blog classics

I am a sucker for good old wisdom and to see how people were thinking then and relate it to now. There are some archived blogs that i find interesting.

Let’s start locally, Ory Okolloh’s blog has insights about her views on politics, social justice na kadhalika as she calls it. Last blog post was in 2010. Gives you a feel of kenya, africa and global affairs between 2005-2010 especially.

The immediate former CEO of Uber, Travis Kalanick has an old blog called swooshing that was last updated in 2010. It offers his insights on startups, investing and technology in general. One post even predicted what would happen to a company once its reputation is in question, especially in relation to past dealings. for example this quote is lifted from one of the blogs ‘ But I think that reputation is anything but dead, and instead will become more important than ever. With more data and info getting on the net, and as the tools to decipher fact from fiction get better, reputation becomes more accurate, and significantly more valuable‘.

If you are into technology, startups and related insights i find Mark Essien of  , Mark Cuban and Fabrice Grinda’s equally thrilling.  These are still updated once in a while.

would love to hear your suggestions on favourite old blogs that are not updated anymore.


PRISONER’S DILEMMA- occurs when two completely rational individuals fail to cooperate even if it would seem that cooperating would lead to favourable outcome for both. ie when two prisoners are in jail and asked to betray each other. Betraying each other would make each of them worse off, remaining silent would make each of them better of.  However, since they do not know how the other party will react, they are most likely to try and betray the other person and end up being worse off: longer jail time.

lesson: in market economics, cooperation is sometimes better than non-cooperation. If one party protects themselves at the expense of another party, there is greater chance of greater losses if the other party also makes a decision. 

RACE TO THE BOTTOM- government undertakes measures to deregulate the business environment through measures such as tax cuts in order to retain economic activity by attracting investments in a certain region. The consequence, if not well monitored could be poor standards. In corporations, happens when competitors attempt to undercut the other by lowering standards such as safety standards in order to make a product more affordable. It is referred to as race to the bottom  because it could be destructive/unethical since some of the safety/product specifications are ignored thereby harming of society in general and even the corporation in the long run. As competition intensifies, some companies may adopt policies that ensure costs of production are reduced at all cost- eg low pay, ignoring some safety standards etc in order to offer low product prices to undercut the other competitor.

FREE RIDER PROBLEM/TRAGEDY OF THE COMMONS : free rider problem occurs when people are able to use a public resource without paying for it. For example through taxes. It occurs when consumption cannot be restricted eg, use of a public road, public library etc. Free rider problem is basically when the public tend to shrink/ignore their responsibilities at the expense of others, leading to Tragedy of the commons. The tragedy of the commons happens when people seek personal gain at the expense of the society. For example, overusing a public resource and ending up depleting it completely leading to a scenario whereby no one is using it. Examples would probably be-traffic jams. Roads are meant to be used by general public and everyone would try to maximize their payoff by using the road. what happens when public transport system becomes unreliable? People buy their own cars in order to get to work faster. But it ends up clogging the roads and everyone gets stuck. One way to solve is ensuring decision makers have direct consequence over the decisions. ie. those responsible for public resources should be using them in the first place, what Nassim Taleb called skin in the Game. This could result in some urgency in fixing the problem.

ZERO SUM VERSUS NON-ZERO SUM GAME: simply put, zero-sum games happens when one person’s gain equals to another person’s loss. meaning that the net change in wealth or benefit is zero. Zero sum game is not necessarily a bad thing if it is positive zero sum game, for example trade. When two people trade, there is exchange -one person loses something and other gains, but both are happy participants, and have anticipated gains from the engagement. Buying and selling options and futures is zero sum game,one has to lose for the other to gain. Everyone cannot outperform the market, some will have to lose. Stock market is not zero sum game. Non-zero sum game occurs when the aggregate gains and losses are less or more than zero.

EXTERNALITIES in economics can be either a cost or benefit incurred or received by a third party who has no control over its production. The basic and most straightforward example is pollution, when a company pollutes and the people who have no association with the company end up paying for it-by damaged health. There could also be positive externalities such as clean environment, healthcare system that ensures a healthy population that is able to contribute positively to nation building. Knowledge accumulation by population is also positive externality. R&D by corporations could be positive externality.

