Enterprise

Risk-takers who inherited Philips business on its Kenya exit

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Professional Digital Systems Limited(PDSL) CEO David Karanja. PHOTO | EVANS HABIL | NMG

How do you buy out your former employer and grow the company into a multi-million shillings enterprise?

David Karanja and three colleagues staked a bet on buying Philips, a Dutch multinational, as it exited the Kenyan market.

Mr Karanja and three others pooled their savings and the money they had been given as terminal benefits and set up Professional Digital Services Limited-Kenya (PDSL).

They started the business on April 10, 2000.

Mr Karanja and his small team became local agents to their former employers and supportive service providers to their new clients.

Their business was installing communications devices, business telephones (PABXs), conferencing and sound systems.

“It was a simple buyout. We were buying its operations here in Kenya. So what mostly we needed was office space and tools for our maintenance work. If I remember well, we invested between Sh1.5 million and Sh2 million. We pooled from our savings and part of the payout benefits we received from The Philips of Netherlands,” he says.

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Their client list stretched from luxury hotels, State agencies to financial institutions in Kenya and Uganda.

The following year they expanded the business by introducing data network installation and maintenance as the Kenyan market had started demanding Internet and related services solutions.

They added more ducks to their row when in 2002, they were appointed as local agents for Actaris — a multinational that dealt in water and electricity metering solutions.

That same year, they were appointed as the local agents for Axalto, which later merged with Gemplus to form Gemalto. With this partnership, they ventured into SIM card sales for mobile network operators.

In 2004, they swam deeper into the high waters when Atos Origin appointed them as their local partner in systems integration. Together, the two firms implemented the Safaricom billing system and loyalty system Bonga Points.

Four years later, together with Actaris, they implemented a pilot project for prepaid electricity meters for Kenya Power, providing 25,000 prepaid meters.

Two years later, they received Kenya Power’s nod to replace the old meters with the new prepaid meters, increasing the meter count to more than one million. So far, they have replaced about 6.3 million units.

Luck might have played a part in getting so many opportunities, but Mr Karanja says planning played a bigger role.

“We have been strategic about our growth and the areas we wanted to venture into. I am always travelling abroad for seminars and workshops to understand the business and how to implement it here. For example, the idea of having pre-paid electricity meters locally came from a function I attended in the UK. I saw how effective it was and when I came back home I sold the idea to Kenya Power. It took 11 years for our proposal to be taken up and even then, it was in the pilot stage, which took us another four years to get to the implementation stage. We have been aggressive in our journey to look for new businesses and that has paid off,” he says.

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With technological advancement, they evolved. They now offer utility payment solutions for power, airtime, water, and pay TV as well as a platform for bulk SMS delivery.

In 2017, they were prequalified by Kenya Power and Rural Electrification Authority (now Rural Electrification and Renewable Energy Corporation) as a power lines contractor.

In 2018, The Kenya National Examination Council appointed the firm to provide a channel for the transmission of examination results for primary and secondary schools.

More jobs meant an increase in the workforce. Now they have 52 employees in Nairobi and contract workers as the need arises.

On entrepreneurship lessons, Mr Karanja says: “I have learned that when growing a business, you have to be clear about where you want to go, the things that you want to achieve and know what you need to get there. Every business has the potential to grow. Having the right focus is key in achieving this.”

His luck came after his job ended.

"The loss of a job does not mean the loss of your skills. You have to reinvent yourself after a loss of any kind to stay alive. Better your skills and learn better ways of doing what you know, that way you remain relevant in your field and therefore useful," he says.

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