From Local Startup to Pan-African Success: The Beem Story

Note: Transcripts are generated by machine and lightly edited by humans. They may contain errors.

Are you just figuring all this out on the fly? What’s going on?

Taha Jiwaji: Completely on the fly.

Darius Teter: Really? So tell me this, did you actually have a strategy written down at some point here, we’re going to go to these five markets because that’s where the business is?

Taha Jiwaji: No.

Darius Teter: No?https://www.facebook.com/CureNGLY1/

Taha Jiwaji: The only plan was: get as many countries as we can in the shortest number of months.

Darius Teter: Hey, everybody. Welcome to season four of Grit & Growth from Stanford Seed, the podcast where Africa and Asia’s intrepid entrepreneurs share their trials and triumphs with insights from Stanford faculty and global experts on how to tackle challenges and grow your business. I’m your host, Darius Teter, the executive director of Stanford Seed, and it’s great to be with you again.

Is the growth of your own business limited by the size of your domestic market? Have you wondered, well, what would it take to tap into new markets? Is there a formula for expansion?

Scaling a business beyond your national border can be like navigating a maze in the dark with only a penlight. Every twist and turn presents new challenges, from understanding different cultures and local customs to complying with regulations and tax laws. It’s a delicate balancing act of knowing your value proposition even as you adapt to new opportunities.

Our guest, Taha Jiwaji, knows this journey well, the complexities, the nuances, the importance of physical presence, the challenges surrounding growth and talent acquisition, and not to mention the creativity required to work smart and sometimes without a formula. Today we’re going to explore Taha’s story and learn how he took on that question.

Taha Jiwaji: Hi, my name is Taha. I’m the founder and CEO of Beem. We call ourselves a pan-African cloud communication platform. Our mission is to enable businesses to create lasting relationships with their customers through the mobile phone, and that’s kind of the crux of the business.

Darius Teter: In 2022, only 36 percent of Africa’s population had broadband internet access. So businesses must reach their customers where they are on mobile. That means SMS [short messaging service], WhatsApp, and social media. But with connectivity all across the African continent, quickly increasing services that enable businesses to reach more customers with less effort are vital. But long before Taha was shaping the first iteration of Beem, his goal was entirely more self-serving.

Taha Jiwaji: We wanted to get free pizza. I studied at Lafayette [College] in Pennsylvania and we could never remember which events were happening at what time. Three of us came up with a concept to send out reminders on SMS for any events.

Darius Teter: Because they were going to have free pizza there.

Taha Jiwaji: Of course, free lunch is like an awesome incentive.

Darius Teter: Brother, I totally understand this. As a university student, actually even as an intern on Capitol Hill, knowing where the free food was was the most important thing you could do.

Taha Jiwaji: Exactly. So we started a small company to try this out, and we got a bunch of student groups using it and a bunch of signups, but it didn’t really take off. But that kind of idea of SMS stuck there.

Darius Teter: The initial idea lost steam, and after graduating about a year later, Taha dove immediately into corporate life, working for a large consulting firm based in Los Angeles. Wait, so you went straight from undergrad to Capgemini?

Taha Jiwaji: Yes.

Darius Teter: So you were not a slacker in college. Let’s just be clear about that.

Taha Jiwaji: No!

Darius Teter: The days at Capgemini were long, but despite a 12-hour time difference back home in Tanzania, Taha was still experimenting with SMS as a marketing tool with his parents’ business over 10,000 miles away.

Taha Jiwaji: My parents at the time were running a computer business selling laptops and computer accessories here in Dar es Salaam, Tanzania, and their challenge at the time was how to reach students who were their customers and send them offers. And I was experimenting with different things, different communication. We tried magazines, and then this SMS idea came back to me, saying, why don’t we try this? And so we just manually saved numbers on a phone and we kind of sent out a broadcast, I think it was like a couple of hundred people, and it worked. The people came back, they bought products, and then we said, okay, let’s try this a couple more times.

Darius Teter: And so a minimum viable product was born — sort of.

