way they want. You decide what needs to be done but don't dictate how it's done. This process was hugely embraced at Mxit."
Mxit is a big company, 'with a lot of moving parts', says Harris. "We needed to ensure these were aligned and that everyone knows how it's aligned and where the dependencies are, and then set up targets and budgets - the framework in which you can let everyone loose to be creative."
Migration
The grand plan is to grow Mxit into Africa. Already the continent's biggest social network, Mxit has 7.5 million active users every month, 6.5 million of whom are in SA. Its users are also mainly on feature phones, although the service works on over 3 000 different devices and across all platforms.
"I see it as a migration - to migrate from being mainly on feature phones to grow into smartphones, to keep people as they get older, and to migrate into the rest of Africa," Harris states.
Of course, for any social networking venture, commercialisation is key. Mxit makes its money in several ways, like advertising, which is well established and will always be there, Harris says. Mxit has ventured into the app world, launching an app store in March. It takes a share of app sales. It had 126 active developers and had launched 219 apps by then, with more being published monthly.
"We're encouraging developers to build apps and access the user base commercially," says Harris.
In order to facilitate said commerce, Mxit launched 'lite' bank accounts in partnership with Standard Bank. Mxit Money can be used to buy airtime, electricity, apps, or sent to other users at no cost. Deposits and withdrawals can be made too.
"We're enabling anyone to have a business," says Harris, adding that the potential that lies in the tie-up between banking and mobility was another thing that attracted him to the company.
He says Mxit is doing a lot of work around vouchering, so if a user responds to an ad, for example, they can get a discount at the advertiser's store - users redeem that through a voucher on their phones.
There's a big opportunity here; Silicon Valley doesn't develop for feature phones.
Mxit doesn't make revenue out of the Mxit Money accounts, incidentally, rather seeing that as an enabling factor for its app store.
"To me, what really illustrates the potential is the size of the base. It's not growing much in South Africa because it's so big already, but in other parts of the continent it's growing fast," he says.
"There's a big opportunity here; Silicon Valley doesn't develop for feature phones. This industry is so fluid; you can be a little bit of everything because it's an over-the-top player. Social networking is the middle man, and the base for all middle men to play in. Our idea is that we facilitate that, and clip the ticket. We have a revenue-share model with developers, and strategic things like the bank accounts are enablers; they don't make us money but they let people make payments and let us participate in those."
Harris says he's totally committed to Mxit. "We're in a partnership with management, we're providing the financial resources, we have a plan, and it's on track. We're very happy and in it for the long haul."
Of course, he could still be wrong about Mxit, says Harris frankly, but "we think the upside outweighs the risk".
First published in the June 2013 issue of ITWeb Brainstorm magazine.
Share