RK: Tim, are you there? Good to have you on #360Mentor
TM: Yes, I am. Good to be here too.
RK: Why are you called ‘Lil Timmy’?
TM: I could never have guessed such a question. That’s my high school name. If you were looking for me at Makerere College School and you were looking for Timothy or Timo, you would never find me. Everyone called me Lil Timmy. You would be taken to the address in a minute. I thought I had left it in Macos. The secret is now out.
RK: I want you to tell us about Laboremus and e-mata.
TM: Laboremus is a financial technology company. Most people call it fintech. We make tech solutions for the financial sector mainly banks and fintechs. But to be more specific, two years ago, after serving the banking sector for some time, we knew it would evolve. But I think we can move much faster. We realised that there was a lot of underlying infrastructure just like you see roads that were needed to help these banks move faster. Specific infrastructure we have decided to build to enable banks to operate faster around the delivery of credit. You know the difference between the haves and have-nots in the economy is those who can access credit. Whereas banks are giving out a lot of credit, they’re giving out to a small number of millions a year. But we are a country of 40 million and fintechs it’s just early days for them to venture into credit. So laboremus, in short, is providing that infrastructure to enable banks to issue credit anywhere anytime.
RK: As a lay man, this is what I understand; your infrastructure enables the issuance of loans.
TM: Correct. We enable the financial institutions’ process of lending money easier and quicker.
RK: And this is the back end?
TM: Ahh, it is a combination of things. If I want to ID you, Robert, how do I know you are Robert? We enable the bank to do that verification very quickly. We want to check your credit worthiness. If we want to check whether your boda boda is valid or that you that land title belongs to you. There are so many things that go into verification. For now it is still manual and now it takes weeks. And that is for the people in the urban centre. In the rural areas, people don’t have to show their earnings, but they are still part of the economy in one way or another. Maybe they save money in a sacco or savings group. As long as this information is digitised, there are leaders who know how to convert this information to predict whether you are creditworthy or not. They can create a digital footprint that can be made available for these people.
RK: So that’s what Laboremus does?
TM: Yes. e-mata is also into credit except we said we are going to run two tracks. Laborums builds infrastructure but e-mata is a digital bank. We decided to focus on farmers. And we use the same approach, we work with cooperatives. We get data on how farmers produce let’s say milk or maize, we look at how much they are able to produce in a day or season or in a year and using techniques of data science, machine learning, artificial intelligence. We use those techniques to predict the pattern of the farmer and we tie in data, weather, in future we shall include soil temperature. We look at data for as far back as 30 years ago and then we can look into the future then we can tell that this famer qualifies for one million for six months. Our goal is to bring the cost of credit down. We don’t have branches, we can give out a loan at a rate lower than the bank does..
RK: Can I suggest something for you?
TM: Yes please.
RK: Can you convert that data into something I can buy as a farmer. I will pay for that information because I need to be able to plan for my own farming activities. I need information on things like water patterns and soil temperature; those are things I need. I don’t want to predict rain on my own. I am sure you get subscriptions from farmers who are looking at big yields. That is a service that is very necessary. There was someone who was bringing inverts and the first information they wanted was rainfall patterns for the past 30 years and there was nowhere to find it.
TM: I will hook you up. I need to know how many people there are who need to know this information.
RK: That is very important for people in horticulture.
Tim, help us understand, for a country like ours, you talked about how tech is disrupting things the way the car disrupted the horse. What is going to hit us in the coming years? particularly on the Ugandan scene.
TM: That’s an interesting question. It’s clear, Uganda is a very young country, 2nd youngest in the world after Niger. Half the population is below 15 and growing at about 1 million a year. The thing for the young people is mobile phones. The growth of smartphones is still low, but basically everything now is revolving around the smartphone. It is the centre of consumption of information. What does that mean in terms of perspective going forward? It means that when I want bank details, I turn to the phone, paying bills. Now even for a medical diagnosis I use a chatbot. You can get diagnosed by answering questions. It looks like the medium of communication is going to be centred around mobile. And now what you don’t see is that this phone is tapping into a lot of computing power we like to call cloud. When you make a request, a bunch of servers lined up somewhere in South Africa, Netherlands, Iceland are churning data to answer the question you have asked. They are all trapping you on what next you are going to buy. All I can say now is that mobility and the delivery of services through the mobile phone and the leveraging of data around us is the next wave. I don’t think we have even scratched the surface yet. Because I know the financial sector will be at the forefront and we work with them. It is a long way to go.
RK: Our December sessions are about helping people better plan for 2022. How can professionals tap into this tech; how is it going to affect them and is there a fortune for them to earn. I am a lawyer, so as a lawyer, you had the monopoly of the law and how it worked. Now, sitting in Seattle you can incorporate a company at URSB online. What would you tell anybody in the profession today?