Butterfly effect : is the concept that a simple thing can cause far more impactful/unseen and even unintended consequences. The concept is imagined that when a butterfly is flapping its wings, it is causing a typhoon. Ofcourse, a butterfly cannot cause a typhoon.  It is mainly used in chaos theory. Some small acts of people may cause far greater consequences than intended. In history of the world, it is assumed that it is great events than caused great impact but in reality, it is small acts of people that spread like wildfire. In markets and business, sometimes it is hard to predict because sometimes things happen from what appears to chaotic behaviour partly because everything is highly interconnected.

ACTING IN SELF INTEREST IS THE INVISIBLE HAND THAT RUNS THE ECONOMY: when a person acts in self-interest and ends up benefiting others. for example, a farmer who plants in order to sell and get money, ends up creating a whole ecosystem from farm to processing industries, to transport, to logistics, to restaurants to the person buying the food. The farmer most probably did not intend to affect all that, he/she wanted to feed their family, get some money. Acting in self-interest does not therefore necessarily mean something bad. It is this principle that underpins blockchain. For the blockchain transactions to be verified, mining has to take place(verification of transactions). Miniers do so in order to earn some tokens/coins not necessarily in order to help the blockchain ecosystem, but in them doing so, end up sustaining the blockchain ecosystem. So in order to get even millions of people to cooperate even without them knowing or intending to, look out for their self interests. Another quote says ‘incentives run the world, understand incentives, direct or indirect and you understand people’. The good thing is that people can cooperate in millions even without government control or a structure as long as each party is benefiting. Self-interest and competition are what Adam Smith termed as ‘invisible hand’ that runs the economy. Self-interest is the motivator while competition is the regulator.

The blockchain promise

I have not been able to post on this blog for a while. I took time to work on a few projects one of which is CoinWeez . It is a platform for sharing information, news, reviews and all things blockchain. Together with a few friends, we thought of starting the site after we realized there was not much being discussed about blockchain especially from Kenyan/African perspective. The site will also try and focus more on the broader blockchain ecosystem to analyze the opportunities as well existing challenges in this technology. It is still a work in progress but it is something we think is exciting to watch. coinweez Yellow

Everyone has a different angle, opinion about the blockchain. It is okay to appreciate individual biases in any article/opinion expressed about blockchain. Notwithstanding, in the last couple of years, we have observed many industries coming up with the intention of disrupting the middlemen in various industries. Airbnb, Uber, Alibaba, Amazon etc all have one agenda: to eliminate the costly middleman and use a centralized software to aggregate the marketplace and connect buyer and seller in a more efficient way. That has been the model of many consumer facing startups in e Commerce, travel and marketplaces. Marc Anderson even penned the now famous article ‘software is eating the world‘ as a pointer to how internet-based businesses have been thriving and even co-founded a venture capital firm a16z with the same mission statement.

Now there seems to be a new aspect: blockchain could further change this dynamic by introducing decentralized ledger system instead of centralized software.  The decentralized system adopts the concept of peer-to-peer networks and therefore running the system through nodes within a network.  To make it work, the community is incentivized to run the network through the process of mining for, the case of bitcoin, which is basically verifying transactions.  Blockchain achieves two inherent goals: ability to build trust and data sharing without the need of a centralized system or meeting the other party. Another interesting facet is smart contracts. They could represent the final puzzle in order to enable two parties to enter into a binding agreement without need to meet and is all enforced on the blockchain as a well a variety of other digital assets. Smart contracts especially, are promising because of the ability to build decentralized applications on top of Ethereum blockchain and this could bring forth new applications/industries. Check out more articles on coinweez exploring different dynamics of blockchain.

The biggest focus has of course been on Bitcoin, the decentralized cryptocurrency introduced in 2009. The prices have been skyrocketing like crazy and there are two completely different camps on this. Some believe that Bitcoin is going to be adopted world over while others believe it is a scam/hype that is going to die down and it is a bubble. This is a long discussion and that could probably be a subject for another post.  However, I am intrigued by the idea of borderlines internet money that is not controlled by one government like say the US dollar. In terms of investing in  cryptocurrencies (they are in thousands now), that is based on personal research just like any other investment. In every technology, there are innovators, early adopter, early majority, late majority. The biggest challenge of any technology is crossing the chasm  which is the stage between early adopters and the early majority. For the vast majority to use a new technology or just about anything, people need assurance, stability and such like things. I think Bitcoin and blockchain  in general will appeal to more with continued improvements in aspects such as application, stability, ease of use. In the meantime, there is lot of volatility.  We will see what happens. Back to investing, i think Barbel strategy is a good strategy to use when investing in anything.  I came across it from Nassim Taleb. Taleb advocates that 85% of your earning should be put in ‘safer investments’ such as money markets, Saccos, fixed deposits, bonds etc.
Then 10-15% into ‘risky investments’ such as venture capital, equity investments and probably now cryptocurrencies. With time, one can then raise their portfolios based on experience in the industry and other improvements. When one side starts winning, then you double down.


