Friday, 14 August 2009
Business: Hermann Chinnery-Hesse (Founder of SOFTtribe)
"Africans don't need to beg, we need to participate in the global economy." Hermann Chinnery-Hesse
"Technology is the only way for Africa to get rich. We don't have proper infrastructure and we can't compete in manufacturing. But if you put me behind a PC and tell me to write software for a Chinese customer, then I can compete brain for brain with anyone trying to do the same thing in the US." Hermann Chinnery-Hesse
"Our mission is to provide Tropically Tolerant software solutions to the West African market. We are committed to ensuring that we are responsive to rapidly changing Information Technology and to changes in our clients’ environments." Softtribe.com
I happily stumbled across an exciting piece about Hermann Chinnery-Hesse written by By Briony Hale [BBC News Online business reporter, Accra, Ghana], dated Tuesday, 3 June, 2003 and entitled: 'Ghana trumps mighty Microsoft' -and just had to google Hermann Chinnery-Hesse. And I am very pleased that I did. What an inspirational man!
Hermann Chinnery-Hesse is a 'tour de force'. Touted as the Bill Gates of Ghana -this power house -and a self-described “geek and gangster”, -Chinnery-Hesse has an excellent track record. Often called the “Father of the African Software Industry”, in 1991 he co-founded theSOFTtribe - the largest and most successful software company in Africa. Anyway, I found a very interesting piece by Max Chafkin [for Inc.] entitled: 'Meet the Bill Gates of Ghana' -and the following is an insightful and well written piece about Hermann; -the 'trials and tribulations' of doing business in Ghana, -and the many opportunities that modern Ghana offers modern businesses:
Brash, ambitious, and optimistic, Herman Chinery-Hesse has already accomplished what many considered impossible -- building a thriving tech business in his native Ghana. His new goal: to spark an entrepreneurial revolution in Africa by bringing e-commerce to the most remote corners of the continent.
By Max Chafkin | Oct 1, 2008
It's just past midnight, and Herman Chinery-Hesse can't sleep. The 43-year-old entrepreneur is lying on his back, eyes closed, mind cranking.
He's working through the details of a pitch to American and European investors -- many of whom have never backed a company like the one he's proposing. The pitch is absurdly ambitious: a tech company that aims to reshape the business climate for small entrepreneurs in Africa while grabbing a share of the $28 billion that Africans living abroad send home every year. His start-up is a long shot, will cost millions of dollars to execute, and could take five years to get off the ground. In other words, it's not the kind of thing you would expect from a company based in West Africa, a place known for many things -- malaria, civil wars, famine -- but definitely not disruptive technology companies.
But Chinery-Hesse thrives on just this sort of contradiction. He's a technology entrepreneur on a technologically barren continent, an atheist in a deeply religious country, and a capitalist raised amid the excesses of socialism. He also loves an uphill battle -- and this particular battle is just too intriguing to pass up.
I know this because I'm lying in bed next to him. I had come to Accra, the capital of Ghana, to understand what African entrepreneurship looks like, and I had sought out Chinery-Hesse in particular to answer this question: Who in his right mind would sell software in Africa? I had been following him around for a week, a frenetic experience that typically began each day in the late morning and lasted until midnight. I observed Chinery-Hesse make hundreds of phone calls, send thousands of text messages, and smoke a carton of Benson & Hedges cigarettes. And now, I was cowering close to the edge of a king-size bed around midnight, reluctantly conducting an interview.
This is not as weird as it sounds. Business in Africa is much more informal than in the United States. Meetings are not typically pegged to a specific time, and lateness -- even several hours' worth of lateness -- is not considered worthy of reproach. And then there are the sleeping arrangements. In Africa, it is not uncommon for two people of the same sex, when pressed for space, to platonically bunk up. This point had been mentioned to me several days earlier, but it acquired a terrifying immediacy when the tiny hotel where we had intended to stay was booked, and a friend of Chinery-Hesse's offered to let us stay at his place.
Chinery-Hesse is an imposing man. He stands 6 feet tall, has a Tony Soprano -- size gut, and possesses a salesman's mannerisms, including a blistering laugh and a fondness for crass language that belies his upper-crust background. Most of the time, his clap-you-on-the-shoulder pose is endearing. But his size and tendency toward overfamiliarity make him a less than ideal companion in situations -- a bed, say -- in which personal space is scarce.
