Part 1: Treading the Fine Line Between Bravery and Stupidity
I was once on a date and after a lovely dinner was faced with the familiar embarrassment of being unable to pay for the dinner due to a POS failure. The restaurant tried charging my card but got an error. They tried another device and yet another error. The only option was to pay cash — of which I had none. Apologetic, I had to leave my date at the restaurant and go to the ATM. The first two ATMs also gave me an error — “issuer inoperative” — the third ATM worked — and I was using the same card in all these instances. It was quite frustrating, but thankfully my date understood the “Nigeria” factor and didn’t hold it against me (we didn’t end up working out, but that is another story).
Today, April 3rd, 2019 marks 10 years from when I embarked on the Paga journey. A journey that began because of my frustration with carrying cash everywhere in Nigeria and not being able to make payments efficiently.
Once, over coffee with a friend, I mentioned that for Paga to be as successful as I dreamed we would have to invest over $100m.
“Did you consider this fact before you started the company?” he asked
I was stunned by the question and realized that I actually did not fully consider the amount of money nor could I have imagined the challenge that lay ahead of me when I was starting out. He said I was brave. Reflecting on this conversation I realized there is a fine line between bravery and stupidity. Was I brave? Or was I stupid? On telling another friend this story she said that she “sensed Paga was a stupidly brave move”. I’m inclined to agree!
Our first market has been Nigeria, a country of over 200 million people with over 90% of transactions done in cash. Though the company started in April 2009, we took our services to market in August 2012. It took us 25 months to get our license from the Central Bank of Nigeria, and then another 7 months to close our Series A financing.
In 2009, I worked at a Private Equity firm, and each day our office runner would make the rounds asking people if he could go to the bank for them to get cash. When going out to drinks or dinner with a group it was prudent to carry wads of cash to cover the bill without any embarrassment. If you were traveling, you had to go to the airport, line up and buy your ticket in cash. Till today most people traveling internationally from Nigeria pay with cash at a bank branch. In a world that was fast moving towards a digital age, we seemed stuck in the dark ages, reliant on cash for almost all transactions.
How do you bring people who are not banked into a digital ecosystem?
When I decided to quit the private equity job, I spent about 3 months exploring various ideas — everything from starting a members-only club to (believe it or not) selling women’s hair. But I couldn’t shake the desire to start something big that would have a huge impact on the world. First, it had to pass the “Big Idea” test — no one would question the market size. It had to be obvious… “this could be big”!
On telling another friend this story she said that she “sensed Paga was a stupidly brave move”
I wrote down 20 ideas: Number 10 was mobile payments, and I had a note on the side asking if it can be combined with number 2, cloud payroll and number 11, banking the unbanked. I mulled over this until I had an epiphany about the key challenge I saw with mobile payments — how do you bring people who are not banked into a digital ecosystem? The answer was doing the hard work to scale a network of neighborhood stores where people could pay cash into digital wallets and make electronic payments. I knew that if I solved my frustration, I would be solving the same frustration for millions of other people.
I started Paga with one goal: To solve the “use of cash” problem — Cash is still king around the world — and that needs to change. Cash is very expensive to clean, manage, and store. In high-risk countries like Nigeria, carrying sums of cash around poses a security risk. Storing money digitally and transacting digitally significantly reduces friction, transaction costs, convenience, and improves livelihoods.
I immediately knew this was what I would pour my life into. I turned in my resignation on Monday and the journey of Paga began!
Here is what stupidly brave looks like; It is embarking on entrepreneurship in Nigeria, one of the most difficult countries to do business. It’s processing over 72 million transactions worth over US $4.5 billion for over 12 million unique customers. It's $34.7 million raised in funding so far (not quite at $100 million yet!). It's building a team which is currently at 460 people, with over 800 people having worked at this organization at a point in time, and over 20,000 agents recruited who have created over 10,000 jobs in their communities.
Stupidly brave also looks like many ups and many downs, unforeseen curveballs and having to think on your feet and come up with creative solutions when the ‘Nigerian factor’ inevitably rears its head.
What I didn’t say to my friend was that my stupidly brave ambition extended to building a company that will last 200 years.
At Paga, we say we are making life possible for our customers. We want to make payments so seamless that you can focus on what you really care about — whether that is ensuring that your wife is admitted to the hospital for treatment, or ensuring your daughter is allowed into school because payment was made on time, or enjoying your dinner date without ruining your swag ;)
I’m incredibly proud of what our team has achieved so far. Our investors have been fantastic partners and we won’t be here but for their belief in this stupidly brave idea called Paga!
Over the next few days, I am going to share short stories about the Paga journey these last 10 years. I hope our story inspires others to tread that fine line between bravery and stupidity!