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The next African story will be written by Africans, and there are people crafting the narrative now. Join Dotun as he hosts a series of conversation with people whose ideas and work is shaping the African future.
BTF S5 - Tosin Eniolorunda
Guest Introduction
Dotun O: [00:00:00] My guest today is Tosin Eniolorunda. I met Tosin in early 2020 at a conference in Rwanda, where we spent a long time talking about our shared belief that the most effective way of distributing digital financial services in Africa is through well structured offline channels. That conversation and several after that provided me with the opportunity to lead the first two institutional funding rounds into Moniepoint.
A few years later, I joined Tosin in his journey to build one of the largest and fastest growing FinTech startups on the continent, serving as the company's chief commercial officer and board observer.
Tosin is a profound thinker on product development and one of the most effective company operators I know. I'm continually impressed by his practical understanding of building financial services for the mass market. How he thinks about reducing utility friction and
[00:01:00] managing complex distribution networks. This episode provides a glimpse into some of the typical conversations I have with Tosin on various topics.
We discussed how Moniepoint leverages insights from Nigeria's electoral strategies to build a nationwide FinTech network, how the company grew discreetly and bootstrapped to several millions of dollars in revenue, his personal point of view on startup fundraising, and framework for motivating talent. I hope you enjoy this episode as much as I did.
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Interview
Tosin, it's good to have you on this show. You and I have come a long way and I know quite a lot of people want to dig deep into what is it that makes Tosin and Moniepoint tick.
Maybe the best place to start this conversation is. Remember when we met at Rwanda? Yes. February, 2020. Just before the whole world went
Tosin E: Crashing down.
Dotun O: Covid!
[00:02:00] and somebody introduced us. And it was just a casual introduction. “Hey, meet Tosin” and I was then at Novastar and we got talking for about 45 minutes.
And we are jamming about distributing financial services through offline, which was a bit contrarian at that point. And we both jammed on that because I've read a lot about it. I've developed a thesis. I was looking for businesses to invest in. And you were just on this cusp of launching or actually scaling.
You've launched it at that point and Moniepoint or Team Apt then was a newcomer. Tell me about how you developed that thesis and conviction around distributing financial services.
Tosin E: So well you know that TeamApt started as building software solutions for banks and, I think from there we understood some of the weaknesses of the banks in their ability to craft great products. And initially it wasn't yet apparent that there was also a distribution problem. You could remember that the industry
[00:03:00] was a lot more focused on online type distribution, especially online payment systems, online payment gateways were in vogue. That would have been in 2019, 2018, where payment gateways, of course with the successful payment gateways like Paystack and Flutterwave would've launched then. But we knew that we needed to build financial solutions because that's what we knew.
That's what we've been building all along. And we knew that the banks didn't have it in them to actually build great products that customers will love. So when we did the pivot and we had now begun to think of distribution, I sent my team out to the field to go and say, “how are people using financial services?”
It was Paga that was quite on the field then. And I remember when I sent my guys to go and take a look at what people were using and they were like, guys. These things are everywhere. And I felt to
[00:04:00] myself that okay, because when you don't have data to know how big something can be and somebody tells you that these people are already everywhere, it's a little bit discouraging.
So what I now decided, “you know what? We'll try anyway”. So in reality, I would say that we didn't figure it out immediately, that you could actually build bigger financial services distributed offline immediately. It was when the numbers started coming in that we realized that, okay, the way to get Nigeria or emerging markets is not the conventional online.
It's not just the conventional online. So, I will not say it's an epiphany. I would say it was a try and we figured it out at the end of the day exactly that I felt. But then again, it now makes sense looking backwards. I think it was one Steve Jobs, , interview or maybe it was in an opening speech for maybe Stanford also, that was saying that sometimes you can only understand your life when you
[00:05:00] look at it backwards.
I dunno if you remember that speech. And it makes sense looking backwards now, it makes sense because most Nigerians, despite the fact that they're connected online, mostly make decisions through recommendation. You trust something mostly because. [...] we don't trust our superior.
We don't trust the government. So you don't trust what people say online. You generally trust what somebody else is telling you, and it is one, trust is one of the major things that leads to buying decisions, especially for financial services. So the best way to distribute things in emerging markets, and it's not just about Nigeria, it's generally about emerging markets, is to find a way where people can make buying decisions based on recommendations and high trust.
So that's why it makes sense looking backwards. It's okay online too. Things are getting better online. If you were in the UK for example, people will make decisions based on Trustpilot, right? Trust. And that's because they know that Trustpilot
[00:06:00] will do vetted checks and come up with a rating that can make you trust.
People don't have such faith on online systems in emerging markets. So you need to find an aggregated way to build trust offline. And obviously being able to build such a sales network is key to distributing financial services.
