Alan Knott-Craig Jr: How I nearly missed out on buying Mxit

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Africa

In the first of a series of extracts from the opening chapter of his new book “Mobinomics”, South African-based entrepreneur Alan Knott Craig Jr speaks about what it was about Mxit — the massively popular youth-based social network he now owns — that turned him into “an evangelist, an unpaid, unofficial ambassador for the network”. He also offers a glimpse of the respect he has for the company’s former owner Herman Heunis and how difficult it was to turn down opportunities for a stake in Mxit. Twice.

Run a small business. Find a job. Educate a child. Pay your bills. Bank. Run a big business. Learn, teach, share, counsel, build. Connect.

In Africa, my home continent, there are about a billion people, and more than half of those hold in their possession the most powerful instrument of social, economic, and political transformation ever invented. We skipped the printing press, the telegraph and the fixed line. We leapfrogged every major breakthrough in communication technology, waiting for the ultimate.

The mobile phone.

Millions of nodes on a network, each representing a person with a dream of their own, and the means, however remote, to achieve it. This is our age of digital Uhuru, of the African mobile economy on the move, and it excites and inspires me to be a part of it.

But this story of mine begins with a networking exercise of the old-fashioned variety. An amble along the banks of the Eerste River in Stellenbosch one August morning in 2011. It was raining. I was sharing an umbrella with a guy named Herman Heunis.

Earlier, I had popped him an SMS: “Keen for a 9.30am coffee-walk?” Ah, the coffee-walk. A fine Stellenbosch tradition. There is something about walking in a town like this, something about a cup of coffee to go, that stirs the air and quickens the senses.

You’re thinking on your feet, going places, open to serendipity and the elements. You’re on equal footing. Which is important, when the overriding item on the agenda for your coffee-walk is a business decision that will dramatically change both your lives. Herman and I had an understanding.

A Memorandum of Understanding, to be precise, in terms of which, a few months prior, I had made an offer to buy a company from him and his equity partners for just under R700-million.

A company called Mxit, an instant-messaging and chat service that in less than a decade had grown to be the biggest social network in Africa. More than that, it had become a cultural force, a community of millions, with its own economy, its own infrastructure, its own systems, its own traditions.

I had become an evangelist, an unpaid, unofficial ambassador for the network, flipping the lid of my laptop to show anyone who had a moment that the numbers were mind-boggling and that this was so much more than a forum for teenagers to chat and flirt.

It was a marketplace of products and ideas, a platform for lobbying and mobilising, a springboard for education, opportunity, social upliftment, empowerment.

I had begun to think of Mxit as a country, rather than a network — a country with connections all over the world, and its heart beating strongest in Africa. Of course, I wasn’t just flying the flag for goodwill and PR. I wanted to raise awareness, and turn that awareness into bundles of cash.

I wanted to see the Mxit flag flying over my fledgling group of mobile internet startups, World of Avatar. I wanted to live in the Republic of Mxit. I wanted to raise the standard high. We walked. I took a sip of coffee. Bitter.

We talked for a while about a subject that was marginally off the agenda. Religion. I told Herman I had stepped impulsively into a chapel on the way, to say a little prayer. Some deals, you need all the help you can get. He laughed.

Herman is a wiry, no-nonsense kind of guy, with a scraggle of silvery, shoulder-length hair and an edge of flint to his voice. He grew up on a farm in Namibia, a son of the soil who is at his most animated when sharing his passion for the African landscape. He mountain-bikes. He kite-surfs. He 4X4s.

A few years ago, roaring through the Namib desert on a motorbike, he almost wiped himself out, in an accident that left him with a broken back and a spell of several months in rehabilitation.

But there is an aura of Zen about Herman too, the soul of an artist, and he grappled over whether to do an Arts degree or a B.Comm at Stellenbosch University, after his stint of military service, writing software for the South African Navy. He chose commerce.

Computing was his hobby, but it became his obsession, and then, it became his fortune. He started out as a tamer of mainframes, the mighty beasts that crunch numbers and mull over data at banks, insurance companies, and other mega-corporations.

Then, like an astronomer switching his gaze from Jupiter to a speck of stardust, he scaled down, down, down to the micro-cosmos of mobile. He spun off a division of his mainframe consulting company to build text-based games for cellular handsets.

From that fusion of big and small thinking, plugged into the right technology in the right place at the right time, Mxit was born.

Herman wasn’t the coder, the Grand Designer, but he was the founder and the architect-in-chief, and he had assembled a team of wizards and whizz-kids who had come up with something simple and magical, a portal to networks and communities and worlds.

But over the last few years, he had fallen out with his one-third partners, the multinational media conglomerate, Naspers, and he was tired. He wanted to cut his ties and move out of the building. He was a willing seller. I was an eager buyer. But it takes more than good intentions to build a bridge between those stations. We stopped.

“Sorry dude,” I said. “I just haven’t been able to raise enough cash.”

There we were, two guys in brown leather jackets, sharing an umbrella, having a breakup conversation in the rain. Bizarre, I know. But, to his eternal credit, Herman was cool about it.

We walked back to his car — a brand-new Porsche — and shook hands. No words. He got inside and drove off. I carried on walking, watching the rain chasing the leaves in the gutters of Stellenbosch.

To make matters worse, it wasn’t the first time I’d had coffee with Herman and found myself walking away from the opportunity of a lifetime.

“Mobinomics” is written in collaboration with veteran journalist Gus Silber and printed by MacMillan publishers.

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