31
year old Ashish Thakkar is Africa’s youngest billionaire. Born in
Uganda, the young billionaire was just 13 when he and his family had to
flee the continent to escape the Rwandan genocide. He started his
entrepreneurial journey at age 15 after taking a $6,000 loan to start
his first company.
The journey led him to found Mara Group which has become one of the largest information technology companies in Africa.
Wharton
Business School recently interviewed the young business man about his
foray into the business world and his remarkable success. Check out the
interview below. Don’t forget to share it with your friends and
associates online.
Knowledge@Wharton: You started making money
at the age of 14 by selling your own computer at a profit to a family
friend. After you sold it, you didn’t have a computer yourself. Why did
you do it?Ashish Thakkar: That’s how it all began. Basically
my parents bought me a computer. My father’s friend came home for
dinner that night. He saw it and he said, “How much did you get that
for?” I told him the price but added on US$100 more than what we
actually bought it for. And he said, “How many do you have?” I said,
“I’ve got two.” And he asked, “What are you doing with the second one?” I
said, “I’m selling it.”
He said, “OK great, could you deliver it
tomorrow?” And I said, “I’ll do it after school.” So while they’re
having dinner, I’m cleaning up my computer, deleting all the files,
emptying the trash can, packing it up so I can deliver it. Obviously I
didn’t have a second one. I delivered it the next day and I made a
hundred dollars. I said, “Wow, this is doable.”
Knowledge@Wharton:
What did your father say when you gave his friend a price that was a
hundred dollars more than what he paid for it?Thakkar: He
was laughing. We didn’t discuss it much. We just kind of left it at
that. I was a little scared that he would tell me off so I didn’t really
discuss it. I just delivered it the next day and bought another
computer. And I managed to sell my second one to the school.
Knowledge@Wharton: So from then on, you got into the IT business?Thakkar:
What happened was then my summer holidays came. I had two months of
holidays. I was 15 and I said to my dad I would like to set up a small
shop during my summer holidays and then I’ll shut down my shop and then
go back to school. I did that. I set up a tiny, little shop with a
US$6,000 loan. At that time, floppy disks were the hot thing. I was
selling those. And then my summer holidays finished and I didn’t tell my
parents immediately. After a week, they figured it out. We sat down and
I said, “Look, if you want me to study, I’ll study but I’m going to end
up doing this anyway. Why not let me do this now?”
My father is a
pretty unconventional person and he said, “OK, fine. Go ahead and do
this for a year. Do it on your own. If it doesn’t work out, you’ll have
to go back to a year below your class.” I said, “Done.” So I still have
that option available.
I didn’t have enough working capital to do
cargoes and shipments. I would travel to Dubai every weekend. Fill my
suitcase with IT stuff. Pay my taxes on Monday. Sell Tuesday through
Friday. Get my cash on Friday. Go back to Dubai on Saturday and Sunday.
Pay my taxes on Monday. That was my cycle for six months. And then I was
thinking, “There are so many people coming to Dubai to do exactly the
same thing. Why don’t I set up a base to help them? We then set up an
office in Dubai when I was 15 in 1996 to actually supply IT hardware
into African countries. And the rest is history.
Knowledge@Wharton: You had set up an office at 15?Thakkar:
In Dubai, you need a local sponsor. I found a local sponsor who was a
senior guy in Dubai. We went to the court to register a company. They
were speaking in Arabic and I didn’t understand what they were saying.
And he goes to me, “There’s a mistake in the document.” And I said,
“Why?” He said, “They’ve written your age as 15.” I said, “Well, I am
15.” He said, “You’re kidding. You can’t just set up a company when
you’re 15.” And I said, “I am 15 and I want to set up a company.” And he
said, “Oh my God. Well, your dad is going to have to fly in and sign as
a guardian so he knows what you’re doing.” And I said, “That’s fine.
He’ll fly in.” So the company registration got delayed by a week. So
that’s how it all began and then we diversified.