Dotun O: There are two things I want to unpack from what you just said. And we can go in a rabbit hole on those two things, but let me just lay them out and they're a little bit different. One is what you just said, which is a very good framework in a trustless society, you build products that is patterned on how people buy and how they make … the transaction stack.
Yeah. Which is, my neighbor tells me this, yes, I trust my neighbor. Yes. The therefore, or I trust my pastor. Yes. Therefore, I will buy this rather than a random guy on the internet told me about it, or somebody said, it's a technology that is better, therefore we go for it. So if you're building a product, you have to think about the psychology of the buyer in the place that you're buying, you're selling into,
[00:07:00] and you build to mimic that.
And over time you can change their behavior, but you don't start by trying to change people
Tosin E: not immediately.
Dotun O: And that is a thing that I want us to unpack because it goes a long way in the way you build your product. Yeah. Whether it is the agent, now merchant, and also the banking, you seem to not just build a product without recognizing how people buy.
Yeah. But you also distribute how people buy. Yeah. How people areal already transacting. Now, whether it is true the way you think about how N-U-N-U-R-T-W are distributing themselves.
Tosin E: Or how elections are are won.
Dotun O: Oh, elections are won. And I'm gonna go into that as well. And because I tell people money points everywhere, because fundamentally they think they thought about how elections are won in Nigeria.
It's not by Facebook or Twitter. It's about going to the world. But let's pack that. But it's something you mentioned which is you recognize at the beginning that there are incumbents there. Big, you sent your team to the market and they said there is an incubate. That increment was just not
[00:08:00] an incubate.
It was not a bank, an whole bank or a non-tech incumbents. were actually tech incumbents with a lot of money more than you at point.
Tosin E: Yes.
Dotun O: And there is this theory about forced move advantage now people always use when somebody is trying to build a new thing, and I do that as well too. When you see a startup pitching to me, I say, oh.
Can. Somebody else is doing this and they raise more money than you. They're smart as well. It's a Google theory. Will Google build this? What stopped you? From using that as a way to say, okay, somebody's doing this. And not just Paga at that point, I think there's Opay
Tosin E: there was OPay then
Dotun O: collectively.
[...]
When I met you in February, there may have been about $700 million that have been raised for that thesis.
Tosin E: Yes.
Dotun O: What is it? And again, I wanted to touch that fundamental thinking that you normally, that you have, that you talk about a lot that made you to think there's still gap here for me to win.
Tosin E: . Yes. Thanks. So I think ultimately everything is about timing and about luck. That when [00:09:00] opportunity meets preparation opportunity is the timing. You don't control that. Preparation is your own input. In this case, I will say we were lucky.
Anybody else that says otherwise is just being cocky or proud or not being realistic. The preparation part is that okay, we're already good builders. We could build products having, slogged it out, building in hard environments for, four years. And we knew the market a bit. The luck that we had was, the market had not yet matured.
And despite the fact that there were tons of funding, there were still lots of reliability gaps in the system, and that was because of some of the processing infrastructure that everybody was using. Then there was still opportunity to even distribute those solutions a little bit, further.
So yes, they were there, but they were not as big as it could be yet, and I had the special ability to compare the volumes. I could see that they were generating. Against what the whole industry was. So I could see that there was a bit of a white space
[00:10:00] because, because we dealt with banks, I could see some banking data and see that yes, OPay is big, Paga is big, but they were just maybe 3% or 4% of the whole banking volume.
So I could see that there was some white space ahead. So the opportunity, or the luck, or the timing part in this place is that.
That
The industry had not yet matured. Products were not as the best they could be. They were not yet as reliable, and there was an opportunity to build a better product. Also they had not yet fully distributed.
They had not yet entered every nook and cranny of the industry. And then we had the ability to build a better product that customers will love. One of the first things we did was
we obsessed a lot of our reliability. Those days? A good day was when your transaction reliability was around 80% as a good day. Most days were around 75% successful transactions. Inside those 75% and 80% were also tons of disputes. People will
[00:11:00] try their card, they'll get debited, they won't get value.
These days, bad days are 95% success rates. So there was a lot of improvement that could have been done.
Dotun O: Yeah. And it's good to actually ping on that or put a pin on that, which is you saw a wide gap. Yes. And you saw the incumbents are doing well to some extent.
Yes. But you saw that there's still wider gap that has been left and you zoning in on what is not being done, which is reliability. Yes. It's very funny. When we're doing D.D., on, on Money Point, I know it was a painful and extensive D.D. that we did and you and I used to speak every Friday nights at that time
Were educating me about the business, about the market.