It’s like playing both attack and defensive football. The way Jose Mourinho approaches footballing-extreme on both fronts but nothing in the middle. You can score goals but not likely to lose and if you win, it is a win that many are not expecting. Like Ferguson says, ‘Attack wins you matches but defence wins you titles’.Being conservative but when you have a chance, even slight, you go for the kill.

Moving on, Mark Cuban advice to  Vanity fair employees is to diversify and if you are a true adventurer, things like Bitcoins, limit it to lower percentages, it’s like being an art collector- if you are more intrigued by it, then you will not mind the price point placed on it.  I think this is a reasonable way to approach investing. Actually that is how venture capital works. A venture capital portfolio consists of a group of companies. Most likely not all of them will succeed but ones that do have greater upside thus offsetting the not so good returns. In startup investing, for example Y Combinator  invests in early stage startups in batches. Each year YC invests in more than 200 startups a year.  Of Course most do not go on to become great but the breakthroughs have such a large upside that it offsets the losses. Take for example, the market cap of all YC companies so far is about $80 billion. Airbnb, Stripe, DropBox all which came out Y Combinator make more than half of that market cap. I think it’s a good strategy to try in smaller scale but nothing is bulletproof of course.

But overall, blockchain is an interesting space  to explore and that is what we’ll be doing at CoinWeez. I will resume  posting  articles on this site on all things, startups, ideas, innovation, the world, Africa rising etc. I have many drafts that i have not really edited but will try to post- generally curating based on what i am gathering on all these aspects.

2018 up next




forerunner entrepreneurs in Kenya

It is said that for one to know where they are going, it is important to understand where they are coming from. In the case of entrepreneurs in Kenya, it is necessary to understand the challenges, successes of previous generation in order to have a solid basis for future growth. This post is like a book review of “A profile of Kenyan Entrepreneurs” by Wanjiru Waithaka and Evans Majeni. The two authors have done a good job of trying to document some of the environment that some of the forerunner entrepreneurs faced in Kenya. They come close to documentary named “The men who built America” detailing the work of American forerunner entrepreneurs such as Henry Ford, J.P Morgan, John Rockefeller and Carnegie. I believe in telling of stories. That is how information, lessons are passed from one generation to another. As I said in an earlier post (Here), it is important for those who came before us to document their failures and successes in order to provide context to those who come after them. It’s a fascinating tale of the business environment before independence, the coffee boom, the africanisation policy in 1970s, political corruption and new hope in 2000s. The book covers more than a dozen entrepreneurs such as Ibrahim Ambwere, Sunil Shah, Esther Muchemi among others but i only review three in this post.

profile k

S.K Macharia: A compelling account of struggles and successes of a pioneer in many things in Kenya. Went to study in USA under very challenging conditions, (took a bus from Nairobi to Kampala to Juba then to river Nile then to Benghazi,  before crossing the Mediterranean by ship to London and finally USA, a 3 months journey!!).  He came back and worked in civil service for a while before delving into business. He has had many businesses. Matatu business (failed), Ngwataniro enterprises- a project to manufacture clothing pegs, Madhupaper, one of the first tissue manufacturer in Kenya (lost it under unclear court cases, government interference), Royal Credit Limited -a hire purchase system that evolved to a credit card system), and finally Royal Media services. It’s a riveting tale of political impact on business environment, resilience, failures and successes. In between, you get a glimpse of how the famous ‘Biashara Street came to be, due to “Africanisation agenda’ by Jomo Kenyatta, KIE (Kenya Industrial Estates) role in supporting early business environment after independence.  Provides great context to the type of businesses that operated that time.