Knowledge@Wharton:
So now you’re in real estate, tourism, manufacturing, etc. Can you talk
a bit more about the businesses you have?Thakkar: Today,
we’re in 24 countries, of which 19 are in African countries. We have
about 7,000 employees in Africa. We’re in IT services. It’s the same IT
company I started a few years ago and we merged it a few years ago. It’s
been labeled as Africa’s largest IT company but I don’t know how true
it is. We’ve got an IT company. We’ve got a call center business across
Africa. We’ve got a telecom infrastructure company. We’ve got a
corrugated packaging business in East and Central Africa. We’re building
a paper mill in East Africa. We’ve got an agricultural project. We’re
building an Intercontinental hotel, convention center, shopping mall and
office park in Uganda. We’re building two hotels, shopping mall, office
park and hospital in Tanzania. We’re pretty active on the real estate
side. We’re building a glass manufacturing company in Nigeria. For
agriculture, we’ve secured a large piece of land, about 26,000 acres in
East Africa. We’re looking at potentially going into the power
generation industry as well.
We’re a pretty diverse group. We
advise some of the heads of state in Africa. We’re pretty active on the
African front. I’m on the Global Agenda Council on the World Economic
Forum for Africa and quite a few others. We speak and we’re very
passionate on the African platform.
Our model is we partner with
international companies who want to come to Africa and become their
local partners. We typically do 50-50 partnerships. We both put in
capital. We both bring different expertise to the table. That’s the
idea.
Knowledge@Wharton: What sorts of traits make a good entrepreneur?Thakkar:
You need to have that passion. You need to have that vision. And the
most important thing is you need to have a very high moral ground. You
need to be very ethical and transparent. I think as long as those three
things fit together. Passion meaning loving what you do and really
enjoying it, looking forward to waking up the next morning and getting
back down to it is really important. That’s what’s going to keep you
going. Vision is thinking big and starting small — that’s very
important. Being very honest, transparent, open and ethical is very
important. Never giving anybody the raw end of the deal is very
important. Making US$100 on a margin on a computer is business. That’s
fine. Everyone thinks profit in business or the world doesn’t go around.
You don’t want to mess people around. It’s always better to under
promise and over deliver and I think that’s how relationships should be
held. My father always said, “Earn with your partners and not from your
partners.” What goes around comes around. It’s important to be very
transparent and clean.
Knowledge@Wharton: Africa doesn’t have a
reputation as being very transparent. Is that quite hard to keep those
ethics while doing business in Africa?
Thakkar: We’ve
definitely lost business in the past because of that. We don’t entertain
that kind of stuff. Genuinely speaking, a lot of our leaders have the
right passion and vision. They’re really about transformation. In that
respect, it’s just important to know how to go about it. So when you are
put through that bureaucracy and people are trying to frustrate the
process. We manage to reach out and scream. We make sure we get the
right attention. We’re not just going to start entertaining other types
of stuff because that’s just not something we agree with. Principally,
it’s just not the right thing to do long term at all. We’re a case study
in that sense because we’re absolutely transparent and we’ve succeeded
in doing business. It is a generalization.
Forget North Africa
but sub-Saharan Africa has 46 countries. Even if 10 or 15 are not great,
the others are. Out of the 46, I’m only in 19. Not all 19 are clean
either but we have more emphasis on the ones that are.
It is
doable. Africa isn’t plug and play. It is a challenging environment but
as long as you have the right intentions. We don’t do any sort of
business that doesn’t have a social impact on people. We don’t want to
go into mining and take out minerals from countries and export them to
make a quick buck. We don’t do stuff like that. We want to do things
that are sustainable for the continent that will benefit people and
create some sort of local beneficiation that really help the communities
we work in. In that respect, it’s important to have the right
intentions. You’ve got to be a long-term player in Africa. You can’t
come in with a short-term mentality.
Knowledge@Wharton: You
also have the Mara Foundation that includes an incubator in Uganda for
entrepreneurs. What sort of atmosphere will help support entrepreneurs
in modern Africa?
Thakkar: After starting off as refugees in
Rwanda, we lost everything. That’s when we started off with very little.
I started off at the age of 15 with US$6,000. You understand what young
entrepreneurs go through.