Yeah. And we were doing a lot of research and what I came across was. People were thinking if they don't look at the industry they think, agent want better price. Yeah. So you look at, oh, do you wait to win this market is better price or fancy banner and branding.
Yeah. If you look deeper and what we quickly realize, there are three things that matters and they're in this order,
[00:12:00] reliability,
Accessibility to the customer service.
Tosin E: People supportive
Dotun O: be, to support, to be, to solve the problem. And then price came out the third way and you optimize obsessively around reliability
Tosin E: First two, .
Dotun O: without ignoring even branding.
People know Moniepoint now, but for a long time there was no branding
Tosin E: Zero branding.
Dotun O: and you obsessed a lot about reliability, that this is the POS that should work
Tosin E: Yes.
Dotun O: The question for me here is that you, you talk a lot I've seen you obsess it all about technical debt
Tosin E: Yes.
Dotun O: I want to extract for us Yes.
Your view about building product, not just that, but when you wanna build product, what do you, what are the key frames that guides your thinking?
Tosin E: Like you said, it's first principles thinking or Like I always say it's first principles thinking.
First principles is being able to extract the fundamental reason why something is the way it is. It's one plus one equal to two. I don't know if a lot of people can explain why one plus one equal to two, but you could say that as a fundamental
[00:13:00] understanding if you're able to go down into people's behaviors, the wants and needs.
Essentially figure out what people really want. It's as simple as that. A trader who is on the street is trying to sell cash or sell goods and services. What the first of all need is for them to make a sale. And if your system is not reliable, such that when they luckily have somebody that wants to make a sale, you now fail them.
They'll be royally pissed. They don't care about price at that time because at that time, I can't even make a sale. I can't even make money. How much more you charge me? How do you charge me? So that's the F reason, fundamentally, that's the reason. That's the first thing. The second reason also is that you're dealing with money.
And ultimately problems will arise. You want to have comfort that when something happens, I'm not going to be running around to look for a solution somewhere, right? I might look for something that is cheaper, but when I have problem and all my money is stuck, how am I going to get it resolved? That's why they think of it as a
[00:14:00] second thing.
And thirdly, of course, okay, fine, those two things are fine, but can you make it cheaper? That's now number three. And you'll understand all this when you talk to customers, fundamental, it's like Exactly. And when you now have an obsessive focus on those three things,
there's no need for fancy documentation, fancy book reading, fancy courses. It's, what do customers want? Give them what they want. ,Oftentimes customers don't know what they want though, but it doesn't change the fact that you need to figure out what customers really need. And you now obsessively build it.
Of course, they talk about banners and everything, but one of the funny reasons why we didn't do banners is because when we saw that we were beginning to have traction and we were the platform to beat, we realized that others wanted to just come after Moniepoint customers because by the time you put banners on, you see , Moniepoint everywhere. Competitors began like to get worried. It was clear, it was deliberate. We actually canceled media launches.
There was a time where we're going to do a media launch for Monnify that night we [00:15:00] canceled and say we're not doing it. That would rather go underground, and the reason was because we're not as funded. You how much did I raise then? Maybe $5.5 million out of its 3 million was debt. Only 2.5 million was available for execution.
I have competition that have raised from hundreds of millions of dollars to tens of millions of dollars. So the advantage I have at that time of course includes stealth.
Dotun O: And by the way for context, that $2.5 million is actually a billion naira in today's money, it was
Tosin E: is. Exactly. It was 900 million. Okay, so lemme change it.
900 millionaire then, which is less than $1 million now. Yes, exactly. So exactly. So that's what we raised then. So obviously it was an opportunity for us, but it's also a lesson for incumbents that you should always keep your eyes on the ground. Listen to what your sales team are saying, especially because they see the closest guys to the ground are almost all the times sales teams.
So they see a lot of things. So [00:16:00] if you can listen closely to what they're saying about emerging trends, emerging threats, and move products teams pretty quickly to be able to cover it obsess about what customers really need, then you know, some of these, potential threats in the future can be detected and you can mitigate some of them.
Dotun O: That leads me to talking about the second point that I want to delve into, which is the distribution Moniepoint is all over the country now. And has been for a long time and people didn't realize that. And people say this company just came overnight and took over. But what they didn't realize was there was an underground swell of distribution agent, and I've been to Kano to talk to some of those agents, the distributors,
I feel personally that some of those guys can win elections.
Tosin E: Yes.
Dotun O: Because of the intricate network that they have in all local government. You want to use this analogy of the union, the transport union, how they distribute? Yeah. The churches. How redeemed church is all
[00:17:00] over the country and how elections are won.
Can you walk me through, you started life as a enterprise tech guy.
Tosin E: Yes.
