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Where Africa and Technology Collide!

Michael Joseph and Mpesa: A Missed Opportunity

Michael Joseph was the CEO of Safaricom, taking the mobile operator from 5 employees to dominating the Kenyan mobile operator market with over 80% market share in his 10 years at the helm.  Regardless of your personal feelings on the man, you have to admire the tenacious approach he took growing the business, and his willingness to invest in his company’s future, thereby decimating his (often inept) competition. 

Possibly MJ’s (how he’s known in local Kenyan parlance) greatest business move was also a measured risk, that is being the company to take a software created by parent Vodafone Group and push it into the market.  That software: Mpesa, the most successful mobile payments system in the world.  Safaricom has more transactions each day than Western Union does globally in a year.  Yes, it’s that impressive.

When Michael Joseph stepped down in October of last year, he had a blank slate.  Only he knows just how many opportunities were out there, but I’m guessing there were many.  He just announced his next move, and that is to join the World Bank and “spearhead expansion of mobile money transfers” in their member states.  

“The first fellow under the programme, Michael Joseph, will advise the Bank and governments on spreading the use of mobile phone banking, drawing on his knowledge and experience at the helm of Kenya’s largest telecommunications service provider,”

All of the business acumen and cache that MJ has built up is going to go towards being the World Bank’s ambassador for mobile money.  Meanwhile, he is maintaining a role at Vodafone as a director, where he serves as an advisor on the expansion of Mpesa to other African countries.  That’s to be expected, as he’s one of their greatest success stories to date.  Both of these, though good, seem like a waste of potential, and I’ll explain why.  

A missed opportunity

No one in the world holds as much knowledge on how to deploy a mobile money system, nor how to grow it and operate it as Michael Joseph.  However, all of his success was penned in by the fact that Safaricom only serves Kenya, he could never grow it outside of the country in a meaningful way.  Forays into Tanzania and South Africa have happened, but aren’t seeing nearly the success as in Kenya.

Vodafone knows they’re sitting on a goose that lays golden eggs, yet it’s only laid a single egg – their problem is that they’ve not figured out how to duplicate its success.  

Instead of trying to hold on to Mpesa, they should spin it out as its own entity, put Michael Joseph at its head and let it take on the world (not just Africa).  

There’s a few good reasons for this move:  

First, Vodafone is too big and slow to do this internally, it’s like all of the services and startups eaten up by other large companies that die due to not being within an ecosystem that has an entrepreneurial bent, but instead are sucked down by bureaucracy.  

Second, no one else could take this brand global and have the ability to stand toe-to-toe with other operator peers around the world like MJ could.  It needs that type of personality if it’s to do what’s next.

Third, there aren’t many opportunities that crop up that allows you to take on massively profitable and embedded incumbents and win.  In this case, that’s all of the other payment methods, including credit cards and internet payment platforms.  Mpesa could become the defacto mobile payment system for the world – displacing other methods.

To be honest, I thought this was the obvious play when Michael’s time at Safaricom came to an end – for all of the players: Vodafone and MJ himself.  I kept thinking that surely there was a reason for them not moving on it, that it might have something to do with timing.  Instead, it looks like the big IP owner, Vodafone, is unwilling to take Mpesa big – and it looks like the reason why is that they’re unwilling to let go of control (now ownership). 

That’s how it looks from where I sit, if you know more, add it below.


  1. Hello

    I’ve heard it had been tried before elsewhere but failed, only to pick up in Kenya. To say the least, its timing was perfect…a growing economy, advancement in ICT, cheap handsets. Other countries do not have the luxuries of an exanding middle class as kenya was, or already have efficient solutions(Maghreb and S.A)

    Id say (judging by his timing of exit at SafariCom) M.J is good at reading signs of times and not just grabbing an opportunity but running miles ahead with it. And not that he can take anything(MPesa) and replicate the Kenyan success.

