Ham Serunjogi on How to build an African Fintech

#360Mentor is a continuation of the #40DayMentor series. In this episode, Robert Kabushenga (RK) speaks to Ham Serunjogi (HS) on How to build an African Startup.

RK: Ham, good evening from Uganda.

HS: Good evening Robert. It’s quite early here in San Francisco. It’s 9 am.

RK: Ham, I have a suggestion for you, if you ever choose to take on another career, I will suggest broadcast it is for you, you have such a great voice.

HS: You serious? Thank you!

RK: Especially like the dating session!

HS: Hahaha, Robert. What a compliment!

RK: There is a question I ask every one on this show, were you born a businessman?

HS: I guess in hindsight, yes. People are all products of their environments. My parents are self employed and they have been all their lives. They never had a “normal” job. I grew up seeing them run a farm for many years and then later they did a few other businesses. But the story of my childhood and teenage years was about seeing my parents make the best of the various opportunities that came their way. And It was  hard. It’s wasn’t easy. But I found it honourable in the sense that they had full control of their time. Because of that our dad used to take us to school and for swimming every day. He did this everyday of our school time. He was also my coach.

RK: I want to stay with you on this. You represented Uganda at the Olympics, is that correct?

HS: Yes. I swam competitively for very many years, up until college.

Rk: I am also a swimmer but I swam for leisure. What’s your favourite style?

HS: I specialised in the butterfly style.

RK: That’s my style too. I always liked flying in the air. It gave me wings. You walked around school like you owned it.

HS: I like that stroke too. It was one of the most difficult strokes. I enjoyed doing that.

RK: Related to that, I would like to ask, how did competitive sports shape who you are and what you became?

HS: For me it was life changing. Obviously, it was a challenge. At the time I didn’t like what was happening. But in hindsight it makes sense. I mentioned my dad. He picked us from school every day. And by every day, I mean without fail to go swimming. We would swim at the pool at Makerere University from 5pm – 8pm and then do that long drive to Gayaza. After that long traffic and swimming, you would get home at 9pm or 10pm. And at the time there was no electricity in Gayaza and we would have to use a generator or something else to do the homework. By the time you got to bed it would be at 10pm or 11pm. And you had to wake up at 4am or 5am to beat the traffic to go to school and you repeat that on and on. That was my childhood. At the time, I hated all the responsibilities. I was a very good swimmer. I broke so many national records. My friends always looked at me with that “ how lucky can you be eye” but they didn’t see the hard work that went into it. I missed so many birthday parties and many other things that kids used to enjoy because I had no time for them. But as I grew older, a seed had been planted and a muscle had been built that made me more aware of this idea of delayed gratification. The thing about life is that many times, you have to put in work if you want to get certain results. It was worth going through that. I have been able to do the things I’ve done today because of that background. To this day, I tell my parents that I am grateful.  But back then, I wasn’t thankful.

RK: Paint for us a picture of the home in Gayaza back in the day so that we know that you are a real local boy.

HS: We are a small family of five. I am one of three boys. I am the middle child. We grew up in Kayebe, Gayaza. Both of my parents grew up in the city and they decided to have their life 20 miles out of town. My mother has this joke she tells of my older brother when he was young. He said, “Mummy, we should get a big ladder and scream to the whole world so that they know that we are here.”

It was so remote then. Today, more people are moving there. It’s changed. It was so far. But it  was a lovely place to raise children. Very quiet and safe. Great people everywhere. We went to school at Aga Khan in Kampala. That was a very long commute that we took every day, like I mentioned earlier. Up until I left Uganda, that was my connection to the world. We would drive an hour and half or two to school and come back. On the weekends we would work with our parents and that got to be how we viewed life. In fact, my brothers and I tease ourselves that we didn’t look up to school holidays. We had to work on the farm. For me going to school was a holiday.

RK: Where did you go after Aga Khan?

HS: I went to Mombasa for two years for my International Baccalaureate (IB). When college time came around, my elder brother had gone to a college in the US. He took a gap year and found this college called Grinnell College. Our parents had been keen on us finding a good university in the US or elsewhere but affordability was a big issue. It narrows down your options. Grinnell College is a small college in Iowa with an endowment of USD 2 billion and only 1500 students. We went there. That was 2012.

I landed in Iowa and it became a second home to me. It’s a lovely state with lovely people.

RK: That place has a lot of maize

HS: Yes. It is called corn here.

RK: Oh yeah! My nephew calls it kasooli.

HS: Me too.

RK: What did you study when you got there?

