Capitalism Allows You to Become an Entrepreneur, but also Saves You from Becoming One

I think that capitalism, as an economic philosophy and foundation for economic organisation is good. For most people.

Capitalism allows individuals to harness resources to produce needed or wanted goods and services for other individuals or organisations. The production process often requires the contributions of other individuals, and so jobs are created. If the enterprise is sustainable over time, those employed individuals can have long careers in that firm. If the economy is vibrant, those individuals can offer their skills (which they have refined through practice in that firm) to other firms, if they so choose.

The burden of entrepreneurship is borne primarily by the individual entrepreneur, the one who spots the opportunity, and takes the risk of creating the enterprise. And this burden of entrepreneurship is heavy. It requires one to step out into the unknown, and become vulnerable- to financial failure, and the social angst that “failure” carries along with it.

Capitalism allows those who are talented and naturally oriented towards creating and building enterprises, to do so. And it allows the many who are not, to still contribute meaningfully.




How do You Change Organisational Culture?

Culture in an organisation is the kind of thing that one struggles to describe with words but whose effects are clear to see. When ‘things are not working’ in an organisation, or when employees tend to hang around the office after 5PM despite there being no urgent work, that is culture. I believe that culture is one of the most important – if not the most important- factors for the long-term success of an organisation.

At the beginning, when an organization is new and employees are few, it is clear that culture can easily be set by the founder or founders. How you behave, the performance standards you enforce, the way you get your work done, that sets the culture. The founders can actively recruit and hire employees who can maintain or enhance the already-established culture. How about an organization that has been operating for several years, whose performance standards are objectively low (e.g. producing poor quality products), and requires to change course? How do you begin changing culture? The very same way: how you behave, the performance standards you enforce, the way you get your work done, that resets the culture.

Ideas Thinkpieces

Why a Safaricom Online Store Makes Sense

This week it was announced that Safaricom would be launching an online marketplace. I sat back and wondered why. “Is this Little Cab all over again?” You see, I hold the view that Little Cab got into the market a little late. To compete, it would have to offer outrageous benefits to customers, drivers or both, with the effect of squeezing profit margins and cannibalising the business. In time, such a strategy could smoke out weak competition from the market, but one wonders whether Uber or Taxify really can be considered weak
After a few days of ruminating on the “Masoko” matter (this is name I’ve come across for the e-commerce platform, I could be wrong), I hold the view that Safaricom’s foray into e-commerce (i) could work, and (ii) could be the new offering Safaricom has been sorely looking for. Here’s why. Potential

  1. Infrastructure
    The established online stores operating in Kenya rely on a strategy of “home” (office) delivery. You look at products online, you move to transact (you can pre-pay or pay on delivery), and the product gets delivered, usually to an office building or nearby landmark. While Masoko can (and should) have a delivery service, they have the distinct advantage of being able to allow customers to pick-up their goods at Safaricom’s already-established retail outlets. Ideally, all 45 Safaricom Shops in the country can become pick-up locations for customers, giving Masoko instant economies of scale when it comes to countrywide distribution. Because the road infrastructure is less than superb, they can avoid the cost of investing in last-mile delivery through motorbike riders, and simply leverage on what they already have (a huge distribution and retail network that works) and let the customers go to them. Or do both.
  2. Brand
    Safaricom is easily among Kenya’s most recognisable brands. We can pretty much all agree that we trust the company to offer reliable service. Masoko can (and should) be built on this foundation of brand recognition and customer trust. The more the Masoko marketplace can be associated with the Safaricom brand, the better. A goal for success can be reaching for a mental association in the customer’s mind between Masoko and Safaricom that is close to that of M-PESA and Safaricom. If customers can skip past the part of wondering if a company will fulfill its promise, and get straight to using it, that would be a major tailwind.
  3. Cash
    For Masoko to succeed at a scale that would make sense for Safaricom to keep it going, it will take a lot of cash. Cash for a massive marketing push over the next year. Cash to build a customer funnel by offering exclusives that customers want (e.g. a line of Huddah Monroe lipsticks can be sold exclusively on the platform, tickets to the next big Jameson concert could be sold exclusively on Masoko, etc.). Cash to be able to absorb the negative cashflow from the first 2 or so years of operations and still offer a great service. Cash to buy and stock hot consumer products (e.g. the iPhone X, or the Nintendo Switch). Fortunately for them, Safaricom has that cash by the bucketload. If the company can loosen its purse strings and give the startup the cash it needs to grow, Masoko stands a real chance of being a billion-shilling business (I really think so!).

10 years after M-PESA was launched, Safaricom badly needs its next new thing. With its size (~KES 1 trillion in market capitalisation), it needs its next new thing to be big. Acquisitions would only make sense in the billions. For perspective, a KES 5 billion shilling acquisition would be about the equivalent of the average net profit earned in one month. Greenfield initiatives must have the potential to grow into behemoths within a few years. For perspective, a KES 10 billion shilling new business would be the equivalent of about 1% of the company’s current market cap. From the get-go, Masoko can (depending on its strategy) enjoy the economies of scale and branding that Safaricom has already built. Network effects can be gained by offering a great market-beating service, a large variety of products and desirable exclusives. And with these 3 ingredients, the final recipe could (should? 🤔) be delicious.


PS: It is obvious that the Masoko website and apps must work well, have excellent UI (look and feel), intuitive UX (be easy to use), have a simple and reliable payment system, et al. This article assumes that.