Taha Jiwaji: So I actually wanted to explore startups in the U.S., if I had been able to join. I needed a sponsor and just too many permutations, combinations, and I just was itching to do my own thing. I could see what my managers were doing, and I was like, I can do what they’re doing and I’m not going to wait.

Darius Teter: Though his parents thought he was out of his mind, Taha decided to step away from that safe corporate job with a strong desire to be his own boss.

Taha Jiwaji: When I got back, it was just me, right? The business was just me, and I think I hired one employee a couple of months in, but at that point I had a team of about three to five people doing software development, sales and marketing, etc. These are all folks hired in Tanzania. We’re running the business, we were getting customers, but it wasn’t really massive growth. It was kind of just incremental. You couldn’t really see, okay, where this business was going. Then I think there were a couple of key pivotal things that happened. One was, by chance, customers from outside Tanzania started contacting us to say, “We want to deliver SMS within Tanzania.”

Darius Teter: Was that a surprise?

Taha Jiwaji: That was a surprise because I’m like, why would someone outside of Tanzania want to send an SMS to someone in Tanzania?

Darius Teter: And sorry, just to make sure I understand the technology here, so you need to have a relationship with the Telco in Tanzania so that you can send SMSs on behalf of this customer outside of Tanzania.

Taha Jiwaji: Exactly. And so we had those relationships already, and so it was, okay, I will serve you. You’re just like any other customer. But then we quickly realized as we spoke to them and more came that there was a bigger demand outside than inside. In fact, these same customers also wanted multiple African countries. And the more we looked, there weren’t any companies doing it across the continent. This was the light bulb moment. We basically just put everything else on the back burner and started focusing completely on the outside.

Darius Teter: So I am going to ask a dumb question here, but let’s say I’m a multinational, but I have an office in Lagos, right, and I have customers in four other countries, and I want to reach them with SMS. Do you need to have relationships with all those Telcos?

Taha Jiwaji: Exactly.

Darius Teter: That sounds hard.

Taha Jiwaji: You have to go visit these places. So I always say, look, you have to have boots on the ground, visit, and spend a few days in any market depending on how much you’re going to invest. So if you’re going to set up a team and invest a lot in the market, then you have to spend a proportionate amount of time because there’s just so much you have to learn about each market and develop a strong network in each market, which is very hard to replicate otherwise. So you have to give it that time. There’s 54 different countries on the continent, so each one is different in terms of language, policies, etc. So you need to spend time in them, on the ground to really learn about them, unlike the US or Europe where there’s a lot more — it’s more homogeneous. It’s not the case on the continent. So our experience is really valuable in that sense because we’ve gone through that. We’ve spent the time and energy to do that, and the customers come to us because of that market knowledge and those nuances.

Steve Ciesinski: So I’m Steve Ciesinski. I’m here as a lecturer at the Stanford Business School.

Darius Teter: This is Steve Ciesinski. Steve teaches entrepreneurship at Stanford Graduate School of Business. He was also past president of SRI International and has been an investor and leader in multiple successful tech companies in Silicon Valley. So I asked Steve: What does he find most important when expanding into other countries?

Steve Ciesinski: We guide our MBA students to — you have to have somebody there that you completely, 100 percent trust, because things will go wrong, and when things go wrong, you don’t want to have somebody who’s spinning things to you and telling you this and telling you that, and all of a sudden you’ve got a lot of problems. What’s the country like? What’s the culture in the country? How do they do business? So you need to have your co-founder or somebody very, very close who’s been with your company, understands your culture, and is going to move there and then partner up with somebody there, find somebody there who eventually can become the general manager of that business because you’re expecting that business to take off.

Darius Teter: I want to know how you went from light bulb moment to, oh shit, I need to make this work in five, six, eight, nine countries, and I have a staff of three software developers.

Taha Jiwaji: Let’s just say it was a lot of iteration, but some of the ways we really achieve this, we leverage a lot of our relationships.

Darius Teter: Which relationships?

Taha Jiwaji: So we started with the relationships in Tanzania.