HS: My dad had tried to pursuade us to venture into our own paths but he had a strong IT background and I love IT. And he said “don’t just do IT because I did it. Do your own thing.” So I got there and I enrolled for computer science for the first quarter. And I loved it and the idea of building a new age of tools that are based in a virtual setting. After my first year I was focusing on my computer science. I then went for an internship in Palo Alto in California. I  worked in this place which used to be the former Palo Alto Research Centre where Steve Jobs had his house. When I came to California in the Silicon Valley, I was seeing all these tech companies we grew up using; Google, Skype and I was there asking myself: how have these people taken on strong concepts and turned them into massive impactful businesses? And in that experience I got drawn more and more to the business side than the technical side.

So I go back for a second year at Grinnell and I switch my major from computer science to economics. And I majored in economics. That skill is good to have. I didn’t want to lose it. I wanted to have a strong business foundation. Understanding how basic micro and macro theories work and how you can tie that with technology (which I thought was a powerful combination) to build big businesses.

RK: There is something fundamental that happened to you at Grinnell, you met a friend, tell us about him.

HS: Oh yes! without Maijid Moujaled, there would be no chipper. This is one of the most impactful friendships I have had in my life. Life is very interesting. You are a high energy atom  bouncing around in a vacuum and everything therein kind of changes your trajectory slightly and some are more than others. Maijid was a massive inflection point on my trajectory.

When I met him, he was about to graduate. He was two years older than me. And he is a computer science major. He is a pure left brain creative guy. At the time he was willing to show me around. He was like a mentor of mine. I learnt a lot of computer science from him. He and I started spending more time thinking what things we should do that would be powerful ideas in the places where we grew up. He grew up in Ghana and I in Uganda. We tried a number of things. We messed up with a number of ideas.

The first idea was  a logistics app that was supposed to help drivers or trucking companies track their fleets across the continent. That didn’t go very well obviously. And then we switched to a voice app. That also died a natural death. But along the way we researched a lot of stuff. We were learning more and more what mistakes not to make. And that is one thing we did throughout college. It is one thing I appreciate about American society and culture; the strong emphasis of encouraging people to try and fail. And that lack of being worried of failure or doing something. We really embraced that. We tried a number of things before we did chipper. We wanted to do something that was very impactful.

By the time I graduated, we had tried to build two companies that had not worked out but what we knew for sure we wanted to do something together. Eventually we did Chipper together.

RK: You finished Grinnell and then?

HS: That was another interesting period of my life. I graduated in 2016. And somewhere before that graduation I was doing an internship at Facebook. And that internship was one of those points that highly impacted my trajectory. I got that internship by sending a cold email to Sheryl Sandburg at Facebook.

I was applying for internships left right and centre and nothing exciting was coming through.

RK: Hold; like how many did you fire off?

HS: Easily over 100. Easily. I would start early. I would start in winter applying for the next summer. I was trying to get ahead and the challenge is most internships would ask “are you someone who will need immigration sponsorship if you were to get a full time job?”  And I would have to say yes. Because I had a school visa not a work visa. And because of that, it would narrow down how many options I could go to. So it was wise to start as early as possible and give myself as much time to potentially find something.

Beyond gaining the experience, I needed the money. I had no money. I had to survive. It was both practical but also important for my post graduate opportunities. So Maijid had already graduated and was working in Silicon Valley. In winter I would come and stay with him. I told him this internship thing is giving me a hard time, I am going to try a different approach. I decided to email Sheryl, a very informal email; “ Hey Sheryl, I would like to do an internship at Facebook, can you help me?” The next day, it was a Saturday, she replied to me back and recommended me to the Head of Recruiting. They asked me what I wanted to do and I told them. Then they set me up with the team for the interview and I got it. And it was a wonderful internship. I learnt so much. I met so many people. And that was in New York and I did so well that I got a return offer. I was invited to come and work for Facebook full time after I had graduated.

But the challenge of getting a US work visa is a lottery. Regardless of whether you had a job offer, you could as well not get a visa.  I didn’t get the visa.

In most scenarios, that’s  the end of the story, you just have to leave the country. But Facebook was very kind enough to give me another job outside America. I lived in Europe working for Facebook for two years. And that was a very interesting experience. Before I  moved, a part of me was dreading that move, having to go back and begin afresh. But the other part of me was glad because this was a good job, paying me very well and I needed the money. I went and had a great two years.

Maijid and I had promised that regardless of what happens after we graduate, we will only work for two years and thereafter set out to do our own thing. One of the things we were worried about is that sometimes you can get into a rhythm and get complacent especially when you have good comfortable jobs. I didn’t want to blink and it’s already been 10 years and I’m still at Facebook.