Still, it's a big bed, and I figure I can simply turn on my side, avoid eye contact, and fall asleep quickly. Chinery-Hesse will have none of it. "We can still chat," he says matter of factly from the other side. "You can still ask me questions."
When you come to Africa, take everything you know about Europe or America and turn it upside down." This advice, given to me by a Ghanaian entrepreneur named Kingsley Awuah-Darko, was meant not as preparation for unfamiliar mores but as a key to understanding business on the African continent. Judge a company in Accra by the standards you would apply to one in Akron, and you're likely to form mistaken impressions and miss opportunities.
Most people consider opportunities and Africa to be mutually exclusive concepts. We have come to see Africa as more a cause than a place and its population not as a market but a class of victims. Of the 20 cover images of Vanity Fair's Africa Issue, published last year, not a single portrait featured someone who owned a business based in Africa. And although the issue's guest editor, the Nobel Prize -- nominated pop star Bono, lauded Africa as an "entrepreneurial, dynamic continent," the casual reader might have been tempted to ask, Who are these entrepreneurs, exactly?
Ghana is a small country in one of the poorest parts of the sub-Saharan region, but it's also a hotbed of technology entrepreneurship thanks largely to the pioneering work of Chinery-Hesse. Today, Accra boasts dozens of tech companies and one of the largest Internet cafés in Africa. Chinery-Hesse was an early investor in the Internet café, which also serves as an incubator that rents space to start-ups. He went on to found what is widely considered the first and largest software company in the country, called theSOFTtribe, where he serves as executive chairman and controlling shareholder. Chinery-Hesse has also left a wider mark on the country's tech sector. Many former SOFTtribe engineers have gone on to start other software companies, including the second largest in the country.
These accomplishments have earned him a moniker at once homespun and grandiose: "the Bill Gates of Ghana." They have also landed him speaking engagements at Harvard, Wharton, and Cambridge. Last summer, he shared a stage with Bono and Jane Goodall at the TEDGlobal conference in Tanzania. "Herman is the godfather of the software industry, not just in Ghana but in all of Africa," says Eric Osiakwan, a Ghanaian journalist and IT consultant. At its height in 2003, SOFTtribe employed 80 people, mostly programmers, and was booking well over $1 million a year in revenue -- a substantial sum in a country in which a three-bedroom house costs $20,000.
It's hard to imagine the founding of a software company as a revolutionary act, but in 1991 in Ghana, it was. Not only were there no technology entrepreneurs to speak of, but the idea of entrepreneurship as a path to wealth was a novelty. Ghana had suffered for decades under repressive governments that were outwardly hostile to private enterprise. From 1970 to 1990, the country's gross domestic product fell at an annual rate of 2.1 percent. Some of the most successful companies were nationalized, price controls were instituted, and owning many kinds of property, such as a car with air conditioning, was considered an indulgence that risked the wrath of authorities. Entrepreneurs accused of breaking the rules had to surrender their property and financial assets to the military government. If they resisted, they were often beaten and sometimes killed.
Democracy -- along with peace, stability, and a measure of prosperity -- has since come to Ghana. But it is still a hard place in which to be an entrepreneur. As a market, Ghana seems hopelessly inconsequential: just 23 million people, with a per capita income of $676 a year. Nutrition is often poor, and health care is spotty. The average person has a 1 in 10 chance of dying before he or she reaches age 5, and life expectancy is just 60 years. The country's business climate, in which an entrepreneur can expect to spend 220 days just to get the proper business licenses to build a warehouse, remains stubbornly anemic. Interest rates are prohibitively high at 25 percent. The 18 percent inflation rate, while down from 30 percent five years ago, is high by global standards. According to the World Bank, Ghana is one of the most difficult places in the world in which to start a business, ranking 138th -- after Venezuela, Serbia, and Iran.