Manu Chandaria: Manu joined family business straight from his studies in USA and rose to become the CEO and Chairman of Comcfraft Group, an industry behemoth producing everything from plastics, steel, aluminium products. Indians plans their family direction long into the future. They ensure their kids gets educated as much as they want and then try to convince them to join the family business. They don’t prefer their siblings to work for multinational business but for family business, so they set up systems early enough to absorb them. He studied mechanical engineering in order to fit better into family business which was involved in manufacturing. He subsequently engineered production of everyday usage products such as sufurias, PVC pipes, aluminum tiles, exercise books and many others. These were products that were in high demand and they kept expanding.  They focused on areas they had experience- aluminium pots and pans, galvanized roofing sheets, steel galvanized pipes and tubes. However, as more family members joined the business, they ventured into new frontiers based on changing market dynamics. The new family members joined ranks with older family members to create immense pool of knowledge and skills. To show you how long term oriented they are, The Comcraft’s group investments in Africa were considered ‘sunset industry’- sufurias, pipes, roofing sheets, tubes etc, while also investing in new ‘sunrise industries’ in US, Canada, New Zealand such as ICT, media and electronics. In early years, they focused on what was needed in Africa especially after independence. Currently, Africa accounts for 25% Comcraft’s Group size, Europe and North America- 40% and South East Asia and Australia at 35%. A great analysis of how Indians plan their businesses long into the future and long term wealth creation.

Elizabeth Okello: She has accomplished many firsts. First African woman  bank manager, Barclays bank, first woman adviser to the President of the African Development Bank-Abidjan and later thrusting herself to more unstable environment as first chair of Kenya Women finance Trust. After that she co-founded Makini  Schools in 1978. . Makini School was among the first private primary school institutions. started as a nursery school, Makini schools expanded to Junior, middle and upper sections, later secondary and now even college to make up Makini Group of schools.  She advances the idea that people should always look to grow and expand instead of being comfortable with a small business- moving from a kiosk to a shop, to a store to a supermarket, a concept she was adopted with Makini Project.

Myke Rabar: One of the pioneers of turning deejay as a career and forming a media powerhouse, Homeboyz Entertainment comprising of: Homeboyz Radio, Deejay Academy, record label. Homeboyz was also involved in making of ‘Tinga Tinga Tales’ launched in BBC pre-school channel CBeebies in February 2010 and later sold to Playhouse Disney. This was a breakthrough project for Kenya involving fully equipped animation studios employing local designers, writers, musicians and animators. Homebeoyz DJs were pioneers of Radio Mix in Kenya through Tv show (H20), first DJ outfit to start a radio station, organised events in East Africa through working with Coca-Cola, EABL, Unilever, MTV Base Africa among others.

Myke started with free gigs in high school through to UoN, in 1990s, forming ‘Bad Boys’ and ‘The Crew’ later named Homeboyz. Started ‘Campus Night’ in clubs along town, selling tapes to matatus. He was later joined by his brothers and his wife to form a formidable force. Some ventures failed along the way too. ‘The Boxx’ opened in 2005 at Nakumatt prestige on Ngong Road to sell CDs failed: too expensive to maintain, music pilferage, and culture of buying music was too low. Another one ‘HomeGalz’ an all-girl crew launched in 2000 failed. The deejay academy took off.  Also ventured into sound hire industry through ‘SoundTraxx Touring’, studios and ‘Aktivate’- handles roadshows, experiential marketing and product launches. Homeboyz Records commonly known as “Producshizzle’ was less successful. Homeboyz brand was among the first to offer more than one service when it came to music. Currently, Homeboyz Group entails: audio recording studios, tv production facilities, events management, music technology academy, Homeboyz Radio, Homeboyz Rugby, PR and advertising agency. Not bad for an outfit that began with just deejaying. The ability of Homeboyz Group to make inroads in almost every aspects of show business offers lessons on how to build an empire in related industries. Also quite a tale on the growth of entertainment industry in Kenya through 1990s and early to mid 2000s.

In conclusion, the entrepreneurial hype and focus that is there today is good but it needs to be rooted in deep understanding of our social fabric, consumers, the way of life and systems in place. In addition, as one of my friend says, few are willing to put in hours, work ethic and grit required to build an empire today. The basics of building anything formidable to last a long time still remains even in the technology age. What better way to do that than to learn from forerunners and understand their way of thinking and the manner it influenced the businesses they created. I believe it is more relatable for an aspiring entrepreneur to learn from another person who speaks their language, looks like them and lives probably in the same country or at least continent than someone far away.

Startup School

It is commonly said that startups are here to save the world. Maybe not to that extent but the current state of events show that we are at a time whereby we need to harness opportunities to create great enterprises. I am not that old but i don’t believe 20 or 50 years ago there were as many opportunities as they are now. The opportunities i am referring to are mainly in two fronts: technology and information.