Dotun O: Who will wear suit and pitch to banks. Yeah. Who's your first team? Actually till now, your core guys are tech guys who are coding and building, and it took a long time for you to start maybe getting included with business people, but how did you make that transition from that tech guys who are coding in Lekki to building one of the most.
effective and widely distributed network of agents across the
Tosin E: I think in the early days I focused on, I am still focused on product and sales. And distribution network is just a form of sales. There are, maybe you could say broadly, there are three categories, digital sales, enterprise sales, and the distribution network. So
[00:18:00] I think I transformed, not necessarily them, and me being the head of the organization, everybody will follow my path.
So in the early days, I actually personally led the growth of the sales team. I spent 75% of my time on that team and everything else was on making sure that we built solid products. And obviously now the organization is getting matured enough that there are more and more capable people.
There were some people I met in , those days also too, that worked very hard for this. Tolu is one of them. If you remember Tolu, he's a co-founder in Premble Now. These are people that we worked pretty closely together to build what we built. So it has to be something that will come from you personally or somebody who is very senior in the organization who can take responsibility and drive a combination of the sales team and the product team in meeting this distribution goal. Because it's not just about the people, it's also about the products
[00:19:00] that enable them to do what they do, the performance management system, everything that you need to be able to build it. So yes how we're able to do that was because I personally focused a lot of my attention on it.
Dotun O: Let's go deep into how that team was structured
it seems there are assumptions around how. Agents should be distributed in Nigeria. Yeah. Whether you hire them or you work with people that are not as educated, what is it that you picked early on about what could make a difference between what others have built?
Tosin E: Win win-win . It has to be a win-win situation for everybody. And it's not just about even agents, it's about a general life philosophy that if you want people to work for you, you have to align personal goals and interests together.
Even when you're building organizations where you say, these are our goals and objectives, if it is not congruent with people's personal goals, they will find a way elsewhere. So it's the same thing with building such systems.
I'm not here to come and build a business where you feel like I am milking you.
[00:20:00] I have to build you a solution where you feel like staying with these people, I will be a winner. And we have created tons of winners. These tons of winners are creating more winners, and that's where you can actually have an expansive network that keeps getting stronger and stronger.
So one of the things that we figured out early on is win-win. The incumbents then were not too aligned. They didn't have, their teams or their agents as well aligned. And we worked hard on making sure that these guys were extremely happy.
Dotun O: I wanna switch gears now and talk about Moniepoint generally as the evolution of Team Apt Point. It seems you, you moved a lot from. Agent Banking to Merchant network and now having a consumer, what is the congruency here? Because your business square, but you're also building a bank, a new
Tosin E: we're building Cash, cash app and we're also building Square.
Dotun O: Okay, tell me more about
Tosin E: So yeah, I mean at the root of
[00:21:00] Moniepoint our vision is to facilitate financial happiness. And we are doing that by powering people's dreams. As people or as businesses. Providing solutions that businesses and consumers can use to pay, bank, access credit is quite congruent.
Plus, there's the added benefits that if you're successful massively on both, you create network effects. Moniepoint started as providing payment systems for agents. We've now , evolved into become a business bank . So it's not just about merchants now, it's merchants, it's agents, it's all sorts of businesses.
It's people that don't need POS. It's people that need POS. It's people that don't need an online payment gateway. People that need online payment gateway. It's somebody that just needs a business bank account for his business. And the only way he receive payments is through transfers. They don't need a POS.
And all of them can get access to credit working capital loans where , on the basis of people's transactions with us, we're able to advance them loans that they can use in improving
[00:22:00] their working capital needs.
Dotun O: The challenge to that is there are two different ways of acquiring those type of customers, right? We say they are businesses, but a lot of them are consumers, ? A lot of these small businesses in Nigeria you have more than 400,000 or 500,000 of those now.
What are the key drivers and key challenges In terms of customer acquisition, the channels,
Tosin E: acquiring
Oh yeah. So like I said, we, there are three sales methods.
One is digital acquisition, another one is enterprise, and now one is distribution. Nigeria is actually people make a lot of decisions offline, the part of Nigeria that makes online decisions.
Are not as large as the people that make offline decisions.
Dotun O: even for consumers. Even
Tosin E: consumers. So for consumers, you could do digital ads and you'll acquire customers, grow as fast as if you had agents selling for you. One of our competition had been selling online for a while, and in reality the reason why they grew quickly
Two
[00:23:00] reasons. The first one is cashless. Like we all know the whole cashless and everybody did not have any other choice . So online grew quickly for them. But the second big reason that people are not too aware of is that they sell through agents and agents hustle for them, sell cards, open accounts for them.
