Quick expansion cost me almost everything
By Jacqueline Mahugu | February 17th 2021
Seated in his little hostel at Kenyatta University, James Waititu racked his brains on how to go about setting up his business around the one thing he was passionate about. He was a second-year biotechnology student but he was ready to drop the biology aspect and dive into pure technology.
Today, 17 years later, he is living his dream. He is a tech entrepreneur, an award-winning creator and developer of Web and Internet of Things (IoT). James is also the founder and CEO of Mambo Microsystems and Mambo Wallet Kenya. He shares the ups and downs of starting and running a business fuelled by passion and not much else.
Did you manage to set up the business while a student?
Not really. But that was when the dream was born and began laying the groundwork. It is when I started learning how to program and make websites.
When I left university in 2007, I met someone who gave me a space; the receptionist station of his office at Re-Insurance Plaza. I would double as his secretary. He was not paying me but the deal was that when his customers came I would handle them. I would then tell my clients that my secretary was not around at the time, so they would think the whole office was mine.
I got my own office in 2008 at National Housing Corporation (NHC), where I started providing web-hosting services, web-design services and so on.
Would you say that everything you know is self-taught?
You could say that. But a friend taught me the basics of using a computer. Don’t laugh at me. Being from the village, the university was where I first saw a computer.
After learning the basics, I then went to the Computer Science section of the school library where I got HTML and programming books and immersed myself into learning everything I could.
When I got uninhibited access to computers, I was very excited. Using the loan from Helb, I bought my very first computer. The Helb loan was my capital. I knew I would make money from it.
Were you always entrepreneurial?
I suppose so. When I was 10 I reared rabbits and chickens for sale. I also had a small Kei apple farm. Before I joined university, I had a tree nursery. The money from that nursery, about Sh100,000, is what I used to pay my initial college tuition.
When my biological parents died, one of the teachers at the high school, I had just joined, with his wife, adopted me. My new parents took the time to encourage and support my attempts at entrepreneurship and I am grateful for that.
How were the early days of entrepreneurship?
I offered web services, web-design and bulk SMS. Initially, it was a one-man show, then I hired five people when I moved to own office; four developers and one secretary cum messenger. By 2010 we had three offices; in CBD, Ruiru and Garden Estate. In 2016 we closed the three offices and opened one big office in Westlands, where we still are now.
We have recently added payment services and automation. Automation is where for instance when someone comes to your gate, you can instruct the gate, through technology, to open or close. Currently, we have 32 employees. 10 work in-house while the rest work remotely. We have thousands of clients now. A good number of these are the clients who pay an annual fee for web-hosting and others we interact with regularly for the other services.
What are the best and worst business decisions you ever made?
The decision to start web services was the best decision I ever made, because it has taught me a lot of things. From it, we also added another business of content writing called amexwrite.com. The worst decision I made was expanding too fast. The cost of running the three offices was very high. At one point we had to close down two of the offices for six months and raise capital.
That is one lesson I had to learn the hard way: let the business expand naturally. Don’t try to force expansion. Don’t expand if you haven’t placed the necessary checks and balances, otherwise you will find yourself spending a lot of money for very low productivity. If you are moving from a support team of two people to ten people, you have to make sure there are mechanisms to monitor quality.
What are the skills that every entrepreneur needs to have?
Management skills, patience, time management and learning how to cope with stressful situations. I had to learn some of these with time. For instance, I used to have a temper and could get very worked up and fire an employee.
These days I listen and if I feel very annoyed, I don’t speak at that time. Sometimes anger can be very costly. You can fire someone who is very critical in your operations and the following day you realise the damage you have done to the business.
What would you do differently if you went back in time?
I would start by looking for capital and hiring the right people. When starting out, you learn by making mistakes, which takes very long and some mistakes can be very costly. With enough capital, you are able to hire someone with good enough experience to run your business. Without that, you would be trying to teach someone while not having enough experience yourself, so some of the things you teach them are wrong.
What are some of the frustrations you have encountered?
There are highs and lows but things aren’t always bad. When you own the business, you carry the whole burden and there are a lot of people relying on that business. For instance, when money is low, an employee wouldn’t understand, and they have to be paid on time so sometimes you have to do it on credit. We once got a big project from Mount Kenya University (MKU).
Three developers who were supposed to work on that project resigned on the same day as they got better offers. If you are a small company and someone else is offering twice or three times what you give them, you can’t compete. That was our first major project and I was forced to cancel it because we could not do it on time. It was very stressful. With time I have learned how to cope with such situations, and the main lesson and my advice to other entrepreneurs is to make sure that you understand the business so that you are not at the mercy of your employees.
Having one employee being the only person who understands a certain segment is very risky. I have also had a lot of sleepless nights. There was a time I was working up to 16 to 18 hours. Sometimes business requires a lot of commitment and dedication, so you have to sacrifice weekends and night’s sleep. But that won’t always be the case. Once the business picks up, the sacrifices will pay off.
How do you deal with competition?
I focus on enhancing my product and making sure that I have something better than the competition. It can be customer care, offering more features or just making sure my product meets the industry standards. Ensuring you have good customer support is crucial in ensuring you retain and attract more customers.
Construction of Sh20b housing project kicks off in Athi River
- Digitisation key in unlocking banks’ potential
By Kendi Ntwiga
- Kenya leads peers in water supply and sanitation inequalities
- Tying varsity funding to graduate jobs bold step
By XN Iraki
- What HR can do as burnout drives workers to 'The Great Resignation'
By Samuel Njogu
- Kenya races ahead of peers in sovereign wealth fund set up