Today it is easier to access tools that can help you make a great company. Access to information helps you avoid some of mistakes, learn best practices and scale up. Majority of industries are nascent today meaning that even though there are challenges, they also provide opportunities for solutions. Some of these solutions can be business based solutions. Consider that we are able to learn skills, tactics and ways of doing things through the internet. Facilities such as Y Combinator’s startup school is a great information resource for starting or established entrepreneurs. Earlier, Sam Altman started inviting established founders to teach startup class at Stanford University. Now they have startup school where you can view lectures, talks and live office hour sessions. I find the live office hour sessions to be particularly useful. YC partners talk to early stage founders in batches and assess their progress and give valuable feedback. Each office hour session covers about an hour with batches of about 3 startups each covering approximately 20 minutes. There are other videos on: how to start a startup, product-market fit, growth tactics, how to build and manage teams, PR among others. This, from one of the most successful startup accelerator, is worth some attention. Videos are posted every week. This is a great resource not only for entrepreneurs but anyone in general. check out


Milestones: Ubunifu SACCO

As Ubunifu SACCO, we finally held our first ever Annual General Meeting (AGM) on April 27 2017. The month of May also marks two years since Ubunifu SACCO received certificate of incorporation thereby becoming a fully registered SACCO under the Ministry of Industrialization, Trade and Cooperatives. Therefore it is a double celebration for these important milestones. HAPPY BIRTHDAY UBUNIFU SACCO. The idea behind forming Ubunifu SACCO was a result of members need for an entity that would enable us able to save and access affordable financial services. Majority of the current members are freelancers undertaking online work as well as other related businesses. Offering services that meet the needs of this target group continues to be the major focus of Ubunifu SACCO. Leading up to Ubunifu first AGM, Ubunifu SACCO has made progress in various areas outlined below.

Sacco website

At the start of the year, 2016 the board of management took steps to ensure members enjoyed efficient services from the SACCO. The first major step was of putting the SACCO on the road to making it paperless. The board envisioned that in this age of technology innovation, online operations would ultimately reduce operational costs in the medium and long term while ensuring faster and efficient service delivery. The SACCO set up a website This was first step. Members are now able to easily apply for a loan online without filling any paperwork. The next step that is now on focus is to form a member portal which would enable members to view online statements and track their own contributions, loans and other aspects.

Credit facilities:

The backbone of any SACCO is the credit products it offers. In 2016, we saw tremendous growth in this area. The uptake of normal loans has continued to grow. The introduction of TEKE TEKE LOAN was received well by members since it enabled them to access instant loans processed within a few hours of a working day. Furthermore, TEKE TEKE LOAN is issued without the need for guarantors as long as one is a fully paid up member and has contributed monthly savings. Members can apply for the loan online and get it via mobile money transfer services. The initial loan limit was up to ksh 20,000 but due to increased requests from members, the loan was limit was moved upwards to ksh 30,000. We continue to make progress towards ensuring the SACCO is responsive to member needs and the focus in 2017 is to introduce more savings and credit options that directly address member needs.

SACCO Accounts Assistant

Towards the end of 2016, the board deemed it fit to hire a accounts assistant to assist in accounting as well as marketing efforts. This was due to overwhelming amount of work involved especially in managing member monthly contributions, loan applications and processing and marketing efforts. The board put out an advertisement notice in October 2016. After a rigorous recruitment process, Fednarnd Chikira emerged as the best qualified candidate and became the first intern for the SACCO. Fednarnd served well in the first three months and the contract was renewed for another three months in February 2017. Overall, he  helped us streamline our operations mainly related to ensuring SACCO books of accounts are up to date. He has also contributed in marketing efforts mainly related to social media. We look forward to a longer term engagement with Fednarnd in 2017.

In summation, 2016 has been a year that has mainly focused on laying the ground work for future growth. As the board of management, we believe that in these foundations will put the SACCO on a growth trajectory. For 2017, our major focus is on member growth, improving efficiency in SACCO operations and new products. We believe that if we keep focusing on improving our services to serve the needs of members we will ultimately attract new members from our target market. Furthermore, we are keen on research and marketing and in order to seek ways to make our products even better for our existing members as well as to attract more members. Together with the support of members, we can make Ubunifu SACCO to grow even further as we DREAM CREATE and ACHIEVE.