I was 24 and I thought this is the best time to take a risk. It’s  better now than when I am 40 or older. I figured I should use my youth as an advantage. And I promised my parents that if I failed, I would get another job. That was a tough promise to make but it was important to give them some comfort.

RK: So how did you arrive at this exciting idea that then became Chipper cash?

HS: It was something we had softly agreed upon before I let for Europe. We really committed ourselves to it. After I graduated, I would come back to Uganda as often as I could. When I was at college, I spent four years without coming back because I didn’t have the money. But when I started working I would come back for the holidays and I would try to come as many times as I could. I was always curious to know what the people were doing, what phones they are using. How is mobile money taking off?  How are people moving along with the trends? In late 2017, it became very clear to us that of everything that was happening in Africa in terms of payment, the biggest opportunity that no one had addressed yet was sending money across borders. And that was still as bad a long time before when I was going to South Africa.

It was a light bulb moment for us. No one had done it. It was massive. We think now is the best time to try. I left facebook and moved back to the US and we started.

RK: There is something you said about sacrifice, you had to leave your job to go and start afresh, what was that like?

HS: Indeed like you mentioned, a lot of sacrifice. We had to cut back on costs and live as lean as we could. We were putting all our money in the company so it could be strong enough to attract outside capital. And obviously, with every first time entrepreneur, you are probably doing more optimistic thinking than you actually are. So whatever money we had we thought it would last longer than it actually did. Before I left Facebook, my dad asked me how much money have you saved? Have you paid your landlord? Do you have any standing obligations anywhere?

With all my obligations paid, I had like maybe USD 30,000 left. Maijid had like another USD 30,000. With USD 60,000 we were ready to hit the road running.

So we start. There is something about money just going out and not coming in. It goes out so fast. I promise you we were living in a very scrappy manner. I was sleeping on an air mattress. Majid’s apartment was already very small. It was less than usd 2,000 which in this area is not very much. It was a very small apartment. You could open the fridge in the kitchen while in the hallway. That’s how small it was. Whichever way I tried to stretch out, I could be straight. I had to curl out all the time. That is how I was living for about 7 months.

For food, again, we were very scrappy. We had a rice cooker and we’d make a bunch of rice. There was an Indian restaurant across the street where we would go and get some stew. So I would tell the Indian guy; don’t put meat in it, just the soup. Because I wanted as much stew as possible. We wouldn’t do breakfast. We would make rice for breakfast, lunch and dinner. We would do it again the following day. We were stretching every penny as far as we could. It was the most grueling thing. Maijidi’s a phenomenal engineer. He was building the product. My role was to make sure I get investors interested. We had to raise the amount of capital that allows us to scale the operation, get a small team. But I also had to move to a work visa at the same time in that period. I was doing a lot of investor pitches. We were so naive. The idea was so clear to me, I thought it would be so clear to others as well. I thought we would go and raise USD 5m at the first try. People would laugh me out of meetings. It was hard. It was one of those moments that are character building. 

RK: Self doubt was checking in a that moment

HS: It was. Did I make the right decision? We were already in financial ruin but we came close to disaster. Maijid once sent me a text. I remember it was a Thursday. And he said by the way, after this month, we cannot pay rent. He was the one paying the rent.

I  had this moment of realisation that I am a failure. I had failed at this thing. My parents expected very high of me. Everyone had high expectations. I too had high expectations of myself. And this thing was not shifting. I was not looking anywhere else. I went  back to Maijid and told him. I had tried to do everything the right way I thought. I had tried to do things differently.

That was one of my lowest points. And ironically at that moment, Maijid was more optimistic than I was. That was a moment of double insanity for the both of us. And in that moment I highly relied on him. One thing we were both committed to was that this had to be done by someone. It could be us or someone else, but it had to be done.

The second thing we were very committed to was that we wanted to do our thing. We didn’t want to be in a situation where we didn’t have control and we thought this was the right time for it. The ingredients not to give up were there and we relied on those very heavily. Hindsight is what saved us. You know, unless you want to do something and you love what you want to do, you  will probably not  see it through when it gets hard. We were able to get some money through the door, and the rest is history as they say.

RK: What I would like you to describe for us is the grueling pitch decks that you had to do and how tough was that?

