3 Important Technology Startup Lessons From Kenya’s Angani Debacle

Over the last few weeks, Kenya’s digital ecosystem has been rocked by the debacle that hit Angani, the cloud services business that experienced what could only be described as a catastrophe of epic proportions. After a major falling out between the Founders and its Investors at a board meeting, Angani experienced an exceptionally long period of downtime that compromised many of its customers. Over the last week or so, Angani is somewhat(?) back online but I just checked and their own website is down as of this writing. The Angani brand and reputation has taken a massive knock.

I have been keenly observing Angani’s recovery and also had the benefit of engaging with stakeholders who are close to them – that is the Founders as well as the Investors who made a board decision to change the leadership of the business. There have also been a good number of blogs in Kenya and beyond covering Angani’s unfolding story here, here, here and here. Some have very credible insights, whereas others have what seems to be unverified and dubious information.

Going forward, Angani will probably become a case study of what happens to a Kenyan technology startup in probably the worst case scenario possible? Most of us were rooting for Angani to succeed and I was even planning to move this blog and other client business to them recently since I was fully confident that they had ‘arrived’. I have thought long and hard about the things that Angani could have done differently and below are the three most poignant lessons we can learn from what happened:

Customers Should NEVER Become Collateral Damage

The most stunning thing about what happened at Angani is that somehow they managed to lose focus on the end game? That is, the customers! It seems that the Founders and their Investors fell out over business performance related issues but ironically the customer is the one who got the hardest hit in the fallout. As far as I can tell, the Founders (may have?) refused to handover their server passwords to the Angani Investors when they could not get guarantees absolving them of any liabilities post-handover.

Instead of ensuring that the Angani servers could keep humming even if they had differences in the boardroom, it seems that an abdication of the highest order ensued and customers got damaged in the process. Apparently, Angani’s servers went down when the Investors got a team of hackers to gain control of the servers(?). Others say that the Founders deliberately sabotaged the servers(?). Whatever the case, even if the Founders and the Investors could not see eye to eye, the worst bit is that the customers got compromised in the process.

Angani’s entire business model was predicated on the idea that they were offering a world-class cloud services platform right here in Kenya. What they managed to do as a company in a few short weeks is completely reinforce the notion that we need to go outside of Kenya for this sort of service, after all is said and done, which is the last thing that should have happened. Its going to possibly take years to recover the confidence needed by customers to use a service like Angani again given what happened to them.

CONTROL The Narrative Before Bloggers & Social Media Do

I feel that Angani as a business should have been much more proactive in controlling the ensuing narrative on traditional and digital media, instead of social media and bloggers running with it. It seems that bloggers in Kenya and beyond have been essentially communicating what the Angani Founders have been saying and you can’t help but get a sense that there is an overwhelming bias in favour of them in the blogosphere? In addition, the narrative has been so skewed and corrupted that some bloggers have posts with racial undertones that paint the Founders as the victims in this whole thing.

What no one seems to be saying is that the whole Angani boardroom debacle that led to the exit of the Founders seems to have been triggered by issues of business performance, more than anything else. For technology startup founders in Kenya, the lesson that must be learned from Angani is that when you sell a stake in your business you become more than ever accountable to your Investors. This is a trade-off you make to fund your business and accelerate growth. Business takes on a much more serious flavour when there is a fully functional board represented that are looking to see their investment nurtured into to a lucrative venture – that is after all why they invested, right?

Ultimately, the foregoing seems to have been the main bone of contention. Sadly, its only at the tail-end of the Angani debacle that one of the Investors has came out with a blog post that vaguely(?) explains what happened there. I think that the current Angani leadership should have been at the forefront from day one in over-communicating the Angani position immediately after the Founders resigned. Plain and simple. By allowing bloggers to run with the story, and letting this narrative flood social media, Angani may have suffered irreversible damage to their business.

There MUST Always Be Another Way No Matter How Bad Things Get

It seems that Angani’s Investors and Founders could not agree on the basics of how the business would be run which is what led to their falling out and a change of leadership. I suspect that as bad as it looked, there must have been another way of coming to some sort of solution in the boardroom? I suspect that both sides took extreme positions and it became a matter of egos rather than finding a viable way of keeping the business functioning at an optimal level? Their customers ended up being the biggest casualty at the end of it all.

I am not convinced that the Founders and Investors could NOT find a way of getting things back on track without having to resort to extreme measures. This proves that there is need for a greater sense of maturity where technology startups are concerned in Kenya. There is a long game at play here and the digital ecosystem in Kenya is still really nascent so short-term disagreements should not obscure the long-term potential. Egos were bruised, loyalties were tested, game plans unravelled spectacularly but there must have been another way. This is was too much too soon for a technology startup like Angani.

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1 Comment

  1. […] that they are working together to resolve the issues. Ultimately, there is a lot for startups to learn from what happened at […]

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