Chris Mugendi Kariuki

Secretary, Ubunifu SACCO.

this post originally appeared on Ubunifu Sacco blog here:

of culture,ecosystems and learning

When you look at some of the world’s most innovative companies, you witness a trend of creating forums and channels for upcoming talents to improve their knowledge and skills. Thriving Startups and established companies  for example have yearly forums, platforms where industry leaders get to share their views about the future, what the companies are working on and giving a chance for upcoming innovators to showcase their creations. Here I am talking about developer conferences, annual letters, prototypes, trends, experimenting and stuff. This creates a culture of continuous learning, expanding the market and creating future talent.


image source: Google images

Facebook F8: This is an event held mostly annually for entrepreneurs and developers who build things around the website. Over the years, the sessions begin with a keynote speech from founder, Mark Zuckerberg and then followed by various breakout sessions. New products are also announced in such events.

SpeceX Hyperloop competition: It gives students and no-students a chance to showcase different designs of scalable prototypes of a new mode of transportation. To facilitate the platform, SpaceX built a 1.6 km test track where the competition took place.

Other trends such as one by Jeff Bezos yearly shareholder letters shed light into what the leader thinks about the industry. Founders of Facebook, Y Combinator among countless others also write the annual letters. The annual letters are mainly available in the public domain and serve as important pointers on opportunities that industry enthusiasts should be working on. I think these serve as a good reference point to where the industry is going and therefore propels growth both in customers and talent.
Furthermore, to establish more university-industry linkages, established founders give lectures in universities. Peter Thiel has lectured a whole unit on startups at Stanford University. Y Combinator is also doing the same and now has an online startup school.
I think the above examples show why Silicon valley and USA continues to innovate. There is a whole ecosystem of linkages which continuously builds talent and a learning culture. I am particularly concerned with the industry-university linkage. When established founders teach some courses in universities, students interested in the startup world get real-time information about what the industry is about and use that knowledge to better enhance their classroom understanding. Also when SpaceX  organised a hyperloop competition early this year, it attracted submissions from students in USA and outside the US. They competed in what could be the future of transportation. These are a bunch of probably 18-22 year olds already getting real world experience about future engineering prospects while still studying.

I think Kenyan startups and companies should aim to establish more of such platforms.  They would be good grounds to nurture future talent, influence the direction of innovation and create room more opportunities. Young talents get a glimpse of what is going on the industry and then try to come up with new inventions, ideas about solving some of our day to day challenges. Also such platforms would probably solve some of the current challenge whereby corporates are complaining that graduates have book knowledge but no industry experience. I am not talking about internships, but probably different kind of engagements that bring together industry players, students, enthusiasts on a day of building prototypes, ideas, concepts and getting a glimpse of what these companies are focusing on. Currently, there are platforms such as Nairobi Innovation Week by University of Nairobi among others. Also, ihub has hosted various conferences ranging from developers and blockchain conferences. I think this would apply to any industry as a way of passing out knowledge they have accumulated while at the same time learning of trends and creating an innovation culture. Eg Cytonn creating a platform for sharing new real estate models, linking up interested parties etc. How about MPESA organising annual forums for showcasing new trends, innovations in mobile money or Twiga foods undertaking class in Egerton University about food ecosystems in Kenya.
Maybe it is because some of major organisations in Kenya have not developed capacity to manage such things. Nonetheless, i think it would be a good idea that would ensure creating a fertile ground for more ideas, innovations and knowledge which would end up benefiting them too in the long run. This could apply to any other company, Cellulant, Safaricom, etc. In Nigeria, is currently training software developers in order to ensure Nigeria has more competent developers to drive the technology revolution. Mark Essien of says in a tweet that “providing a training ground for software developers is not charity but a way of ensuring the company survival”. The Arena kenya has also been organising series of events called MatchMentor that aims at building mentorship platforms and learning from other thriving professionals in various industries. It is exciting to see how this concept evolves with time. Therefore long term strategies are necessary because industry leaders should contribute more to what they would like to see in the future. By doing so, they ensure their own companies’ survival through available of future talent, more customer and new frontiers while keeping the culture of innovation and learning alive.


There are movies I have watched that I think have a somewhat correlation with abc’s of life, work and anything in between. In this post I list some of these I have watched over time.