And that's one of their. biggest sources of customers obviously you get to a point where you now have network effects, where you now have customers net promoting, you recommending your own solution to others to say, oh, okay, I'm using this better go and download, it will work for you. And that's where you want to be as a business.
You want to be in a place where it is customers that are. selling it for you. It .. it eases your customer acquisition. So this same thing also works for consumers.
Dotun O:
So what you're saying, yeah the distribution channel or the track that you built and the lesson you built, learned from selling to merchant also work for customers. The essentials of it. Yeah. Then going back to that first principle thinking, [00:24:00] um, the additional question to that would then be people looked at the numbers of Moniepoint and said, this is massive, but how big can this get ?
Especially when you're looking at it versus the GDP of Nigeria. You and I know that there's still more unreported in the country than it is. Yeah.
Tosin E: But
Dotun O: But for you, what is the next white space here?
Tosin E: So money point's growth is a combination of tapping into markets that people have not tapped into, as well as also stealing market share. So you could say the white space for us is total addressable market. It's not necessarily the. untapped markets and that's actually how we've been growing.
A lot of our revenue comes through payments today, offline and online payments, and there's still a very large white space on credits, a massive white space on credits. We've launched our credit solution, it's growing really fast. I'm extremely
[00:25:00] excited about that business.
It's something that can actually double, triple, quadruple. Our revenue to the extent where I will need to throttle it, because I don't wanna become a credit business. I still want to be a payment business, and I want to ensure that it's not the biggest, it's not like the biggest portion. It's one of the things that we have.
There are also, other things like FX payments for businesses. There are also other things like software solutions for businesses that can also be worked on. There. There are also, other things like going into consumers, especially the employees of those businesses and also there's now international expansion.
Nigeria obviously is the largest market in Africa. It's not maybe not again, but at least one of the most important markets in Africa. But also expanding to more countries can potentially allow us to still build. A similar business that we have built in Nigeria. We're doing a deal in [00:26:00] Kenya right now towards a potential acquisition of a similar business.
We've done a deal in Tanzania that we didn't announce also we're looking forward to doing more deals. And so a combination of continued organic growth and also inorganic expansions, potentially maybe listing in three to five years time. Hope the world does not blow up before then. And that should allow us to be able to, create a business that has grown four, five times bigger than what it is today.
And also well distributed across geographies and across products.
Dotun O: Your last point, actually enable me to segue into one of the point I want us to spend time on, which is your idea, your philosophy around m and a. You mentioned that for expansion into getting more market, but you also seems to view it as a way to increase the pie for other entrepreneurs, and you have this viewpoint, which you talk to an entrepreneurs, you're looking at maybe to m and a, which say,
[00:27:00] okay, your business might be worth 30 million.
My business was a hundred million. Yes. The combination of both of us is more than one
Tosin E: 30. Correct.
Dotun O: Can you walk us through that? thought process of using m and a to expand enterprise value of businesses, especially in Africa, where liquidity is low.
Tosin E: Yeah, it's win-win. Still the same philosophy of win-win.
It's a fundamental principle. If I want tun to, be very happy with me, I need to ensure that there's something in it for him. And people do their best when they are entrepreneurial, which means I am doing this thing for myself. Not necessarily that I'm doing it for my boss. And that's the mentality that actually creates organizations that grow really fast.
When you find a great entrepreneur, they're very well aligned and they have all the resources and the market is good.
And that's the order we choose it. We choose a market first. 'cause you can't be bigger than your market. Then you now find an entrepreneur and you now align the entrepreneur's
[00:28:00] interest.
Such an entrepreneur oftentimes is already thinking about, okay, I need more resources to grow fast. I need technical know-how also somebody has done this before to help me and while I'm doing all this, how will I also be able to get value from it? And Moniepoint generally can come in and solve or ease those three things for you by giving you access to capital.
That's from our own coffers. Two, giving you technical knowhow based on the experience that we have building all over the years. And three, giving you a path to liquidity. This approach allows us to be able to find congruent businesses that would be able to now join the whole mothership and create an entity that is a lot more diversified.
Obviously this is also an approach that works great at this point. If Moniepoint becomes a lot more public and has a lot more cash, maybe because you are public, [00:29:00] obviously you can't do all cash deals, but all cash deals also needs the soul of those businesses to run, and you don't want those people disaligned also.
So I, I don't know other people's M&A philosophies, but based on the realities of what Moniepoint has right now. and what we think will be the factors to drive success. I think that this structure that we're settled on is a structure that will work great and is a win-win scenario for most entrepreneurs.
Dotun O: You've done a bit of this now and in some countries, and I like the fact that. You start from countries you look at GDP, look at the, expansion of the market, you look at technology enable frameworks and also policy,. What are the key things that you then look out for, to choose which company or which entrepreneur you go for
Tosin E: So the country of course is the GDP. And the level of competition. So if we enter this country, how much can we make essentially?
