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Saturday, December 13, 2008

Is Michael Joseph A Business Genius Or What?

It is ironic that one of the reasons why Michael Joseph was posted to Kenya by Vodafone was because it was felt that he did not have the necessary “papers” to head a Vodafone operation in Europe or elsewhere. So Africa was the place. And yet keen observers have been able to quickly identify this man as one of the major driving forces behind the phenomenal success of Safaricom.

He came up with and pushed the M-Pesa idea very hard even when it looked like a pretty risky venture that could go badly wrong. But what really bawled me over were the recent events at the mobile phone operator.

It all started when Zain (formerly Celtel) came up with the Kshs 3 a minute call rate and were quickly followed by Orange mobile’s Kshs 1 a minute call rate.

I must admit that even I thought that this was the beginning of the end of Safaricom. I said to myself that their M-Pesa service would come in very handy now that there would be greatly reduced profits from their core revenue source of talk air time. And there were good reasons for this deduction. The Safaricom IPO had caused a lot of anger against the company as the shares continue to plummet. Then it was clear that what was going to result was a price war of sorts. Maybe Safaricom would have to come up with a call rate of 90cts a minute or something, thought.

But even as the dark clouds continued to gather rapidly at the Safaricom headquarters along Waiyaki Way in Nairobi, Michael Joseph and his troops were preparing to pull yet another rabbit from the hat.

That "rabbit from the hat" was the Jibambie campaign where call charges are pegged on the air time value that a customer purchases with a Kshs 1,000 scratch card qualifying for a kshs 3 per minute call rate (lower than the Kshs 4 rate that has always been charged to post paid customers).

This single idea completely changed the ground rules. Kshs 1,000 cards have suddenly become very popular which in turn has greatly revived the dealer and re-seller interest which had rapidly been waning in the days when Bamba Mbao (The Kshs 20 scratch card) ruled. Naturally with higher commission potential, every small shop and retail outlet now sells the Safaricom Kshs 1,000 scratch cards these days. Imagine what that does to the company treasury apart from helping the company avoid an ugly price war and in the process completely changing the ground rules? So far there has been absolutely no response from their competitors to this "checkmate" move.

Read the amazing Michael Joseph story.

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6 comments:

Anonymous said...

Genius at the obvious!! its all about Economies of scale!! Does not take a genius to figure out that most so called businesses were tailored to the so called Kenyan middle class leaving out the vast majority... something that the likes of Equity has figured out...
Simple question to address this would be to ask yourself, do all adults in Kenya have a bank account? ok, that's asking for too much, let us put the figure to a humble third of the population. Do they have bank accounts or mobile phones? Tap into that market and you are declared a genius...! me thinks not. I call it common sense....

Ken Thumbi

Chris said...

I agree with you Mr Ken Thumbi.

But just how common is common sense?

-kumekucha-

kipsang said...

Dear Kumekucha,

I would like to repost this article followed by a link to your blog for publication on mine (http://kipsang.wordpress.com/).

Hence this comment to ask your permission to do so.

Looking forward to hearing from you.

Kind regards,

Kipsang.

kumekucha said...

Hello Kipsang,

You can re-post this article and others in future as long as you make sure you link back to Kumekucha and that the links works all the time.

Best wishes for the success of your blog.

warmly,
Chris.

bloggeratti said...

Genius.... and thug.

Rumour has it that Safcom has "The Book". It's full of ideas, some generated from within, some stolen from unsuspecting contributors.

Example: A friend once offered these chumps an SMS solution way back in the early days of the mobile. After several meetings and promises of "We'll look into it", my buddy found the same idea he'd mooted to Safcom - running on his mobile phone.

Chris, insightful as you are and with the Kumekucha Intelligence Network backing you, thought you'd have caught wind of Safcom's corporate espionage.

E-Nyce said...

"Is Michael Joseph A Business Genius Or What?"

What.

Google
 
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