The Godfather: the movie came out in 1972 but it chronicles mafia groups led by The Don, Corleone. It’s a packed with themes of leadership, family, and the nitty-gritties of running a business, a drug related business or not. Based on how you view it, it is not very entertaining, it takes time.  It teaches some subtle lessons about making tough decisions and always thinking like a winner.

Shawshank redemption: Now this is one is one of my best ever. A story about how a banker is sentenced to life imprisonment , unfairly, and then crafts a mega escape, prison break style. In between, It is packed with jewels such as to always keeping calm in the midst of trouble, shit happens, importance of friendships, taking chances, always treat others with respect and power of focusing on a goal no matter how un-achievable It might seem be. One of my best quotes from the movie ‘get busy living or get busy dying’.

Field of dreams: one of the biggest questions that a founder asks themselves is ‘if i build will they come?

3 Idiots: First time i watched this movie, I was in campus. It was like a campus theme back then-school is boring, nobody understands what the lectures are teaching, and booze. But I re-watched it later on and I now understand why I related to it: importance of curving your own path and not the one everyone thinks is good for you and having fun along the way.

Big Short: Based largely on the events of 2008 financial crisis. It is reflection of how financial markets are mainly driven by emotions and greed and little to do with facts. In a world where everyone is blind and lacks oversight, four guys predicted the collapse of housing market and they were right, billions of dollars right. And it throws in some concepts about definition of financial instruments like credit default swaps, subprime mortgages and others in a cool way.

Startup: This is a recent one about guys who try to make a new form of currency, GenCoin. It showcases the ups and downs of starting a startup. Even the episodes are named like stages of a startup: seed money, ground floor, proof of concept, angel investor, bootstrapped, buyout, hostile takeover. Also, if you are a startup enthusiast, another series called ‘Silicon Valley’ show is equally good.

The Founder: This is a somewhat controversial tale of how McDonald’s came to be. Ray Croc visited the then small fast food restaurant and was impressed by its efficiency. He then engineered the franchise model that would see McDonald’s expand to one of the largest fast food restaurants in the world amidst the controversy that he underhanded the McDonald brothers.

I would love to see  your recommendations too.


Views on origin and evolution of SACCOs

SACCOs are classified as the cornerstone of vision 2030 in mobilizing savings from current 16% to the desired 30%. SACCO movement started as social in nature and it operated for decades this way. I believe it is possible to maintain the social nature of SACCOs while positioning them to evolve in the new age of disruption. Is it not time SACCOs seek ways to evolve in order to survive in the modern age of financial technology companies that are introducing new and innovative models of saving and lending?

Changing landscape. One is the nature of jobs nowadays are changing. The SACCO movement was mainly formed in order to pool funds for advancing affordable credit to people with a similar common bond. This led to formation of SACCOs with members being predominantly employees of one corporation or entity. For example Stima SACCO was formed by employees of Kenya Power, Mwalimu SACCO by teachers, Afya SACCO, Kenya Police SACCO and so on. However in the last decade or so there has been evolution in the nature of jobs. More and more people are doing freelance work; informal sector is becoming more and more vibrant, creative economy, entrepreneurship culture and so on. These new crop of workers are going to have different characteristics than their predecessors. Differences in terms of work culture, nature of jobs, employment terms, earnings etc. These people also need financial services in terms of savings and credit that reflect their unique situation. SACCOs could be in the forefront to harness this opportunity.


Alternative credit scoring?: In the current state, SACCOs loan to members based on two major aspects: the amount of savings and guarantor-ship. For smaller loans, savings and guarantee from other members is enough to secure a loan. However, for larger amount there needs to be some form of collateral, in most cases it is land, car or any other physical assets. Now this is where I think improvements should come in. Younger people in job settings that I have highlighted above may not have physical assets such as land and cars. Furthermore, they may not have regular paychecks that would enable them to access credit. However, they have income, though irregular. The challenge and opportunity is aggregating useful data about them that can be used as credit score and it’s already happening. For example farmers that rely on approved warehouses to store their produce such as maize, sorghum, wheat and barley can use warehouse receipts to access credit. see more here. Farmers with cows are able to access loans based on amount of milk produced that they take to the dairy. With correct data capture about the amount of milk produced, the health of the cow, feeding etc, the data can be aggregated and used to assess credit worthiness. Imagine if this is extrapolated to other areas that there are people with irregular incomes? Huge opportunity.