Dotun O: And
Tosin E: you're looking at how much
[00:30:00] is in this whole country and which people are already inside this country taking that money. Then I think then of course, for that country also take a look at macro conditions. You look at political stability, maturity of the of the regulatory frameworks, legal frameworks.
You could look at all those things. No country's perfect. Absolutely nobody's perfect. So you need to be okay with some level of risk and how to mitigate those risk. But you also act local. You can't be global, and now you need to be a local. You need to be behave like you are one of them. The country needs to be able to see you and trust you, and one of the ways to do this obviously, is to have.
Not just OGEs or people that are just fronts for you, but people that actually have true stake and decision making abilities reside in that country and work in that country. So obviously that will be a framework for selecting the countries. Unfortunately
[00:31:00] there are not too many countries that can
Dotun O: there's something I want to pick before you move on is about not going for stooges you go to an entrepreneur, make them to feel that , we're not just acquiring a company.
We are together
Tosin E: Yes.
Dotun O: Can you, there are some CEOs have listening to this. How much time should a CEO be spending on this in terms of spending time with the other CEOs that you want to acquire and. What effort do you have to put in to get them aligned with you, with your own
Tosin E: so as a leader, not just a CEO, you should always be looking for leverage. How can I do more with less efforts? How can I do more with my efforts? You don't intend to put less efforts, but how do I always magnify the efforts that I put in? That's always what you've be looking for and people are leverage for you, so you should always be trying to move higher on the abstraction layer of execution while not losing sight of what's going on the ground. And that's incredibly hard to do, and that's one of the reasons why
[00:32:00] CEOs should be operators, and should be people that have depth.
Because what allows you to be able to see what's really going on the ground. Is your depth. That's literally what it means. It allows you to see on the ground, even if you're standing far up, you can cut through all the nonsense and cut all the way down to know what's going on. , So, going back to the original question of how much time , like I said, it's about building leverage and it gets to a point where your leverage is strictly based on the general managers that you have.
And the fact that you're also the public mascot for the organization. And I think there are certain officials or government officials that don't want to see one of your executive directors is you. You want to see. So over time, your job will start moving more towards spending more and more time with your general managers, ensuring execution, ensuring that the congruence with the organization's direction, ensuring that they're upholding the culture.
Of the organization ensuring that they meet
[00:33:00] their goals and targets, and I have found that finding and motivating these people is one of the hardest things.
Dotun O: That, that actually leads me to the, one of the point I talk about talent.
Tosin E: Yeah.
Dotun O: Most, a lot of your leaders started with you and they're still here and a lot of them, and I know them personally. Yeah. They could individually build their own business.
Tosin E: Yes.
Dotun O: They are startup founders. Yes. In their own right. Yes.
And they stayed with you. They're , these technical guys. Yes. And over time you started getting more leaders come in. Yes. How do you balance that? Because it's a different culture on managing the way you manage your day. One guys who have been with you. And the ones that are coming in now who are, maybe formed in their own ways.
They have their own culture, they have their own view, .
Tosin E: Yes.
Dotun O: how do you balance that, especially for startup founders who are, people are than from day one, but then they also have to hire senior people in some cases. Might even be any more than the day one
Tosin E: Yes. Obviously day one guys will start catching up and start earning similarly, so that
[00:34:00] has to happen.
It might not happen. So the way I usually say it is when these more executives come outside, they command far higher salaries. But what they now do is help you adjust the market realities of the people doing similar roles inside the organization. So those ones, their compensation also eventually, now grows almost pretty quickly under six months to a year to similar levels with those other new guys that just came in.
Sometimes also the internal guys, because they grew with the organization, they are often more even junior, sometimes in level of. Experience, years of experience. So sometimes it's also okay to not have them on the same skill, but over time they just naturally catch up because you cannot just now stomach that, oh, because this guy has five or six more years experience at this one, he's now taking a hundred k difference.
You won't be able stomach that. So naturally the organization will balance that. Now with respect to finding these guys who can otherwise build their own startups. I drew the lesson from my own personal experience where I
[00:35:00] didn't have to start Moniepoint. If I got what I needed, I would have been perfectly okay running an organization, running as a general manager in an organization as long as I could express myself and get some level of commercial benefits.
That is not just about my salary, but directly linked to the performance of the organization. That's what I was looking for. And if I got that from my employee, I would not have employer rather, I would not have done Moniepoint. And I actually looked for it. So the only way I could ever find my expression was starting something.
And I drew from that lesson and tried to create an environment where people will love their job. You love your job and there's a level of commercial benefits that can make you better than average, far better than average. A lot of people will not take the risk of now going out to go and start their own on that basis because starting something is also quite
[00:36:00] risky.