We have a huge issue in Africa with
unemployment. Unfortunately, a lot of our governments think the answer
is foreign direct investment. It’s not. That’s when we started a
mentoring program a few years ago. We were trying to mentor young
entrepreneurs. The first year, we mentored around 120 entrepreneurs but
it’s nothing in the grand scheme of things. We wanted to make a much
bigger impact and that’s when we set up an online mentoring platform
that we launched in Silicon Valley about three months ago. Within three
months, we’ve actually got 52,000 young entrepreneurs signed up. It’s
been amazing. We’re relaunching the entire site to have more content and
data and everything else.
At the same time, we’re realized it’s
sexy to be working out of your bedroom in the West but in Africa, people
just don’t respect you and trust you if you’re working from that kind
of thing. In order to give credibility and visibility to businesses, we
decided to set up business incubation centers. So now you’re guiding
them, handholding them, teaching them, inspiring them and you’re giving
them credibility and visibility.
Now the missing link was
partners and capital. How do they get access to funding? Then we
launched our own venture capital fund that basically invests in these
companies. This entire project belongs to the Mara Foundation, which is a
nonprofit social enterprise.
So far, we haven’t raised any
external money. Everything has been 100 percent subsidized by the group.
We’ve launched in Uganda. We’re launching in Tanzania by the end of the
year. We’re signing partnership agreements in Kenya, Nigeria and South
Africa. It’s quite an amazing thing and I spend about 30 to 40% of my
time on the foundation.
Knowledge@Wharton: You met with a
whole bunch of business leaders like Marissa Mayer, the new CEO of
Yahoo, on a recent trip to Silicon Valley. Was it difficult to find top
business leaders to partner with budding African entrepreneurs?
Thakkar:
Everybody loves the idea of it. But it was the method. How do they go
about it? Where do they start? That was the big question mark, which is
why hopefully the platform answers the question. There was a lot of
positive feedback. At that time, we literally had zero entrepreneurs on
our network and now have 52,000. We’re launching on mobile now since
we’re online. Hopefully we’ll be launching on Nokia and Blackberry apps.
That should create a massive scale. When it does, we’ll probably come
back to Silicon Valley and relaunch it. Everybody does want to play a
role. Everybody wants to help out. Everybody loves the idea of it but
doing it in a credible way, hopefully we’ll be one of the conduits for
that and support the entrepreneurs.
Knowledge@Wharton: Any other future goals? You’ve accomplished so much at such a young age.
Thakkar:
Frankly, I’m very passionate about Africa. I’m fourth-generation
African in that sense. My parents and my grandparents were born in
Africa. Helping entrepreneurs is one thing but helping entrepreneurs in
Africa and slowly but surely, taking it to other emerging markets and
other markets generally. We want to make a global platform because
there’s nothing stopping them. The content’s the same.
Entrepreneurial
advice is entrepreneurial advice. Once you have all that content
online, it can be used anywhere. My aim is to impact a few million
African entrepreneurs. We want to make the group global. At the same
time, I’m very passionate about changing the image and perception of
Africa.
Unfortunately right now, when people think about Africa,
they think about a child with a bowl in his hands. That’s absolute
rubbish because plenty in our continent has evolved. We’re really
progressive. I think the right story needs to be told. We need to stop
generalizing about a billion people in 54 different countries. It needs
to stop.
I think changing the perception and hence my whole space
trip is creating a positive buzz about the region, and making people
realize that people in Africa have the vision and ability as well.
So
I think focusing on young entrepreneurs, which is the immediate thing.
Scaling it up in Africa and making it global one day. Also, next year,
we’re launching something called Mara Women, which is focused on women
entrepreneurs through the Mara Foundation. All our incubation centers
and venture capital funds and mentoring will have an allocation fixed
for women entrepreneurs. So young women entrepreneurs, going global and
changing the perception of Africa are what we’re focused on.
Knowledge@Wharton:
You have an interesting family background since you said your
grandparents were born in Africa but you’ve also lived in the U.K.Thakkar:
Sure, in the 1890s, my father’s family left from India and went to
Uganda. In 1920, my mother’s family left from India to go to Tanzania.
