Ayisi Makatiani: The business magnate who’s making waves

When the list of Kenya’s new multi-millionaires is published any time soon, it would be surprising if the name Ayisi Makatiani missed out.

The MIT-trained entrepreneur is arguably one of Kenya’s most astute and meticulous business leaders with a stealth demeanour to go with it.

He is straight in his talks and doesn’t want his words to be misconstrued. He doesn’t want you to imagine what he said or fill in the blanks.
All he wants is that his thoughts are conveyed exactly as he has expressed them.

He makes that clear to me at the beginning of this interview: ‘‘if you aren’t sure, ask.’’ 

It is this attention to detail, this zero-tolerance to goofs that has perhaps made him the multi-million-shilling entrepreneur that he is today.

Everybody knows how he started. In the mid-90s, he, together with some innovative Kenyan friends studying at the Massachusetts Institute of Technology, started an online mailing list to keep each other updated on their social plans.

This was a bit like the WhatsApp application today, only more rudimentary. Technology was at the crawling stage.

This modest mailing list developed into a key news source for Kenyans in the US.

Ayisi was a Bachelors in Electrical and Electronics Engineering student, minoring in Economics and MIT was far away from his humble home in Western Kenya.

Influence

“I was influenced by my mother who was a teacher as I was by my agronomist-turned-senior executive father who both dabbled in small-scale retail business from which I learned the principles of business,” he says.

“Later in life, while at Alliance High School, Kenneth Matiba came to speak to us and I decided that I wanted to follow in his business footsteps.”

He did more than just follow in Matiba’s footsteps and literally took over the mantle from him years after the Alliance talk.

Ayisi was among the group of investors who bought off the prestigious Hillcrest Schools from Matiba three years ago. But more on that later.

His meteoric rise perhaps started with Africa Online, which, upon setting foot back home from the US, he together with classmate Karanja Gakio and Amolo Ngweno, a Harvard and Princeton graduate, started in 1994.

“Look, if you asked me what my plans were post-university I wouldn’t say I was sure,” he says, “but I understood that I wanted to be a professional manager building on my Electrical and Electronics engineering degree.

MIT taught me to be curious, comfortable with analysis of complex and sometimes contrasting situations, with little or too much information and yet make important life determining decisions. It taught me that everyone makes mistakes but they (mistakes) should diminish with time.”

Whatever mistakes he made, African Online, was later to become the largest-pan African Internet provider with a presence in eight countries.
Ayisi had spotted an opportunity that was to pay off but that shouldn’t be a surprise, at least if his speech at a Massachusetts Institute of Technology Africa Initiative Project in Nairobi just around that time was anything to go by.

He is quoted to have said in that speech, “At present, the world thinks that email, the Internet, mobile phones and Internet are high-tech and that Africa is low-tech. It follows that hi-tech is for the rich and low-tech is for the poor.

“That Africa, the great majority of its people will lag behind in the communication revolution, being unable to understand or afford widespread use of the information superhighway.

“I’m absolutely convinced that in this thinking the world is wrong. So spectacularly wrong that their knee-jerk reaction to Africa’s potential is not only short of the truth but the exact opposite of the truth.”

Young Ivy-leaguers with impressive educational resumes in hand and ideologised in the western thinking, of course they encountered the raw hurdles of doing business in Africa.

Politics

For instance, shortly after the office opened in Nairobi, a powerful rival company pulled strings to have the national operator switch off their phone lines, throwing a spanner in their works.

Ayisi could have played dirty, or even bribed his way through most of these difficulties – after all that was the typical modus operandi for most businessmen in Kenya. But he didn’t.

“If you do not pay bribes, people do not ask for it,” came his explanation.

Instead, Ayisi appointed a well-connected board of directors that would shield Africa Online from further turmoil. Naturally, a man of his business standing and corporate reputation must confront a lot of politics in his operations, this being Africa. How does he handle it?

“I don’t think one has to be afraid of political influence. Like anything else including journalism or media, one must learn about and be comfortable with politicians and political influence.

“Politics has a major impact on business and the general business climate. Businesses need to seek out and find ways of co-existing with politicians. I believe this works well in Kenya since some of the biggest business owners also happen to be heavily involved in politics.”
Which makes you wonder what other business philosophies define his business world.

“Once alignment, after thorough consideration, is reached on the long-term strategy and the operational plans of an organisation, 100 per cent focus and energy should be on execution. The most appropriate people must be found to execute the critical processes. This applies whether looking at a pharmacy retail chain, a manufacturing operation, an airline or a hospital.”

African Lakes Corporation PLC, an investment company, was later to acquire Africa Online through a management buy-out in 2000.

Differences in strategy saw the exit of Ayisi as chief executive shortly after the deal. It is reported that he retained a stake in the company worth about $10 million.

Africa Online is now owned by Gondwana International Networks.(Telkom SA, which acquired it in 2007, sold the unit in December last year).

Without a job – but a millionaire, no less – he decided to change boats, from being an entrepreneur to becoming an investor. Together with some partners, they set out to raise $44m to launch Gallium Partners Investments, a private equity fund for Africa.

The fundraiser did not meet the target and that plan went tits up. But as luck would have it, the search for funds had taken Ayisi and his partners to the doorsteps of the World Bank.

Enter African Management Services Company (AMSCO) in 2004. AMSCO was a boat riding turbulent waves. It was making major losses and in a destructive spin. 

Ayisi’s strategy to save it was to cut costs and “sharpen the organisation’s focus” which saved it.

Which begs the question now: how does he spot opportunity? This takes some commercial training (mostly on the job), some commercial instinct but mostly it takes learning from investment mistakes to know how to avoid duds and to select winners. It is about people instinct, asking the right questions and being decisive with the correct conclusions.”

Fast forward to 2008, and one sees Ayisi living his dream after quitting AMSCO and establishing Fanisi Capital Limited — a $50 million (Sh4.3 billion) fund that invests in companies mostly based in East Africa.

And it is in their offices, on 14 Riverside, in a small boardroom where we meet for this interview. Ayisi is as inquisitive as he is succinct.

The question of what his plans are for Hillcrest invariably comes up.

“When we invested in Hillcrest, our first objective was to create an environment with the student as the focal point, and excellent teachers as the primary driver of excellence,” he says.

“It has taken us time to execute most things but I now believe that we have the right driver in Christopher Wheeler and the new senior management team. We are very deliberate in our strategy and it is premature to announce our expansion plans.”

The interview winds up quickly, Ayisi has to run, but not before he responds to the question of his next ambition, and if politics is one of them. That draws a weary chuckle.

“As a person who has spent most of my adult life in business operations and management, I am prone to be direct and prefer to work in environments that lend themselves to direct dialogue. I believe that my management and operational experience is required more in the corporate sector. Politics requires a different approach to issues and I have not considered it at this time.”

Then he is standing, buttoning his jacket, extending a hand in handshake and off he goes to another meeting, to another opportunity.