These facts paint a bleak picture. Yet there's no shortage of evidence to suggest that despite all its problems, Ghana is brimming with opportunity. GDP grew 6 percent in 2007, and in the first six months of 2008 the value of companies listed on the country's stock exchange grew 56 percent. One important factor fueling growth is the explosion of mobile phone use throughout the continent. Ghana alone added 2.7 million cell phone subscribers last year. The rapid spread of cell phone service has made it much easier to conduct business and has prompted some investors to take a fresh look at the African market.
Even so, the West tends to see only tragedy in countries like Ghana. "In the U.S. media, Africa is a place where people are dying and starving, and where there are no opportunities," says Vijay Mahajan, a professor at the University of Texas and the author, most recently, of Africa Rising. In the book, Mahajan argues that Western entrepreneurs are ignoring the next big global market at their peril. He points out that in Africa, for instance, GDP per capita is $200 higher than in India. "I'm not saying Africa doesn't have problems -- all developing countries have problems," he says. "But the opportunity in Africa is at least as great as the opportunities in China and India."
We're going to turn Ghana into Singapore in five years," says Chinery-Hesse the first time I reach him by phone from New York. It's 6 o'clock in the evening in New York -- 11 at night in Accra -- and Chinery-Hesse is still in the office, supervising a late-night coding session. His voice cracks through a bad cell phone connection but betrays an unmistakable level of pride. "This is the Holy Grail. Everybody is going to be rich."
His new company, which is separate from SOFTtribe, is called BSL and draws inspiration from Amazon.com and PayPal. When BSL launches this fall, it will let African entrepreneurs easily sell their products online and accept payments via mobile phone. Such transactions are extremely difficult in a country in which computers are rare and in which PayPal doesn't operate. If Chinery-Hesse can sign up enough merchants and get enough people making payments with the service, he could drastically improve the lives of African craftspeople by giving them access to global markets. "This system is going to allow someone living in a village who makes 20 sweaters a week to export them at $10 a sweater," he says. "That's $200 a week!" It also promises to put Chinery-Hesse at the center of African commerce and make him exceedingly rich.
Not that he needs the money. Chinery-Hesse is an elite's elite whose mother serves as chief adviser to Ghana's head of state. He has three servants, a driver, and two SUVs, and he lives with his wife and two children in a comfortable ranch house in a gated community. At one point, he owned seven cars and two nightclubs. As a boy, he bounced between Accra and wherever his parents, both career diplomats, were posted, including Tanzania, Sierra Leone, and Switzerland. He attended Ghana's prestigious Mfantsipim School -- Kofi Annan's alma mater -- where his friends recall him as brilliant, outspoken, and academically lazy. Like many privileged young Ghanaians, he left the country to attend college; he studied industrial technology at Texas State University in San Marcos.
In Texas, Chinery-Hesse was an outsider: an African who had little in common with the black Americans on campus but who was mockingly called "nigger" by his white friends. He shrugged off the taunts as innocent "teasing" but never felt entirely comfortable. "America is the most racist place I've ever been," he says, admitting that he often felt afraid to talk to strangers or to police. But he was also captivated by the place. "I saw open spaces where there was nothing but cows, and then four years later, it's a whole community." Everyone he knew seemed to own a ranch, and the pace of development was preternatural, with 7-Elevens and McMansions blooming spontaneously from wide-open farmland. He remembers this period as the time of his entrepreneurial conversion -- when he first understood how business might change an impoverished country. "Every aspect of underdevelopment requires a business," he says. "I realized that the opportunities were everywhere."
He returned to Accra for Christmas in 1990 and announced to his friends that he was coming home for good. The group had been partying at an Accra dance club, and Chinery-Hesse's friends responded with incredulity. They were thinking about how to get out of Ghana, not back in, and they had been badgering him all night for help in getting jobs abroad. (At the time, his mother was working as a U.N. official in Geneva.) "You guys are crazy," Chinery-Hesse responded. "The opportunities are right here."
Chinery-Hesse talked his way into a contract job with Accra's largest travel agency, whose owner was a distant relation. He was paid $2,000 to write a software program that automated the company's accounting and customer service functions. The program, which Chinery-Hesse called Gbefaloh, meaning "traveler" in Ga, his mother tongue, would eventually be adopted by travel agents throughout the country.
Please read the rest of this article at: http://www.inc.com/magazine/20081001/meet-the-bill-gates-of-ghana.html[Read from page 3]