After they got married, they lived in Kenya and moved to Uganda. And
then in 1972, the Idi Amin saga took place and everybody was expelled.
My parents left, lost everything and went to England. My parents worked
in factories, built some capital, started up a business, built more
capital and bought a home. In 1993, they decided they wanted to go back
to Africa so they sold off the home, sold their business and took
everything they had to Rwanda in Central Africa.
Nine months
later, unfortunately, my parents, my sister and I were taken from our
home and we were refugees for three weeks. I don’t know if you’ve seen
the movie Hotel Rwanda. I was in that hotel. We were evacuated.
Fortunately, we came out alive but unfortunately everything they built
from 1972 to 1993, they lost in 1994.
So we literally started
from scratch. My father took a US$11,000 loan and set up a business. And
I took a US$6,000 loan and set up a business in 1996. And here we are
today.
Knowledge@Wharton: That must’ve been terrifying as a refugee because you were so young at the time?Thakkar:
I was 13. It was crazy because you remember everything. It was
extremely terrifying. You think back to my father, having my sister, my
mother and me with us. He was still playing games and acting all chirpy
acting as if everything was fine. When you think back, you think, “Wow,
he’s something else.”
Knowledge@Wharton: You have been quoted as remembering U.N. convoys running over bodies to make sure everybody was dead.
Thakkar:
What happened was we were in a truck being taken from the hotel and I
was curious. I stuck my head out and saw that bodies were being loaded
in trucks. I asked the U.N. guy. Basically, whichever army or rebels or
whoever, are taking all the bodies and putting them in a truck and
taking them to a place and blowing it up to make sure everybody was
dead.
When you go through all that, it makes you think, “Wow.”
This is the reason it gives you a completely, completely different
perspective on life.
I’m 31 and have so many people around me,
saying “Why are you spending 40% of your time on the foundation? There’s
so much more in business.” Literally we have the ability to access
anyone we want to, a whole specter. We can do some crazy stuff in the
entrepreneurial space.
But I think God has been amazingly kind
and given us so much. It’s given us a second or third chance. Why not
give back and impact other people’s lives? We’ve been lucky that we’ve
been able to make things happen but so many others haven’t. Why not help
them and give them a second or third chance. It’s important to give
back and genuinely that’s how I believe wealth should be measured.
Knowledge@Wharton: It sounds like the Rwandan genocide has really impacted the career you’ve taken on?
Thakkar:
It has. Another major factor that has played a key role in my life is
my spiritual leader Morari Bapu at moraribapu.org. He really is an
amazing, amazing individual. He has three core teachings, which are
truth, love and compassion. He has these nine-day functions every so
often. I try to attend at least one or two a year.
Listening to
him keeps me really grounded. Just listening to him makes you really
realize there’s so much more to this world than just earning money.
Since I was a child, I’ve been following him. That’s my one little
secret. It freaks me out even thinking what I would do without him. He
has been an amazing inspiration. He really teaches you truth, how to be
honest, how to be a better person. Love – how to love everyone around
you, regardless of religion and color and race, this, that and another,
regardless of their position in society and all that rubbish. He teaches
compassion, like how to give back, with no hidden agenda and no
particular intention.
That’s why I hate the word “CSR.”
[Corporate Social Responsibility] It’s such a useless word. Someone
doing it for the sake of doing it so they’ll look good in society.
You
have to go about creating social enterprises. That’s the way forward.
You have to make sustainable wealth in a straightforward and simple
manner. I set up my manufacturing plant ten years ago. At that time, I
was producing 30 tons a month. Today I’m producing 30,000 tons a month.
Why? Because there was a demand so I created this plant.
My
foundation helped 120 entrepreneurs three years ago. Why can it not help
a million entrepreneurs? There’s a demand. Why not create the platform?
I
did it in packaging. I did it in all my other businesses. Why not do it
in this? I looked at it as a real business. That’s where I think we
need to switch our mindset. I’m hoping this will create a huge impact,
and I’m hoping this will inspire the public sector to do more to support
these young entrepreneurs. And also the private sector to do more. It’s
not about the size of the check. It’s about the impact that you create.