HS: It was by far, the most difficult thing I have ever done. I did over a hundred pitches. It’s such an interesting thing. Raising money at that stage is like a storytelling exercise. It’s about how well you can craft your narrative. You have to make it in such a way that someone else wants to be part of the journey. That they get convinced to commit capital for that story to have a chance at growing. Keep in mind this was me at 24 and Maijid at 26. For both of us, it was our first time building a company. Two African guys in Silicon Valley trying to build a company. There are many ways to raise money other than that. So we were already disadvantaged in that sense.

We were trying to solve a problem that most people don’t see. You tell someone you want to solve cross border payments in Africa and someone asks you, what is that? What about this thing called mpesa? Those are the questions you get. The learning curve is high.

 I decided to go straight to the African investors because they would understand these things better. What was so funny is that they were the worst. Every African investor I spoke to was either very rude or dismissed me off the bat. From their perspective, they were the experts, I was the young kid who came in with this idea but who clearly knew nothing. There was no convincing them.

Secondly, I had no networks. Everything I was doing was cold emails. One or two people were willing to give me an audience. That was at the beginning. That is when I decided to try other investors. And I started to get more traction with US investors because they were coming in without knowing anything. They were completely ignorant and they were willing to learn. There was something here.

And so eventually, we were able to get our first investor who put in USD 150,000 and that was turnaround. That money was a lifeline. When it came in, we were able to accelerate our growth and bring in a small team and be able to pay them and things went to another level all together. We went from strength to strength. More people were coming to us wanting to invest.

RK: The question then to you is what is chipper cash?

HS: It’s a lifestyle payment platform that started as a cross border product. It is now a more holistic platform for people to not just send and receive money easily but also do things like investing. We have just got a US license to offer people the ability to buy fractional shares on the US stock exchange. So everyone in Uganda can go and buy shares in Amazon or Facebook or Google straight from the app. You can also buy crypto currencies as a saving mechanism for people who want to have an exposure to that new digital assets. We have a strong partnership with visa where you can spend your money or wallet on your visa card. And that product is launching in Uganda soon. And we have been working aggressively on expanding our networks. Now, people in Uganda can send and receive money from more countries. The most recent being US very cheaply. You get it at market rates. No hidden fees. Fully transparent.

Robert, download our app and I will send you some ka-money to show you how this works. Also choose 20 people. I will send USD 50 once they have downloaded the app.

We want to make it essentially easy and convenient to send and receive money in Africa. Today we are all being exposed to platforms like whatsapp which are very easy to use for texting, we want to take that level of ease of use and apply it to money. You can send money with Uganda and other parts of the world as easily as that and for no cost.

RK: Could you talk about the partnership you have entered with twitter, I could be sitting on a goldmine.

HS: True. And it is built for users like yourself who are based in the countries we serve and are also active twitter users. Twitter built this platform called tips where you can connect payment products you use. You can connect your chipper account onto your twitter profile and someone and open that app and they can send you money very easily. It works for people fundraising and those selling products.

RK: Ham stop, stop. Guys, if you have a twitter handle, for the first time, it could just make you some money. 

HS: On twitter, edit your profile, you will see an option that says tips, tap chipper and you can select your chipper tag, and that is your identity on the chipper network. And you plug on your twitter profile. Anyone who taps your profile can see your tag and it will direct them to their chipper wallets to pay you directly.

Comrade Tony: What’s the attitude that a startup guy  must have, you talk about character building, what about the mindset? How did that put you on top? Can you talk about building an attractive investment business?

HS: The most impactful thing I have found is sheer perseverance. One thing in my experience is that I have learnt every step of the way. I cannot say that I knew everything. I was naïve. Everyday there was a new obstacle. I had to make sure I stay. It’s okay to fail. Embrace that and keep going. Keep the mentality of perseverance.  

To attract capital is the most difficult one. We live in a world of biases whether you like it or not. Two people can have the same idea but it will be looked at differently. That makes all the difference. We happened to be two young African boys, that does not help that much. More than anything, us being dedicated to what we were doing was the best drive. We knew that what we were building there was a massive opportunity. It is a continuation of different people building back at different points in time. At the end of the day, make your company as strong as you can make it.

Angella Asiimwe: What’s your sustainability plan? Also how do you address the idea of negative market sentiments for you to thrive?

HS: Looking at the successful brands that have gone before us, the trick is to build a brand that is bigger than the person. Chipper is not about Ham or Majid. Big companies go beyond the founders. They are about the product and the mission. Our job is to nurture it and get it to a point of dominance and success that can persevere for a long period of time that it can outlive us. It is a very hard thing to do but very important for the eventual sustainability and longevity.

