What do mobile money and the first moon landing have in common?
Recently, the Project Management Institute published its list of the top fifty most influential projects of the past half-decade.
The World Wide Web holds the top spot for achieving what curators explain with exquisite simplicity: “connecting everyone and everything.” Next comes Apollo 11, the Intel 4004 Microprocessor, and the Euro. The entire list is stuffed with projects in nearly every field of human endeavor: healthcare, architecture, entertainment. There’s the Prius Car (#7), the polio eradication initiative (#28), the first IVF baby (#40). It’s a remarkable inventory of human achievement.
Sitting in a top-ten spot, right between the Live Aid Concert (#8) and the Svalbard Global Seed Vault (#10), is the M-Pesa Mobile Microfinancing Platform. Curators acknowledge M-Pesa for “delivering cutting-edge mobile technology that allowed Kenya to leapfrog past more advanced economies and start a banking revolution.”
Seeing M-Pesa nestled comfortably among these other giants of industry, acknowledged for all that it’s done to reach those who were exiled to the fringes of the financial world, is genuinely inspiring. It’s also instructive. As technology innovators, we all have lessons to learn from Safaricom and Vodafone, who partnered to launch M-Pesa in 2007 and now have over 31.8 million active users.
I’ve been thinking about these lessons recently as I work on a forthcoming white paper about how to build a successful mobile money business, based on Telepin’s experience of launching new mobile money deployments in the Middle East, Africa and the Americas. At Telepin, we owe our success to a few core principles which define each of our unique projects. I can see many of those same principles at play in M-Pesa’s story, which provides an interesting example of how to do mobile money the right way.
They knew their customers
In 2006, nearly 74% of Kenyans were excluded from formal financial services. This resourceful population adopted calling cards as a form of unofficial currency, inventing a way around the inconveniences of cash and planting the seed for mobile money’s future success.
This is where the innovators behind M-Pesa demonstrated their first stroke of genius. They didn’t try to invent a problem in order to sell a solution; instead, they recognized a problem that already existed, and they built on that problem’s grassroots solution. Their customers already existed (unbanked Kenyans), the platform already existed (the mobile phone), and the behavior already existed (using that phone to send and receive money). By understanding this rubric and adapting their solution to fit within it (rather than forcing customers to adapt to their solution), M-Pesa created a model for all of us to consider when launching a new product into the marketplace.
They knew their market
When the first iterations of M-Pesa launched, mobile money was such a new concept that it wasn’t yet subject to the regulatory reverse-thrust that’s slowing its progress in some parts of the world today. The Kenyan government of 2007 was a government of ambition and vision. It understood what M-Pesa could offer its citizens and the larger economy, and it responded with a flexible regulatory framework that supported the technology’s revolutionary potential.
Working inside this framework, the M-Pesa team focused on building a strong distribution network. This was key: in order to encourage adoption, they needed customers to trust that M-Pesa would go with them everywhere. To do that, they built a large, accessible, and knowledgeable agent network. They invested millions right from the start, selecting agents early and training them well as brand ambassadors.
While building this network, M-Pesa’s managing director famously threatened his staff with firing if they failed to add one million customers during the product’s first year on the market. While my own leadership style may differ, I respect his point: the product’s usefulness depended on its ubiquity. And because the company went to such lengths to build the foundation for that uniquity (there are now 120,000 M-Pesa agents in Kenya, compared to just a few thousand ATMs), they succeeded. By the end of that first year, they had 1.2 million active customers. Presumably no one was fired after all.
They followed an agile, incremental rollout plan
The third lesson from the M-Pesa story is perhaps the most important: they stayed agile.
In 2006, the M-Pesa team tested a beta of their product in the small city of Thika. That first iteration was designed to support access to micro-financing, which they thought would be their customers’ primary use case. But the trial taught them something new. Customers were using the system to exchange money with each other, not (only) with micro-lenders.
The agile development team used this insight to pivot the product, ensuring it would do what customers needed it to do: send money to friends and family securely, quickly, and for a fraction of the fees charged by traditional institutions. They owe their present-day success to that early agility. Because they were able to learn quickly and adapt accordingly, their product has evolved from that trial in Thika to steady growth in ten developing markets. Today, users rely on it for far more than peer-to-peer transactions—the platform offers savings, loans, and insurance.
Conclusion: To reach the moon, start with the fundamentals
For TelCo players who have followed the M-Pesa story and are beginning to dream of their own mobile money success, my best advice is to study the core principles outlined here. What are your ideal customers already doing? What do they need? What can you learn from them? How quickly can you learn it, and turn that learning into action and agile development?
I’ve left the final, very important piece of the puzzle for last: who will you partner with to help drive your success?
Scanning PMI’s list of 50 influential technologies one last time, my eye falls again to the Apollo 11 moon mission, the result of a colossal effort and committed partnerships between its crew members. Armstrong, Aldrin and Collins depended on each other fiercely, each bringing skills into that rocket that helped it to launch, land and return to earth with enormous fanfare.
Like launching that rocket into space, launching a mobile money deployment into the marketplace also requires a careful selection of “crew.” Find the right technology partner to drive your deployment forward, and you’ll start with an enormous advantage.