When
you’re putting up a business, your simple bottom line is what’s your
IRR? How much are you making at the end of the day? It’s not a matter of
what kind of investment you make, it’s the return you’re focused on.
People need to look at this very differently. It’s time we changed that
mindset.
Knowledge@Wharton: I want to talk about you being an
astronaut. You talked about changing the image of East Africans and
you’re the first East African to become an astronaut. You’ve signed up
to be an astronaut on Virgin’s private space flight. What made you
decide to sign up?
Thakkar: A few years ago, I was in China
watching the news. And I saw the news and I thought, “Wow, that looks
pretty funky, a bit crazy.” It pumped up my adrenaline and I was at the
airport lounge. And I just logged onto their site and I just signed up. I
didn’t take it that seriously. I hadn’t even watched Star Wars so it
wasn’t like I was jumping up and down. I just kind of did this. When I
was a child, I always thought about being an astronaut or a pilot. I
didn’t take it that seriously and I didn’t take it that seriously when I
signed up.
But then I got a phone call from Virgin. I was
offered a Founder’s Position from Africa to represent the continent to
become Africa’s second astronaut and East Africa’s first astronaut.
I
just thought it can create an amazing political impact. So the heads of
state officially handed over their flags to me and I officially
represent the region. So it’s feeding that buzz that we have the vision
in East Africa.
I did training in Philadelphia’s NASTAR Center
when they put us through the centrifuge. They’re pushing you down 3.5-Gs
[as in G-force] so it’s really intensive. You walk in thinking, “Oh
yeah, I’m going into space” and then you walk out, thinking, “Oh no, I’m
going into space.” It’s really cool though and very exciting. Virgin
Galactic has been an awesome company to be associated with. The whole
journey has been really fun. I met some amazing individuals.
Knowledge@Wharton: You’re based in Dubai now.
Thakkar:
Our home office is in Dubai. It’s the perfect hub for Africa. It’s more
centrally located than London or South Africa. We feel passionately
about Dubai as a hub for Africa.
There have been a lot of
historical routes between this region and Africa. I think more and more,
there’s an active role being played and it’s increasing further and
further. Obviously, India and China have invested in Africa pretty
aggressively. Europe has inroads from the colonial times. I think the
Middle East is getting to grips with it now. They’ve done so much in
Africa. But I can see the momentum is increasing. I don’t think the U.S.
understands its story as well but I think that will slowly change. You
can see the transformation taking place in people’s mindset. Still,
there’s a huge lack of understanding.
People still need to
understand sub-Saharan Africa or take even East Africa. Each of these
countries is an independent case study. You can’t copy and paste
anything. You have to localize it. The culture is different. The vision
is different. The leadership is different. The jurisdiction and laws are
different. Policy is different. The mindset is different. You have to
plug into each country being very local. And that’s very important.
Unfortunately right now, we really generalize the continent and that’s
very wrong.
Knowledge@Wharton: So because of these
generalizations, people in the U.S. and the Middle East have been
hesitant about investing in Africa?
Thakkar: I think it’s
more than hesitancy. It’s a lack of understanding. You can see the
eagerness and there are historical ties. There’s a lot of warmth here
for Africa but translating into more trade between the two regions. It’s
been happening but I think it’s been increasing. But with the U.S., I’m
not sure. I still haven’t seen any huge movements in that respect. In
the past, the U.S. has been a little bit more conservative and moved a
little slower but I’m sure in time, the U.S. will come into play quite a
bit more, which is a good thing.
Knowledge@Wharton: So where in the Middle East have people been more interested in investing in Africa?
Thakkar:
The United Arab Emirates [UAE] has been more active. The UAE is the one
I understand the most. I haven’t seen too many Qatari groups come in. I
haven’t seen any Bahraini groups come in. I haven’t seen too many Saudi
groups come in. The UAE seems the most active in that respect. But you
can see everyone else bubbling up as well. Hopefully, we’ll see a lot
more now.
http://www.cp-africa.com/2013/01/22/meet-31-year-old-ashish-thakkar-africas-youngest-billionaire/
