Pratik Kumar a serial entrepreneur from India, and came into Kenya some 3 years ago. He has a background in engineering with a Computer Science degree and 5 years of tech consulting. He is not a person to do one thing for a long time and after the 5 years he went on to do an MBA in year 2008/9 and immediately moved into finance. This lasted only 6 months before the entrepreneurship bug came biting.
That’s when he and his brother ventured into the space of restaurants and cafes while still in India, a business that his brother still runs. While there, his father who is a successful businessman in Africa told him to evaluate and look at what is happening in Africa, and this led him to a move into Kenya.
Pratik’s father heads ISON Group, a company with operations in 14 African countries that has interests in Business Process Outsourcing with ISON BPO, tech consulting with ISON Technologies and a very young entry into incubation and investing into early stage startups, ISON Innovation which is slightly a year old. ISON Group has 12,000 employees with the largest operation being Nigeria with 3,000 employees. This has been 7 years ongoing.
Pratik needed a something to do when he came to Kenya, so he tied up with a trading company. How he came to Kenya was by shipping manufacturing products from India to Africa, but trading was not exciting enough. He wanted to move to the knowledge space, started working in corporate training imparting soft skills, a business that thrives quite well with a presence in 7 African countries. He says they have trained 4,000 people. “I quickly realized that for such a business I needed trainers, subject matter expertise to run the training business, so I set up a professional team to run operations a year and a half ago, and after that I started getting bored again,” Said Pratik.
And so he had to look for something new and interesting to do. Pratik says they figured that business discovery in Kenya was quite a task and if you wished to know where to get a product or service, or even a certain type of food joint was quite the task. They decided to start Oliza, which is coined from Uliza – meaning ‘Ask’ in Swahili. Oliza is a platform to assist merchants and customers discover each other. But they learnt that the cost of getting this done was going to be very high and he needed a business that would show viability in a short time with lesser resources. So they shelved the idea of mapping businesses.
The next in line was Ocharge, an airtime recharge app that gives you discounts across various stores and restaurants. Consumer insights and other data have it that Kenyans spend a very huge part of their disposable income on airtime, sometimes more than they spend on food and other basics. This brought an idea that if they started an airtime recharge application that enabled one to recharge their phone on whichever network one is on, and with various payments methods, then give 100% discounts to merchant products then they had a winner. They thought of the idea in October 2015 and immediately set up to plan the execution.
This is how Pratik told his father he’d like to do a startup, incubated at ISON Innovation, including getting access to funds that startups at ISON Innovation would get. And thus he started the company. The current team comprises of 13 staff split across tech, developers, brand partnerships and marketing. They are housed at ISON Incubator in Westlands, Nairobi.
App development started earlier in the year and the app was published in the play store in June 2016. They however didn’t go all out with aggressive push for app downloads, something which Pratik explains to be because they want to get the app done right. This is the opposite of rival Xtravalue which was published in the play store late last month with much publicity and fanfare.
“..We wanted the user experience to be just right before pushing it out to a large number of users..”
“We wanted the user experience to be just right before pushing it out to a large number of users,” Pratik said. “Marketing a bad experience is not good for a new market, you want people to stay, so collect feedback from the small number of users before going to the mass market.” Pratik attributes this approach to the part where Ocharge is meant to scale into many markets in a near future, they are not keen on turning around the company into profits, but want a market fit with a viable product. And to get there the user must want to stay around.
Since publishing it in July, the app has between 5,000 to 10,000 app downloads and according to Pratik there are 1000 monthly active users. This he says is from organic growth as they have not done any marketing push, a deliberate move since they consider the app to be still in beta. This is bound to change as they will have to change tact following launch of Xtravalue in the same space. Ocharge was scheduled for marketing in December, but they wish to take charge of the narrative of the very new market of airtime recharge apps. This is more a reaction than planned. Ocharge went out first, but now they are seen as a second mover because of the visibility of the rival.
Ocharge may be raising money in a near future for scale into new markets, but that’s after they’ve got the best working product. Their target market is anyone with a smartphone, of course on pre-pay subscription as postpay subscribers don’t buy airtime. Pratik feels that these people will feel the need for being regulars on the app as Kenyans have this peculiar habit of purchasing airtime in bits, we are not bulk airtime buyers. This works well for the merchants signed up on board with discounts.
As much as the primary product for Ocharge is selling airtime which they get from mobile carriers at a wholesale price, they also target merchants for marketing purposes. “People buy airtime several times a month, sometimes every two days, and this means when they get points to redeem they will be browsing through a catalogue of merchants from whom to redeem. This is a very high interaction between customers and merchant brands,” says Pratik. The app plays a role of discovery for brands and also pulling back customers according to him.
they had to make a trade-off.. “…people won’t pay 22 shillings to buy 100 bob airtime…”
The hard part of getting such a service up and running is getting all the ducks to align in a row. The ducks here are merchants, well developed application and all third party players that make it work. Pratik mentioned that the service has plans to integrate with mobile money and debit/credit cards for airtime recharge. Currently there is only Mpesa set up with other methods still coming soon. The easier Mpesa integration is Pay Bill, but Pratik says it’s not the most convenient for the user. Buy Goods and Services option is free to the user, but Pay Bill has a more seamless experience. They had to make a trade-off.
“Pay Bill is the more developed integration but it has a fee for the user to make payments, that doesn’t make sense for airtime recharge. People won’t pay 22 shillings to buy 100 bob airtime,” says Pratik. “This is the reason we set up Buy goods and services option which is free for the user, although less friendly.” This naturally means that the experience could have been better but the cost here was more important.
Pratik hopes that Ocharge will catch on and that it will go on to become the value he envisions for both consumers and merchants. So far they have observed trends in deals redemption, and there is more interest in food and night life than other categories. Pratik sees a diversification soon into online shopping deals as this is something requested by users. We shall be interacting with the app and will give feedback on what the user experience is like, and whether it’s worth having as a regularly used app on your phone. Stay around.