On market sentiments. We try as much as we can to be data focused. We have a research team that makes sure that we are up to speed with market trends. Market sentiment is hard. In our part of the world where people expect your product to work perfectly, you are constantly being kept on your toes and the way to maintain very strong market sentiments is to build a strong product. And have an obsession on great user experiences. The minute you have a bad product, people will tell you off.

Bruce Twesigaomwe: How do you advise building a start-up, do we all have to leave Uganda?

HS: In some regards, yes. That is one of the reasons why I am based in the US. Because when I think about the best things I need to position myself as a company to succeed. Things like access to capital, talent and other things that I think we are still working hard to get those ingredients such that maybe in two generations, we don’t have to leave Uganda to do that.

I think of myself as well. I want things to happen asap, I try to pay it forward. I invest in entrepreneurs back home. I have invested in over 30 entrepreneurs. I know how usd 20,000 or 30,000 will go in giving  them a much needed push.

We are getting to retrain young people  and once they have finished their courses because we want to hire locally.

On value proposition: a lot of startups worry about competition when they are still very young. Most times they are premature. Your company is going to die of competition when it is still young. There is enough room for every company to participate at that stage. It is large companies that indulge in that. When you are still young, you should mind about the product and your execution. Those are the things that determine success more than the others.

We launched Chipper when there were other potential and similar products and we have been able to grow faster than many of them. And that is not because they stopped growing, no. We focused on building our product. The product is so good and the market is so large. If you solve the problem for your user so well, you don’t have to worry about your product, people will use your product. And there is very many of them out there. Africa is going to be half of the world’s population in the next 30 or 40 years to come. That is like 4 billion. There is enough room just worry about having the right product, the rest will  take care of itself.

Lillian Tamale: With all that you have established, what is that one thing, looking back, that you would caution one to avoid? Also what was your “aha” moment?

HS: This is actually a tough question. I have failed many times. Picking out just one is probably hard. In hindsight, my biggest failure is that I did not leave Facebook soon enough. I should have left sooner.

Sheila Nduhukire: Could you talk about the ability to buy shares on the US stock Market.

HS: That product is going to be available on 15th October.

Evelyn Namara: How much do you think that having the partner you have contributed to the success you are having today?

HS: Evelyn, one of the top three things that make up for the success of the startup is the co-founder relationship and partnership. For me, that’s the part where I got the luckiest to have a partner like Maijid. When we met in college, we were both aligned. We wanted to tackle problems in Africa. We were both similarly insane. Sometimes you need to find a similarly insane partner that if you get to leave a known path, you somehow stay in it. That kind of person can be a powerful partner and can make all the difference. We have both been able to support each other in very trying times.

It is also one of the intense things, short of being in a marriage, experience and process. You want to be with someone who will supplement you where you are weak. It is important to find someone who you even know. That makes a massive difference. Take some time on who you want that person to be. If you’re lucky like me and you met them in college, and you have been friends already, then you are good to go.

RK: Could you talk to my 23 year old niece or 19 year old son. And 25 year old nephew

HS: I would say, there are no rules. The world is a nonlinear place for you to get from where you are to where you want to be and more than anything it is creative thinking that ultimately gets you closer to your goals. Personally, I have felt a greater obligation. I mean people like me who were able to get a great education in Uganda, have food on the table, and all these luxuries that many people don’t have, I think we are in a unique position to use those gifts and fortunes to try and solve some of our society’s issues.

We are what Warren Buffet calls the lucky sperm club. We were just lucky to be born in families that were able to support us. We didn’t do anything special to be born in those families. To all those people in that group, I’d say use your fortunes to impact people’s lives in a positive manner. It doesn’t have to be on a large scale. Even one person’s life is a tremendous contribution to society especially through business.

It’s okay to fail. As a society the more we can de-stigmatise failure, the more we shall have very bright and capable people try on new things. We have everything we need in Uganda to improve our society. And I am excited for how much growth is going to come out of our country and region all together.

RK: Thank you very much Ham. Let’s dream on.

HS: Robert, you are young at heart and you still have what it takes. I enjoyed speaking to you all today. Thank you.

6 thoughts on “Ham Serunjogi on How to build an African Fintech

  1. Remarkable! Thank you, David; thank you so much, Ham; thank you always, Robert! What a lesson on resilience!

  2. This was a lovely read. Since RK blocked me on Twitter some time back, this is my only way to catch these great conversations hehehe..thanks David.

  3. This was a really good session and Ham is an exceptional example to young people all over. Going through the transcript again has provided so many insights!! Thank you

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