An Interview with Sim Shagaya, Ceo of Konga

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Sim Shagaya is the founder of DealDeyKonga (both strong contenders in the Nigerian e-commerce space) and E-motion Advertising.

In this interview, he discussed starting up a technology business in Nigeria, the competition, funding, building a team, and the future of technology (among other things).

IN THE BEGINNING

You have E-motion, DealDey and Konga. How did it all start?
The first business was E-motion, that started in 2007. I was much younger and I didn’t know as much as I know now. I have always been intrigued by technology so back then, I probably was spending much more time just sort of browsing and reading than I do now, while now I just spend more time sort of doing. I think like many young entrepreneurs today, you are just trying to figure out what you want to do and trying to understand your environment so you don’t make too many mistakes. But I do know that even now, even though, there is lots more work and many more challenges and the things we are building are kind of in the lime light so if you fail, you fail in front of everyone. In spite of all these things, I’m a much happier person now.

Why were you qualified to start a business?
I really wasn’t. I had tried to start a dating site called Alarena, I tried to start a job site called Job Clan, I tried to start a classified site called Gbogbo. I tried to do all these things and they just weren’t working. The timing was just wrong. And then of course a streaming media business called iNollywood, and all these things were just way ahead of their time.

And now that’s what everybody is doing.
Yeah, I know. I think part of it is just reading the times as much as finding the opportunity. Anyways, after all these things, I literally was at a point where I was like, ‘Okay, I’m just going to go back to school, get a PhD and teach, and I’m done.’ But at the time, I had a wife and a child and I was like ‘okay, I need some kind of income stream’, so I figured that billboards were like real estate business, you build something and then you just charge rent. So, I wanted to set up a couple of them in Abuja and this would just be kind of my income stream. I put up two digital billboards in Abuja, and what was supposed to be ‘set this up and then have somebody kinda manage the cash flow so I could go back to school’ (I had started applying to universities) just quickly grew.Very very quickly and I couldn’t finish my application. So here I am.

Konga’s 1st day

You started this many businesses, but I have never heard of you having a cofounder. Do you have one of those?
Yeah, in E-motion, I definitely did. I had one and I think it helps. I don’t think anyone can do this sort of stuff alone and even for Konga, I don’t have one, not for not looking for one. I looked for one pretty hard but I didn’t end up finding. But that said, there are about two or three colleagues of mine that I must give credit to that were here from the beginning when it was just four of us in a room with diapers stacked. I mean in some sense, I had those co-founders, but just in a very different kind of way.

ON COMPETITION

I keep on trying to separate DealDey from Konga.
Yeah, many people do.

How do you draw the line between two separate companies that seem to offer similar things?
There is a Chinese wall between the two, and they are both kids. Let the kids compete. They even compete on some level.

I noticed that. How can you compete with yourself?
They are different retailers and even in brick and mortar retail, you have a high street retailer and you have thediscount, out of the way outlet mall. They are both tools for brands so if you are Ralph Lauren, you sell high street and what you can’t liquidate on the high street, you pass off to the outlets to kind of get your capital back.

You have deals on both Konga and DealDey, how does that work?
I think one of the big drivers of ecommerce is the savings that you get. So, whereas DealDey is really fashioned around the discounting experience, Konga looks at discounts more as promotions. The other really big difference between them is, if you are familiar with TV shopping  like the home shopping network, DealDey is more like that kind of retail. TV shopping is a potent form of retail where you have one thing, this is what it is, 20 people have bought, call and buy. And I think for Nigeria, Dealdey sort of fills that space of TV shopping. The other thing about DealDey is that it is discovery commerce. You don’t come there looking for something, there’s no search tool even. You come there and you’re like ‘uh, wow, that’s interesting’ versus the Konga retail experience where you are actively looking for something.

When you think of the competition in any of your businesses, do you take steps to actively combat them?
Competition on some level serves a purpose. It sometimes brings out the best in you and it also forces you to distill what is most important to you. Competition in the outdoor space was completely different from this life I am living now. In the outdoor space, when you have a billboard, you have monopoly on that radius. But I think that for us here, we have had to kind of get very comfortable about where we are going and why we are doing this.