    My 2 cents

  2. In agreement fully. M-Pesa would have scaled much faster globally if they opened up to multiple operators. Basically having a similar model to what Visa have with banks.

  3. Hi,
    MJ is still a board member at Safaricom and has indicated to me that he will still be working with Vodafone to deploy M-Pesa in new markets around the world – namely other African countries and Latin America.
    So not such a huge loss I think 🙂

  4. World Bank are a pretty useless (but very rich) organisation. It will be interesting to observe the result of the collision of WB with MJ. Can MJ absorb the level of BS which exists and persists throughout WB? Can MJ make an impact on the amorphous achieve-nothing-while-talking-plenty culture at WB? Overturn those applecarts, MJ. If you dont get fired you may even achieve something useful on a global scale.

    Alex Weir, London and Harare

  5. Possibility of bad blood between MJ and Vodafone – http://nairobitech.blogspot.com/2010/10/unloved-vodafone-delay-mjs-contract.html

    M-Pesa came up in an unregulated environment, and its success was so spectacular that telco’s, banks and regulators in other countries took notice and the cautious approach that prevailed stifled the ability for another product to replicate this

  6. I agree with bankele – understanding the regulatatory environment is key to understanding both mpesa’s success in kenya and its lack of traction in other markets. This is an important lesson to learn. If Miachel Joseph can take that lesson into the world bank – that could make a difference.

  7. I think Safaricom/Vodafone has been quite lax in developing Mpesa platform further. Sending money through a text message looks primitive, all of a sudden. That, I think, will be the biggest lost opportunity. Mpesa, whether it will be spin off from Safaricom and run it’s own show might find it hard to break into other markets if it continues offering its services exclusively through Mobile2Mobile SMS service. Other companies are catching up quickly and are coming up with technologies which, if successful, will consign Mpesa to the dustbin of past success stories, kinda like the Walkman. Its time Mpesa moved online, develop technologies that will enable faster and quick PoS payments (I’ve seen technology developed by IBM that enables payment by waving a mobile phone in front of a PoS device), and also release SDK to enable developers come up with innovative applications to go with MPesa.

  8. Hello there! I’m looking to connect with some great African blogs and bloggers: can you (or any of your readers) help?

  9. MJ should just start his own mobile money solution a la the Bank Simple model. Vodafone management and strategy is misconstrued.

  10. Mpesa was a success in kenya as it filled in a gap that the main stream banks had failed to address. I other countries where the banking system is very well entrenched it might not fair well especially coupled with stiff regulations already in place.

  11. We may very well find, as has often happened with other large companies and their innovations, this control issue intransigence has cost them the market. There’s a few young guys working away in Holland and around the world to do with Bitcoin [www.bitcoin.org] what Vodafone could have done with Mpesa, if they’d been a bit quicker off the mark. The market, as they say, will out!

  12. As i have known MJ for a quit a number of years,he’s made Kenya a proud country,creat employment 2 the jobless,give a lot of revenue to the govt,initiated projects,offed scorlaship to a good number of Kenyans and now the economy improved by a given %ge.We have to appreciate the good work done by Michael,we say” Ahsante sana”though the mission is not accomplished,we thank MJ for good job done!

  13. Mpesa is licensed to Vodafone and not Safaricom, how about that, anyway, its one of a kind.

  14. Mpesa is owned by Vodafone group, safaricom license it as a (technology) service as do other geographies. Vodafone group has displayed typical poor management and agility when it comes to truly capitalising on innovation (like almost all operators). As mentioned previously regulation is a significant hurdle but little aggression and investment from Vodafone has materially hurt the expansion of mpesa into new markets. Again, typical for operators. Until Vodafone spin it out and maybe get Telefonica to invest in the spin out (providing access to South American as well as others) I can’t see Kenya success being replicated, and time is ticking (or maybe already ticked). MJ might be the one to drive this sort of change but it’s been a year and focusing on diversions like NFC and developed markets is a waste of time and money at this stage…. Spin it out and drive it as a startup should be driven.

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