There's no guarantee of success and , we only hear the good stories. . You're only hearing about me because Tosin made it, or is making it rather. But there are tons of people that have started something smarter than Tosin and didn't make it and people sometimes are smart enough and they don't want to go through that risk, and this organization gives them that ability.
So to do that, what you need to do is create an environment where they have autonomy. So I have a four-M framework that I usually talk about and it is one in which people are challenged. In doing what they do, they love it, and they see that they're growing the amount of challenges that they're getting is somewhere on that challenge curve where they're most challenged but not also. flustered. It's not like they're out of their zone, but they're also not in a comfort zone. I need to recognize people's bandwidth and capacity and always put them in that zone. And that's what I call mastery people are, everybody's always striving to get better and achieve mastery.
In doing this,
[00:37:00] they are recognized. That's membership. A membership is both internal and external. Internal. Their boss recognizes their contribution. There's a recognition for what they're doing. And also the organization they work for has a brand that they can be proud to associate with.
And the next M is meaning you can relate to what is being worked on. You cannot explain it. In fact, the better it is, you can explain it to people, to others, the better it is. And also it has social impact. You can see your. products being used everywhere and you can see that you are part of something that is impactful and meaningful.
So when people are challenged and they're members of something great internally and externally, and they are working on something meaningful, what you just need to, the last thing is to add money.
Oftentimes, a lot of people don't want to take the extra risk. If they can find comfort, take care of all their, there's no noise in their
[00:38:00] lives because of money, and they also have excess to be able to, splurge. Obviously you might not be able to create this for everybody, but this is what everybody is striving towards.
So if you have these four Ms, people are generally motivated to work for the organization. And of course, autonomy is part of membership where you recognize them in enough and you give them their space to execute.
Dotun O: I'd like to spend the last few minutes on fundraising. Your company started profitably and you were being profitable for a long time. When I met you in February, then I remember when you were picture and you're saying, I'm gonna property with March, and I just said,
Tosin E: Yeah.
Dotun O: it's not gonna happen. And then in April you were profitable. since then, company has been profitable. . But you are still raising money. Yes. Can you walk us through your approach to raising money?
Why and what money can do for a startup that's profitable? Added to that is. What have you found most surprising during the fundraising journey,
What has also reinforced your belief at the beginning
[00:39:00] about startup, fundraising ?
Tosin E: So I generally like to take risks that I can control.
As an entrepreneur, you can't not take risk, but it doesn't also mean you should be reckless. It means that as you're about to.
Jump one very big, gutter like that. You should have practiced it somewhere and see that you have the ability to actually jump four meters and that gutter is 3.9 meters. And what you're going to do is try your best to make sure that you don't take it. That's my own philosophy to taking risks and it applies to fundraising also, that I want to run this organization, but I don't want to run this organization that I'm leaving it to luck. Leaving it to luck means that I am leaving the survival of this organization to factors that I cannot control, and I can't control other people's decisions about my organization, so I had better take responsibilities into my own hand and ensure that I can survive and if somebody wants to back me all well and good. And that's the
[00:40:00] philosophy that led to. bootstrapping. It's a need to ensure that I control my risks. So if I run this organization in a way that at least I can make payroll , and I continue growing, I'll become attractive for investment.
It turns out that this philosophy now forces efficiency inside the organization, unlike people that already have excess. And that's one of the reasons why we grew for a while, up till now, we've only raised $50 million in total. And it's not typical of my competition or everybody has raised in excess of, 500 million plus.
So that's the philosophy that led to the bootstrapping approach. And secondly, fundraising takes an awful amount of time and is a big distraction into what is important about the organization. You don't want to spend so much time in. In front of investors rather than spending in front of customers.
Even investors don't want that because what they're looking for are returns. But if you're going to, in this current climate, if you're going to
[00:41:00] get one I investor to back you, you're going to talk to shitload of people. That's my philosophy. Philosophy is control my risk, and I want to raise funds from a position of strength where it's not like I'm dying,
I just need funds to continue to do something. That I don't have to do, but if I did it, I will continue growing massively. And that's what they call rocket fuel. You are already, accelerating, you just want to inject more nitro to, to continue growing. And that's our philosophy. So fundraising and I mean in us trying to raise funds is to be able to take on even more bigger initiatives that if we were going to do organically.
It'll take us a lot more years to gather the funds internally through returns that we have, and that's the philosophy that we have to fundraise in.
Dotun O: You and I spent a lot of time talking to some of the best investors all over the world. Yes. What have you found most surprising and also reinforce your belief in that journey?
Tosin E: Investors are not smart.