We look at competition but only from the point of view of ‘how can we make things better for our customers’. I don’t think you can live as a hermit and ignore everybody else, but we try not to be reactive or let competition drive what we are doing because what will end up happening is that some of the good things you are doing, you will undo to try and copy somebody. I think everybody has to chart their own way.

That said, I think the best businesses, the greatest businesses that have been built in Nigeria, whether they are MTN or DSTV, across all sectors, its always been very strong collaboration between a very well aligned and incentivized local team and very capable foreign expertise. There are some exceptions to that but I think by and large, if you look at the banking sphere for example, the purely foreign operations are at the margin and I think that speaks to the fact that you have to have this close collaboration between local and foreign and it cant be collaboration just on an employee level, it has to be collaboration in the fact that if this enterprise, this journey goes well, everybody shares in the spoils. And that’s why we’ve set aside 10% of the equity of this business for employees, they are all aware of that so as you join, after six months, you are evaluated and you’re given a grant. There are many people now who are shareholders. What is the point if only one person does well?

What is your take on advertising?
There are different forms of advertising and you have to do all. You have to do digital, you have to do banner, you have to do radio, you have to do TV. We are doing all of them, but the most important form of advertising is word of mouth.

BRINGING IT ALL TOGETHER

I have noticed three things that stand out for ecommerce businesses: the technology, the logistics and the client relationship. So far, you seem to have the last two on lock, but I’m not so sure about the technology, especially for Konga aesthetically. What’s going on there?
Really? Well, it’s going through vast improvements. We are constantly iterating and releasing. I mean, I think we have had to learn a lot of this stuff and I think another thing with me technologically is that we didn’t buy an out of the box platform like Magento. We are building this thing, and while this is an advantage, it looks like we are slow out the gates in the beginning. It’s like Usain Bolt that the first ten meters, he is slow and then he starts building up. But that said, I think the technology is about to increase and improve rapidly.

All from local talent?
Yeah, local. And we work with Indians. We are going to be doing some really interesting things with interfaces over the next few weeks. Really really interesting things.

How do you balance all your businesses with your personal life? Where do you find time for you?
Well, I love what I do so for me, it’s back to this work/life balance thing. While I’m here, I don’t really feel like this is work, it’s just life. The other thing about me is that I really value my family. Without them, you can’t really get very far. When I’m not here, I’m at home.

I guess it helps that you have people on ground that help you?
Exactly. That’s the biggest part. That’s the most difficult part of my job. How do you find the best people you can find?

How do you find them?
You look for them everywhere you can find them. Some of the people have come to us. You go give a talk at TED and somebody runs up to you afterwards and says ‘I have to join you’. A number of people have said they have to join us and some people have joined us from competition, we’ve not poached one person. Also, we interview here for head, intellect, as well as heart. This has to be somebody I can spend a lot of time with and whose heart is really passionate about what we are doing. Beyond that, there are other things you have to do. We’ve been to INSEAD, reached out to MIT, some of these schools to try and pull Nigerians back and motivate people to come back. It’s a lot of work. There is also a bit of frog kissing.

Yeah, till you find the right ones. So, you’ve had bad experiences with people?
In the minority, yes of course. Not because they are bad people but just because they didn’t quite understand the scope or the scale of the wok or the energy required. They didn’t just really kind of understand it.

Is there any minimum requirement to join your team? You mentioned you went looking at INSEAD and MIT, and those are top schools.
We have also been to Lagos Business School at the career fair. We are going to be touching Yabatech and Unilag. I think one of the key things about businesses that we are building is that it can’t just be populated by Ivy Leaguers, there is a role for everybody here – for the repatriates, for the expatriates, for the Nigerians.

When you started these businesses, aside the need to make money and sustain yourself and your family, what were the other driving forces?
It’s what I enjoy. It’s what I’m good at. Some people play the violin, some people run, some people play football. I like tech, I like building tech businesses. It just makes me happy. And then also I think it’s about leaving a mark and about helping our community and Konga is taking that direction.