Steve Ciesinski: Things are very, very different and very subtle sometimes as you get into a marketplace. You have to be very agile, you have to be super flexible, you have to make some, sometimes, many times, decisions based on not a lot of data. So you’re out there as a CEO founder of the company out there with customers or would-be customers really trying to understand them and how many pivots do you have to make or do you have to do a complete 360? Things are moving so fast.

Taha Jiwaji: A new operator came into Tanzania called Smart, and it was a small company, so they were willing to work with us.

Darius Teter: This is a mobile operator.

Taha Jiwaji: This is a mobile operator. So because I was able to do this, I was able to build up that relationship and they connected me to their operating company in Uganda and Burundi. So immediately we had a step into those markets. Then Tigo and Vodacom and Airtel, which were the other big ones in Tanzania, they had operations in other markets. So we would try to get referrals. And so Tigo, which was one of the ones that really helped us, connected us to Tigo in Senegal and then Tigo in DRC [Democratic Republic of the Congo]. From there, we would just build on top of that.

Darius Teter: The first critical step in expansion? Building real relationships on the ground in person. For Taha, this meant knocking on doors and getting customers and partners to sign up. You make it sound so easy, but I’m assuming there’s a lot of technology underneath all of this.

Taha Jiwaji: There’s a lot of technology in the background and there’s a lot of contractual relationships, commercial relationships, and market knowledge of those specific countries, mobile operators, that you have to develop over time.

Darius Teter: You’ve just described how you actually need knowledge about the market there. You need knowledge about the company. Are you just figuring all this out on the fly? What’s going on?

Taha Jiwaji: Completely on the fly.

Darius Teter: Really? So tell me this, did you actually have a strategy written down at some point here, we’re going to go to these five markets because that’s where the business is?

Taha Jiwaji: No.

Darius Teter: No?

Taha Jiwaji: No, absolutely no plan. The only plan was —

Darius Teter: Okay, that’s it. The podcast is over because that doesn’t help anybody. I’m just kidding.

Taha Jiwaji: The only plan was: get as many countries as we can in the shortest number of months.

Darius Teter: Don’t let Taha fool you. When it came to picking countries, there was a strategy. They factored in projected mobile penetration, demographic trends, but they also picked markets that were at the frontier, meaning much less direct competition. That’s why they initially avoided what would otherwise seem like obvious markets for expansion, like Nigeria or Kenya. The big players found frontier markets hard, but Taha and team figured out how to make the hard countries work.

Steve Ciesinski: If you can make it work, you are the only game in town. Now the question is: can “if” become “when,” and “when” become, “you really have a thriving business here,” and how long will that take? How much capital will it take and will that pull you away from your mainstay country or other countries to where you’re spread out too much? You wouldn’t be going into a country unless you’ve done enough research and you found that that market is going to be as big, maybe bigger, maybe 10 times bigger.

Darius Teter: Steve’s point is important. New markets come with costs, including the opportunity costs of another option. So if you’re going to place a bet on a country, you better have some kind of differentiator.

Taha Jiwaji: There was some kind of formulation in terms of which markets to go after and what to focus on. So our competitors come in two forms. One where in each country there would be local companies that are doing some sort of SMS or VAS services, as they’re called — value added services. Every country had them, but what was our differentiator is someone could come to us and get multiple countries at the same time, and so there were only a couple, really a handful, of companies that were doing this, and so they were the ones that we kind of tracked. So I’ll give you one example. A lot of our customers are solar energy companies — on the African continent, we call them pay-as-you-go solar companies. These are technology companies that are enabling individuals or families to have a solar home system in their house, but they pay for it in units.

So they pay for a day’s electricity or a week’s electricity on that solar system, and all of their energy tokens are delivered on SMS, and their customer service may be on WhatsApp, potentially, depending on their audience, or USSD [unstructured supplementary service data] as a way for them to do customer service. And this is a very popular concept on the continent because it allows lower income families to access electricity. Now there’s gas, water, all sold in the same format. We provide the infrastructure in the background to drive a lot of this communication for technology businesses and non-technology businesses. On the continent, on average, only 30 percent of people have a smartphone. So there’s 90 percent phone penetration, but only 30 percent smartphone. And in fact, out of those 30 percent, only about 20 percent have an active internet connection at any point in time. If you have 30 percent right now, there’s a whole other 70 percent too that you have to fill up. And all of those are going to be new users that are going to be driving demand for digital services. And, like I said, each of those consumers is going to be reliant on something like us.