[00:42:00]
Dotun O: You're throwing shade at us
Tosin E: investors are not smart to trust me. A lot of investors are stupid. A lot of people just follow patterns and unfortunately when original companies that come their way, they're not discerning. I'm not throwing shade at people that didn't back us, but obviously I feel that way that if you didn't back us and you backed some other people that went to fail. So what's your job? I told you everything.
I
I told you everything I was going to do. But yeah I found that surprising. I found that surprising that if, and I think I don't blame them as people individually, it's the system, right? It is the system that they are in. It's a system where you want to be able to balance risk with rewards.
And oftentimes you don't go wrong. You know what they say, but you don't wrong buying IBM. The equivalent of IBM in investor world are trends that, okay, this is what is reigning and everybody's going in. So it feels like everybody just take that cohesive direction
[00:43:00] because it's hard for people to stand against what is conventional.
And if it goes against you, you are the most stupid person. I can remember Dotun, how you had to fight for Moniepoint's deal because people didn't get it. A lot of people didn't get it. And. If Money Point didn't do what it's, you'd have, they would've fucked you up. So I think that's one of the things I've found.
But also most founder funds, where it is led by founders have the ability to actually now make better decisions because
Dotun O: because
Tosin E: can take, they don't have to optimize for making their boss not feel like they're stupid. They're just optimized for returning funds so they can take better risks,
Dotun O: and is their money at stake as
Tosin E: And it's also their money at stake. So I found that also I've also found that it's easier to raise funds from foreign investors when they have local partners that understand the domain.
Dotun O:
[00:44:00] That's super important.
Tosin E: extremely important. Say
Dotun O: seen that pattern with
Tosin E: And we've seen the pattern with money point. A lot of funds that came to Africa in 2020 to 2020 were tourist funds, like they were not real funds that were here to stay.
Money that can stay is going to require somebody in that fund that can say, I know this country, I know this space. I know this people, and give confidence to their ic. To be able to take a bet on that company.
Dotun O: And also the investors too.
Tosin E: And also the investors. And we've seen the pattern on all the people that have backed us.
So even if you're talking to some of the world's biggest investors, it's going to generally be harder if they cannot get confidence. And unfortunately a lot of them are slowing down hiring partners for Africa. They were doing that last year and two years ago. So that's another thing that we found.
And also your ability to raise funds is far higher when you don't need the
[00:45:00] funds. Your ability to raise funds and negotiate is far higher when you don't have to raise the funds otherwise you would die. So it's better that you just been in position where you don't have to need it. It's coming now back.
It's coming back now that investors cherish profitability now and no, it's coming back. That initially was gross margins. No. In fact, initially it was, I don't care about gross margins growth, then it came down to gross margins. Now it's coming to profitability. So
Dotun O: Interesting. I remember that conversion around,
Tosin E: gross margin. Gross margin.
Dotun O: to Christmas ago.
A lot of conversation
Tosin E: margins. Gross margin.
Dotun O: Yeah.
Tosin E: Now I remember talking to one investor that has gone through a lot of flack more recently, and I told them that.
we were profitable. And he looked at me with disdain like, what the heck are you doing? Why are you profitable? I didn't understand like, why this doesn't make sense. Like why? Was talking about it with pride and they were looking at what's this man talking [00:46:00] about? But then again these are trends, this are fads.
They were only dancing to what the industry was saying.
Dotun O: okay, I would like to end my interview with just one fire round question with you, which is what belief have you held before that you've changed your mind on recently?
Tosin E: I think most of my beliefs have more or less not made a U-turn. But they've just been refined. One belief that I've always held is about happiness being available to everyone. It's still true that happiness is available to everyone, but when things are going your way, it's easier. When things are not going your way, it's harder.
What makes me equivalent to the average guy on the street selling pure water? Is that the same way I can smile, he can also smile. It's available to him. It's gonna be harder for him if he cannot find transport money to go home clearly. But the same amount of positive feelings that I have is what it has, and that I believe is equalizer for everybody in life.
Dotun O: . What book are you reading now? Or what book have you read recently that struck you?
.
Tosin E:
[00:47:00] Funny enough, I don't read a lot of books , but one of the books that struck me, it wasn't recent but struck me a lot, is execution By, Jack Welsh, was that his name? Yeah.
, that's one of the books that struck me. And the content of it.
Dotun O: and it shows in the way you executed. People do ask me what is the one thing about toss? I said. Tosin is nothing but an executor and he's comfortable doing execution product meeting for nine hours than talking to investors for one hour.
It's great having you on this
Tosin E: Thank you very much,
Dotun O: It's always a good conversation and we should continue another time.
Tosin E: Thank you very much. Okay.