TM: There are two answers to that. There are some professions that are going to be wiped out. People just need to reinvent themselves. Today, if you do an MRI at one of our centres, there are companies now that are able to diagnose an issue without having any individual involved. It is done through artificial intelligence. It is already being done with cancer. Computers are giving diagnostics. What does that mean for the professionals who studied to do that?
The education sector, in companies I am involved in, when we hire people we put them on coachella, udemy and in two or three months they have the foundation knowledge we want them to have to contribute productively in our work environment. This is something that would previously be done on a desk and give instructions. If you look at the health sector, transport and many others. This may sound futuristic but for those who can dare, learn something on how you can work in this era of digitisation.
RK: I want to go back a bit, I am fascinated by how you got here. What was school for you? were you from outside countries or you are from around?
TM: I was off until after S6.
RK: Where was around?
TM: Around was Makerere College for both O and A level.
RK: What were you studying?
TM: As you know here, O level you study everything, I wish I could do away with that. What a waste! I then moved on to A level. My father wanted me to go to Budo but I only choose one at Macos. He didn’t know what I had done. I did physics, mathematics and chemistry with a goal of becoming an engineer. I always knew I wanted to be an engineer but I didn’t know what type of engineer I wanted to become. At the time, you just went with the hype. The peers at the time used to tell us that the best engineers do civil engineering.
Later I went to Columbus, Ohio in the US.
RK: What did you end up doing while there?
TM: I did software engineering. I did it because they could not give me electrical engineering. All the classes were full. The only one they could offer me was software engineering. It was not on my list but I decided to go with it.
RK: What did you do after school?
TM: I realised that this was an interesting field to be in. I started working for financial institutions during my holidays or part time during class days. I worked with JP Morgan. I wasn’t working as a software engineer, I was working in the financial sector. I was processing payments for loans more like a clerk. You fill in things in excel and you upload and things happen.
RK: It was a hustle basically.
TM: A proper hustle. I worked for Capital One, a bank foamous for its credit cards for students. I was in retrospect learning about systems. How they work, how they are built. I remember Microsoft coming to install software for JP Morgan that cost 160 million dollars.
TM: Yes. The interesting point is that Microsoft failed to deliver and they wrote it off. They wrote off the system. I learnt that just because you are the best company in the world does it mean that everything will go according to your interest. This was for me a boot camp on what would happen for me later in the tech space in uganda.
RK: How does that background of your outside countries shape your outlook on innovation in Uganda?
TM: I think it helped that I was here first for a good part of my life to see how things were working and then go out there to see how different things also worked. These guys, when it comes to technology, are really far. The only way to wrap yourself around it is to go and see. So, I remember telling myself if I was in Uganda, I would like this. To the point that when I got back here, everything looked virgin. Everything was untouched. I had a blank converse where I was going to apply.
RK: You had already developed the plan on how you wanted to innovate?
TM: I didn’t know the specific things I wanted to do. But I knew I wanted to do big things. I wanted to come and change the way the education sector works. I wanted to change the way banking works but I didn’t know which area of focus I would get into.
RK: The additional question is that, we have young people with dreams and aspirations who want to innovate in this space. How would you advise them on the execution level? What would you tell them?
TM: My piece of advice is to be patient. It takes time to imagine a problem, imagine its solution, test it out, then embed that solution and choose its relevance in society. And the leather on having a good story to sell to an investor to someone who can buy into the company. To find what you have created to be of value to buy into. Laboremus has been in Uganda for 8 years, it started off different things and now it is doing something else. I am not saying everyone is going to take eight years. With the mindset of I need to make it really quickly then you are going to be broken really fast. But if you come in with “I love this and I am going to invest in this thing” time will fly so fast that before you know it someone will be knocking on your door saying I am interested in what you are doing. But I have seen so many young people who want to get things done quickly. They can’t wait for the money to come in. The Elon Musks have been at it since 2000. A young person may think Elon Musk started about four years ago.
RK: In fact if you dig deeper, he left South Africa in 1988 and began messing up in Canada in 1995. Technically, speaking this guy has been dreaming for like 30 years.
TM: There is a tech company he created as a teenager and sold it off. The other thing to tell the guys is that these guys have been at it since they were young. It’s not that you graduate and begin pushing. If you don’t push before you are in primary or secondary school, you have to put in the time. You have to pay the dues like they say.
RK: The courage to leave the bigger world and come back home, how did you process that?
TM: Actually for me it was very simple. First of all, there was so much hustle in the US. You have to be watching in order to see what is happening. You can easily get credit. They just check your credit and you walk to the bond. If you want a house and you have good credit, it’s yours. A big screen,same thing. Everything is available if you have good credit. What happens is that you immerse yourself in a huge debt and then in the next 20 years you are working for those people. Some people are comfortable with that.
For me, I always saw huge opportunities in Uganda. I worked for a software company in the US. They used to make me write code for 10 hours, I would go to the supervisor who would then ask me to test it and test it again. It occurred to me that those guys had built a system that does not depend on an individual. You can be replaced in a second. And yet you are using a miniscule percentage of your brain to apply yourself in this environment.