Grameen 2.0: The current developments are what i would call Grameen 2.0. Professor Muhammad Yunus conceptualized the idea of group lending whereby members of a group are used as collateral for a loan. The micro-credit system was devised to enable the poor in Bangladesh to access credit and it led to formation of Grameen Bank in 1980s. This has been one of the great pillars that has made chamas, investment groups ,merry go-rounds and SACCOs to thrive. Could we now be entering into Grameen 2.0 whereby instead of using other members support, your own digital footprint is used to aggregated data as a basis of lending? The use of digital traits has been conceptualized since 2011 and growing. Some startups are currently experimenting with non-traditional forms of data for assessing credit worthiness of a potential borrower. Algorithm and big data analytics are allowing companies to use social media activity, location, and mobile phone usage to identify, score and underwrite credit to low and middle income consumers that lack formal credit history. Using data processing facilities, it is possible to analyze a person’s digital footprint in a new way that is not captured in the traditional ways. Some other new startups are using metrics such as amount of credit in your phone, frequency of topping up credit, number of people you call, length of each call to evaluate credit worthiness. The examples are many. A good example would be:  These are mainly being used to lend for smaller denominations.

Another area that I think is going to witness changes is the repayment models. Majority of the above borrowers are not likely to have stable, consistent income to enable them make rigid loan repayments. This results to missed payments and defaults. There is probability of new and flexible ways of repaying that could be favorable to both the lending institution and the borrower. I think SACCOs have a grand opportunity to offer even better products than even banks and other financial technology companies. They have a pool of members, they have data, they know their trends. However, all the data silos is rarely used to inform credit scores that would see evolution of financial services offered. You can get more details on this concept here and here.

All these alternative ways of lending are in their early stages and there are risks involved just like in any innovation. The default rates are still high as they work to improve the models. Embracing a long term view is crucial in order to work out the best model. It remains to be seen which of these models will be robust enough to ultimately move the needle and disrupt the credit scoring model especially for informal markets. Ultimately, these credit scoring alternatives will reduce costs of borrowing and therefore interest rates on loans will also reduce. I remember the way equity was among the first banks to cuts costs of opening a bank account to attract low income earners. The current battleground is on use of alternative data to rate credit worthiness of a borrower as well as structuring repayment schedules.


Another area is the nature of investments that SACCOs undertake. Established SACCOs command sizable amount funds that are channeled mainly into safer investments like real estate and stock market. There is also other opportunity for SACCOs, and chamas to diversify their investments. If a chama or SACCO is well endowed financially, it can diversify its investment portfolio,  say invest in a pool: real estate, stocks and venture capital, particularly, venture capital. Understandably, VC investments are long term oriented, 5-10 years and are not very attractive in Kenya at the moment. However, channeling some funds so that they are invested through holding companies could be attractive. The SACCO then holds majority shares in the holding company and invite other participants, say 2 or 3 investors. The pool of funds can be used for venture capital investing. To resonate well with members, the funding can go towards projects within the community at first and then expand thereafter. For example investing in areas such as light processing industries in the area etc. This model was proposed by Stephen Gugu and Wilfred Mworia in Chapter 14 of the ‘Digital Kenya Publication’ titled ” Venture Capital in East Africa, is There a Right Model?

This could work well because it becomes part of larger social fabric that cements the SACCO as being part of the larger community because of job creation in the area and uplifting the living standards of local people. This approach could benefit in improving funding for local SMEs to bridge the funding gap. The long term effect would be that the SACCOs would morph to be multi-faceted investment vehicles that serve many functions within the community and the country at large: improve savings culture, low lending rates, increase the banking reach, improve access to capital for SMEs in the local area, promote creation of job opportunities, more taxation and others. The wealth creation cycle therefore grows even further and becomes a fabric that shapes communities and a country at large.

Majority of innovations boils down to the fundamental laws. Innovation could be improvement of an existing product or service. The first mobile phone that was made is not the same as one today, although the fundamentals that make it a phone  remain: communication. Even in SACCOs, the fundamentals laws should always remain, savings and lending, pooling of funds, affordable credit etc. but other things should evolve in order to transform it to be ready for disruptive 21st century. I believe what is true is that people will continue to demand affordable credit. Saving in order to advance affordable credit is the basic principle. Now we should build on that and see how we can improve on it going forward.

If you are interested in further reading you can check out some of the links i have provided below in text. Just click the links and read away…


In the next post, I will explore more in VC funding in Kenya. check out soon…