Darius Teter: As you think back about your geographic expansion journey, I’m curious as to your top lessons or advice to other technology businesses that are looking to expand across sub-Saharan Africa and beyond.

Taha Jiwaji: One thing: persistence. Things take a long time. Government regulation, people move very slowly across these markets, and sometimes it takes years for a relationship to finally come to fruition or an operator contract to come to fruition.

Darius Teter: What was the longest?

Taha Jiwaji: I think it was about four years.

Darius Teter: Wow.

Taha Jiwaji: And so you really have to be persistent in that case.

Darius Teter: To establish in one country.

Taha Jiwaji: In one country, yes. With a mobile operator. Again, you have to have faith in, once you have critical mass, there’s going to be hits, and then there’s going to be ones that kind of work but not great hits. So you don’t know which ones are going to be hits and at what time. So it may be that this market takes off later. So those are some of the things that you just have to accept. A lot of tech businesses are raising a lot of money on the continent expecting to grow very fast, and that’s great. You’ll disrupt and grow very fast. But non-tech businesses and the rest of the folks don’t move as fast. So you have to allow for that. And the traditional VC model doesn’t usually allow for that, and that’s why you are seeing a lot of businesses folding, etc., because they’re not able to keep up with that. The other thing is really, from day one, really think about revenue models and cash flows, right? How are you going to get paying customers with a solid value proposition from day one? Because that just means you have product market fit from the get-go because you have customers that are willing to pay for something.

Traditionally, particularly in B2B sales. African businesses are the worst payers, absolutely worst payers.

Darius Teter: So you’re sitting on a huge pile of accounts receivable, presumably. I mean, this is one of the things we talk about in the Stanford program to the extent that you can negotiate your accounts payable so that they line up with that slow-paying customer. But is that possible with the Telcos, or they just want to get paid?

Taha Jiwaji: So I’ll tell you an interesting insight. There’s mobile operators who don’t invoice us for six months. That’s free cash flow, that’s positive in that sense. But then there are a lot of operators who want to be paid up front. If you are having to prepay on one side and then having accounts receivable on the other, it just does not line up. So we’re having to be very, very strict with customers on that and just cut off if they’re not paying. So these are some of the things we’ve learned, and these are some of the things that tech businesses need to really understand. Traditional businesses know this because they’re cash and this is how they work. But tech businesses really need to understand that these fundamentals are very, very important on the continent. Otherwise you’ll die very quickly.

Darius Teter: Is it time to raise capital?

Taha Jiwaji: Very good question. We’ve looked at raising, we started to raise even when we first started back in 2011-12, and we would always get feedback like, your team’s not right, or your traction’s not enough, or your product market fit isn’t enough. And we just said, look, we’re going to do it. So we just kept at it and kept doing it. I just said, maybe we don’t need external investors and we’ll keep growing organically.

Darius Teter: So you were walking into meetings with a pitch deck, you’re pitching, and they were shooting you down, and you didn’t walk out there thinking, shit, we got to change our business model. You walked out there thinking, these guys don’t get it and we’re going to just keep doing it.

Taha Jiwaji: Yeah, because everyone had a different reason. So I’m like, they can’t all be —

Darius Teter: Yeah, otherwise this business is a total disaster, or they’re all a little bit wrong.

Taha Jiwaji: And there’s customers, so it’s not like — there’s customers, they’re paying for it. So obviously there’s some value. Maybe there needs to be some tweaks and whatever. But yes.

Darius Teter: Okay.

Taha Jiwaji: So we’ve kind of put fundraising on the back burner at the moment because (A) it was taking a lot of time, and (B), I was having to educate all the investors on the market and the products and how it works, and if I’m having to educate them, they’re not going to add much value to me, aside from the money, which is kind of pointless for us because half of the reason why we would want to raise it is to help us scale and grow our business. And if they don’t understand and we are having to educate them on how the market works, then it just doesn’t make sense.