I knew in Uganda, I would build an entire industry. That was a no-brainer for me to come back here.
RK: That was enough for you to come back home?
TM: I was tired of living like a slave in the US and I am not saying everyone thereis. But for me that was the stick. The carrot was what I was going to do when I was here. When I got back here, I started by doing consultancies. But then I met a friend, a Norwegian. He started working in a company in Norway and he met someone in an elevator and literally did an elevator pitch. This guy told him he was there to attend a conference. They were moving to expanding development to india. The elevator guy asked him why not Africa. Classic elevator pitch, they had agreed to meet and start Laboremus in Uganda. And he told him of a friend in Uganda with whom they would join hands and that is how Laboremus started.
RK: That’s what a young man here recently called Proactive serendipity.
How did you make friends with this friend of yours? I am asking you this question because I want people to learn the value of relationships.
TM: You couldn’t be any more right. This friend is one of my best friends today after so many years. Relationships are everything. This gentleman and his family were working on the continent building water projects for a non-profit. I met him through a friend and he happens to be interested in computers. He meets me and every time he sees me through my other friend he would see me with a backpack. Then he asked me, “what are you always carrying in that bag?” I told him it was a laptop. Then he said he too was into computers. I pulled out my computer and showed him the code I was writing and he was interested in it. We became friends. At that point there was no business involved. He invited me to his home in Kanungu. That was the first time I visited the national park.
It was really about becoming friends. And since then we have been working together. He is the Chairman of Laboremus now.
RK: How tough is it to scale up a business. 2, how do you fundraise to scale up?
TM: I will start with customers. Before an investor is going to take you seriously, they need to know that what you are selling is something needed in the market. You need to know the number of customers you have.
It is one thing to have customers and another thing to have customers that are paying. The investors always ask; what is the ability to pay? There are many cases where innovators got investors without customers like facebook.
When you have the customers, you can start fundraising. This is something I got to know fully this year. We run a consultancy company that we thought would grow organically. You put a product out there and you use the product to invest in the product. And then you grow by 10%. So now it is the venture capital world. When you have a product that you have proven that customers want it. The venture capitalists will ask you if you are waiting to reach the truck of five years when you can do that in one year. Why wait to hit your goals in five years when you can get it done in one or two years. Hence the word venture, there is a lot of experimentation in it. Trying things out. They come and put one million dollars in your company so that they can accelerate your growth or scale you up.
RK: So that’s what it means?
TM: Yes. They have a lot of appetite for risk. Where there is risk there is also reward. They also want exponential growth. Big results. When you go in there, you should be ready to work your butt off to fulfill their expectations. Normally those expectations are lined up with yours otherwise there is no need to be in that “marriage”. Once that understanding is clear, my experience has taught me that, I think in Uganda especially for our young entrepreneurs, they have underestimated how hard it is to prepare yourself to attract the attention of an investor. When you see in the news that company x has raised 100 million dollars, you assume you are going to be the next one. You don’t know what those guys have been through. First of all, the Ugandan economy is really too small. Most of those things happen in Nigeria, Kenya. They are attracting big money. Their economies are big. It doesn’t mean we can’t attract venture capital here but we need to work harder to be able to do it. The other thing to remember is that the venture capitalists do not want you to develop a solution for only one country, they want something that can work elsewhere. That’s too much risk. They always ask you how your solution can work in other countries.
Beyond that describe your market. You must have built a financial model. Most developers today are a two man team. But there are slaes, finance and all those are other departments. You have to convince an investor to invest in you.
Lastly, every successful tech startup, at least the ones I know of, are experts in their domain. They were bankers and started a fintech company. They were lawyers and started a legal platform. If you want to increase your chances, go and work in a hospital or a bank before you start building. It will help you get the right information because you are solving a problem for that industry. How can you solve a problem you know nothing about? I think that is the biggest observation.
RK: You are right. I met many of those. There are guys developing solutions for farmers who have never been to a farm.
Talk to me as a father of teenagers knowing what you know, what would you say to them about the future.
TM: Unfortunately, I am not a father yet. I think speaking to you as a father of these teenagers, they are going through highschool and university. They are going to want to start a career in something. As a father, you want the best for them. When I look back on my life, I wish I started earlier. Ask them to think about their careers. There are some varianteibels we call constants in maths. Most likely your children will live in an era where digital will be the way of life. Already right now, start to see how they can be exposed to different aspects of technology. They don’t have to do computer science itself. It’s basic things, allow them to experiment. If one asks you to do a course in tech, allow them. And it doesn’t matter whether they will work in tech or not. Whatever they will do, I guarantee you, it will have something to do with tech. But that is the subtle way of telling you.
But if I was their father, I would just get them and force them into computer science school and tell them to stay there.
RK: I would like to see you as a father, Timothy. Thank you for the time you have set aside to share with us.
TM: Thank you for the opportunity to share my story.