Because we have a pool of people who want to go into technology entrepreneurship too and they just don’t know how to go about it, do you have any advice for people who want to startup?
I think there are some basic things you need and then everything from there – school, your environment, whether you went to some Ivy League institution or not – all of those are secondary. I think the primary thing is hard work. You have to be willing to work harder than you think you can; you have to be willing to push yourself beyond the limits that you think you can physically push yourself to.

I also genuinely believe be good to people. Be good to your investors and your friends, and your family and those around you because all too often, I have found good luck, or some will call it karma, but I think its just when you try and be good to people around you, roads open and somehow, goodwill just comes to you.

And be willing to fail again and again and again and again and let the only bloody constant about you be your stubborn willingness to just get up again and again and again and if you fall yet one more time, get up again.

I was wondering how you could have started like five things before and they all sort of failed
I learned something from each, every single one. There is not one I didn’t learn a lesson from. You just have to keep getting up. And have no ego. I think half the time we don’t come out and farm under the sun because we are afraid of what people will say if we fail. But if you don’t fear what people say, then, i mean, look at Elon Musk. That’s what I love about that guy. Not only does he build businesses, he goes after the most daring goals. I mean, who tries to build an electric car company and a space company at the same time. And then he does it but more than that, when those rockets take off, the whole world is watching your work and the dragon spacecraft exploded three times. Seriously, it was on the forth time it got to orbit. Three times! And the whole world is watching and you do it again and it explodes again and you do it again and each attempt is tens of millions of dollars. He took all of his savings from PayPal and put into that thing, everything. At one point, he was borrowing money from friends. Everything he made from PayPal, he would have lost. He literally would have become like me and you from being worth like hundreds of millions of dollars, and not because he lost it in an alimony battle in a bitter divorce or because somebody robbed you, but you yourself, you took your own money to go and do something that seemed like a pipe dream.

I guess that’s another quality you have to have. You guys have to be crazy.
You have to be. Going back to Elon, he describes entrepreneurship as staring down a chasm, chewing glass, and in many ways, it feels like that. Like last year, at the beginning of Konga and what was happening in the competitive landscape, and the noise, people were telling me ‘don’t do it, don’t go, these people are too strong.’ There are moments when you think ‘maybe I shouldn’t’, but you go, you just have to go.

ON FUNDING AND PROFITABILITY

I know you’d have made  money from the businesses you owned before, but Konga and DealDey are funded right?
Yes.

By the same people?
No. different people.

So who has DealDey and who has Konga?
Dealdey is myself and Kinnevik of Sweden. Konga is myself and Kinnevik and Naspers. Naspers are amazing. We knocked on every door to find money, we couldn’t find but Naspers came to us.

Has there been any one moment when you felt you were going to lose it all?
No matter how good your intentions are and how strong you think you are, you need funding in this game. I think the biggest time of anxiety came when, at a certain time after our first round of funding, we had started exhausting it but we had to keep accelerating. It’s like you see a cliff but you have to just have faith that when you get to that cliff, a bridge or a ramp will appear. And Naspers came through. Of course, when your team sees you, you look like nothing is worrying you but between October 2012 and January 2013, I grew quite a few gray hairs.

Are you profitable yet?
No.

How long do you think in your estimation?
It depends on competitive dynamics and how quickly Nigeria as an environment grows but I think profitability will probably come in 3-5 years.

ON THE YOUNGER GENERATION …AND THEN SOME

Young Nigerians, like folks in their 20s, I think you guys are really amazing! My generation has nothing on you guys, you are so creative, so daring, you don’t care about government. Look at the music and the creativity and the energy, look at what you guys are doing. It’s amazing.

So there are people you look up to, like mentors, but are there people who look up to you? Do you have any people you mentor?
I think those relationships are important without explicitly making them sort of a give and take.

I know that you love your work and its part of you and what you do, but minus ecommerce and technology, what other things interest you?
Hmm, I like poetry, I read a lot of poetry, like a lot. I used to write a lot but now with Konga and KPIs…I love tech. I love nanotechnology, just futurism and what will be. When I think of Konga, I think of 20-30 years from now when there are robotic vehicles delivering things. I think that’s where we are going to go, like all these Google automated vehicle technologies are going to work. Yeah, I love technology.

Credit: Tolu Agunbiade, OTEKBITS

 

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