Darius Teter: You want their advice. You want sophisticated advice.

Taha Jiwaji: Exactly. How do we grow? How do we solve our very specific challenges? And if we’re having to explain to them how it works, and I had to create a deck just to explain how the CPAC market works and the nuances of it and all of those kinds of things. So it didn’t make sense. And also we’ve kind of realized that the pure VC model will not work for our business because B2B sales and stuff takes time, right? And the demands of a VC investor are you grow X in a certain time. And as much as I would like to predict that, I cannot predict that because customer behavior — maybe getting the right product market fit will take longer than that in these newer markets. So we’ll do it, it will take time, and we’ll do it.

Darius Teter: In the ever-changing world of business, one trend is leveling the playing field: technology is more affordable and more accessible than ever before. Whether you’re a small startup or a big corporation, powerful digital tools are now at your fingertips, and this changes the game for commerce, especially when traditional venture capital doesn’t quite fit the bill.

Steve Ciesinski: The sophistication of the technology can be yours even if you’re an SME. So if you’re a hundred, 200, $400 million company, if you’re a hundred person company, you now have some tool sets that are being brought to bear that you can use in your own company that are actually economic for you to bring in because of SaaS and some of the other ways AI will help out as well. That was not the case some time ago. And what we’ll see is, I think, in these countries where there is a certain population, so we’ll see these SMEs take off because they don’t need to raise and they don’t have to have, and they can’t raise anyway, capital to grow because no one will believe them. But now the capital that you need to expend in order to bring these tools in, you don’t have to expend that much capital. You don’t need that much capital. And so I think that what’ll happen is entrepreneurs will see this and will partner up with — call ‘em mom-and-pop shops, but they’re more advanced than mom-and-pop shops — that maybe under sophisticated founders of these SMEs, bring in people who are used to using productivity tools and so forth, and they become partners. Obviously, you have to have a culture match and so forth and take over an opportunity when it didn’t exist.

Darius Teter: I want to underscore how powerful Steve’s point is. Even the most high-performing economies on the planet were built by small and medium enterprises. Even today, in most European countries, SMEs account for the majority of GDP and the majority of jobs. They are in fact the backbone of broad-based growth, which means broadly shared, equitable, and prosperous. So the fact that these companies can now compete on the playing field with much larger companies with less capital to get the same technology is a real game changer. Today, Beem is a lot less shy about expanding into countries where there is existing competition.

Taha Jiwaji: We see a lot of long-term prospects with the Kenyan market in terms of customers with our new portfolio of products, particularly around social commerce as we talked about earlier. So there’s a lot of opportunity, and I think Kenya is also a regional as well as kind of a pan-African hub. A lot of businesses operate out of Kenya and Nairobi, and we want to be closer to them to be able to work with their head office and be able to serve them across markets.

Darius Teter: So I’m curious, as you’re expanding to the hardest places, as you described them, the hardest countries to work, are you establishing a physical presence? Do you have staff? Are you registered as a business? What does that actually look like? I understand you said 30 to 40 countries now, but servicing 25 African countries. Do you have a team? Where are they?

Taha Jiwaji: Yeah, so at the moment our core team is based in Dar es Salaam and Nairobi and then a few in India and the UAE. And then we have a part-time team in about 10 other markets across the continent, so from West Africa to southern Africa. But at that time, we were completely lean, right? So we’ve never raised any money. We were just trying to grow organically from the cash flows that we were generating. And so we were trying to find the leanest way to operate. Each market is different. Some markets require us to be registered, some don’t. So that was also another thing we considered when we were trying to enter these markets. We went for the ones that were the lowest touch and lowest cost first, and then said, okay, is this country worth incorporating in? Do we see long-term prospects?

Darius Teter: This is super interesting because again, and I understand now that the answer to the “did you have a strategy question” is that you did, but it was in your head. It wasn’t written down. It was pretty clear, right? So we’re not going to go where the competition is already well established. We’re going to go to the places that haven’t yet attracted those big competitors, but we’re going to rank them based on regulatory ease of doing business and upside potential.

Taha Jiwaji: The regulatory burden in Africa is massive, right? Compliance and just red tape. If anyone’s done business on the continent, they would realize this. I want to avoid registering companies because I don’t want to get into the regulatory red tape. So whatever we could do, we tried to avoid registering in countries or new companies because it becomes a much bigger burden to kind of manage in the long run.

Darius Teter: I guess because your service is digital, that is possible.

Taha Jiwaji: So we’re lucky in that sense. Our business model allows for this kind of lean and really haphazard kind of expansion, you could say. It’s really helped us and worked for us as a way to grow.

Darius Teter: As Beem grew and imagined more sophisticated services, Taha realized that their asset-light model would only take them so far. They needed to attract top-quality talent.

Taha Jiwaji: As we’re growing, we need talent. I think any business wants, needs talent, and Kenya has a really large pool of talent, so we want to be able to capitalize on that.

Darius Teter: Since you’re basically building the workforce of the future, are people trying to steal your staff? Do you have retention problems?

Taha Jiwaji: Massive retention problems. Last year we lost, I counted, it was about 16, 17 people.

Darius Teter: Out of how many?

Taha Jiwaji: Out of 30 …

Darius Teter: Wow. How do you survive that?

Taha Jiwaji: … at different points in the year. And half of these were new people that we were hiring to grow, and some were existing folks that left. Immediately, the leadership, we sat down and said, okay, these are some of the immediate things we need to do around culture and organizing our roles, etc.

Darius Teter: What was your diagnosis of the retention problem?

Taha Jiwaji: Just we weren’t able to keep up and give enough time to people for them to feel comfortable talking to me or that other person. And it needed a dedicated person who kind of had the beat of what people are feeling, what employees are feeling, what we need to change, what we need to improve. So how do we create a set of values? What are the values that we need the team members to really uphold and work off?

Darius Teter: Ignore employee needs and workplace culture at your peril. Disengaged, burned-out team members are typically not innovating. Investing in your people fosters a healthier work environment, and that drives business success. But how do you keep great talent, especially in emerging markets? I put that question to Steve Ciesinski, who’s led companies big and small and worked in emerging markets.

Steve Ciesinski: Well, a career, and not just a career with that company, but a personal career. So this kid might be a high school graduate, maybe a year or two of college, maybe not, a dropout, what have you. Where is this kid in Ethiopia or in Peru going to go for the future? Well, there are choices, but one possible choice is to go in this startup technology-oriented company and help that company be successful, learn along with that company, and, gee, that company is offering some classes and some ways that I can improve my skill set. And by improving my skill set, I’m now more marketable to other companies. And by the way, if I spend a few years here, I look like to other companies that I actually will stay at a company, will contribute to the company in my own area, and so on. So now I’m really building up my background, my resume, my CV, so that I am more attractable. I can now earn more money, and I have a more predictable future than I would have if I were just languishing or floating around. Building a real culture around the kinds of things that are beneficial to raw talent coming into a company and what the finished product might look like and point to people as role models and so forth, I think is really quite important

Darius Teter: What began as a quest for free pizza in college evolved into a transformative vision for the future of digital marketing and customer outreach across Africa. Taha’s strategy has worked to capitalize on existing infrastructure while simultaneously pushing innovation. He started by going where others feared to tread. From grappling with regulatory challenges to addressing the critical issue of talent retention, Beem’s story underscores the resilience required to thrive.

I want to thank Taha Jiwaji and Stanford’s Steve Ciesinski for sharing their stories and insights. Erika Amoako-Agyei and VeAnne Virgin researched and developed content for this episode. Kendra Gladych is our production coordinator, and our executive producer is Tiffany Steeves, with writing and production from Nathan Tower and sound design and mixing by Ben Crannell at Lower Street Media. I’m Darius Teter. This has been Grit & Growth. Thank you for joining us.